If you read local news, I'm sure you have heard there has been a shift in the real estate market. After several years of a steady double-digit increase in home prices and multiple offers on homes being the common place, we are finally seeing a change.

I’m here to tell you that YES, we are starting to see the market slow down a little bit. Inventory is up, but we need to put that in context. We’re still hottest housing market in the nation, according to CNBC, growing faster than almost anywhere else, and that should continue. We also saw buyers step back from the market this summer.

What has happened? New figures from the Northwest MLS show year-over-year improvement in inventory (up 6.5%), but modest drops on both pending sales (down slightly, more than 7%) and closed sales (down 3.4%). Despite these drops, prices rose 8.64% across the MLS service area that spans 23 counties. The Seattle and King County supply is at the highest level since first quarter 2015 and has almost doubled since March.

In a “normal” real estate market, we see 4-5 months of inventory on the market. Right now the NWMLS reports 1.7 months of residential and condo listings, King County at 1.1 months, with West Seattle at .8 months of supply, and Seattle at just .9 months. The entire NWMLS has been in a seller's market since February 2015, King County since November 2012, and Seattle since August 2012.

As you can see, we are still very entrenched in a seller's market. However, everyone actively participating in real estate felt a “tremor” in the middle of May. Listings were not getting multiple offers and we are seeing more price drops. Buyers who have been searching for months finally got their offers accepted. A return to a balanced market will create a healthier and more sustainable market. I am predicting a slower home value increase of 8% over the next year (still double the historic rate of appreciation, but not nearly the 24% we’ve seen in recent years) and a continued return to a balanced market.

WHAT THIS MEANS FOR SELLERS:

Contract terms may not be as favorable.
Don’t expect multiple offers & drastically increased sales prices. We do still see multiple offers on well-priced homes that are in high demand.
Preparation is key as more competition comes on the market & buyers can afford to be more discerning.
A pricing strategy by an active agent in the market is more important than ever.
Terms like “price reduction”, “contingent sale”, and “pending inspection” will be more common.

WHAT THIS MEANS FOR BUYERS:

It has been a long time coming, but we have some solidly good news for buyers. The increase in listings is having a calming effect on prices and competition.
The most desirable houses will have a lot of competition. However, the insanity seems to be subsiding.
I predict for home buyers, the next 3 months will be the best time for selection and availability of new listings until March 2019.

Photo by Hannah Ray on Unsplash