What does Seattle and Fireball Whiskey Have in Common?
Seattle's Real Estate market is hotter than the shot of Fireball Whiskey you might need to take after reading this article. Buying Real Estate in Seattle has become more competitive than ever - unless you've got a copious stash. Not only has it become a debacle for the average home buyer, investors are also grumbling about market prices.
As a Real Estate Broker, I have the advantage of being in-tune with market conditions. I also have the privilege of representing several Real Estate Investors. However, in recent investment ventures we continue to get outbid (on homes you would not dare step into) - not because our offers aren't strong enough, but more-so because competitors are desperate and willing to overpay. Amateur investors are entering the market in droves. Low margins on profits are becoming the norm. Buyers are banking on potential market growth as their primary means for profit - the endeavor is risky. To illustrate, my most recent offer took place on a 1,700 sq. ft. Kenmore home consisting of boarded up windows and graffitied walls - it looked more like a dungeon. The home was offered at $299,000. We were certain the home was ours, coming in with a strong offer of $355,000 cash, no contingencies and possession to take place within a few days. Review day came around and I never heard back from the listing agent, only to later discover that it sold for significantly more.
What does this mean? Should consumers be concerned? A recent Bloomberg Market Report sees the industry raising a red flag. It continues by claiming "when you see this high percentage of properties going to third party investors, that is a sign that these speculators may be over-inflating the market.... their analytics are telling them: it's not a good time to buy." In other words, It's time to sell, sell, sell.
Counterintuitively, these signs may indicate a more continuous growth to come as investors are seeing more faith in the trajectory of the market. As interest rates continue to stay low, buyers are incentivized to make the purchase. Money is cheap and buying a home has never looked so attractive. While rental rates are seeing an all time high (an increase of 9.7% within the last year in Seattle - soaring four times faster than the national average - Seattle Times), would-be renters are seeking alternative options. Furthermore, buyers are seeing a recent influx of new listings entering the market - June's inventory increased in figures not seen since 2010.
Although the days of snagging property for a "deal" are far gone, buying real estate has never seemed so promising.
On a separate note, sellers have a decision to make: continue to wait it out in hopes that the market sees steady growth, or cash out and spend it all in Vegas. Final Word: If you decide to invest, meet with a trusted local Real Estate Broker who can help you navigate the ever changing landscape of this complex market.