“Seller's Market' Developing As Housing Inventory Hits A 13-Year Low” is the hue and cry from most real estate luminaries. Read that in Forbes this morning. Here in King County, Washington, there seems to be an anomaly:
Appears to be more New Listings this week than Listings Sold. Longitudinally that is relatively consistent here. Yes, the best of the best (best value, location, condition, location, style, location) sell quickly if not immediately. Then you have not only what is tracked by Zillow, NAR, Trulia et al but you have a significant faction of “Shadow Inventory” in the form of For Sale By Owner, “Pocket” listings, Limited agency agreements etcetera. Sellers Market beware.
We tend to subscribe to the adage, “Location, location location” as a group of real estate professionals. There are two additional considerations: Price and interest rates.
Price is literally set by the “Market”. The real estate agent sets a baseline derived from the most current available data, influenced (duly or unduly) by the seller, and the list price is established.
Currently in our area all new listings are previewed by a multitude of agents and their Moms. Mom provides assurance the agent is in the right business. And, of course, due to the nature of eagerness amongst involved parties, the wave of previewing is done immediately upon listing. Then the “natural progression” occurs.
When the property is accurately valued offers materialize instantly. Example: Tuesday afternoon a property suitable for “Y” clients became available. Immediately “Y” was notified and agreed to meet at the property right after dinner. They loved it. Chose to ruminate together at home, decided to pursue it. The offer was created and submitted within approximately 12 hours of the listing going public. It was returned with a thank you note from the listing agent stating the home was “sold subject to inspection” a few hours earlier. “Y” experienced an extreme of the current market but was now able to relate to the market first-hand rather than via data compendiums. Apparently the price was right.
Were the price 20% lower and interest rates around 7% what might be the consumer response? A majority could be off-market due to the rates and requirements. With the current user-friendly rates hovering around 3.53 on a 30-year-fixed buying power is dramatically different than were it around 7%. Easy math.
The mortgage rates influence the homeowner’s financial viability as well. The better the available rate the more cushion they have with any “negative” equity. More simple math.
With this seemingly adequate supply of inventory why the “Seller’s Market”? Perhaps pent-up demand popped the cork and released the buyers. People seeing prices going up and rates vacillating may perceive a window of opportunity closing.
What do you think? This question is out there for everyone. Respond if you wish. But please, if you’re “in the market” be sure to fully complete your decision-making process before jumping in. There will, in fact, be another home awaiting your next journey out there. More next time.