Happy Tax Day! I never feel like the prior year is over until today, which can make the first three and a half months a little like purgatory. Now that we’ve graduated fully into 2013, I feel like it’s a good time to give you an update on how the real estate market is moving, and how our team, Pickett Street Properties, is changing with the market.
It shouldn’t be news that the real estate market has changed. After 5 years of depreciation, after 5 years of foreclosures and short sales, our local real estate market is rebounding, and in an aggressive way. Buyers shopping now are paying 15% more than last year in King and Snohomish Counties (year-over-year), and this upward trend in appreciation appears to have some legs. Simply put, demand is up and supply is down.
The data can be confusing though. At first glance, housing sales are actually lower in both counties. Knowing that fewer homes are selling should usually worry sellers, but a closer look at the stats shows a different story. There are fewer homes available this year over last year (down over 4% in Snohomish County), fewer homes going under contract compared to last year (over 3% lower than last year ), and yet prices are still going up. Inventory is actually so low that there isn’t enough available inventory to accurately reflect the demand in the marketplace. Most new listings are selling within the first weekend on the market, usually with multiple offers. We’ve had listings that sold for over 10% above the list price, with buyers waiving their inspection contingency and even offering to pay some of the seller’s closing costs!
Another interesting trend is the financial strength of the buyer pool. Buyers that have the minimum requirement for down payment are finding it especially hard to secure a home because of two primary reasons (1) investors – including national hedge funds that are buying up available inventory as the market appreciates, and (2) owner-occupied buyers that have been saving for years, waiting for a clear indication that the housing recession was over. With clear indications that the market has bottomed out and is on it’s way back up, investors with cash and buyers with a significant down payment are making it harder for first-time homebuyers with minimum down-payments to compete.
At Pickett Street we’re seeing all of this reflected in our sales volume. We’ve closed over 63 homes so far in 2013 – if that trend continues we’ll sell well over 200 homes for the year (well above the 143 in 2012). Our listing inventory has also dropped, as everything that we’ve put on this year has either sold or has an offer on it. We’re adding agents to our buyers team, as the buyer’s demand on Matt, our showing specialist, is becoming overwhelming.
So we’re staffing up. In February we added Katie Silver as our new Listing Coordinator, and in April we’ll be hiring another showing specialist and interviewing for a third. Many of the top real estate teams in King and Snohomish are hiring, so if you know someone looking for a change, please let someone on our team know and we’ll meet with them to see if there might be an opportunity with our team or another team in the area.
Additionally, we have many buyers looking for listings in every price range, in every condition, in just about any location in Snohomish and North King Counties. If you or someone you know is entertaining the prospect of selling a home, let us know how we can help.
If you’ve been thinking about investing in real estate, it’s a great time to start. My wife and I recently partnered on a condo purchase in Bothell that will cash-flow around $1,000/month from the very first month. We are going on our fourth year helping clients buy flip and rental properties at trustee’s sale, and because of the time-frame of the foreclosure process in Washington State, foreclosure volume has remained stable even as home prices appreciate.
Thanks for taking the time to read through this update, and please feel free to forward it on to anyone else that you think might benefit from it. For everything there is a season, and today marks the end of the tax season – let’s hope you weathered it well.