Seattle area housing market remains strong through April
Housing activity has remained strong despite what some would have thought was a sure death to the areas high flying housing market. While Covid19 has caused a disruption to life and work, buyers and sellers are active and coming to agreeable terms to complete a purchase and sales. Most parts of real estate are moving through the pipeline without major issue. Lenders are funding loans, inspections and appraisals are taking place, and all parties to a real estate transaction can do their job. With a few new tactics to stay healthy and less in person interaction, buyers and sellers are getting to the closing table on time. Serious and prepared buyers are taking advantage and patient sellers are being rewarded.
Are we in a repeat of 2008? – Indications say No!
The 2008 financial and housing crisis was just that, a housing crisis. It was caused by home mortgages provided without proper oversight or qualifications, homeowners over leveraging every bit of home value possible, lots of available housing to speculate on, and mortgage investments packaged to investors as “low risk” when they were anything but.
Today’s higher standards for borrowers with larger down payments, solid credit scores, qualified employment, and loan products with more scrutiny is helping prevent a repeat of 2008. There is also a housing shortage that cannot keep up with demand, especially in the greater Seattle area. The high costs of land, construction materials, labor, and regulation costs limits what builders can and are willing to build. With little new supply to meet demand, and strong financials and increased home equity, current value and desire for houses remains high.
Home Sales – Still going, just a slower pace
Buyers and sellers who planned to sell or purchase a home in the 1st quarter of the year stayed the course as the call to “shelter in place” began. Some just beginning the process took a step back to re-asses, catch their breath and decide what to do next, and are slowly re-emerging now that the news is not dire. With the days on market dropping by over 1/3, and mortgage applications for new home purchases trending upwards after bottoming out in the first weeks of April, indications are that housing is still in demand and buyers are finding homes they like.
Home Prices – Holding Steady(ish)
Pricing continues to stay and remain positive throughout the city. Historically March to April show a price growth as activity picks up steam, but currently prices appear to be rather stable with no visible over correction in either direction. First quarter (January – March) of the year started out strong with eager buyers and low inventory, increasing overall values. Current listing prices appear to be focused on attracting buyers interest and sellers are able to stick to their listed prices and some receive multiple offers. Values are riding the wave of Q1 home appreciation.
Inventory – More Opportunities
There are 50% less listings than last year, but understandably so. The absorption rate is decreasing, meaning there are more homes on the market than are being purchased as buyers wait for the home that fits their need. Roughly 6 months of inventory is considered a “balanced” market. Seattle has 2.1 months available, up from 1.8 months in March. Anything less than 6 months is considered a “sellers-market” as it has been for some time.
West Seattle Bridge – A loss for our region and community
As a West Seattle resident, and a real estate agent conducting over 80% of my business in the area, there is no denying the strain a lack of transportation in and out of the area is going to cause. This is a serious and unfortunate turn of events and I sympathize with those this will seriously affect. But people love West Seattle for what it offers, not what it does not.
West Seattle has access to beaches, waterfront, parks and a small town vibe like nothing else in the city. Being off the beaten path, with little need to leave “The Island” is one reason West Seattlites enjoy their neighborhood so much. The loss of the bridge might lower interest from some home buyers for a short period of time, but it creates opportunity for those that want to live here and understand the value.
A small number of homeowners who experience a serious burden getting to work, moving kids around the city for school or events, or a busy life outside of West Seattle are considering a move out of the area. But home buyers and residents that work further south (Tukwila, Renton, Kent, etc.) or work from home (expect to see more of this), use public transportation to and from downtown, and families looking to upsize or retirees looking to downsize, will continue to seek out West Seattle and the options available.
The long term repair or replacement options are still being studied, and everyone is waiting to see what is done next to ease the burden felt by residents and businesses.
If you are thinking of buying or selling in the next 12 months, and you have question or want insight to how to prepared for the market ahead, call me today at 425-766-4202.
We will focus on your goals, outline how I work with sellers the greatest ROI in the shortest amount of time on market, and how buyers can save time and money to win in a competitive market. If you think we are a fit, we can discuss your next strategic steps forward. Call me today at 425-766-4202 or via email at firstname.lastname@example.org.