For the first time in nearly a decade, Seattle’s housing market is in flux. The market cooling off faster than any other city in the country.
All reports from Lake & Company brokers indicate that there is absolutely a shift in the market. Interest rates are a clear driver of this change. The latest Northwest MLS shows 6,435 pending sales last month, and about the same volume (6,464) of closed sales. Both figures were down from the year-ago totals, with pending sales dropping about 39% and closings declining
around 35%. Also commenting on interest rates was the National Association of REALTORS®, which noted the slight dip in mortgage rates this week despite the Federal Reserve approving another 0.75% rate hike for the fourth time this year. NAR cited Freddie Mac’s 30-year fixed mortgage rate that fell to 6.95%, down from 7.08% the previous week. “It seems that rates have already priced in some of the effects of the Fed’s higher interest rates. It is also promising that this was likely the last rate hike of this magnitude, as indicated by the Fed,” wrote Nadia Evangelou, NAR’s senior economist and director of forecasting. Evangelou also speculated “a return to the sky-high interest rates of the 1980s isn’t likely in today’s economy” and drew comparisons to payments now with those of 40 years ago in today’s money. “In real terms, after adjusting the median home price for inflation, the monthly mortgage payment was about $450 higher in 1982 than it is now,” she wrote in a blog, adding, “If mortgage rates were currently 9% the monthly mortgage payment would be comparable to 1982 rates. Thus, in real values, current buyers pay less for their home purchase than buyers who purchased their home 40 years ago, although home prices are significantly higher now.”
Open houses remain active indicating there are Buyers still looking and that they may see this new market as an opportunity. With increased inventory and longer market times, Buyers are seeing more options than they have for many years. Another Buyer friendly shift is the ability to include many of the safeguards Buyers were forced to eliminate before. Including inspection and financing contingencies.
Combine these benefits with creative mortgage options like interest rate buy-downs or adjustable-rate mortgages, previously frustrated Buyers are seeing an opportunity to move into a lifestyle they had hoped for. Some
Sellers fearful of further interest rate hikes and increased Spring competition
are seeing this moment as the time to sell. Sellers must pay close attention to price and condition when presenting the home to the market. What took place on your street six months ago is no longer applicable. Education is important for Buyers also.
Get educated by your Broker as to market conditions in the specific area you are looking. While the theme is a Buyer friendly market, there are still some homes that receive multiple offers due to their style, location, or special features.
If you or someone you know is thinking of buying or selling in the next year, it is more important than ever to have an experienced broker. With over 35 years of selling real estate in the Greater Seattle area, in both booming and recessive markets, I have the knowledge, experience and confidence to navigate the market and help my clients achieve their real estate goals.
I am always available for free, no pressure consulatations. Call, text or email me! And, please pass along my contact information to anyone you know who could benefit from my services.