With the weather getting warmer (and drying out) and the spring season well underway, it’s time to take another look at how the real estate market is playing out across our area. Because pictures describe so well what words cannot, please refer to the charts (inside) for this review.
COMMON TRENDS FOR EACH CHART (NWMLS AREA) SHOWN HERE:
- Very low inventory of homes “Active” on the market and ready for sale.
- The greatest number of homes entering into contract for purchase (Pending) in years.
- The number of homes entering “Pending” status started increasing shortly after the start of 2013 and the trend continues upward.
INDIVIDUAL CHARTS (NWMLS AREA):
- South Bellevue: The number of homes going “Pending” either equals or exceeds the number of homes “Active” and the trend looks to continue.
- East Bellevue: The number of homes “Active” is increasing weekly, but the number of homes going “Pending” is increasing at the same rate. In fact, for several weeks shown this spring, the number of homes going “Pending” (previous 30 days) was greater than the number of homes “Active”.
- West Bellevue: West Bellevue shows a more normal market picture, but the inventory is still lower than it has been in recent years.
- Kirkland: Very low inventory level of homes ready for sale, but the number is increasing. Buyer pressure is strong, but not consuming all of the homes available for sale.
- Remaining Eastside: The remaining areas on the Eastside all show the same trends, but the inventory levels are marginally greater than south Bellevue and east Bellevue areas
HOW IT ALL WORKS
The timeless economic principle of supply and demand has certainly prevailed this year and sellers are finally seeing some recovery from what has been lost since midyear 2007. However, sellers who try to get too much back too quickly have learned that the buyers in today’s market are very smart, and not willing to part with their earnings until the price to value relationship appears to be right. The alternative is to remain where they are – renting in most cases – if they can’t strike a deal that makes sense. For buyers, the game has changed. In order to successfully capture a home, buyers must be ready, be sure they know what they are looking for, have their financing all set to go, know what they can spend, and be prepared to pay the list price or more when they find the right home.
STILL A GOOD TIME TO BUY
The bottom of the market is behind us – about December 2011 according to Case-Schiller – but the recovery has been slow. Certainly the recovery has picked up speed this spring, but as mentioned in a previous paragraph, the buyers get very resistant when they perceive that the price is too high. This resistance on the buyer side has proven to be a great control over pricing, so while prices are climbing, they are not skyrocketing. We have seen multiple offer scenarios where the final selling price seems over the top, but this has been limited to the hottest of the market areas.
THE CASE-SCHILLER INDEX
Supply and demand has begun to push prices upward, but a quick look at the Case-Schiller index for the Seattle area shows that we have only begun the recovery. The Case-Schiller index for February for the Seattle region was 140.97. The market high index value in 2007 was 192.30 for the same region. It’s a Good Time To Sell So if you’re thinking about it. . . and especially if you are a move-up buyer, the market softens (in most areas) as you move up the price scale. For those of you who may not mind a little longer commute to work, now could be an excellent time to consider the purchase of a beautiful country retreat as the rural market is softer than the market in the core urban areas.
You can download a PDF of the newsletter here: May 2013