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Just like the temperature would suggest, winter is typically a cool time for the real estate market. But 2022 continues 2021’s unusual trajectory: Real estate in Madison Park and our surrounding neighborhoods is hot, with multiple offers common and above-list sales prices the norm.

Why is this happening? It’s due to the scarcity of inventory across the Puget Sound coupled with record-low interest rates; that is what has driven this seller’s market for the past two years. Just look at our own neighborhood: In Madison Park in 2021, there were never more than four single-family homes on the market at the same time.

We’ve just entered the new year, and anecdotally we’ve seen more buyers come off the bench and enter the market. But listings aren’t coming on fast enough. And it’s possible the climbing home prices that we’ve seen since 2020 could start to level off in the spring if a few things come to pass that industry leaders are expecting.

First, if interest rates do continue to rise, some of the buyers might decide to press pause on their home search. That means fewer offers for sellers to choose from, and it makes it just that much more difficult for sellers to negotiate their ideal terms.

Second, a combination of those rising interest rates and more sellers entering the market in the busy spring selling season could cause a recipe for home price sales growth to level off.

Higher interest rates will mean buyers will have less flexibility to escalate their offers, and there will be more houses to make offers on, easing the competition.

The truth is, there hasn’t been a better time to be a seller. Historically, spring is the time to list. More buyers are entering the market in the spring, and it usually creates an ideal environment. But if you’re planning on listing your home for sale, and you can list now, you are at a huge advantage. So few homes are on the market that multiple offers are common. That doesn’t just make it more likely for the seller to get a high offer; it also puts them in a great position to negotiate additional terms that will benefit them in the long run — including protections if you haven’t found your next home.

Last year proved to be a challenging and rewarding year in real estate. I’m so honored I was able to guide my clients through the process of selling a home or finding their next. If you’re thinking about what a move in 2022 could look like for you, let’s grab a coffee or set up a time to connect.

 

Neda Perrina

206-218-8589

neda.perrina@rsir.com