Sellers added the most inventory since May 2019 to the 23 county NWMLS system in July, but buyers continued to show up & buy. This pent up buyer demand has lead to continued tight inventory in most markets. Major population centers in King, Snohomish, Pierce & Kitsap counties have little more than 3 weeks supply. Prices on the other hand, are rising, with residential prices (single family & condo) prices up 12.8%. Median prices in King county continue to lead the way, up 7.2% YOY (Year over Year) to $670,000.
As one would expect, COVID-19 induced remote work practices are beginning to show, with median price increases in outlying counties such Lewis, Grays Harbor, Okanogan & Cowlitz being around 20% or more. Workers are no longer constrained to being close to work & coupled with more buying power due to record low interest rates, rural areas are expected to continue to be in demand.
Sellers are cautioned to not overprice, todays buyers are armed with too much information & are too savy to over pay. I still see numerous price reductions, sometimes from over pricing, sometimes from poor presentation, that ultimately hurt the seller. Buyers on the other hand, are urged to act quickly if they see something they like. Todays buyer, now accustomed to virtual tours & remote signings, are actin quicker than ever.
I read a white paper several years back that described the fact that there was a measurable difference in the sale prices of homes that had fewer zeros in the list price: as in $699,999 as opposed to $700,000. The basis was that the mind plays subtle tricks and the mind would think that the $699,999 was a more accurate number and not receive as large a counter offer as $700,000 would. That statistically, the final selling price of the $699,999 list price would be larger than the final selling price of the $700,00 list price. It was a small %, but still measurable and money in the bank.
Since then I have employed it in both buying and selling, setting list and offer prices with no zero’s. My faith based clients have used bible verses for ending numbers such as $XXX,316. One buyer, faced with multiple offers, used the date of the offer. In all cases, it seems to have worked, rarely have we lost a bid or not sold near asking when clients accepted my theory. My current listing (1321 117th Pl SE Kent) is listed at $676, 247 because it has 2 kitchens, 4 bathrooms & 7 bedrooms. We’ll see how that goes, but over a dozen shows in 2 days is a good sign!. Update -It is now Pending at Full Price.!!
Click on the Video below to hear Dave Danforth disuss oiur COVID-19 response and how we are here to serve you.
We are open for business and have the tools & best practices to serve you, now and in the future. Contact Kurt Kreager to discuss how we may help you buy or sell your home. Click here for a free Home value estimate with a monthly update compliments of Kurt.
Brokers were temporarily on the sidelines due to the Stay at Home order allowing only those brokers with contracts pending able to work to satisfy buyers and sellers obligations. This was later revised to allow showings, inspections, etc, with strict restrictions in place. Only two persons in a home (including broker), No Open Houses, work remote if possible, to name a few. The result of this was some sellers pulling homes off market, particularly occupied homes. Other sellers rushed to market. Buyers thought they had hit the jackpot and came out in droves, looking for bargains. The result is a continued strong market, for sellers and a continued frustrating market for buyers. Cash deals, over asking offers and short market times are still occurring, particularly in strong markets like Bellevue. Although the full extent of this will not be determined until Aprils numbers are in, but I expect volumes down slightly but those deals that do happen will be at or near asking with short Days on Market.
Going forward, as restrictions relax and people return to work, expect a flood of both houses and buyers to occur. Sellers will need to be extra sharp going forward and use brokers who use 3-D virtual tours, high quality pictures and are prepared to go the extra mile in service. Buyers need to be extra prepared, have financing pre-underwritten and use a broker who is adept at buying in a virtual world. My experience at buying homeS sight unseen during the foreclosure crisis has given me this skill.
Call or email to schedule a virtual meeting with Kurt Kreager by clicking these links : Kurt@kurtkreager.com 425-829-4270
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.
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.