Reading the doom-and-gloom headlines about Seattle’s real estate market is an echo of what happened this exact time last year — it’s like wash, rinse, repeat. You have to look at the data and understand consumer behavior to know that right now we’re far from experiencing a housing crash.
While it’s true we’re no longer in an insanely hot market, that’s what most buyers and sellers have been used to. So any slowdown feels like the real estate market is imploding. But the data says differently — we’re still in a seller’s market.
Economists and real estate analysts peg a neutral market as one that has four to six months worth of housing inventory. Any less, it’s a seller’s market; any more and it’s a buyer’s. Despite all the frightening stories, the greater Seattle metro market has a home inventory of 3.8 months, which is almost neutral but still leans toward the seller’s advantage. In the micro neighborhoods, such as ours, our data tracks only 2.3 months of inventory.
Like last summer, the sales pace has slacked off. But that’s normal. Real estate, like many other products or services, is affected by changing consumer habits. When summer comes, daily habits change, and fewer people want to deal with buying property. Once school starts and everyone gets used to living on a more regular schedule, consumer habits reboot and sales will pick up again (as they did last year).
That being said, my team had three homes go under contract in one day in mid-August. So there are still people buying. Even in a more transitional market, our neighborhoods remain strong. In August, we had an average of 47 days on market, with an average sales price of $1.6 million.
All the data points to this year picking up in the fall again and finishing strong.
No one can truly predict what the future brings. We are seeing data sets that have never been displayed before.
Economists say we’re due for an economic downturn. In terms of our real estate market, sales and prices can’t continue to spike as they have for the last several years. But mortgage rates are still crazy low. I had a buyer qualify for a Jumbo loan at only 3.625 percent. Rates are reaching historical lows again, so we have to stay calm.
If you’re buying this late summer and fall, get ready. There will be more homes on the market, so you’ll be able to purchase with more protections than you might have been able to last spring (or maybe next spring, if trends continue). That means all contingencies, negotiable prices, and no bidding wars. Get your financing in order, and take advantage of the low mortgage interest rates.
If you’re selling, make sure you look at all the data and price your home right for right now. There are active buyers looking for their next home, but they have choices. Get your property cleaned up and looking tip-top, work with a broker who has experience in transitioning markets, and be ready for the certain activity spikes we see between now and the end of the year.
My home, office, team — my focus is here in this neighborhood. If you’d like to set a time to talk through any of these matters involving buying or selling your home, my door is always open.
Chris Sudore is managing broker at Coldwell Banker Bain | Global Luxury and a Madison Park resident. Reach him at [email protected].