Prospective homebuyers hoping to get a home at a discount during the winter months are finding like minded buyers competing for the same properties. Although inventory in many areas has increased over last year there remains a limited selection, especially in areas close to employment centers like downtowns Seattle and Bellevue and those in top ranked school districts.
November sales activity fell for the first time in 29 months below the year before sales. Does this signal a shift in the market? It is too soon to say, but most likely it is as a result of multiple factors at play: continued low inventory, increased interest rates and unusually high numbers in sales year over year in those last two plus years before.
Owner occupied home buyers are competing with foreign buyers and investors who are paying cash. In the end, cash from a financed loan or cash from the buyers savings means the same to a seller, but with a financed transaction the seller is at risk of the borrower being denied the loan and the sale failing to close forcing the home back on the market and the seller’s moving plans delayed.
Historically, winter is a good time to buy because there are fewer buyers in the market. Seattle is outpacing most other cities in job growth because of its combined mix of industries, technology, service and manufacturing. Seattle has added nearly four times more factory jobs than the rest of the US in the past two years, according to the Wall Street Journal. Many of these jobs are creating migration from other parts of the US and from areas outside the US. As a result, there are many buyers in the Puget Sound market.
Prices and interest rates continue to increase as do the lending requirements which are more stringent as a lingering result of the “meltdown” from poor lending standards that were rampant prior to 2007. Today a buyer must have a good credit score, a history of continued employment, money in the bank and proof of the ability to repay the loan. Contrary to many rumors, low down payment programs are still available. Those considering a purchase are advised to get preapproved prior to starting the home shopping process to increase the likelihood of success when presenting their offer to the seller. Additionally, they should be prepared to pay more than asking price and avoid looking at homes at or above their qualification price point.
Relying on their trusted John L. Scott advisor, a homebuyer or home seller can make the most of the winter months to beat the crowds that begin to build in January and tend to peak in April or May. Over time, real estate is a proven investment provided the property is not required to be liquidated short term. In King County, the market shows double digit appreciation over last year, a trend that is forecast to continue in 2014 as a result of continued lower inventory level. Now is a great time to consider a move in the market as a seller or a buyer. Give me a call to see if it is a good time for you!