Multiple Offers – Ugghhh!! by Rebecca Carlson

Last month, I wrote about the changing market and the prevalence of multiple offers.  Since then, I’ve been through way too many multiple offer situations representing buyers where my wonderful clients have lost out on a home!  Yes, can I whine for just a minute???  It’s exhausting for all involved.  And, only one buyers wins.  I have clients that have lost out on 2, 3,  and 4 different offers because of this crazy market.  For buyers who are giving it their all every time they make an offer, it’s so emotionally draining to lose one house after another in bidding wars.  The stress, disappointment and frustration take over the positive, exciting feelings of looking for ‘the dream home’.   Then, the feelings of doubt about jumping back in and doing it all over again start to take over.  I really feel my client’s frustration and the worst feeling in the world is to have to make that phone call that they didn’t get the house (again!).

Don’t believe me that multiple offers are a normal part of the Seattle market?  Check out these examples that sold in the past 45 days:

• 1703 N. 39th St:  listed for $569K, sold for $630K
• 9856 41st Ave SW:  listed for $549K, sold for $590K
• 1704 25th Ave:  listed for $375K, sold for $517K (wow!!)

And, it’s also stressful on sellers.  The overwhelming response to your home means that agents are calling you all hours of the day trying to get their clients in as quickly as possible.  You might as well just leave for a few days because you’ll pretty much be forced to be out of the home anyway.  Then, when you look at the 3, 4 or 10 offers in front of you, you have to decide if you focus on the money, or the one with the best personal letter.  (of course, 9 out of 10 times, money talks!)

I don’t mean to sound so negative about the market right now!  I really am glad to see the positive shift in the market (especially for sellers who have been so afraid of not being able to sell their house at all).  But the incredibly low inventory has made it a bit of a feeding frenzy and it’s certainly incredibly challenging at times!  (Ironically, the challenge used to be having too many houses on the market and too few buyers; now we have too many buyers and not enough sellers!)

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Multi-offers, Pre-inspections and Escalation Clauses – Oh, My!!

I’ve been writing about the shifting market for the past few months now.  But, dare I say we’re in a seller’s market?  It certainly feels like it!  I am out showing and previewing houses every day – from West Seattle and Capitol Hill to View Ridge and Queen Anne.  What I’m seeing are many well priced, well prepared homes selling with multiple offers by the first open house!

Why the shift?  Put simply – low inventory!!  There are very few homes coming on the market, especially between $300k-$700k.  So,why aren’t more sellers listing their homes, you ask?? I think there are still assumptions that the market is  bad.  Up until this past month, national media portrayed a struggling real estate market.  However, real estate really is local and Seattle is doing quite well right now!  Another reason is that  for some, they haven’t found a house to move into and are holding off until that dream home comes available.

If you are one of these many buyers out there trying to buy a home in this market here’s what you can expect right now:

1. Packed open houses – or multiple Realtors showing the house the same time you are walking through it.
2. Multiple Offers –  think you are the only one to fall in love with the cute Wallingford bungalow?  Think again!  If it shows well, is in a good location  and is priced right, expect some competition
3. Pre-inspections – this is where you have an inspector do an inspection BEFORE you make an offer.  If the inspection is good, you waive the inspection contingency of your offer.  This makes your offer incredibly competitive!  But, for desirable properties, they are having 3 or 4 pre-inspections.
4. Escalation clauses – for those ‘hot’ properties, making a full priced offer just isn’t enough!  You’ll need to consider adding an escalation clause to your offer.  This essentially states that you agree to pay a certain amount (say $1000) over the highest offer up to a maximum purchase price (you set that number).

Even if you have done all of this, there’s still not a guarantee yours will be the most competitive.   I had a client recently make an offer on a house priced @ $309k.  We did a Pre-inspection and an escalation clause.  Unfortunately, we didn’t get it and the highest offer ended up being $355k -$46k above the list price!

Hopefully, all of this doesn’t scare you away from buying a house.  But, you do need to be prepared and have a Realtor advocating for you.

As for you would-be sellers out there, what are you waiting for???

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Pending sales up and inventory down – what are you waiting for?? by Rebecca Carlson

For the past few months, I’ve been urging sellers to put their homes on the market sooner rather than later.  There is huge demand out there right now, and yet many sellers still seem hesitant to list!  There are homes going for $50K and up to $100K over ask price!  Buyer confidence seems to be back, partly to hiring picking up in the area, and interest rates remaining relatively low.

Clearly, there are sellers who can’t sell without losing money.  So, I’m mostly speaking about the sellers who have owned their home for at least seven or more years and are interested in selling.  If this is you, what are you waiting for??

While we don’t  have the statistics from the MLS of March sales, I can tell you March has been another ‘hot’ month!  In the Ballard/Greenlake/Fremont areas, inventory is down 43% the same time last year (Feb. 2011 vs. Feb. 2012).  West Seattle inventory is also down 44% for the same period.  And, even the downtown condo market, which suffered so badly over the past few years, has seen substantial declines in the inventory and increases in pending sales.  Inventory is down 38.6% compared to the same time last year, and pending sales are up 19% for the same period.  This is pretty much the trend throughout the area. (scroll down to see trend charts of these areas)

It should also be noted that the low inventory is pervasive at all price levels.  But, I do believe we are seeing many more ‘move up’ buyers entering the market, who are looking for a bigger house.  Yet, many are frustrated with the lack of options out there right now!

Why are sellers holding back?  Here are a few thoughts:

• Fear — many sellers are still fearful that their home may not be worth that much.  A lot of this fear is just not having the knowledge to make the best, well-educated decision for themselves.  I say you don’ t know until you ask!
• Can’t find a home to move into — many ‘move up’ sellers are waiting to list their house until they find their ‘move up’ house.  This strategy doesn’t work well in the current market with low inventory.  It is very difficult to compete for a desirable house with an offer contingent upon the sale of your home.  If this is you, I’d recommend listing your house – you can always rent until you find your dream home – and you’ll be in a much better position to negotiate for that next house.
• Want their lawns to look better — I hear this a lot!  And, for some houses where the landscaping is the selling point of the home, this makes sense.  But, most homes look fine this time of year and a cleaned up yard will still sell a house!

Of course, just putting your home on the market without any preparation isn’t going to guarantee a quick sell.  Buyers are still sensitive to price, condition and location.  If you are off on one of these key factors, it can impact your selling time and ultimately, the price.   But, if you are seriously considering selling your home soon, talk to a trusted Realtor who can give you an honest assessment of your home and whether now really is the best time to sell.  I’m willing to bet it is!

Ballard/Greenlake/Fremont

West Seattle

Downtown Condo Market

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Are you ready to buy a home in 2012?

Whether you are a first time home buyer or looking to downsize or up-size, the decision to purchase a home is big.  Clearly, the biggest factor is “Can I afford to own a home?”.   But, beyond your finances, other factors must be considered such as market conditions and your future plans, among many others.  I believe it’s critical that buyers carefully plan out their home purchasing decisions.  In fact, many first time home buyers can get caught up in the fun of looking at houses and don’t fully understand the costs associated with purchasing a home.  Now is the perfect time of the year to think ahead and consider what 2012 may hold for you!

In a recent article by the National Association of Realtors, they outline considerations to keep in mind when weighing your purchasing options.  Below is an excerpt of that article.

PURCHASING CONSIDERATIONS:

• How long do you expect to live in your new home?
• What can you comfortably afford to pay each month for housing-related expenses beyond your mortgage?  These include:
  • Property taxes
  • Homeowner’s Insurance
  • Utilities
  • Maintenance costs
  • HOA dues (if purchasing a condo)
• Do you have the funds to pay the additional costs associated with purchasing a home?  (closing costs, moving expenses, etc.)  In addition to having a down payment of typically 3.5% or more, you can expect your closing costs to be another 3% or more of the amount you are borrowing.
• Do you know your credit score?
• Have you built up your savings enough to provide you with an emergency fund for unexpected events?
• Are local market prices favorable to purchasing?  What are your expectations on future prices?

RENTING CONSIDERATIONS:

• If you are currently renting, what are your rental expenses? (monthly rent, utilities, parking, HOA dues, etc.)
• Do you live in a city where buying can be cheaper than renting?
• How does renting vs. buying factor into your long-term investing goals?

OTHER FACTORS:

• What are your personal preferences regarding the type of housing you wish to live in?  How does location factor into your housing preferences?
• If you have children, or plan to have children soon, have you done your research on the schools in the neighborhoods you are considering?
• How do you expect your personal situation to change in terms of your future housing needs?
• If you currently own a home, is your home ready to be listed for sale?  (touch up paint, cleaned carpets, etc.)

For first time home buyers, check out this LINK for more tips about purchasing a home.

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Rental rates on the rise, maybe now is a good time to buy by Rebecca Carlson

Many homeowners have struggled to sell their home over the past few years.  For those who had to move, many put their home on the market as a rental in hopes of selling their home once the market recovers in a year or two.  This shift in the market brought a flood of new rentals onto the market, contributing to the drop in rental rates over the past few years.

But, the market is shifting.  In a recent story by By JOHN OREHEK, he states, “According to a recent report by Dupre + Scott, a local apartment market research firm, the Puget Sound region’s rental market is showing marked signs of improvement with the vacancy rate at 5 percent — down from 6.3 percent in March and more than 7 percent at this time last year. As vacancy rates decrease, rental rates have been inching up. Rents in the Seattle area are now averaging $957 compared to $945 in March of this year, the first time rents have increased in two years.”

Does this mean that all renters should become home owners?  Of course not!  But many renters out there should reconsider their financial situation and decide if they want to continue to pay someone else’s mortgage, or invest in themselves.  See below for a few more articles on this hot topic.

Seattle – Top 10 Rental Market in 2011

Vacancy Rates Drop in Seattle

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New Construction Condos Offering Big Incentives by Rebecca Carlson

With sales waning after the end of the homebuyer tax credit, new construction condos in downtown Seattle are pulling out all of the fanfare to get their units sold.    The most common offering is seller-paid closing costs of up to 3%.  The Gallery in Belltown is one such buildings offering this incentive for offers received by 10/31/10.  The Marselle is promoting their recent price reductions:  “JUST RELEASED/BELOW AUCTION PRICING”.  Most likely a response to the Olive 8 auction held a few weeks ago.

All of these great deals are fabulous for buyers, but what about the ‘average’ seller trying to compete in this market?  It’s tough.  Not only do you have to compete w/ these incentives, there are also still quite a few short sales in the Belltown area.  While short sales aren’t for everyone, you can get pretty good deals if you are willing to wait through the bank approval process.  But, the pricing on these units are certainly having an impact on the overall pricing of the neighborhood.  As a seller, it may take a little longer, but there are buyers out there.  In fact, 35 units sold in Belltown last month (see chart below) and there are currently 71 units pending; of the units sold, 1/2 were units in new construction buildings.  (with Escala leading the pack in sales)

Moral of the story?  There are some great deals right now on Belltown condos.  And, with interest rates around 4%, it’s an amazing time to buy!!  As a seller, price is the driver in this market, so make sure you are priced competitively. And, a little patience in this market might not hurt either!!

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Seattle Market Hot, really? by Rebecca Carlson

It seems like buyers are just chomping at the bit to take advantage of the tax credit and great interest rates.  Many homes priced under $400K are selling within days and with multiple offers.   Even homes priced at the higher end ($800K) are seeing a lot of activity.  But certainly, it’s that under $400K range that’s really sizzling right now!

Check out my video for some additional thoughts on the market.

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Townhome Sales ‘hot’ in Seattle

Over the past few months, I’ve been working with various clients who are looking to buy a townhome in Seattle priced under $450K.  While the beginning of ’09 showed a glut of inventory of townhomes, the end of ’09 had a substantial decline in what’s available. Here’s a quick summary of the activity (areas:  West Seattle, Greenlake, Wallingford, Ballard, Queen Anne, Magnolia, Capitol Hill, Beacon Hill, Central Area, Mt. Baker, Seward Park, Columbia City):

• January 1 – June 30, 2009 
  *337 townhomes sold 
  *Average Sales price:  $340K
• July 1 – December 31, 2009 
  *443 townhomes sold 
  *Average Sales price:  $332K

Interestingly, 32% of the sales in the second half of this year occurred between 11/1 – 12/31.  Clearly, the tax credit had a significant impact on sales as the original credit was set to expire November 30th.  However, December is has been a busy month, as inventory is low compared to earlier in ’09.  I’ve certainly experienced this with my clients.  As we’ve looked at townhomes over the past few weeks, many have been snatched up by other buyers.

So, if you are looking for a townhome priced under $450K, you may find that you’ll need to move more quickly to get the one that you want.  But, the good news is that builders are still offering closing costs to help you make your purchase affordable.

Here are a few of my favorites priced under $450K:

Beacon Hill

Mt. Baker / Genesee Pb Townhomes

Ballard Modern

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