For the first time in years, homes in the Seattle area are spending weeks—rather than just days—on the market, bidding wars become an exception to the rule, and sellers are bringing down sales prices to attract buyers in a cooling market. As Seattle Times reports, July 2018 was the first time in four years that the market began to lean in favor of the buyer, as inventory continues to increase, this time at a staggering 44-percent rate in King County.
One would think that a higher rate of homes for sale equates to more sellers deciding to list, but it’s actually that homes have been spending more time on the market, contributing to greater levels. As the Times reports, the median home price in King County in July was just under $700,000, down $27,000 from record-breaking highs reported in May.
Looking specifically to the Seattle market, trends are similar as the Emerald City’s “median house price of $805,000 was down $25,000 from the high point reached in the spring and was the lowest since last winter, as inventory in the city shot up a whopping 60 percent.” On the Eastside, prices fell $30,000 in July at $947,000.
Though prices did increase 6.3 percent on a year-over-year basis in King County, it was “the smallest annual increase in three years, and about half the average price growth the region has become accustomed to in recent years.” To combat current market trends, many sellers are reducing list prices, with approximately 12 percent of Seattle metro area listings in June receiving a price cut, which is just shy of the national average of 14 percent.
There are myriad factors contributing to the cooldown, but market experts agree there are a few key factors:
· Steadying rents have some buyers putting the brakes on their home purchase plans.
· Increasing mortgage rates are diminishing buyer power.
· Population and job growth are steadily growing but at a slightly lesser rate than previously.
According to the Times, this means sellers are “no longer deliberately underpricing homes to create a biding war” and are being more flexible in terms of time frames, recognizing that it can now take a few weeks for a home to sell.
So, you may ask, what does this mean for the near future of our housing market?
Market pundits say that it would take triple the current inventory averages to reach a balanced market, but even if it does, it will be a gradual shift. And though Kitsap and Snohomish counties saw falling price growth and rising inventory, the same cannot be said of Pierce and Kitsap counties, where prices rose 13 percent at median sales prices of $353,000 and $364,000, respectively.