The Seattle real estate market has seen a surge in buyer demand in January 2023, with the turn of the year apparently bringing many “on hold” buyers out of the woodwork.
Now that February is in the rearview mirror, and March Madness has arrived, we are seeing a brisk activity in many parts of the Seattle housing market, with homes selling quickly and often for above asking price. This jump in demand is the result of several factors, including low inventory, a strong economy, and perhaps buyers giving up home of seeing ‘yester-year’s’ low interest rates again any time soon.
The main factor we see with the potential to significantly impact the market at this point, is volatile interest rates.
Interest rates had been low for several years, which has helped to fuel demand for homes and drive up prices. But as the economy continues to recover and inflation concerns mount, interest rates are higher now than they had been for the last several years. A regression to the mean that was not unexpected.
Good News: Home Buyers are BACK, Baby!
So, what does this mean for Seattle home buyers and sellers?
For buyers, the volatile interest rates could mean that if they lock their loan on a bad day, their mortgage will be more expensive each month. High interest rates cooled the market last summer, and could have the same effect this year if they trend upward in a significant way. Some buyers may be priced out of the market. It’s important for buyers to keep a close eye on interest rates and to work with a lender to secure a mortgage before rates rise too high.
For sellers, the spring has presented a surprisingly strong market, and in order to take advantage of the sales momentum, seller’s can come out with confidence, but have to avoid over-pricing their homes and turning away potential buyers. Average Days on Market is low, but some homes linger – primarily due to pricing mistakes.
If interest rates go up further, it could mean that demand for homes could wane, leading to longer wait times for homes to sell, and potentially at lower sales prices. It’s important for sellers to work closely with their real estate agent to price their homes appropriately and to be prepared for a potentially slower market.
Overall, the Seattle, WA real estate market is still strong – some areas are doing better than others. I just sold a seller’s house for $100K over asking price. I just negotiated a deal for a buyer where he bought the home for $45K below listing price. There are potential wins and losses on both sides of the aisle, but a good agent can help you navigate the challenges in the market and help you come out on top. Keep a weather-eye on the the volatility of interest rates, as well, because those could impact both buyers and sellers in the coming months. It’s important to stay informed about the market and to work closely with a real estate professional to navigate any chop in the market.