Call it a convergence of events, harmonic happenstance or good fortune, but homeowners thinking of selling probably never had it so good. The market is experiencing a frenzy of activity, with buyers chasing homes amid a severe shortage of inventory in most sections of King County and beyond.
We’ve said it before on this blog: There is plenty of demand and scarce supply. What a wonderful opportunity to be a homeowner looking to sell.
Digging into the data, there are 48% fewer single-family homes on the market in King County (2,428, as of July 1) compared with a year ago and even less than in May (2,513) when stay-home orders were largely in place. This has sparked sharp competition for certain homes, including a report of a seller receiving 30 offers (many with escalation clauses) on a Phinney Ridge-area home in June that led to a final sale well north of $200,000 above list price.
Owners of single-family homes in good condition should realize that the only certainty in residential real estate is uncertainty. (A pandemic that shocked – and then mostly shuttered – the world is a prime example.) That’s why we are telling those on the fence to consider selling now or possibly miss out on a rare opportunity. Here are just five reasons to ponder:
- Demand is stronger now than in years
The pandemic and stay-home orders forced thousands of buyers to the sidelines in our region. The pause in residential real estate in March/April was unprecedented. Buyers were primed to embark on their springtime search when the proverbial rug was pulled out from underneath them. Now, they are back in droves, oftentimes snapping up homes within a few days of being on the market. More buyers reached mutual acceptance (Pending) with sellers this June than June 2019 (by 11% each in King County and Seattle) – all while existing inventory was nearly half as last year.
- Fewer days on the market
A resale residential listing (as opposed to a new construction home) is on the market a median 10 days in our county, down from 13 last autumn, according to Northwest MLS data. (It reached its lowest-ever number of days – 7 – in the extreme-selling frenzy of spring 2018.) That’s not long in “real estate time.” In fact, we are seeing a large number of sellers today formally request all offers be submitted within a week – sometimes less – and buyers are responding with highest-and-best offers. Can you say FOMO? May the best buyer win!
- Home prices hit record highs
With “bare-cupboard” inventory comes higher prices – and sellers are getting top dollar for their homes. The median final sales price for all home types in King County for January 2020 was $590,000. Through June, it was $675,000, or 14% higher in just a half-year. The average price of a home was even higher – $812,000 as of July 1 – the first time this category shattered $800K in the county. This may come as a surprise to many sellers who may have expected a softening of the market amid a pandemic and recession but the numbers – softening downtown Seattle condo activity, notwithstanding – speak otherwise.
- Mortgage rates flirt with all-time lows
It’s difficult to ignore our low interest rates on all kinds of financial instruments. The 10-year Treasury, for example, is trading on the bond market at around 0.6% – unheard of only a year ago when it was around 2.0%. And mortgage rates have been on a slow decline since mid-March when the average rate for a 30-year conventional loan was 3.65%, according to Freddie Mac. As of July 16, the average rate was a record-low 2.98% nationally (compared with 3.81% a year ago) – fantastic news for buyers and sellers alike. Mortgage rates have fallen to record lows at least six times since the start of the coronavirus outbreak and most indications suggest the decline will continue.
- Going virtual can limit in-person home activity
We have heard anecdotally that some owners are uncertain about the safety of putting their home on the market amid a health crisis. That’s a fair concern.
There is no doubt real estate professionals will want to resume open house events once the county is in Phase 4. That may take several more months and possibly not until a vaccine is developed and widely administered.
The safety and health of owners, their loved ones and those who visit are of prime concern. Protocols are in place both on the federal and state level, as well as within our industry to ensure all people are kept safe. With so many guidelines in place, sellers are arguably safer listing a home today than before.
To reduce the frequency of guests to the home, we have instituted a strict screening process to make sure only healthy and genuine buyers are visiting in person. It also means being creative with our marketing and promotion, including staging the home virtually (images of furniture, rugs and artwork added to photos of empty rooms), as well as conducting live open house events through video-conferencing or social-media platforms.
While some owners remain on the fence, others are moving forward with their desires and dreams. They are selling while the going is good.
This is a seller’s paradise. What are you waiting for? Give me a call!