The real estate market has certainly changed over the past year.
A year ago, inventory was painfully low. Looking at emails from the fall of 2017, we had clients looking for homes on the Eastside around $700-$800K and there were literally just a handful of homes available in Issaquah and Bellevue. Most listings went pending within a week with multiple offers. We would often get emails about the same properties from multiple friends / clients.
Fast forward to today, as of this writing, if I were to do a search for 3+ bedroom homes for under $800K in Issaquah and Bellevue, there are 99 active listings and just 35 pending listings.
So what does that mean?
We tend to use terms like seller’s market or buyer’s market. It’s been a seller’s market for so long that the swing is catching some people off guard. I actually think it’s pretty balanced right now. There are definitely sellers out there that are willing to look at any offers, but for the most part, areas such as Mercer Island, downtown Bellevue, South Cove (Issaquah), Lakemont (Bellevue), are still very sought after and the sellers are willing to hold on for that buyer to come along who is willing to pay the asking price.
So what happened?
Things seemed to be trending this way for a couple of months. Earlier in the summer, we would see one property get 10+ offers, and then a similar property a month later would get 3 offers, and then another similar property would later get 1 offer. But over the past month, the buyers just stopped. They stopped showing up to open houses, stopped reaching out about new properties, stopped replying to our emails about new listings. I think a lot of them are fed up with the way sellers were treating them for the past several years. They’re fed up with the increasing prices, multiple offers, and competition with other buyers.
My biggest concern about this, as a real estate agent, is that this type of market is exactly what a lot of our buyers were waiting for.
A lot of this is typical, and some of the newer agents just aren’t used to it yet. A natural slowdown happens in real estate when kids go back to school (because parents don’t want to move during the school year), the weather cools down, days get shorter, people think about spending their money elsewhere (due to the holidays), and usually fewer homes are available on the market.
The fall slowdown never happened the past several years because buyers were still fighting for the few listings that were available. And a lot of them thought, “It’s fall, there’s still competition but there’s less competition compared to spring and summer, so we’re going to keep looking year round.”
So what’s next?
There’s no reason to think the market will crash or will stay slow like this. The Seattle job market is still strong, and people are still moving to the region. Interest rates are still low compared to what they’ve historically been. My guess is that some sellers will just take their listings off for the winter and wait to relist in the spring. We’re not getting a sense of desperation from most sellers. And it’s not like mortgages aren’t being defaulted in record numbers.
We are seeing quite a few price drops. And we’re also seeing many homes stay on the market longer.
If you have been thinking about real estate, it is one of the rare moments in the recent Seattle market where the buyers have a little more control over what goes on. Inventory is still relatively low when looking at history.
I would take advantage of it and go take a look at some homes. If you’re not locked into a lease or some other commitment, it would be a great time to find your first home. For others, it might also be a great opportunity to upgrade to a new home, or find an investment property.