By Chris Sudore
Tuesday, April 3, 2023 7:30 PM
The Seattle real estate market has another new look. We left 2022 in a strong buyer’s market, with houses sitting on the market for longer than we’ve seen in the past decade. Our neighborhoods had 13 months of housing inventory as we toasted a new year. Many buyers sat on the sidelines, waiting to see if the market would crater during the fourth quarter of 2022.
Spoiler alert, it didn’t.
On Jan. 1, my phone started ringing — even though, yes, it was technically a holiday — and it hasn’t stopped since.
By the middle of March, the number of available houses tightened to 4.5 months of inventory. That puts us squarely in a neutral market, which real estate analysts define as four to six months of inventory. Homes are selling again. As I write this article, 109 properties are pending within the neighborhoods in this publication.
Hitting the reset button
In the last six months of 2022, sales were slowed by rising interest rates and diminished consumer confidence. Everyone adjusted to the new rates, sellers adjusted their prices or hit the market in a sweet spot, and buyers came out swinging.
Buyers are willing to pay, and they’re ready to act quickly. That’s something that happened with regularity when inventory was tight and there was a frenzy to get a house, any house, at mostly inflated prices. That behavior has also reset.
What’s selling now
Buyers coming back into the game are snapping up homes for sale that have three things in common. These homes are in premier neighborhoods with good schools and access to amenities that will offer a lifestyle boost. They’re in pristine condition, and they’re priced right. Buyers are willing to pay for what they consider a premier property.
In our neighborhoods, new listings this year have gone under contract quickly, within 30 days. A home priced over $3 million sold within 14 days. In Madison Park, an over-$4 million home closed fast in a cash deal. Even at the upper end of the market, things are moving quickly. A $9.8 million home in Capitol Hill went pending in eight days.
If you’re selling
If you’re planning to sell your house this year, be prepared to put the work in to sell it. The properties that sell quickly are in turnkey condition. That means fresh paint, including trim. Get those nagging repairs completed — even the things you look past, like the sagging cabinet door under the sink or the foggy window with the broken seal. Buyers will see them with fresh eyes. Declutter: Even if you need to store things in a crawl space, attic or garage, make it neat. If it’s overwhelming, rent a storage space.
Walk your property. All that talk about curb appeal isn’t just talk. It really does matter to a discerning buyer. Spruce up gardens, lawns and trees. All these things will pay off in the end. I help my sellers take care of these tasks through my network of tradespeople who can do it all quickly, including cleaning and staging services. Buyers expect to be wowed by the home they will buy.
Do your due diligence and get an experienced broker to guide you through this process. In the past, I’ve had clients want to list the house at a time convenient for them, like during a vacation when they’ll be out of the house anyway. That won’t work in this reset market.
You have to get the house in the best possible condition, well before it’s on the market. Good photos can make or break your showings. It’s the first impression buyers get, and you need them to show them an optimal product. Data says the more showings your property gets, the better your offer will be.
You also have to price it right, for right now, not last year. Set your expectations. While we’ve seen a few multiple offers on homes to our east, that’s not what’s happening in Seattle. The days of escalating offers may come again someday, but it doesn’t look like it will be in the near future.
If you’re buying
If you’re buying, you also have to prepare. Do your homework. Have your financing in order. With premier properties going quickly, you have to be prepared to move.
You also need a broker experienced in down markets to make the most of the opportunities in this one. I’ve been doing this for a long enough time, in the same area, to know the inventory extremely well. I can look at a property and know, with a high degree of probability, whether it’s a premier property or not.
Backing that experience with hard data, I can devise a strategy that will give my buyers more control of the process in negotiations. Negotiating isn’t just about the sale price. The data tells me that, right now, the price negotiations will land between 2 to 3 percent of the asking price on a $1 million home. Coming in much lower with an offer would only insult the seller. If there’s a house in less-than-pristine condition, I know how to negotiate that for a better deal.
There are other details open to negotiation. With the higher interest rates this year, sellers may be agreeable to, for example, handling the closing costs to allow buyers to use more of their available cash toward the down payment. There are also programs out there to get credits toward your home loan or to buy the rate down.
For buyers or sellers, who you work with matters. I talk to people on both sides of the deal, and after all the fluctuations in the market in such a short time, they’re shell-shocked. Use the wrong broker, and you may settle for much less than you want. With the wrong advice, sellers may rush or overprice and watch the market pass them by. Buyers can either overpay or watch the deal blow up after a lowball offer.
You want someone who will go the extra mile. This year, I’ve already knocked on one door to ask the owners if they would consider selling after clients fell in love with the house while seeing something else in the neighborhood. In another instance, I called a broker who had sold a home that was currently off-market to see if the owners would consider selling. Sometimes they will, for the right deal. You don’t know unless you ask.
It’s been a turbulent last few years in the real estate market. My team is one of the top real estate teams in the state. We succeed based on our experience in changing market conditions and our data-driven approach. We’re flexible — willing and able to do the hard work for our clients that others don’t or can’t. Madison Park is my neighborhood — my home, office and team are right here. If you have any questions or concerns about the investment in your home, and what it means to you and your family now and in the future, I’d love to set up a time to talk. My door is always open.