Matt Holmes

Matt Holmes

Co-founder at CoBuy
Global explorer. Dual US/UK national. Former investment banker. Real estate enthusiast. Rock&roll lover.
Matt Holmes

Well hello, 2018!

We surveyed 20 top real estate pros from our network of agents, loan officers, and builders in and around Seattle to get the skinny on what’s going down in the Seattle housing market.  Data is a funny thing – often sliced, diced, and compiled to suit a purpose.  Our goal is simple: ask people who are well-positioned in the market what they’re seeing.  We asked 10 multiple choice questions + 1 open-ended question, and we’ll do the same next month.  

To summarize the Seattle housing market across the Metro region in one word: “hot”.

After a seasonal slow down at the end of 2017, we have a hangover of buyers who deferred their home search late last year plus new folks entering the market to buy a home.  Unfortunately for buyers, the inventory situation of new homes coming on the market doesn’t seem to be keeping pace. Competition for the inventory of homes on the market is increasing.  The word on the street is that this trend is likely to continue and home prices should rise over the coming months.

We heard some crazy stories from industry professionals!  One agent shared that a tear-down that came on the market at $900k in Clyde Hill received 20 offers and went for over $1.3 million, while a condo in Bothell with no review dates received multiple offers within 48 hours before selling.  Another industry veteran cited two prominent buyer groups as coming out in full force since the start of the year: young tech professionals (surprise, surprise) and aspirational married couples with budgets just shy of the $1 million mark who are being forced further and further out.  This theme was confirmed by another respondent, who noted he is seeing more all-cash deals outside the metro areas than he has in the past.  Consistent themes were cash offers, bigger budgets, constrained inventory, and high traffic at open houses.

What does this mean for anyone looking to buy a home across the Puget Sound over the coming months?  Be prepared.  In a market characterized by bidding wars and cash offers, it’s important to have your ducks in a row beforehand.  The savvy homebuyer can take steps to save time and energy while positioning themselves for success:

Establish who is party to the purchase and what they bring to the table in terms of financial contributions to both fixed costs (cash available for down payment + closing costs) and projected contributions to monthly housing expenditure (principal + interest on the mortgage, property taxes, homeowners’ insurance, and potentially private mortgage insurance).   You’ll also want to have an idea of where the parties to the transaction stand on the credit spectrum.  Free apps are helpful but do not reflect the FICO score that most lenders will use to assess your ability to repay.

Decide on a budget.  A budget is an equation: it depends on the inputs (see above).

Determine what you’re looking for in a property.  What are the key requirements in terms of type of home, size, location, amenities, etc.

Build consensus.  Whether you are buying with your spouse, your partner, a friend, or family members, it’s important to get on the same page about key aspects of owning a home together.  How long do you intend to own the property?  How will ownership be affected in the event of a move?  What happens if one of you is laid off from your job?

Secure pre-approval prior to kicking off the home search.  Viewing properties ahead of pre-approval may be fun, but warning.  Don’t get too attached!  We have seen more than a few cases where buyers go to an open house and fall in love with a home.  No pre-approval = not ready to make an offer.  

Avoid life changes.  Changing jobs, taking on new debt, or freezing your credit will have financial implications that could jeopardize your status with the lender.  Contact your lender to communicate any such circumstance ASAP.

Key Take-aways

Prices: most respondents expect home prices to increase over the next 3 months.

Competition: most respondents see the market as more competitive versus last month.

Inventory: opinions on supply were mixed, though consensus pointed to tighter inventory versus last month.

Traffic: buyer traffic is clearly up as pent-up demand came back to market after the holidays.

Offers: most buyers are placing 3-5 offers on homes before their offer is accepted and respondents indicated the number of offers buyers must make before an offer is accepted is slightly up.  At the same time, two-thirds of respondents said new home listings are receiving 6 or more offers.

Seller concessions: increasingly rare.

Appraisals: 35% of those polled reported seeing appraisals come in low “sometimes” or “often”.

Are you seeing or hearing of seller concessions (closing costs, repairs/replacements, etc.)?

How frequently do you see or hear of appraisals coming in low?

For more info on how to get in on the housing market, check out CoBuy.  Our online platform makes it easy to buy a home with friends, family, or a loved one.  We guide you through the process from start to finish, assisting with planning, joint financing, and preparing a co-ownership agreement.

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