Home Prices up 20% From Last Year on Capitol Hill for Single Family Homes. Condos are up by 15% from Q1 of last year to this year. The city of Seattle overall is at 18.9%. The Seattle Times just released a good article about the current Real Estate market in Seattle. Normally when a story like this comes out I am always skeptical about the data. In this situation we are looking at one of the most intense markets this Diva Team has seen in the last 15 years.
So what is going on exactly? And how is this affecting our favorite microhoods in Capitol Hill?
Seattle Housing Inventory is at a 22 Year Low: Back in January the NWMLS released their NWMLS NR (Jan15) report on housing inventory. The quote from the press release that still sticks in our minds here at the Diva team is “The current inventory of homes available for sale has never been lower in my 22 years as a real estate broker,” lamented MLS director George Moorhead, designated broker and owner at Bentley Properties.” But think about how many more people are living in Seattle? How many more people are relocating to Capitol Hill because of its walkability and proximity to South Lake Union and Downtown? We’ve done a lot of thinking and writing about how these shifts are changing Capitol Hill.
The Seattle Times article references a recent press release by our NWMLS. It is a bit intense to read both but it does give you a really good view on what we are dealing with in the market. The quote below from our Managing Broker, John Deely, perfectly sums up the current Seattle real estate market zeitgeist. And who cannot resist a Cinderella story during bracket season:
“Sellers are currently experiencing the role of Prince Charming as buyers vie to win the Cinderella title by escalating offer prices above market value, releasing earnest money and waiving contingencies normally used to safeguard the transaction,” he suggested. The less fortunate “stepsisters” are becoming shell-shocked after numerous failed attempts.”
Read more here directly from the NWMLS press release: Frenzied Market Frustrating Buyers.
What is Impacting the Market and Creating This Housing Scarcity? The number of actual closed transaction is up 17.7% from last year in the entire NWMLS. Meaning more people are buying and selling homes. But the number of new buyers in the market has way outpaced sellers. Below is our own opinion as to why this situation is happening.
- Renters Being Pushed Into the Market: We are currently getting a several calls a week from renters whose landlords are finally selling their homes after holding on to an asset for a long time that is losing them money. Renters are being given 60 day notices to vacate at the end of their leases. The whole rental market on the Hill has changed. Our friends at the Capitol Hill Seattle blog wrote a piece about this issue last September. Many of these folks are realizing it is cheaper to buy than rent in some cases. But they have 60 days to make the whole process work. Read more about what is happening in the rental market from our Rent Guru here and here. Need advice about renting your home or how to final a rental connect with our Rent Guru Roy>
- Buy Up Sellers Do Not Have Anything to Buy: We personally have a lot of clients who are sitting on a goldmine. One of our favorite clients is sitting on $100,000 in equity on his gay boy pretty view condo. But he needs that money to make the leap to a home with a fabulous kitchen. Our Diva Dweller was the inspiration for creating what we are calling the Buy Up Packet
- Never Coming Back Inventory: Divas had a lot of clients buy their third house as their first house back during The War, a.k.a the recession. Rates were 3.5% and you could buy a swank townhouse near Volunteer Park for next to nothing. These people are NEVER SELLING THEIR HOMES!
- Not Making Enough Money to Make Selling the Home Worth It: Lots of folks bought in 2007 or 2008 and are just now above water in their homes. They could sell, but they are only going to walk away with $20,000. And they look around–wow, great transit, amazing culture, awesome neighbors. Why give all this up for $20,000 after selling expenses? People are hanging on to their property with tight little fists cause the know Light Rail is opening next year and their homes will be worth more.
- No New Housing Stock: Majority of the new construction is geared towards the $600,000 price point. Folks are building larger homes geared to the tech workers in our city. Back in 2007 and 2008 we toured some lovely new built green construction in the $400,000 price point. Those real estate glass slippers (silly Cinderella reference) are gone!
How Do you Become the Diva Cinderella and Clean Up in the Market?
- Size Versus Location: Right now $300,000 might buy you a studio in Pike/Pine East or spend $500,000 and get around 1,000 sf with one parking spot in a decent building near the Pony Triangle. Or, you could buy a three bedroom, two bathroom house in south West Seattle or Seward Park. You choose? Both options are great and both sets of buyers are different.
- Be Practical: Slow and steady wins the race in this market. Know what you can afford, be realistic, look below your price point, save money, and be practical. Think you only want to live in Pike/Pine West? Maybe widen your search and check out the North of Olive microhood. Our practical buyers are cleaning up in this market with decent deals and realistic expectations in multiple offer situations. And for god sake hire someone who can represent you well. Read more in our buyer section >
- Sell if You Can: Seriously we are in once a generation market right now. Sell if you can. Especially sell if you have a condo. Eventually new developers will figure out they can build a condo building and make bank. Make the money before the developers make the money. Read about our most recent listing closing where the Diva Difference Strategy helped our clients to be the Divas of Real Estate >