Real estate has not been immune to the challenges we all are facing from COVID-19. While sales and listings are continuing to occur, recent data shows volumes are down significantly, mostly in listing volume. In some ways this will further reduce inventory, already challenging to buyers, but the off-set of a reduction of buyers will temper any price increase. The reduced number of buyers may in fact impair prices downward. The good news is that anyone out trying to buy right now, in a virtual world, is serious. Below find my take-aways on where we are & where we might be heading:
Any listing currently under contract is allowed to close. Brokers, inspectors, appraisers, mortgage professionals are all allowed to do what is takes to fulfill contracts, with proper distancing, remote meetings, etc.
Moving companies can now move people to fulfill contract obligations, protect jobs or finances, & public safety.
Agents can list properties, tour properties, write offers, etc. providing that as much as possible is done remotely, & safe distancing on-site is followed.
Listing volume is down significantly the last week after spiking because of the impending shut down. I expect list volume to increase significantly as restrictions are lifted for 3 reasons:
delayed spring surge.
Sellers / investors on the fence till now, feeling a sense of urgency to take advantage of high prices and the fear of an unknown future.
Struggling homeowners & landlords affected negatively by COVID-19 selling to avoid even larger problems.
Prices & interest rates:
Prices will fall due to increased inventory (see above), plus fewer qualified buyers out looking. This will begin to show this month as inventory rises, buyers disappear, & mortgages become harder to get.
Interest rates will rise as lenders increase their ‘risk premium’ amid an uncertain future.
Mortgages will become harder to get as underwriting standards are tightened up.
Need help with your real estate?? Give me a call or send an email, we can do a virtual meeting to discuss all your real estate needs.
It is amazing how much the world has changed in 3 short weeks. Real estate in the Seattle metro area is no exception. Open Houses are being cancelled, in fact NWMLS (Northwest Multiple Listing Service) has disabled the ability to advertise Open Houses for the time being. But that does not mean Real Estate deals are not happening. A quick check of the NWMLS site shows 750 new listings, 1433 contracts written and accepted (Pending) & 638 closings -ALL IN THE LAST 3 DAYS!!
Both of my upcoming listings are on track for early April, but we will now have to be creative in our approach to marketing. Video tours will be more important and each home will be equipped with sanitizing supplies.
Sellers should expect a bit slower closing times but limited inventory still is working in their favor.
Buyers should realize this is an opportunity to be aggressive in their search. Using the Coldwell Banker search engine will allow us to collaborate on listings in real time with minimal face to face contact. Go to Kurts search sign up page here to create an account.
And, of course, I will come out and show properties as long as we practice safe distancing and we both are not showing signs of illness.
In closing, STAY SAFE, and call or email me if you have any needs. real estate or not, I am here to serve you!
Every year around this time, The President of the US gives their State of the Union address. I like to take this time to give my State of the Market which gives a snapshot of where we have been and a peek at where we might be going in regards to real estate.
Regardless of which side of the aisle you sit, many of the things President Trump discussed are having a huge impact on real estate and housing across our country. Locally, the strong economy, raising wages and low interest rates are prompting buyers to seek housing, which is in short supply. After a brief increasing of inventory in Spring 2019, with the corresponding slight dip in prices, buyers came out and absorbed most remaining inventory going into the year end.
As I wrote in my December blog ( Here ), buyers got the memo about more choices and low interest rates and continued their buying into the Holiday season. This buying activity absorbed lot of the remaining inventory and has lead to an even tighter market. Inventory of single family & condo properties across the entire 23 county NWMLS (Northwest Multiple Listing Service) is down at year end by 31% with the I-5 corridors counties of Thurston (-54%), Pierce (-38.9%), King (-38.8%) & Snohomish (-35.6%) leading the way.
While December is typically a slower month, activity stayed brisk across all categories. Closed sales in December were up 11% (reflecting Novembers results) and December Pending sales (the best indicator of current market activity) were up 4.7% over last year. Even more close to home, Coldwell Banker Danforth had the best December ever and my listing had showings every day but Christmas & New Years in the last two weeks of the year. It went pending shortly after the 1st. ( 5508 S 2nd Everett, WA ).
Going forward, some brokers feel that prices may moderate as spring inventory increases. While I agree, I believe it will be short lived. My best advice is as follows:
Properly priced and presented homes will still sell at a premium.
Sellers should take the Costco approach, bring your home to market earlier than every one else. While most market advice says mid April, I am advising anytime between now and then that you are ready but no later than March 15. Those buyers who trusted this advice last year did quite well, as the buyers were out but sellers were not quite there yet with more choice.
Buyers, as always, be prepared, have financing in order and move quick.
This Covington buy, fix and sell project was, perhaps, the quickest project yet. Although it took the bank over three months to resolve some title issues, once we were cleared to close and finalized the purchase, my investor client was off and running. Originally designed as a rental purchase, once we closed, it was determined that it could also be resold at a profit. The IDENTICAL house two doors down sold at a very high price during the time we waited on the bank. That comparable home, two doors down, was not even listed when we went under contract. It sold for more than asking in a few days. So, it was decided that this purchase would make a good resale. 3 week remodel, 1 week on the market, several offers received. The home sold at $374,888 which was $6,000 over asking. 30 days to for the lender to close and VOILA 63 days start to finish. On to the next one!
In a bit of a surprise for both brokers and sellers, buyers came out in November and absorbed some of the unsold inventory in the system. Pending sales for November in the Tri-county Puget Sound area rose 9.2% year over year with closed sales increasing 5.5%. The resulting median selling price year over year gain was almost 10%, with almost 1/3 coming in the last few months. Coming during a usually slow season, these signals show that continued demand & tight inventories will continue to push prices upward.
More affordable price points and areas continue to lead the way as first time home buyers & inspired renters are choosing to enter the market to take advantage of favorable interest rates and motivated sellers. Areas like the Eastside continue to show the effects of lack of affordability, with prices flat or lower than the highs of Spring 2018. The silver lining on the Eastside is out of state investors and / or local buyers are actively pursuing what they see as bargains, with the number of pending sales in November higher than either of the last two Novembers. This buying activity, couple with seasonally low inventory, will bode well for sellers choosing to enter the market BEFORE the typical spring rush.
Seller Take Aways
Listing between now and March will yield rewards as inventories are currently low due to this buying activity.
Waiting till April may get more buyers, but you will be competing against much more inventory.
Well presented, well priced homes are still selling quickly. My recent residential listing in Covington went under contract in under a week.
Buyer Take aways
As always, prepare your financing and buying objectives ahead of time.
Be prepared to move quickly, the best homes still sell fast
Investor take ways
There are still bargains to be bought, you just need someone who knows how to find them.
Consider pooling your resources into one of our upcoming buying funds. Call or email for to set up a meeting, I’ll buy the coffee!
As always thanks for reading. Please share or like. I am thankful for all of you who have made 2019 a success, looking forward to a incredible 2020.
This 1290 Square foot, 3 bedroom, 2 bath rambler was a recent REO (Bank owned) purchase by a client of mine. After a short remodel which included a new roof, interior & exterior paint, new windows & flooring and more, the house was ready to bring to market. Traffic has been brisk and we are now entertaining offers after just one short week. Stay tuned for the rest of the story.
As reported last month, buyers came out in large numbers and began to soak up the increasing inventory from spring. Faced with better choices, lower interest rates and motivated sellers, they snapped up homes in all areas. Pending home sales (an indicator of current market activity) increased, while surprisingly, the usual August bump of new listings, did not appear. New listing activity in August was down (6.3% from July & 18% less than August 2018), perhaps due to sellers getting the message their home value was slipping. This has created yet another shortage of available homes, leading to frustrated buyers who were waiting for further price improvements.
Many buyers are faced with looking outside of King County due to affordability. Both Pierce and Snohomish counties saw double digit increases in both pending sales and solid increases in home prices. Overall, King counties median sale price of $615,000 is up 0.8%, Snohomish County is up 1.8% to $470,000 & Pierce county leads the way in affordability with a median sale price $369,000, up 6.1% year over year.
As a seller, I recommend considering listing now before buyers get tired again and hunker down for the winter. Buyers, hang in there, stay prepared and be ready to act quick when you find the one!!
You know the old saying – What are you going to do after ……………. ?? Go to Disney Land!!
Well, promptly after assisting my out of town seller sell her home in fabulous Phinney Ridge (MLS 1472680 – 7216 4th Ave NW Seattle, WA – Sold for $675,000) that is exactly what we did. Star Wars Galaxy Edge was incredible, Splash mountain was very WET! & hanging with family was great.
So what does this have to due with Real estate?? Not much except that I am back and ready to help you buy or sell your next home or investment property. There are pockets of value, even with reducing inventory. Call or email me to discuss your next move.
I have known these clients for over 20 years, & even though they have other neighbors and friends that are also Agents, they knew they needed the best for this complicated transaction. They received an unsolicited offer from a renter in a nice River front house they owned in Issaquah. The offer was very low, they were not thinking of selling but wanted my opinion. After showing them the true value of the house, and discussing the options, they decided to move forward with possibly selling the home to the tenant. After a few weeks of back and forth, we got the price up by over $200,000. Because my clients were now convinced that selling was a good option, we did not want to waste valuable summer listing time if the renter could not preform. We insisted on mortgage Pre Approval, & them showing Proof of Funds ( a bank statement). We also insisted on no repairs, besides a certified septic system, as the tenant had been there a long time.
A few weeks later, we closed the deal. Unrealized potential & good timing resulted in my clients now having many options in front of them.