It's an interesting world in real estate right now. Buyers may be cheered by an uptick in inventory, but the improving supply is unlikely to reverse rising prices. Of the 23 counties in the Northwest MLS service area, only six of them reported year-over-year gains in inventory compared to a year ago. King County was the only one in the Puget Sound region to notch a gain, up 13.6 percent from a year ago.
Area-wide there is 1.3 months of supply, with 4-to-6 months used as a gauge of a balanced market. Three counties - King, Kitsap, and Snohomish -- reported less than a month of supply. The condo component remains very tight with slightly more than three weeks (0.87 months) of supply.
Prices are still climbing at double-digit rates in most counties. Year-over-year prices for single family homes and condos combined jumped about 15.3 percent overall, from $360,000 to $415,000. Within the four-county Puget Sound region, King County notched the biggest gain at nearly 18.2 percent. Prices there rose $100,000 from a year ago, from $550,000 to $650,000.
While prices are still increasing, both inventory and the number of expired listings are also rising. The rising interest rates are having a "moderate impact" with buyers, forcing some to look at homes in lower price points. Buyers still want a good home in a good area but some are reconsidering just how much they want to pay, saying they don't want to be "house payment poor."
Sellers are beginning to realize the amount offered over list price may not be bankable unless buyers are willing to make up the difference. Consequently, they are being more discretionary with the offers they consider. Using local, proactive lenders, increasing and/ or releasing the earnest money, preferring verifiable cash offers or conventional over VA or FHA, higher down payments, shorter closing times, and setting some future date when they will review all offers are examples of common practices in offers.
Here are a few myths occurring in our market
- "Seller has to take the highest offer" - the seller can accept any of the offers that are presented.
- Similarly, "if multiple offers are made, the seller has to take or work with the first one first," is also untrue. A seller can address any of the offers in any order.
- "Cash is always king." - if the cash is not verifiable to the seller's satisfaction, a conventional offer may actually have a better chance of success.
- "Pre-approval with a lender is the same as pre-underwritten," is another misbelief. The farther down the path a loan application can go, the more likely it is to be approved.
Buying or selling a home can involve nearly two dozen people so it continues to remain important that buyers and sellers work with a broker who is well-versed in the process and able to coordinate all the participants to assure a successful closing.