Summer Days…

The stats don’t seem to change much, so I won’t waste time with a lot of numbers. Suffice it to say that real estate prices in our area continue to rise, inventory remains at record lows, and sellers remain in the catbird seat with most listings selling quickly and for more than the asking price. What else is new…

Though things are decidedly tilted in their favor, to achieve the best results sellers still need to be smart and strategic as they prepare to list a property. The better prepared, priced and marketed listings consistently attract the most attention and sell at the greatest premiums. There are pre-listing projects that sellers can ignore in a market like this, but the key is knowing which tasks will add to your ROI and which to let go. Getting (and following) some good advice on how to set your listing apart will reap big rewards on offer review day.

Obviously, things are more challenging for buyers in this market. It’s competitive, but someone wins the day and winds up buying every property put up for sale. In the immortal words of Russell Wilson, “Why not us?”. I’ve been involved in 4 successful purchases representing buyers in competitive multiple offer situations the past 30 days. In each case our success was at least partially due to an ability to create an advantage for my clients long before the offers were presented. We either had more information than other buyers or a better relationship with the listing agent…or both! As a buyer in today’s environment, there is no substitute for having an experienced, professional in your corner.

Give a call if you’d like to talk about these buyer or seller strategies in more detail. I can also fill you in on the market dynamics in your specific neighborhood – or the one you want to land in.

Thoughts From The Frontlne

In the month of February, 65% of the single-family homes sold on the Eastside sold above their asking price (up from 34% last year) and the average time on market for these listings was 5 days. Translation: Offer review dates and multiple offer scenarios are just part of the process if you are buying or selling in our area. Here are some thoughts from the frontline on how to successfully navigate today’s reality.

I’ve represented either the buyer or the seller in 11 transactions so far this year ranging from single family homes to high rise condos to townhomes in a variety of neighborhoods and at a variety of price points. These deals came together by aligning the needs and motivations of buyers and sellers, and almost all of them utilized some or all of the tactics below to make that happen.

Today’s sellers are looking for offers without escape hatches that would allow buyers to exit the deal without penalty. In addition to waiving inspection, financing and other contingencies, which is often required these days, one effective way for a buyer to indicate that they are qualified, serious and GOING TO CLOSE is to release their earnest money to the seller as a non-refundable deposit. If you think this one through it’s not as crazy as it might sound. The released earnest money is fully applicable towards the purchase price and still counts as part of the down payment if there is a loan involved. In other words, you are going to part with the money anyway and giving it to the seller up front makes the offer that much stronger in their eyes without adding any additional cost to you.

Much is made of how buyers can compete with “cash” offers. Keep in mind that except in rare instances, the seller is going get “cash” at closing anyway, and the only real difference between a cash offer and one that is financed is the risk to the seller that the deal might fall apart because the buyer’s financing doesn’t come through. Having $50,000 or $100,000 of the buyer’s money in their pocket and non-refundable makes it a pretty good bet that the buyer is going to close and effectively as good as cash.

Since buyers effectively give away any rights to exit a deal without penalty when they release earnest money, some serious due diligence is required before doing so. I’d recommend working with a known, local lender who can give you the needed confidence in your ability to get financed. Buyers also have to be completely confident that they understand as much as possible about the condition of the home, its main systems and the property being purchased before waiving an inspection contingency. This often means hiring a home inspector to conduct a thorough inspection BEFORE making an offer.

Give me a call if you’d like to talk in more detail about how all of this works in a real transaction scenario. There are proven strategies for both attracting airtight offers as a seller, and for making them as a buyer and neither has ever been more important than in today’s competitive marketplace.

You Never Know…

BACK TO THE FUTURE
It’s been a couple months since my last newsletter and the anticipation is palpable. As you may know, the local real estate market maintained its frenetic pace right through the holidays and the first month of 2021. While the COVID lockdowns have devastated portions of the economy nationwide, the sectors that are driving the residential real estate market in our area continue to thrive. Those who can do their job with a laptop and a smart phone are adapting to the new reality and forging ahead. Many are looking for new housing arrangements that include more flexible spaces for offices or classrooms and others are moving out of the city (or state) entirely, having been liberated from physical offices and daily commutes. Buying power is enhanced by extremely low interest rates, but buyers still heavily outnumber sellers in our market, and face lots of competition for the historically low number of homes available for sale. Sound familiar?

We’re back to the future of the seller’s market of 2017 and 2018, complete with offer review dates and multiple offer scenarios. Half of all single-family homes sold on the Eastside last month closed at or above their list price – up from 22% a year ago. And 65% of January’s sales sold in 15 days or less! One by-product of this new market reality is a thriving ecosystem of off market sales. Sellers hesitant to list properties in COVID times are being paired with buyers willing to “hit the bid” in order to avoid the hassle of competing on the open market. I’ve helped several clients through such deals already this year and there are potentially more on the horizon. Here’s a sampling of some current buyer and seller profiles that could turn into win-win scenarios by putting the right parties together. Food for thought.

Seller Profiles:
2-bedroom Bellevue condo in the $300s
2-bedroom West Seattle condo in the $400s
2-bedroom Kirkland view condo – $2M
4-bedroom Enatai home @ $2.5M

Buyer Needs:
3-bedroom Kirkland house (east or west of Market) — $1.5M+
3+ bedroom house in Madison Park (fixer ok) –$1.5-$2.5M
West Bellevue waterfront lot/remodel — up to $10M

If anything here piqued your interest, or if your property or wish list should be added to one of these lists we should talk. You’d be surprised what might happen.

Q3 Market Insights

Pulse of the Market…

As you probably know, the real estate market around here has been beyond resilient since the COVID outbreak hit in March. (Yes, it’s been that long! The National Emergency was declared on March 13 and the Washington State Stay Home, Stay Healthy order was issued on March 23. Time flies…) The big technology companies that dominate the local economy are not just surviving in the current environment – they are THRIVING. Many companies are shedding employees, but they continue to hire, and their share prices are through the roof. Add in historically low mortgage interest rates and you get the picture: the demand side of the real estate equation is stronger than ever.

At the same time, historically low housing inventory keeps the market out of balance, pushing prices higher. According to the Case Shiller Home Price Index for July, home prices across the Seattle metro area were up 7% vs. a year ago. (See an interactive graph and all the numbers HERE) Transaction volume is also up. The number of new Pending transactions (i.e. listed homes going under contract) plummeted immediately after the stay at home order was implemented both in Seattle and across the Eastside. It climbed back quickly, however, and has been hovering about 30% ABOVE pre-COVID levels for the past three months. Amazing.

It seems counterintuitive, but while new listings continue to sell very quickly in all price ranges, a thriving market for private sales is also flourishing. Sellers worried about having their homes on the market during COVID or just not wild about the idea of listing their homes are being matched with eager buyers frustrated in the open market. So, if you have a wish list as either a buyer or a seller, let me know. I have quietly matched off-market buyers and sellers in some great deals over the past few months and would love to do the same for you.

Come On Autumn!

We’re about a week away from the official end of the “Summer of Love” here in Seattle and most agree that this summer will look best when it’s in the rearview mirror. In our new normal bars, restaurants and beaches are mostly closed, mini-weddings are all the rage, our masks are doing COVID/smoke double duty, NFL and MLB stadiums are empty, the Huskies aren’t playing at all, and classrooms have taken root in garages and bonus rooms everywhere. It might be funny if it weren’t all true!
Meanwhile, from the “challenges beget opportunities” file, many are using their current reality as impetus to take the blinders off, adjust their perspective and consider new options and opportunities. I’ve heard from lots of people who are re-evaluating their plans for everything from employment and commuting to caring for family members and retirement.
If you are among those considering new options (or even considering considering new options) it might be a good time to take stock of your real estate situation. While generally holding up quite well, the local market can be a bit tricky to navigate these days. Historically low inventory levels have brought back offer review dates and multiple offer scenarios at many price points and in many neighborhoods. It is nearly impossible to underprice a property in the current environment, as properly priced homes will attract eager buyers and be bid up, if worthy. That said, the market remains very efficient and overpricing a home will leave you sitting on the sidelines wondering why your property is not selling in this hot seller’s market.
I like to say that a quick conversation with a good realtor to get all your real estate goals and options on the table is almost always worth the time. This statement has never been truer than it is today. It remains as important as ever to get all aspects of the home selling process right in order to achieve the best possible result. 
Let me know how I can help.

Strange Days, Indeed…

When I wrote back in April that these were “strange days, indeed” I had no idea. No idea that we’d still be largely locked down heading into June. And no idea that we’d see protests hijacked by violent rioters across the region and across the country. Strange days, indeed. I’m not here to make political commentary, but if you’re ready for a 5-minute break from the madness, the virus, the news videos and the blackouts I’m here for you with a quick dose of free real estate chatter.

So far, our local real estate market seems remarkably unfazed by everything going on around us. Last month I highlighted the fact that despite the COVID-related business closures, stay at home orders and general economic upheaval, King County real estate activity was “only” down 25-30% depending on your neighborhood. The analysis compared the weekly volume of new real estate contracts to the same week a year ago. The Eastside was a bit slower due to some sluggishness at the higher price points, but this generally seemed like incredibly robust activity.

Fast forward one month to the week ending 5/27 and the volume of new contracts is actually AHEAD of where it was a year ago in all 3 geographies (see charts below). Interestingly, all price points are now contributing, with five West Bellevue homes priced over $4M going under contract in the past 2 weeks alone. Two of them sold in less than a week. Amazing. 

Obviously, there is no guarantee that the current activity levels will hold. Headwinds, including new listings not keeping up with demand and major structural damage to the economy from a prolonged shutdown could still slow things down. But so far things are full speed ahead. We’ve figured out how to list and show properties safely and according to the state’s guidelines and we’re helping buyers and sellers are navigate their way to listings and through transactions. If you’re considering a move don’t wait for things to “get back to normal”. The strange days may be with us for a while and right now there’s no time like the present! I’ll keep you poste

Click HERE and I’ll leave you with the best thing I saw yesterday. Stay safe and be kind, everyone.

Open For Business…

It’s been about 6 weeks since the Covid stay-at-home order went into effect here in Washington and most of the people I talk to are settling into new routines and figuring out how to safely go about their own essential activities. On the whole we’re a pretty resilient bunch!

Until recently, news from the real estate front was understandably well down on most priority lists. But recently I’ve been surprised by the relative strength and activity level of the local market and by the number of questions I get about what the market is doing. So here goes.

First, the all-important caveat: Predictions are tough right now since no one knows exactly how or when the economy will pull out of the current mess. Our market, however, continues to chug along thanks largely to the solid fundamentals in place before everything was shut down. And while activity (new listings, pending sales, etc.) has slowed, it has by no means stopped. In fact, the weekly number of new properties under contract compared to a year ago tells an interesting story of resiliency. The market was screaming along heading into springtime, jammed on the brakes and now seems to be slowly accelerating again. New contracts are down “only” 32% across King County and 25% in Seattle. Given all we’ve been through those numbers are incredible to me. The Eastside is a bit slower due to sluggishness at the higher price points.

As restrictions are lifted, I’m confident that the market will continue to strengthen, aided by pent up demand, low interest rates and an overall improving economy. We’re not out of the woods yet, but there’s light at the end of the tunnel, and it doesn’t appear to be an oncoming train!

So hang in there and we’ll get through this. In the meantime, have some fun. Pick up the phone and call someone you haven’t talked to in years. Better yet – Facetime them. I have both made and received such calls in the past couple weeks and it’s a hoot. Let me know how it goes!

Deja Vu All Over Again…

After a year or so that felt something like a balanced market things are heating back up. Heading into the spring selling season we’re back in the grips of strong seller’s market. Buyers, who had taken a breather are back in force, along with record low inventory and interest rates. Add in a roaring local economy that attracts thousands of high earners to our area every month and you recognize the familiar picture. So, here are some thoughts and a couple of new resources to help you successfully navigate the current market. 

As a Buyer At most price points and in most neighborhoods you are going to have to compete for desirable new listings. This means working with an agent who knows their way around a deal and how to present the strengths of your offer in the best possible light. (Hint: It’s not always price!) At the top of the to-do list is putting your finances in order. If you are financing your purchase it’s a good idea to work with a lender who can go beyond the standard pre-approval and get your loan fully underwritten in advance.

I know lenders who will guarantee to a seller that you will close quickly. Some will even promise to pay the sellers thousands should your transaction fail to close on time for some reason. Others will actually close on your behalf if needed and then transfer the house to you when the loan comes through. These are powerful programs that show sellers that you are solid and serious, which can help you compete with all cash offers and win deals.   

As a Seller While things are tilted in your favor, buyers are still discerning and properties that are poorly presented or overpriced will sit on the market. Pricing is critical and the way to maximize your return is to price your home fairly, not aggressively. It is nearly impossible to under-price your home in this market and I can show you how and why to set the price for the best result and return.

Three of my recent listings have sold in a matter of days. All three sellers addressed any maintenance issues before listing and went the extra mile to stage their houses for the market. All three also reviewed the market data and were smart and fair when pricing their homes. The result in each case was multiple offers, clean deals and sales well above the asking price.
If the hassle and cost of completing pre-listing “chores” is a deterrent, I can introduce you to vendors to do the work and a program that will front you all of the upfront costs , including staging. These expenses are then repaid out of your proceeds at closing with no additional fees or interest. Now THAT is full service!

There are ways to find success in any market. Let me know how I can help. 

Back At It…

The final 2019 real estate stats are in and 2020 seems to be off to a brisk start. Below are some thoughts on navigating the current market and HERE is a link to all the facts and figures if you are so inclined.  
As far as values are concerned, prices in most neighborhoods are still just below the last market peak back in June of 2018. Prices are climbing slowly, however, and depending on where you live the value of your home probably increased +/- 5% during the past year. While not the 10-15% annual increases we got used to in the overheated market of a few years ago, if this level of appreciation is the new normal – and I think it will be for a while – we’ll probably all survive.
On the supply side, after seemingly turning a corner early last year we ended the year back near record low inventory levels and I don’t see this changing significantly any time soon. Some industry analysts are actually adjusting their definitions of a “balanced market” downward from the historical consensus of 4-6 months of inventory, which should tell us something.
Here are a few takeaways. Sellers have reclaimed the driver’s seat, but can’t get too bold. The market remains amazingly efficient and even at these inventory levels buyers are not exhibiting the same behaviors they did back in the frenzied days. They are willing to move quickly on prized listings in great neighborhoods, but are not pushing prices to ridiculous levels. Nor are they overlooking shortcomings or waiving contingencies as in the past. Multiple-offer scenarios are out there but not in the same numbers or intensity as before.
To be successful as a buyer take the time to educate yourself on the market dynamics in your target neighborhood(s) and be ready to act when the right opportunity presents itself. Air-tight financing and a good agent in your corner to protect your interests and guide you through the buying process are must haves in the current environment. First movers in today’s market can often negotiate certain deal terms and perhaps even price, but you have to be smart and professional in your approach in order to walk away with the prize.
Let me know if you’d like to talk more about the general market, your neighborhood or a specific property. A quick conversation is almost always worth the time… and I’ll buy the drinks!
Happy New Year!