4th of July has come and gone, meaning, summer in Seattle has begun!
It also means we’ve made it through the first two quarters of 2018. Which is a good time to take a look at the past 6 months and see what we can glean moving forward. So, here goes…
2018 started off like a rocket in the local real estate market. The typical “spring frenzy” was in full swing by January 5th. This continued through February, March and April. However, we experienced a significant shift come May and June.
What changed exactly?
•Days on market increased. What once sold in 5 days (or less) is now sitting past the 2 to 3-week mark and in some cases even longer.
•Price reductions. Yep, you heard that correctly. According to the Seattle Times article on July 5th, 32% of active listings had a price decrease.
•More Inventory. That same Seattle Times article stated the increase to be 43% over June of last year.
What factored into this modification? We think it’s a product of a few things:
•Increased inventory is a big one. Buyers now have more to choose from and can be slightly more measured in their decision. That’s why you’re seeing longer days-on-market.
•Prices pushed to the max! At some point, there’s going to be a time when Buyers say “no way” and we may have just hit the ceiling.
•Interest rates have risen. If you aren’t paying cash the interest rate will always be important. Though still low, even small increases can change the price point for a Buyer.
•News of the day. This isn’t as easy to gauge as days-on-market or pricing. But, the recent Seattle Head Tax debate and upcoming downtown LID tax have made their way into the conversation. See info for LID tax link here.
•Fewer foreign Buyers. This is especially significant for Sellers in Bellevue, Issaquah and other east-side communities.
What should we expect moving forward?
•It’s NOT doom and gloom! Let’s be honest, we knew this was coming. And even though we see prices coming down and days-on-market going up, it’s nowhere near catastrophic proportions. In fact, it’s the market correcting from INSANITY to a mere palpable stress level.
•Good news for Buyers. The buying process may not be so heartbreaking after all!
•Seller expectations. This is still a Sellers’ market but the level of expectation needs a re-calibration. The fundamentals are the same – price it right, have a strategy and make your property look as good as possible. There may not be 7 offers in 48 hours but your home will certainly sell for a great price.
As always, we’re here to answer any questions and discuss your real estate needs. Have a great summer!
-Kathy and Tatum