The year got off to a hot start, and as we approach summer, the market is still expected to favor home sellers, though there may be some welcomed relief for home buyers. While there doesn’t appear to be a drastic cooldown on the horizon, there are advantages for both buyers and sellers to jump into the market sooner rather than later.
Where we’ve been
Anemic inventory has been a problem across the nation — and Seattle was no exception. While the first quarter of the year in Seattle typically starts slow and gains momentum as the season progresses, the homes being listed to market couldn’t keep up with demand. In the first quarter, there were 15 percent fewer homes listed for sale than in first quarter 2020. Fueled by low interest rates and the additional lifestyle and economic factors stemming from the pandemic, buyers entered the market en masse to try and find their dream home.
The homeowners that listed during this time were often rewarded with multiple offers within a few days. Overall, single-family homes were on the market on average only 26 days, compared with 36 and 47 days in 2020 and 2019, respectively. Median sales prices continued their upward trajectory, up 8.28 percent from this time last year, hovering at $850,000. With a scant .8 months of inventory, it was certainly a sellers market.
These conditions won’t last forever
Already, we’ve seen more inventory available in the second quarter, and following the trend lines from year to year, that’s to be expected.
Spring and summer are popular times to list a home for sale, and proposed capital gains taxes are causing some to sell now. There has been discussion of a potential 7 percent tax on gains over $250,000 for Washington state and, with property values soaring, many residences throughout our region would fall subject to the tax.
With slightly more inventory available, multiple offer situations may be less likely, or, if multiple offers do occur, it may be in fewer numbers, with less-aggressive price escalations and reduced terms that tend to favor sellers.
Buyer fatigue is also a concern right now — as many buyers found themselves on the losing end of many multiple-offer situations during the spring. That said, many buyers are feeling recharged with the start of a new season and are choosing to stay engaged.
Why you want to take advantage now
Low interest rates: They have certainly been a driver for buyers to enter the market since the beginning of the pandemic. While there was a slight uptick in rates in the early part of the year, they soon went back down to the near 3 percent.
Concerns over inflation are on the horizon, however, and if the Fed sees it as a real threat, those interest rates will start ticking back up quicker than industry analysts previously speculated.
For buyers, entering the market now will mean securing a low rate.
For sellers, capturing this active audience, before they burn out and before interest rates start to tick up, puts you at an ideal advantage when it comes to listing your home.
— John Madrid
Realogics Sotheby’s International Realty, Madison Park