It has been a high-speed chase in the real estate market — in Seattle and elsewhere — for the past few years, with escalating prices, bidding wars and low inventory. The Federal Reserve tapped the brakes after the spring market with an increase in interest rates, and we saw an immediate slowdown in the home-buying frenzy.
In July, we saw 2.9 months of inventory in Seattle. In August, it nudged up to 3.6 months. Prior months showed only two to three weeks of available supply, with multiple offers on many houses. August’s inventory numbers put us in a weaker seller’s market. It’s still short of a neutral market, which analysts define as four to six months of housing inventory.
In our neighborhoods, there were 307 active listings and 112 at the time of writing this article in August. Even in the hyperactive markets, we always saw a bit of a slowdown in August, so it’s not unexpected or unwelcome.
We were due for a more normal cycle, and everyone — buyers and sellers — can catch their breath and regroup.
Traditionally, home sales increase in the fall as people return from vacation, school starts up, and everyone has a more predictable routine. They want to be in a new house in time for the holidays or by the end of the tax year.
We saw another pattern this summer. As The Fed fluctuated interest rates up and down, buyers reacted. Every dip to a lower rate and we’d get buyers calling to go out and see listings and other brokers calling to see our listings. Not as many calls after a raise. That’s going to change, though, as consumers get used to the new rates and confidence rises.
It’s important to remember that we’re coming out of a period of historically low mortgage rates. Depending on how long you’ve been a homeowner, you may remember rates in the high single digits or low double digits. In comparison, current mortgage rates are still very low.
Make a plan
The more moderate pace allows — and requires — you to be more methodical, whether you are buying or selling. Pick your broker wisely. Meet with several and interview them for the job. Ask about their experience and knowledge of your neighborhood.
We saw new brokers enter the profession during the last decade when the market was so hot that houses sold quickly and profitably. As the market tends toward neutral, having a seasoned broker who has been successful in more down periods will increase your chances of success.
If you’re selling
As a seller, ask how the broker will market your home to get the best results. Marketing savvy, negotiating skills and an established network within the industry are increasingly important. The right broker will provide the data you need to price your home for this market, not even last month’s. Understand that the time a house stays on the market increases as the price increases.
Take a long, honest look at your house. Consider curb appeal, the home’s exterior and your landscaping. Buyers can afford to be pickier, and for the best results, your house has to be in turnkey condition. You may need to paint, make repairs you’ve been putting off or declutter. This is another place where an experienced broker’s network of tradespeople or home stagers can help put you at the top of the list for services you may need. It’s not as easy as sticking a “For Sale” sign in the yard anymore. Be ready to negotiate and respond to inspections. You have to remove any objections to succeed.
Many homeowners who either needed more room for growing families or less space for empty nesting simply opted out of selling because there was a lowered chance of finding the right house to make the timing work. If you put off selling because inventory was so low that there wasn’t a reasonable expectation of finding a new house to buy, now is your time. The less-hectic pace allows upsizers or downsizers more options.
If you’re buying
Find a broker who can lead you through the process in a changing market. You’ve got more power now than buyers have had in the last few years and more time to make decisions. We’re back in a market where you can take the time to do your due diligence and use standard contingencies including inspections, appraisals and financing.
Get your finances in order. If you will be taking out a mortgage on your home, find a lender and get pre-approved. Again, experienced brokers can recommend lenders they’ve worked with before that will be well-suited for your situation.
While the market has changed, it's a good change. Buying or selling a property should not be a hysterical process. You may have questions, though, because your home is not just where you live. It's a big investment. If you have any questions or concerns about how the market has changed, what it means to you and the investment in your home, I'd love to talk to you. My team is one of the top real estate teams in the state. We've been successful in this market because we're willing to be flexible and do the work that others won't to get those wins for our clients. As a reminder, my home, my office and my team are focused here in Madison Park. If you'd like to set a time to talk through any matters involving real estate, my door is always open.
Madison Park Resident
Managing Broker Coldwell Banker Bain | Global Luxury