What a difference a year makes. One year ago, life skidded to a stop in the still-early days of the COVID-19 pandemic, as we looked at everything with uncertainty and not a little fear. Workers were sent home, some businesses shut down completely, and the real estate industry went quiet.
Real estate a year later has not just rebounded, but we’re seeing activity on a pace like — or in some cases, surpassing — the height of the market in 2017. It’s not necessarily despite the pandemic, but in many ways because of it.
Throughout the greater Seattle area, inventory — the homes available to buy — is at stunning lows. There is only three weeks of supply on the market — what analysts call the absorption rate. Remember, real estate industry analysts call a neutral market one in which there is four to six months of available homes. In our neighborhoods in and around Madison Park, there is only two weeks’ worth of inventory. In these top neighborhoods, and in certain price points and instances, sellers are fetching 25 to 30 percent over their asking prices.
It’s a stunning turnaround.
New factors at play
The “new normal” life we’ve all learned to live with has had its drawbacks, losses and sorrows for too many. Seattle’s economy, though, is strong. For people with salaried employment, there has been no disruption in their jobs or paychecks, even as they continue to work remotely.
The pandemic has meant we all spend more time at home. What we need from our homes has changed. More room, more bedrooms, more storage, bigger and better kitchens and usable outdoor space is at a premium. People need dedicated home offices for remote work and schooling. For families, the togetherness has been great, but sometimes everyone needs to chill in a more private space. All of these needs are driving this hot seller’s market.
I’ve also noticed that this crisis has made people more deliberate and more decisive when it comes to real estate. That’s necessary now, especially on the buyer side. There is no time to mess around with so few available homes on the market.
There’s also a real feeling of hope and optimism. Vaccination supplies and the number of people getting them are picking up, the stock market is high, interest rates are low. All of these factors contribute to the incredibly hot real estate market.
What to know and how to plan
This market is different than other busy markets. It started earlier — transactions were unusually heavy in December, which is not typical of the months around the late winter holidays. We’re deep into the traditional spring market, and it’s only getting busier.
We’re seeing more movement from the always-hot Seattle neighborhoods to families moving to the east side — homes are larger, lots are bigger, and there’s more space to spread out.
If you’re selling, the time is now. Some of my sellers aren’t looking to buy again right now. They’re taking the proceeds from their sales and renting for a while until things sort themselves out. When they come back in, they’ll have the cash to move fast and aggressively with the intent to win.
The scarcity of inventory is hard on buyers. The single most important thing a buyer can do to increase their chances for success is to work with an experienced broker. Now is not the time to call that friend who has a real estate license because you feel obligated — unless that buddy has years of experience, many successful transactions and extensive local connections.
There’s simply an oversupply of buyers. We see 20 to 30 groups of serious, ready-to-pounce buyers at every available house. Prices are rising as multiple offers escalate to bidding wars and the usual contingencies are waived, and buyers who can put down cash — quickly — are getting those homes. That takes a toll on the unsuccessful bidders. If you’ve ever put an offer together, it takes time and hope. It can be emotional and stressful. An experienced, dialed-in broker can take some of the load off and work the angles that are only learned over time and with experience.
I was working with buyers who were ready to write up an offer on an attractive property. I knew the broker representing the sellers because we’d done many transactions over the years, through hot and cold markets. A quick call, asking the right questions — and knowing what the answers meant — led me to a win. Not the house. It was clear to me this home would ultimately sell for more than my buyers could pay. We didn’t put in an offer, and the win was in not losing. Real estate isn’t just about property and prices; at the base of it, it’s about people. There was no reason to put these buyers through the roller coaster when I could figure out we weren’t in a position to win.
Knowing the market and its players is always important, but never more than it is right now. Buying a house is a huge investment — not just financially. Choose your broker wisely, and you’ll have the best chance to get your new home in this market.
My team and I have already successfully won many homes this year for our buyer clients. We’ve also fetched as high as 25 and more offers for certain sellers that hired us to represent them. If you want to win, call me.
As always, my home, my office and my team are focused here in Madison Park. If you’d like to set a time to talk through any matters involving buying or selling your home, my door is always open. From all of us at King County Estates, we want to thank our devoted clients, families and community for the tremendous support during this time. Stay smart, stay safe and stay healthy.