I think it is too soon to say how the Sequestration will impact our Puget Sound markets. While it is acknowledged that FHA loans will likely be a concern and we may suffer job losses in the government sectors such as military and education it is unclear how soon and how big that impact will be. Instead of predicting gloom and doom I prefer to take an optimistic yet cautious wait and see attitude.
In the meantime, the Snohomish County and north King County markets continue to see a dearth of inventory. It has definitely become a seller’s market which explains why closed unit numbers are down. Virtually every sale is a multiple offer situation, homes are selling rapidly and above list price. The demand is increasing and the inventory continues to decline. We are seeing fewer short sales and foreclosed property listings are nearly nonexistent compared to just 2 years ago. Prices as proven in the statistics, are rising. As opposed to the seller’s market that peaked in 07, sellers are less likely to be interested in offers with price escalators. They are more likely to want offers described as the buyer’s highest and best.
” In my 37 years working in the real estate industry , I have never seen inventory this low”.
We all fear another artificial bubble being created. Many of the sales that are occurring are cash buyers, tenants already living in the homes they are buying, investors and investor groups purchasing in bulk, and we are beginning to see an increase in for sale by owner transactions. Therefore many sales are not going through the NWMLS data base which has a tendency to skew the numbers of actual sales. This phenomenon is occurring across the country in most major market areas. This of course also has an effect on appraisals due to the assessor’s office not having the ability to report the sale statistics as quickly as NWMLS mostly owing to a lack of man power. This is an area that may also be impacted by the sequesters.
I don’t believe that the vast majority of potential sellers realize how high the demand has become, that they may once again have true equity in their homes and that right now they have an excellent window of opportunity to sell. As more and more buyer’s fear that interest rates will begin to rise, and that prices will continue to increase, I don’t see the demand decreasing any time in the near future. Add to the mix of this “perfect storm” scenario the low percentage of new construction inventory and sellers fearing if they sell now they will have nowhere to go makes it even more challenging at best.
Those who work in this industry are encouraged to do their best to help in getting the word out that the market is the exact opposite of just 2 years ago and that sellers owe it to themselves to find out what the current value of their home might be. If they do not investigate the potential they may be missing out on a long awaited opportunity to sell without being “under water”.