Seattle is one of the fastest growing cities in the country, and the influx of people has set the real estate market on fire. We’ve all read about the bidding wars, with offers far exceeding the asking price. As a result of this fervent buying and selling, 2017 came and went, leaving the Seattle metro area with a 20 percent lower inventory of homes for sale.
June brought good news to Seattle’s real estate market, though, with a 73.5 percent increase in inventory since last year. Last month was the first time since September 2016 that this many homes have been available.
What Caused the Increase
Seattle house prices have been trending upwards ever since the market recovered from the bubble that burst in 2007. People are still moving to the area, and the population has been steadily growing since the nineties. With rising prices and demand, why is availability increasing? Industry experts say that houses are sitting unsold for longer than usual. This change is largely due to the price inflation as well as rising interest rates, which disqualify many buyers from the area mortgages.
This relaxation of the frenzied pace allows buyers to take more time in choosing their homes, and sellers are responding with more listings. The president and COO of Coldwell Banker Bain, Mike Grady, adds that international buyers are slowing down, as “China continues to make taking cash out of China more difficult."
Months of supply (MOS) is a metric used to determine how the real estate market leans, either toward the buyer or the seller. MOS is calculated by dividing the total number of homes on the market by how many are sold in one month. A balanced market, versus one that’s more favorable for sellers or buyers, is one that has a MOS of three to six months, affordable interest rates, and less volatility. Seattle — with its less than two months of inventory, rising house prices, and bidding wars — is still very much a seller’s market.
The increase in inventory is undoubtedly a boon for people in search of a home, but the market still has a way to go before it can be considered balanced. What all of this means is that while the inventory of homes stays lower than average, and the demand for houses continues, prices will keep rising in Seattle. The relaxation that is happening right now does take some of the pressure off of buyers, though, allowing more time to shop around and put more thought into what they can realistically afford. Grady says that instead of having an hour to make an offer, buyers maybe have a day now.
What This Means for Buyers
Though the market still favors sellers, it shows signs of softening a bit, if only for the summer months when more houses are typically listed. Realtors forecast that now until October is the optimal time for buyers to get out there and shop for homes, as they’ll see a little more selection and an easing up on the competition. Prices are still high and show no signs of coming down, thanks in part to the influx of people that companies such as Amazon have drawn.
The bottom line is that the squeeze is on in Seattle, and though the frenzy has relaxed a little, having knowledgeable and experienced realtors can help ease that pressure.