They Are Back! Are You Ready?

All the papers seem to be writing about it, and even if you really don’t care it is hard to avoid seeing the signs popping up left and right. It pours in through my email and it seems to be the topic of discussion, at least with me. No, not talking about the election, even though I did get a bit annoyed when Dale Fonk left me his automated message number 76: “Hello, this is Dale Fonk running for State Senate, and I was wondering if you have voted yet…” But no, not talking about the election.

I am talking about the real estate market. I believe it is safe to say now, that the market has shifted and if you were to believe the headlines the dooms day is here. But is it really? The answer is… No. Not dooms day but if we refer to the shift in the market the answer would mostly be yes, and sometimes the answer is maybe. Frankly, I am happy to see buyers are having more say in the transaction, and that contingencies have come back. In most places, read carefully m-o-s-t  p-l-a-c-e-s, you don’t have to give up all your rights as a buyer. You no longer have to pretend to be able to pay all cash and promise to make up for a low appraisal. You get to have your inspection and you don’t just have to suck it up with the title report. As a buyer, you have some say to how things go. In most places. In most places you also have options as well as time, and you no longer have to attack the first house you deem somewhat livable. In most places, in most price ranges.

Geek Wire

But we still have properties that sell awfully quick. The ones that are most sought after, priced correctly and in areas with a very low inventory. Yes, a low inventory still exists in some areas. In some other areas there is more inventory and we also have areas were price reductions have become something that seems to happen weekly, if not daily. So, it all depends.

Seattle Times

Before I continue, I want to remind you that the change in market pertains to you if you just bought your home and now need to sell it. That would be somewhat unexpected wouldn’t it? But things happen. So, if you bought in March and are looking to sell, then you may have a problem. If you bought in March and are planning to live in your home, there is no issue. If you are an investor, you may, once again have a problem. I do want to remind you that in Seattle the median price for a house has climbed by 80% in five years, so most homeowners do not have an issue. Real estate as all markets is cyclical, but in the long run we tend to end up higher that where we used to be. Climb, climb, climb, reach the top, come down, start climbing, climb, climb, climb, reach the new all-time high…

Realtor

Did you want to look at the stats? Probably not, but I’m still gonna throw some at you. Let’s start with my own neighborhood. Remember, I live in Redmond Ridge East and will be looking at both Redmond Ridge and Redmond Ridge East.

Today, Thursday afternoon at 5 PM we have 4 homes for sale. Yes, only 4 active listings. The average days on market is 39, ranging from 20 to 57 and the average price is just a tad over a million with the highest price at $1.35 million and the lowest at $725K. There are 3 properties pending sale, meaning our current inventory sits at 1.3 months. But this is a neighborhood with nearly 2,000 homes and we only have 4 homes for sale and 3 pending. In the past 30 days 3 homes were sold but that’s not because of the slowing of the market, it’s because we have nothing to sell. We do not have a healthy market up on the ridge. We have no market.

Seattle P-I

Now, let’s jump to Redmond as a whole. We have 161 listings. The most expensive one is an almost $6 million dollar, 2,210 SqFt home built in 1902, very cute, but wait it is an equestrian property with 33 stalls on 20 acres. After removing all the new construction and the 2 homes that are really not homes we have 103 homes for sale in Redmond. We also have 79 pending sales leaving us with 1.3 months of inventory. That is way below what it should be for a healthy market. However, days on market has slowed down from 6 to 8 and is now 29 for properties sold within last 30 days and 54 for those homes that are pending sale. May I remind you though that out of all pending and sold homes, 59 sold within their first 2 weeks on sale, and 44 of those during the first 7 days. Generally, those were the homes that had all the 3 things right about them – location, condition and price.

Seattle Times

This being said, the market has slowed down significantly, even in areas where the inventory is still relatively low. We can no longer price properties the way we used to last spring. We need to be more prudent and look deeper into our comparable sales. Are they really, truly comparable? Is the condition same or have they been recently updated? Are the lots smaller or bigger? Well maintained? How do the homes sit on the lot? Curb appeal? We have re-entered the times when things like curb appeal, kitchen remodels and carpets matter, because our buyers have a choice and they can choose not to buy a fixer upper for way too much money.