Is this really the time to buy? Is selling now a good option?
Statistics are again showing positive signs in the housing market. According to the latest MLS statistics, there is less than a 2 month supply of inventory, a decrease of 47 percent over June of last year.
Total active listings are down 34 percent. The fear that a large number of distressed properties would be released by the banks has been proved to be unfounded. Fannie Mae and Freddie Mac’s assurance to the Realtors at their May conference that there is no large supply of “shadow inventory” appears to be accurate.
There is good news for sellers. Single-family home prices (excluding condos) jumped 7.3 percent from last month with market time down 26 percent.
The number of closed sales is up 14 percent which reflects signs of a recovering market.
Looking specifically at residential for the Eastside:
Pending median price for June of last year was $507,370. This year that same inventory would be $522,292 up 2.9 percent
Increase in activity is being reported in all areas. Problems with banking in Europe have contributed to another round of falling interest rates. The question on everyone’s mind is now “How far can they go?” But, interest rates have been at record lows for months and cannot be the only contributing factor.
Inventory has been reported at record lows for several months and has contributed to a slight increase in sales price. But, even this factor is not solely responsible for the recent increase in activity.
What is really causing the buying frenzy?
Banks can see the increase in activity and low inventory and are realizing that that they do not have to discount properties to well below market value. Buyers who were willing to accept the longer wait time and added frustrations no longer see a great advantage in buying a distressed property. Buyers are finally realizing that not all homes are distressed and are accepting the fact that huge discounts are not always possible. But, with approximately 25 percent of homes still distressed, now is the time to buy before the banks increase their minimum bids even higher.
Buyers are seeing reports of multiple offers in most areas. This is creating a sense that consumer confidence is improving.
Although multiple offers are generally on homes that are priced right, are in the right location and are in good condition, this factor has generally been touted as the norm instilling a sense of fear that many will be priced out of the market. Many buyers are realizing that prices have actually hit the bottom of the market and now may be their best opportunity to buy.
Can sellers actually expect a higher sales price? In many markets, in certain homes, YES. Prices are beginning to rise, but slowly. Overpricing will not automatically ensure a higher sales price and sellers should be realistic in their expectations. Listening to a knowledgeable Realtor is the best defense in pricing a property. The most important aspect for sellers is the fact that their home will probably sell quickly allowing them to move on to their next destination with a little more money in their pockets than expected.
Joan Probala is the managing broker for Issaquah Windermere (Windermere Real Estate/East Inc.). She has 30 years of experience in real estate, construction and sales. She is president-elect (2012) of the Seattle King County Association of Realtors.