By Sharon O’Mahony, RE/MAX Broker
This past October proved that the market here in Seattle is definitely coming back. At one recent broker’s open house on a Wednesday morning, I had 12 people waiting at the front door to get in to see a new “fixer” listing in Ravenna. I was not late. These were just eager buyers hungry to see the latest inventory.
First-time buyers are out in great numbers and so are investors with cash looking to flip homes again. With inventory rates at 1.5 months here in our area, things are moving quickly. Most homes that are priced well are getting offers in one week or less. Multiple offers, pre-inspections and letters written by the buyers to the seller are also back as buyers try to up their chances of being the winning bid.
Recently I showed my buyer a home in Shoreline that had come on the market that morning and by 5 p.m. was already sold. The seller didn’t wait to review offers – they just took the first offer they received. As an agent, this drove home the fact that I have to be extra vigilant these days about searching for new listings and getting my buyers out to see properties ASAP. This gives new meaning to “house hunting.” I feel like more of a vulture sometimes.
Don’t be fooled by the low prices you see on many new listings – this is not usually the price you will end up paying. Many sellers are pricing their homes under market value and waiting a week before they will review offers to ensure that as many buyers see the property as possible – and hopefully to start a bidding war. It seems to be working. I have seen several homes in Green Lake go for almost $100,000 over asking price… for nothing special. I find it curious. I think people need to calm down and not panic. We are not running out of houses. I promise.
The good news for those who did wait to buy, interest rates are at historic lows, around 3.5 percent for a conventional fixed 30-year mortgage, so you now have more buying power. The challenge that buyers still have is coming up with the down-payment money. I am seeing a rising trend in parents gifting the down payment to their children in order to help them get their foot into the market. In most cases the kids have good jobs but are saddled with so much college debt that they haven’t been able to save for a down-payment. Thanks, Mom and Dad! It is a great option if you can swing it. An early inheritance you can watch them enjoy and cook you dinner in.
With rents up the incentive to buy is great if you can afford the down payment. The median price of a home in the Green Lake/Phinney Ridge area is $457,000 for October. This same time last year the median price was $399,995.
Not all areas are seeing this kind of bump in the median price but our in-city market here in Seattle is healthier than some of the outlying areas due to the influx of bio-tech jobs – Amazon, The Gates Foundation and Boeing continuing to bring new workers to our area. The majority of homes that are being sold are priced in the most competitive range between $300,000-400,000 with 446 sold in the past 11 months. Inventory is about 25-35 percent lower this October than it was last Fall. When you combine the lower inventory with the 1.5 month supply available, you can see why we are in a seller’s market again.
Given the pent-up demand we have for houses currently, I predict that this coming Spring is going to be very robust for our area as we get a much needed increase in inventory back into the mix to satisfy the demand. Happy hunting!