The national news has a trending topic that real estate is down. Is this an economic fact affecting everyone in the nation or is housing being affected in certain local markets due to weather or other local events?
Seattle has picked up after the holiday season and while more listings are hitting the market it is still a sellers market. I have met many buyers who are specifically looking for three bedroom, two bath homes – often hoping for three bedrooms and one bath on the same floor.
As they are hard to find some buyers are being less particular about the neighborhood and just trying to satisfy their criteria.
Other buyers are looking to be close to a school or medical center and so their search might take a bit longer.
I have run a few reports today that show the active, pending and sold listings in the Seattle area. I included Queen Anne/Magnolia and went as far north as Shoreline, east to Lake Forest Park and as far south as Capitol Hill/Madrona.
Comparative Market Analysis of homes between 400-600k, three bedrooms and two baths in the Seattle area.
Statistical Market Analysis of Seattle between 400-500k, two plus bedrooms and bathrooms.
Area Market Survey of listings between 400-500k.
Also affecting today’s market is a rise in interest rates and new stricter rules on lending that have been created to make sure that a buyer can pay back a mortgage. These rules protect both the buyer and the lender but being more restrictive are creating a situation where some buyers might have qualified in December but aren’t qualifying today.
Additionally, the Fed spoke yesterday and they are cutting back on the purchase of mortgage backed securities by another 10 billion per month for a total of 20 billion per month. Interestingly this hasn’t affected interest rates in a negative way. The rate for a 30 year fixed today is 4.50% paying zero points up to a loan amount of $417K.
Jobless claims came in a bit higher than expected this week so this may be the reason why rates have stayed on the lower side.
Our economy is still showing signs of weakness here and there which overall is keeping rates under 5% for the time being.
It is a very competitive market out there as you all know! Julia, our in-house lender at Landover, will underwrite with a “To Be Determined” address to help buyers be more competitive. An official approval letter vs. a pre-approval letter can make a huge difference.
While it is a seller’s market, sellers still need to be careful of overpricing. I often hear people talk about a strategy of starting high. Sometimes this is because a seller wants or needs to get a certain amount from a home to pay off a mortgage or to have the buying power to purchase a new home. Some think buyers can then make a lower offer perhaps when asking for a repair.
We talk about seller optimism versus market realism. The market sets the price and our job as Realtors is to prepare a market analysis to show you where your property sits as compared to other properties.
If the property is overpriced the public perception that something is wrong, however when it is priced correctly to the market then the listing will get multiple offers.
One compromise is to list five percent above the price pulled from the market analysis and if the property doesn’t sell after one month, drop the price by five percent.
2014 is off to a great start in real estate – all we need now are a few more listings on the market to satisfy the buyer demand!