Job growth, low interest rates, livability — these all are contributing factors to our region’s competitive housing market, and as we head into 2018, local real estate experts see no signs of the market slowing anytime soon.
The intensity of the local market is something J. Lennox Scott, chairman and CEO of John L. Scott Real Estate, is calling a frenzy.
“On the Eastside, there’s high sales activity intensity for new listings,” Scott said. “What that means is, when new listings come on the market, they’re getting quick action, and an extremely high percentage of them are selling in that first week or within those first 30 days that they’re on the market.” For buyers, Scott said he expects to see a continuation of our region’s highly competitive, multiple-offer market, with the highest activity heading into the spring.
With so much competition, buyers have to move quickly and often take gambles in this cutthroat market, according to Rick Costello, principal managing broker with Coldwell Banker Bain in Redmond. Due to the speed and velocity of the market, as well as fierce competition, Costello said buyers are willing to waive contingencies or buy as-is if it means their offer will be accepted. “It’s not just a trend,” Costello said. “It’s a necessity, because of price point.” In Redmond in November, Costello said, average home prices hovered around the $850,000 range, and new construction — which always is in high demand — started around $1 million.
With prices on the rise and home values appreciating significantly year over year, brokers anticipate heightened activity for the Eastside’s luxury market in 2018.
“The one thing I am extremely bullish on for 2018 is the continued strength of the upper-end luxury segment of the market,” said Thadine Bak, principal managing broker for Coldwell Banker Bain in Bellevue. “So much so that we are going to be opening up a new office in Lincoln Square, and it is going to be part of the strategy of Coldwell Banker Bain to really dominate and focus on the luxury market in the Pacific Northwest.”
In October on the Eastside, Scott said, 22 percent of sales activity was above $1 million, compared to 14 percent in Seattle.
“If you look at the stats in that segment of the upper end,” Bak added, “we had a 40 percent increase in (luxury) units over last year, and a 43 percent increase in total sales volume. That’s significant.”
Despite the anticipated growth of the area’s luxury market, not everyone can afford to spend upward of $1 million on a home, which is sending some buyers elsewhere. “Because of the affordability, people are pushing farther out from the job centers,” Costello said. In 2018, real estate experts anticipate places like Bothell and Renton to attract more buyers, due not only to affordability, but other factors like new construction and good schools.
Whether you’re planning on buying a luxury home near hot job centers, or are considering something more affordable a little farther out, the consensus is that competition will be high throughout the region. So, what can buyers do heading into the New Year to ensure their best chances of securing a home in this “frenzy” market? Brokers say: Be prepared.
In addition to getting pre-approved, Scott recommends buyers get fully underwritten before they even make an offer. “The importance of this is that a seller wants certainty,” Scott said. “When you have a buyer who is not just pre-approved but fully underwritten, it just takes it to a whole higher level, that you can then compete with the all-cash offers.”
“I think that there’s still going to be great opportunities for buyers if they’re really smart and well-prepared,” Bak said. “I’m hoping our sellers will see good reasons to list their homes and help move our marketplace along. It’s going to be interesting.”