(This is a sponsored story written by John Madrid, Managing Broker with John L. Scott Real Estate).
“A house, a house, my kingdom for a house”. If you are in the market for a new home you can probably empathize with Shakespeare’s King Richard III. Single-family homes, townhomes, and even condos are all in short supply throughout most the city.
For Northwest Seattle (including Ballard, Fremont, Green Lake, Phinney and Wallingford) there is now less than a 1 month supply of single-family home inventory which is definitely favoring home sellers with the result that homes are really hard to come by. We will continue to see more pre-inspections, multiple offers, and bidding wars on the fewer listings hitting the market.
Why the shortage of homes for sale? First, some home owners simply can’t sell since they have negative equity (they owe more than their home would sell for). Second, are home owners who can’t find a new home to upsize or downsize into that would allow them to put their existing home on the market. Third is that some home owners are either unaware of the improved market for sellers or they are content to stay in their current home rather than over extend themselves. Fourth, are owners betting on continued prices gains over the coming months and years. A final factor has been the significant slowdown in new construction, up until last year, that typically helps alleviate the demand for more housing stock.
In addition to a reduced supply, demand has picked up with the influx of new hires (Amazon, Microsoft, etc). There is also a general belief that home prices and interest rates have only one direction to move and that is up. Many renters have concluded that, with big jumps in rent, buying a home may be the wiser long term investment especially if they are able to lock in these historically low interest rates.
Home prices will continue to rise until there is more of supply/demand equilibrium. If you are looking for a home there are a couple potential silver linings over the coming weeks and months. First, is that we are entering the historically seasonal high point for new inventory. Second, is that interest rates aren’t expected to move significantly upward until the end of the year at the earliest.
More stats on other Seattle neighborhoods can be found at http://www.live206.com/seattle-area-market-update-c21537.html
Tip: The fewer contingences (i.e. finance, inspection) a home buyer has, the more attractive they are to a home seller, especially in multiple offer situations. Believe it or not, buyer “love letters” to sellers can swing things into a buyer’s favor, just don’t overdo it.
John Madrid is a Managing Broker with John L. Scott Real Estate – University Village and is a 2005-2012 Seattle Magazine “Five Star” Agent. His clients include both home buyers and sellers. He can be reached at 206-498-1880, firstname.lastname@example.org or www.live206.com.
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