You may have heard in the news that our real estate market is changing. First and foremost I want to assure you that the sky is not falling. Our national market has been in an unhealthy inventory-starved state for the last couple of years, so in my opinion, this latest influx of inventory is a welcome change.
The Seattle Times and Mike Rosenberg came out with this article recently that outlines what is happening.
“New monthly data out Friday shows median home prices across King County fell $30,000 in August from the month prior, the third straight month of declines. Countywide the median cost of a single-family house, now $669,000, is down by $57,000 since May, according to the Northwest Multiple Listing Service.”
I am pleased to say that our current and local market numbers are representing a more-stable market. I expect to see a reasonable amount of buyers in the market for the inventory we have, fewer multiple offers, and much smaller overall price increases. The wages in our area could not sustain the rapid price increases of the last few years so these changes may allow buyers to catch up.
Here is what buyers and sellers can expect in this more-equalized market:
Sellers – The days of pricing very aggressively have come to an end for the time being for sellers who want to get the attention of buyers. Although pricing at market was important before, the lack of inventory had many buyers overlooking price because competition would cause the price to escalate anyway. Now with more inventory, sellers will need to price correctly to get the most buyers interested. This is evident from the price reductions we are seeing in our market.
Buyers – An increase in inventory means more opportunities for buyers. More inventory means there may actually only be one offer on a property rather than many buyers competing for the same home. This means I expect sellers will be more-receptive to offers and be willing to negotiate on things like down payment percentage, inspections, and what occurs when an appraisal comes in lower than anticipated. And, of course, they will be more willing to negotiate on price, closing date, and more. However buyers, just because the market has shifted slightly doesn’t mean that you call the shots. It means you have more of an opportunity to work with the seller to come to a mutually-beneficial agreement.
It is important to note that this market shift does NOT represent a complete turnaround, putting all power back in the hands of buyers as it seemed to be after the recession. It means that buyers and sellers have an opportunity to work together so all parties can get what they need out of the home-buying or selling experience.
The market is always changing, by price, location, style of home, age of home, and more. The real estate market is no different than the stock market in that it is driven by supply and demand. Supply is on the rise right now, but demand continues to be strong due to the economy, due to natural population increase, due to migration, and due to fact that nationally we still do not have the new construction homes to address the new construction deficit that occurred after the recession. The mechanics for a severe market correction are just not there.
I don’t have a crystal ball, but I am excited about the current market conditions in that more buyers and sellers can join in and can work together. I have plenty of trends to better-illustrate the current situation so you can make great decisions about what you should do with your real estate. Reach out! 206-762-0682 or email@example.com