We keep hearing about a “market shift” and “balanced” or “normalized” real estate market. What does that really mean for sellers in our current market? As we’ve seen recently, the market has shifted and is continuing to shift. Part of this is caused by a normal seasonal break from elevated summer levels, and part of this is a longterm trend. The North West Multiple Listing Service has released data for the month of September, supplying more market data on what to expect moving forward.
FACTS AND FIGURES:
One of the most interesting facts to note is the trend in pricing. While sales have slowed significantly, brokers are seeing that correctly priced homes are still selling fast. Year over year data shows that house prices are up 8 percent from September 2017, which is nearly double national inflation rates according to the NWMLS. The Puget Sound region is still experiencing a healthy economy, while the numbers of people moving to the region are beginning to slow, it’s still an upward trend. Not all people moving to the region are looking to buy, especially as interest rates are increasing. The Seattle Times reported that someone who purchased a $700,000 house one year ago, is paying the same monthly mortgage as a new buyer with a $640,000 house.
. The Seattle Times reported that a buyer who purchased a $700,000 house one year ago, is paying the same monthly mortgage as a new buyer with a $640,000 house.
According to the NWMLS latest press release, the State of Washington has 2.56 months of supply, slowly inching towards the 4-6 months of supply that indicate a balanced market. Across the state, numbers are at the highest level of inventory since 2015. In King County alone, supply has breached two months for the first time since January 2015.
HOW TO INTERPRET THE FACTS:
Real estate is a constantly fluctuating market, month to month can show spikes and drops in rates and numbers. As quickly as the market can change, we also need adapt the correct mindset to the current market. Sellers who can adapt quickly and price their homes accordingly, are finding success much quicker than their competitors. A large part of this is understanding the actual sale value. The days of multiple offers over list price are gone. The MLS reported that most homes are selling at 100% of list price, when the house is priced correctly. It might seem tempting to value your investment at a rate that will help cover places where you have gone over-budget. Making that mistake today could cost you much more in extra carrying costs and extensive time on market. Part of adjusting mindset is understanding the new language around a changing market. A “fast” sell used to mean two days, now, it could mean 14 days.
Going forward we cannot stress enough the importance of adjusting your budget to current trends while projecting for future trends. Looking ahead we know that we’re moving towards a balanced market, as well as the slower winter season. This does NOT mean that your property won’t sell, budget for longer carrying costs, price your home correctly, and work with your broker if you have any doubts or questions.