Balance

What an interesting season it’s been in the Real Estate market here in Western WA.  Interest rates sure have put a damper on Buyer demand in comparison to recent years, haven’t they?!  Let’s piggyback off of last month’s Blog Post about the pro’s and con’s of the current market conditions, with interest rates sitting at their current numbers.

We often hear from Buyers that a co-worker or friend of a friend whispered to them something to the effect of “You can always get a deal on a house in the Fall/Winter market.”  While that’s not necessarily true, it’s not completely false, either.  We talk a lot about market conditions, and how their volatility can quickly sway the market in any direction. For example, in November of 2020, we had 6 clients under contract to buy or sell a house and the average sold price was anywhere from 8-15% above the home’s original list price. Unless a property was in substantial disrepair, overpriced or it was a condo (condo’s weren’t performing as well as single-family homes in terms of Buyer demand), this was a common recurrence throughout that season, extending into 2021 and 2022.

Fast forward to Fall/Winter of 2023 and we are singing a very different tune.  This is where current market conditions have favored our Buyers.  We call this a more “Balanced” market. This season, we were able to negotiate offer terms like final sold price and closing costs in favor of our Buyers, and even squeeze in a few repair requests because of an inspection contingency.  It’s been a very long time since Seller repairs were included in our clients’ contracts!  How did this happen?  Simply put, there are fewer Buyers competing for homes because interest rates are still higher than they’ve been in recent years.  With so many Buyers waiting until interest rates drop before they reignite their search, there’s been a noticeable opportunity for fair negotiations.

For homeowners considering whether or not to finish the basement for more space, or prepare to list your home, you should know that exceptional homes are still selling at or above list price (~ 5% above list price, on average) and we’re still seeing offer review dates on some new listings.  But what is an exceptional home?  They are turn-key properties with clean inspection reports, great staging and a list price that represents a fair market value for the market we’re currently in.  Buyers are still willing to compete for homes that are move-in ready, rather than homes that need substantial updates or costly repairs.  Spending a couple grand on new carpet or investing a little extra on the exterior paint could very well make the difference in a full price offer vs. a listing that gets passed up. We know that major media headlines may be telling you that the sky is falling in the real estate market, but Seattle’s economy is still holding strong, Sellers! And we all know by now that doom = clicks.  If you want the details on your local market, we’re happy to get you relevant answers.

While we’re hopeful for rates to trickle down, the FED isn’t exactly delivering any solid promises for the near future.  Every few months it’s a glimmer of hope and then a vague back peddle to the tune of “maybe, maybe not.” Disclaimer: We really, and I mean reeeeeaaalllly dislike a sales pitch, but in spite of the risk of sounding salesy… As a Buyer, you may actually have more power to negotiate now than in the Spring market when we usually see a big market shift.  Even if interest rates don’t budge between now and March, you’ll still be competing against a smaller pool of eager house-hunters before Spring kicks in.

Balance is good!  Balance brings opportunity.  Balance helps to bring perspective and manageable expectations.  Here’s hoping for continued balance as we navigate the Holiday season and prepare for what’s next.

Cheers!

-Joe & Ashli Haglund