With each new phase of the post-pandemic world, we’ve been told there’s a new normal. Our new normal in Seattle real estate is absolutely all over the place.
At first glance, the data tells us we’re in a fast-charging seller's market. Real estate analysts peg a neutral market as four to six months of inventory. In the last six months, our Seattle neighborhoods have seen 619 sales, with 295 active listings. We have about two months of inventory, which indicates a strong seller’s market.
However, comparing January to July to the same period in 2022, we’re down 34 percent in total sales in 2023. Yet the pace of the market is breakneck. There are fewer real estate transactions because there are simply fewer homes for sale.
But when you dig deeper, there’s more the data can tell us. If you’re buying or selling a home priced at $2 million or lower, it’s a battle zone, despite interest rates being higher than they were in the first six months of 2022. We’re seeing a low inventory of available homes, sellers getting multiple offers, buyers waiving contingencies, and cash offers getting snapped up. It's creating hysteria and stress on almost every buyer.
At the upper edges of the market, however, things are calmer and slower going. Houses sit on the market longer, and buyers have more of an edge.
Navigating and succeeding as buyers or sellers depends on your price point.
In the trenches
Homes under $2 million in our neighborhoods are highly desirable and the low inventory makes it highly competitive. In early July, a home here was listed at $1.5 million and received a whopping 34 offers in almost no time.
In another case, a home that had been under contract returned to the market (the buyers were no-shows at settlement, forfeiting their earnest money). It had three offers on the first day back on the market.
That doesn’t mean, however, sellers can stick a “for sale” sign in the yard and get the price they want. This landscape has changed.
There’s a new breed of buyer, those who are looking for their first home or upsizing and looking to build wealth. They’re demanding a turnkey experience. Many of these buyers need to see a home staged and furnished — an empty home or a diamond in the rough isn’t on their list of wants. One set of buyers asked if they could buy the furniture the stager used because they liked it just the way it was and did not have an interest in shopping for furniture… (the stager declined that offer).
If you’re selling now — or planning to list soon — in this price range, you have to show buyers a move-in ready home. That means landscaping, deep cleaning, repairing, painting, staging, and presenting the home at its best. You’ll also be vying for those vendors with homeowners who are staying put and are also tackling home improvement projects. I contacted a painting company I’ve used before and the schedule was booked out until next year. Another experienced painter was available and got the job done, but the competition is stiff. Keep in mind, that money you spend on prep will come back to you (and more) when you sell. It also helps to have a broker on your side who has a network of contacts who can get the jobs done.
If you’re trying to buy in this price range, have your financing buttoned up and ready to go. You need to be fully underwritten and approved so you and your lender can move fast. If you have cash on hand, this is the time to use it — I had buyers get their home because they could come in with all cash and could close in seven days, even though their offer was lower than the competition’s.
It’s a hysterical market in this price range. To succeed, you have to stay calm and cool. Have an experienced broker on your side, one who won’t give in to the hysteria, and be desperate to make a deal because his or her transactions are down. Find the one who will represent your best interests at all times, can lead reasonable negotiations, and bring in the help you need from their network.
At the upper end
The upper end of the market is quieter, though it’s active when the home is right. Buyers looking above $2 million have more breathing room and a slower pace. There’s more room for negotiation because there’s less competition to buy these homes. I have a beautiful home on the market listed for $9 million. For 30 days, it’s had two to three showings a week, but buyers are taking their time.
If you’re selling in this range, be patient and open to negotiation.
Be prepared for change
Wherever you are in this housing market, understand that it can be a roller-coaster ride. Conditions change weekly, even daily. To make the most of your investment in your home, you need an experienced broker, one who’s been successful in up, and down, markets over time. One who understands your needs and how they relate to what’s happening now, not last month or year.
My team and I work with our clients to give them the best advantages for their unique wants and needs. We rely on our collective experience and what the data tells us. My office, team, and home are here in Madison Park, and we love helping our neighbors make the right moves for them and their future. If you’ve got any questions about navigating this real estate market, let’s set up a time to talk.
Chris Sudore is a Madison Park resident and Managing Broker Coldwell Banker Bain | Global Luxury. Reach him at KingCountyEstates.com or at Chris@KingCountyEstates.com.