Though it’s not technically spring yet, it already feels like it in the local real estate market. Constrained unsold inventory locally means the homes that are available are being snapped up quickly.
According to Mona Spencer, branch manager for John L. Scott’s Redmond office, buyers in Kirkland and the greater Eastside are still facing challenges due to current inventory levels.
She said brokers in her office saw a lot of buyers in the market, but not many sellers. She anticipates the severe shortage of inventory will continue to be challenging in the spring.
“There are interested buyers out in the market, but we cannot sell homes we don’t have,” Spencer said. “With strong demand and low supply, many buyers will find themselves in a multiple-offer situation. While an all-cash offer can be enticing for a seller, it’s still possible to beat one with an offer that considers additional ‘plus’ points for a seller.”
She added that being fully underwritten, as well as offering more earnest money, a quick close, a pre-inspection and fewer contingencies can all boost a buyer’s chances of coming out on top. Given rising costs locally, Spencer said buyers seeking more affordable homes — particularly Millennials — may choose to move further away from urban centers.
“I think as affordability challenges continue, moving out to the suburbs will become more commonplace for Millennials,” Spencer said. “Their entry-level homes in the suburbs will see great appreciation due to ultra-high demand and low inventory. Some of this migration to suburbia has to do with people getting tired of paying high rents and realizing that with the low interest rates, affordability is possible, all depending on location.”
Looking toward February, John L. Scott Redmond broker Nathalie Boss predicts the month ahead will be akin to January — with more buyers than houses to sell to them. She said once more homes are listed in March and April, the market will heat up further, making conditions like those in 2017.
“The traditional ‘spring’ market conditions happened much earlier this year,” said Boss. “2020 began with many of my clients facing multiple-offer situations right away, as there isn’t enough inventory currently in the market to satisfy demand. We’re seeing more listings, but not enough quite yet to absorb the backlog of buyers.”
Boss said she’s currently working with a lot of buyers and was most surprised by their eagerness to begin the process in late fall, when the real estate market is typically slowing down.
“Many of my current clients came to me in October and November to get ready, and by the new year they were pre-approved, possibly underwritten and eager to find a new nest,” Boss said. “I think this can be explained by the market cooling off a little bit since August of 2018. Potential buyers saw an opportunity to jump in and take advantage of a more balanced market combined with low interest rates.”
Now that it’s already “go time” for many buyers in the market, Spencer underscored the importance of working with a trusted broker, especially one with experience winning in multiple-offer situations.
“Though low inventory levels make it a bit more challenging to secure a home, motivated buyers can take steps to find a home by spring,” Spencer said. “This isn’t a market to participate in casually — if you want to purchase a home, you’ll want to have an excellent game plan in place to make it happen.”