Wednesday, September 22, 2021 / by Jodi Hill
Three things you need to know about the real estate market
Is anyone else having trouble making sense of the real estate market?
You’ve heard all the headlines:
“The Real Estate Market is HOT” “Unprecedented price increases”
“Lowest Inventory in decades” “Housing Market on Steroids”
“Area home prices take biggest-ever 12-month leap”
“Home buyers face stiff competition” “Another record-breaking spike in home prices”
With heated messages like these coming at us every day, it’s no wonder we’re all a little freaked out and confused about what to do next. The real estate market is complex, and many economic factors go into understanding the whole picture. To simplify, here are 3 things you need to know.
1. Low supply + strong demand = rapid sale pace and higher prices
Of course you know this. When we say the market is “hot”, it just means that homes are selling and they are selling fast. For a number of reasons, more people are looking to buy (demand) than there are homes for sale (supply), so homes are being scooped up at record speed, sometimes even before they hit the market! For example, last month (August 2021) there were 2991 new listings in King County, while 3028 went under contract. As you can see on the graph above, on any given month in 2021 the number of sales was closely aligned with the number of new listings. We can only sell what is available. When the number of new listings increases, the number of new pendings follows suit. There is a tiny bit of lagging supply (I really do mean TINY) unsold from the previous month, which is the reason our pending count surpassed the number of new listings in August. On average, homes sold for 5% over their listed price in August, an indicator that demand is still stronger than supply.
2. Taking the time to properly prepare your home prior to listing can bring you a massive return on your investment
If you’re a homeowner and potential seller, this is all really great news for you. Your home’s value is higher than it’s ever been, and if marketed properly could potentially attract multiple buyers, driving the final sale price up even further. You may be wondering, “does it even matter how the house looks if homes are flying off the shelves?” Answer: Only if you care about maximizing your investment and generating the highest possible sale price for your home (duh). To read our top strategies for preparing your home for sale, go here. Then call us so we can have a convo about your exact situation and help you craft a plan.
3. Buyers with a strategic plan are having great success
For all you home buyers -- don’t fret. Unless, of course, you’re trying to “wing it” in the purchase process. The fact of the matter is that 3028 people bought homes in King County last month, which is almost exactly the number of homes that sold in August one year ago. So we’re just dealing with a lower number of unsold homes at the end of every month than we were back then, producing headlines that sound, well… frantic. Most people are only hearing the negative side of home buying right now, but this remains a good time to buy -- interest rates are still extremely low which means lower PERMANENT mortgage payments for as long as you own the house. Or you could keep renting and paying off your landlord’s mortgage, instead of owning a home and paying off your own mortgage -- it’s really your choice. The successful home buyers are those who go into the process with a comprehensive strategy and have great agents guiding them toward the victory. Be informed, be prepared, be strategic, be a homeowner.
Whether buying or selling, we will customize a plan just for you. Let our team guide you toward achieving your real estate dreams! Reach out using this link and we'll be in touch right away!