The real estate market is experiencing a traditional Spring upswing following the winter slowdown this year. Median single family house prices in Seattle and King County haven’t completely rebounded from the hit the market took in late Spring last year. Although it is still a seller’s market, with inventory increasing, we are taking another step towards a more balanced market. We are seeing longer market times and fewer multiple offers. However, with interest rates projected to remain under 5% through next year, a wonderfully low unemployment rate, and a pent up demand for homes in the area, our market should remain strong.
What I have found interesting is that single family median house prices in Pierce County and Tacoma have had steady, continued growth through Seattle’s 2018/2019 fluctuations. Tacoma offers city living at lower prices and those who have been priced out of the Seattle market are finding it an appealing place to look for a home.
Area | Median Price | Inventory
MLS +5.5% +6.8%
King -0.3% +38.7%
Seattle -4.6% +67.4%
Tacoma +8.8% +8.5%
West Seattle -1.2% +103%
There is no doubt that we are finally seeing some changes to our local real estate market. Due to recent news articles, I receive two questions regularly.
1. Are we in a bubble? I witnessed and survived the bubble. This market is completely different. Based on a mix of research and observation, here are the reasons that I feel we are not in a bubble:
a. Buyers are extremely qualified for loans and have the jobs to support their mortgages. Many buyers in Seattle have at least a 20% downpayment. During the development of our 2007 bubble, most buyers were putting less than 5% down.
b. Our unemployment rates are extremely low and projected job growth is strong which signals a healthy economy for years to come.
c. Cost of living in Seattle is still more affordable than California.
2. When is the best time to sell? If a house is properly prepared and competitively priced, I have had success throughout the year. However, if you simply take a “statistical approach” there is an undeniable pattern in median home values in our real estate market. Keep in mind, there are a lot of variables beyond the seasonal shifts that could change those historic fluctuations. Politics, health of local businesses, relationships between local government and business, international trade, interest rates, etc., all play a large role in the real estate market.
a. Homes that go under contract in late April-early May, tend to hit peak median sales prices for the year.
b. There is always a dip in the prices of homes that go under contract in December, and usually a smaller dip in home prices that go under contract in late Summer.
c. In 2018, Seattle prices took a hit from late Spring through the holidays. January of 2019 started with a bang! This was a change in the usual pattern. It will be interesting to see if it repeats itself this year.
The patterns reflect nominal fluctuations in prices. In my opinion, the most important element in choosing the best time to sell are the timing related variables for your specific home and goals. Are you buying and selling? Are you changing jobs in the near future? Do you have a waterfront home? My expertise comes in when we analyze the whole picture.
What this means for buyers:
Take advantage of the increased inventory and low interest rates! We often see less buyers searching for homes in the Summer. This means less competition for you on many homes. You also may have an opportunity to negotiate on the sales price of homes that have been sitting on the market.
Working with a Real Estate Broker who has a strong background in negotiation can save you thousands on the purchase price of your home.
What this means for Sellers:
Although it is still a Seller’s market, the increase in inventory and market times requires a shift in the marketing strategy brokers have relied upon the last several years. Not only is there more competition, but buyer psychology has shifted. With more to choose from, buyers are taking their time in making decisions, being more discerning, and negotiating on price and terms. Sellers need to keep this change in buyer psychology in mind when preparing their home for sell and determining the marketing and pricing strategy. Multiple offers are now the exception rather than the rule.
Working with a Real Estate Broker that has experience in a more balanced market is better able to advise you in today’s market. A skilled negotiator will provide you leverage when working out contract terms and repair items.
If you have any questions, I’m available to discuss further. If you’re considering buying and/or selling, let’s grab some coffee and see how I can assist you in reaching your real estate goals.