There has been so much ‘talk’ in recent weeks about the slowing Seattle real estate market. I have received many questions about the market’s slow down, from the uptick in inventory, to why prices are being dropped on some homes. Let’s explore and clarify a few of these questions.
Statistically, August is a slower month in real estate. Many people take vacations, school is about to start, and the weather In Seattle is generally just perfect (we will ignore this past August and the heavy smoke from wildfires). Buyers, generally, are focused on these end-of-summer activities and not on purchasing a home. This August was different than past years because we have seen the largest number of homes to hit the market in the last three years, according the Northwest Multiple Listing Service. In fact, many homes that were placed on the market in July were still on the market in August. Buyers, for the first time in the past year could take their time when looking at a home. There is also a lower expectation that one must look at a home the day it is placed on the market, or consider waiving every contingency to place a competitive offer. According to Mike Rosenberg, Seattle Times real estate reporter, “Seattle home prices drop by $70,000 in three months as market continues to cool.” And the Northwest Multiple Listing Service states, “New monthly data out Friday shows median home prices across King County fell $30,000 in August from the month prior, the third straight month of declines. Countywide the median cost of a single-family house, now $669,000, is down by $57,000 since May.” So, with an influx of inventory, and the median price point falling, the market has slowed down a bit. Our market has also caught up with current local wages and salaries. Housing prices cannot continue to increase at the rates seen in recent months because many Seattleites cannot afford to buy a home if our wages are increasing only 4.9% annually.
Now that we know the market has slowed down a bit what does this mean for the seller? This means that the market is more stable. And, that a savvy seller is going to be pricing their home more realistically, with the expectation that there will not be as many multiple offers, and our housing may not continue to appreciate at the staggering rates we have seen in the recent past.
What does this mean for the buyer? Buyers will be to take more time when purchasing a home. There may be more ability to negotiate on price, or a buyer may actually be able to ask for repairs after an inspection.
All in all, I view the market shift as a healthy one. Buyers are able to purchase a home in a more thoughtful manner. And sellers still can get top dollar for their home if their price is determined in a strategic and realistic manner.