With all the negative news about the slumping National Real Estate Market is hurting the Seattle Real Estate Market even though Seattle is not facing very many of the problems that are effecting other areas like, Las Vegas, Phoenix, Southern California, and Florida. While the national figures show that home prices have fallen by as much as 15% in some areas, other areas like Seattle have only fallen by about 5%. And while that drop started in early 2007 in other parts of the country, it only started in Seattle in the late fall of 2007 and after there was so much bad news about other areas of the country and the sub prim fiasco.
So much fear has been created by the media that many people are just plain scared to buy or sell today. We have one client that wants to rent their home and buy a smaller condo but is so afraid of what is happening that they are not going to do anything. The facts are that they can buy a condo now for about 10% less than they would have been able to at this time last year and they would be able to rent their house for about 15% more than they would have last year. Financially they would be making a good decision to make that move today but all the bad national news has them too afraid to make the move.
The rental market in Seattle is very strong today and there have even been bidding wars on some rentals. Over the past several years there have been so many apartment building converted to condos that we have a short supply of rental apartments. Because the housing market has changed and buyer and sellers are waiting to see where this market is heading, there aren't as many homes for rent. Supply and demand! Demand is up because people aren't buying and supply is down.
We see Bloggers that put out all these Real Estate sales statistics that can be very misleading. They paint the greater Seattle area with the broad brush of average sales prices and prices per square foot. They fail to understand that every city has areas that are different. If you look at sales figures for all of King County you get a much different picture than if you look at Ballard, Queen Anne, or Magnolia. Renton has a different Real Estate market than Madison Park. Yet people tend to lump all the areas together and make their analysis. Usually that analysis is misleading and inaccurate and we believe now that these misperceptions are hurting our market unjustly because of the phycological impact it's making on people here.
A good example of this just happened to a client of ours. They have their home for sale and received a low offer the first day it was on the market. The client countered and the buyer walked away. Three weeks passed and it was evident that a price reduction was needed even though the home was originally priced very well. But the few buyers that are out there are being so cautious that they have to feel like they are getting a very good deal. Well, the original buyers came back after the price reduction and wrote another offer for $30,000 less than their original offer. With this offer they attached a letter from the seller stating that all the headlines say that home prices have fallen by at least 15% and the end isn't near. They stated that mortgage rates have increased as well. What happening in Stockton California and Phoenix Arizona isn't happening in Seattle. In fact that same article with it's headlines saying "Home Prices Fall by 15%" buried in the middle of the article it said that Seattle prices were only down 4.8%. And mortgage rates are still at historical lows but the talk is that mortgage rates will be heading up.
You need to understand your specific market and not just rely on broad statements or sensational headlines. There are some outstanding opportunities in Seattle today to buy homes at greatly reduced prices, yet you still need to be careful and make sure you are buying a good home in a good location at a good price. You need to be working with a real estate agent that fully understands the Seattle market and home values and know how to get you best deals.