So things have changed a bit since the end of Spring.  No doubt about it, homes are taking longer to sell, price drops are becoming common and buyers have become, dare I say…picky.  What do the numbers say you ask?  Here is a quick snapshot of some key figures year over year:

Eastside

Total inventory 1794 – up 86.2% year over year

Average days on market before accepting an offer 24

Seattle

Total inventory 860 – up 101.80% year over year

Average days on market before accepting an offer 18

King County

Average sale price 2017 - $756,102

Average sale price 2018 - $730,002

Decline of 3.4%

Snohomish County

Average sale price 2017 - $674,408

Average sale price 2018 - $581,000

Decline of 13.85%

What kind of market is this?

What some are calling a declining market, I would choose to call a more balanced one.  I get it, if you are selling your home, you want 5 offers, escalator clauses, post-closing possession and a nice love letter from the buyer, right?  However, if you are a seller who is looking to also purchase in this market, be careful what you ask for.  After all, what happens when you become the buyer?  The answer, is that sellers haven’t wanted any part of it and this is a big reason why our inventory has been so low.

In markets like we have had over the last few years, sellers are apprehensive to put their home on the market, not because they won’t get great value, but because they do not want to become buyers.  The prospect of selling your home, without a place to land is really scary.  Historically, homeowners move every 5 – 7 years.  This natural inventory turn, coupled with new construction, has provided the balance of our available inventory.  Unfortunately, in our hyper-escalating market, this resale inventory has been nonexistent.  Rather than sell, owners have been remodeling or making their current living situations work. 

A contingent offer, are you kidding me???

As the market has lost some velocity, those who are looking to sell and purchase can engage the market with more confidence.  One mechanism that helps sellers overcome the fear of being homeless is the contingent offer.  Seller/buyers can identify a home that they are interested in and make an offer that is contingent on their home selling.  If their home doesn’t sell, the perspective buyer just stays where they are.  In the last 6 months, I have written and received more contingent offers than in the past 5 years combined.  Contingent offers in essence “create” inventory and their re-emergence is an extremely positive thing for our market moving forward.

In summary

Everyone has an opinion on where things are headed.  Since this is my blog, I guess I will leave you with mine.  The key factors that drive our local real estate market are employment and scarcity of supply.  Companies like Amazon, Microsoft, and Boeing, just to name a few, continue to import highly qualified and well compensated employees.  To put it another way, the population of our region is growing and will likely to continue to grow into the future.  Due to geographic factors and urban growth restrictions, our inventory of homes is not going to grow at near the pace necessary to meet the increasing demand.  I’m no economist, but even I remember my Macro Economics classes back at the University of Puget Sound.  Low supply and increasing demand drives prices up.  If it were me, I would make your contingent offers while you still have the chance.

Please call us if we can be of service to you or someone you know.

Be Real,

Blair