We had a great show on June 11 and considered the real estate news that floods our inboxes daily. Sometimes those headlines are a bit misleading, so let's consider how to understand the media's messages.
Let's dive into the headlines:
HEADLINE NUMBER ONE: Seattle Home Prices Show Mixed Trends
In 2022, Seattle's real estate market prices reached their peak in May, with prices gradually declining through December. The market experienced this downturn due to rising interest rates. Although have been some declines when comparing prices from January 2023 to the previous year, the trend has started to shift upward since May.
January 2023-May 2023: Home prices are on the rise, with prices in 26 counties showing a 100.9% list/closed price ratio. Multiple offers are becoming common again.
Truth: Prices are not tumbling—they are actually experiencing an upward trend.
Takeaway: If you are waiting for prices to drop, it might be a long wait.
HEADLINE NUMBER TWO: Low Inventory Challenges the Market (currently less than two months of inventory)
Truth: The lack of available properties and increased buyer demand have reduced the time houses spend on the market from around 34 days to less than 7. Multiple offers are now commonplace for homes priced under a million dollars.
Takeaway: Is there a strategy for negotiating price reductions or closing costs? You can start negotiating more with sellers after a home has been on the market for between 2-4 weeks. Some buyers seek a price reduction or closing cost credit.
HEADLINE BONUS: Beware of Zombie Mortgages!
Some homeowners may recall the ease of obtaining loans and second mortgages in the early-mid 2000s, which eventually contributed to a housing collapse. Those who chose to stay in their homes without paying the second mortgage are now facing potential liens on their title when they wish to sell. These lingering debts are referred to as Zombie Mortgages, as they can resurface years later. Contact a real estate attorney for guidance.
HEADLINE NUMBER THREE: Stabilized Interest Rates
Interest rates have stabilized with most mortgages running between 6-7%. Considering the current low inventory producing multiple offers, if interest rates decrease, more buyers are likely to enter the market, and there is no indication of a significant increase in inventory.
Takeaway: Around 5 million potential buyers are currently waiting on the sidelines. The return of these buyers could impact home prices. If you have the opportunity to buy now and refinance later, it may be advantageous for your financial "interest," pun intended. These tidbits of just the tip of the real estate iceberg. Check out the podcast for SO MUCH MORE.