Are you ready for home ownership? Buyers' this maybe your time
If you’re in the market for a home, take note: The 2nd quarter of 2022 may be the opening you’ve been looking for.
- February’s improving inventory and a slowing pace of price increases may ease some of the competitive pressures.
- Buyers in King County are jumping for joy over the nearly 40% increase in new listings.
- King County also saw a 31% increase in pending home sales month-over-month, as well.
Multiple offer situations are the norm for today’s home buyers, but some brokers with Northwest Multiple Listing Service suggest February’s improving inventory and a slowing pace of price increases may ease some of the competitive pressures.
Commenting on the latest statistical report from Northwest MLS, representatives of the service expressed optimism for the housing market as pandemic-related restrictions ease, but also uncertainty due to the global economic crisis around Russia’s invasion of Ukraine.
“In February, we saw an increase in listings, which could be an indicator that more sellers are primed and ready to go. Inflation, rising interest rates, and new financing options are bringing more sellers into the market,” said John Deely, executive vice president of operations for Coldwell Banker Bain.
Aspiring home buyers may have watched as mortgage rates in recent months rose (though to be fair they are still near historic lows), as did home prices. And it all begs the question: What will happen to the housing market in the remainder of 2022? We dug into the latest predictions and asked pros to share their thoughts.
Shannon Woodcock with The Cascade Team sent this message just the past Friday, March 18th: “Boy I think this market is changing… I’m doing due diligence on several upcoming listings and I’m talking to listing brokers that are getting one offer on the review dates, no offers on the review dates, offers below list. I would expect this is happening other places too??”
Predictions on the housing market:
Mortgage interest rates will rise: We’ve already seen rates rise in the early months of 2022, and some pros say that will continue. The Mortgage Bankers Association predicts that rates on average 30–year fixed rate mortgages will hit 4.5% by the end of 2022, which is up from their 4.3% projection a month prior, according to The Mortgage Reports. “Mortgage rates will have their ups and downs in 2022 and I wouldn’t be surprised if they end the year at 4.5% or higher,” says Holden Lewis, home, and mortgage expert at Nerdwallet. And Dr. Lawrence Yun, chief economist at the National Association of Realtors, expects rates to hover around 4% for most of the year.
Expect less intense competition: If you’re in the market for a home, take note: Some experts believe the combination of inflation worries, world uncertainty, increasing interest rates, and increasing inventory may mean less competition. Indeed, Yun predicts less intense competition in the housing market in 2022. And Lewis says: “The combination of rising interest rates and rising house prices will push some would-be buyers out of the market, which may result in reduced competition after the summer buying season is over.”
Sellers will see fewer bidding wars and more modest price increases: I have personally spoken to a ton of agents both that work for the Cascade Team and at other companies… We’re all seeing the same thing…. Be it the increasing prices, interest rates, inflation, or a combination of all. Home sales and multiple offers have slowed just a bit.
It doesn’t mean the sky is falling or prices… It’s more like the market and buyers are just collectively catching their breath.
Overall inventory is still critically low, unemployment in this area especially for higher paying Tech jobs is virtually nonexistent, and historically rates are still low.
Everything points to things continuing to move. Prices are NOT going to fall. In fact, they will continue to increase, just at a more normal rate of 8 to 10% per year. It’s just a little patience now on the seller’s part and realizing that it may in fact take two or three weeks to sell your home and not two or three days. Which I know can be hard when it seemed like everything was selling in just a day or 2…. Normal markets are more like 30 to 45 days, and I don’t think we’ll be anywhere near that.
Now is the time to price your home strategically
Do your research, choose your listing price, and watch the home buyers come. Unlike the cost of a gallon of milk or a flat-screen television, a home’s price can be hard to pin down. It’s complicated because each home is unique and has its own story to tell. When it comes to setting the price of a house, the only thing to do is to look at the recent sales and active listings of similar homes in your area. Combine this research with the inside market knowledge of a local real estate agent, and you can confidently choose your list price. Here are some guidelines to keep in mind when determining how much to ask for your house
When doing your real estate research make sure to look at recent comparables. Real estate markets can turn on a dime, so a deal put together more than six months ago isn’t applicable. Pending sales can be an indicator of the current market’s conditions. However, sold properties are more accurate numbers when determining what price to list your home at (including the condition of your property)
Understand that fixtures and finishes matter in real estate: Let’s face it, home buyers prefer a tastefully renovated home with neutral finishes and fixtures over an unrenovated home, one stuck in the ’80s, or one with outlandish decorations.
When looking at comparable houses online, you must be objective. If your home isn’t updated, it’s not going to sell for as much.
Here’s the good news: The amount of money it would cost to upgrade your house is probably a lot less than the difference in value. Be open to making some small changes before listing. Interior and exterior paint is the most common home improvement with 70% of sellers opting to refresh their walls at an average cost of approximately $6,500. However, prospective home buyers crush the most on freshly painted kitchen cabinets, a project that can be completed for $1,319 on average.
No two homes are alike: The 2,000-square-foot, 3-bedroom, 2-bath home with two-car parking on a quarter acre down the street just closed for $500,000. That means your home — also a 2,000-square-foot, 3-bedroom, 2-bath house with two-car parking on a quarter acre — is also worth $500,000, right? Not so fast. What you don’t realize is that the other home’s three bedrooms are not all on the top floor, and that the home lacks an en-suite master bathroom, its kitchen is closed off from the living areas, and the layout is choppy. Home buyers pay more for better floor plans and flow. Your home, with an open concept kitchen/living area and three bedrooms all near each other, is much more valuable.
Small nuances in the real estate market will affect price: Understand that each comparable home requires some serious research before calling it a “comp.” A home down the block may seem like it’s the same location as yours, but it could be in a different school or tax district, which will affect its value. A smaller home may have sold for 20 percent more than yours, but maybe it was on a double lot that could be split, which makes it more valuable to a builder or developer. If you see a nearby home with a price that seems off the mark, there must be a reason. Dig deeper to uncover what it is, and realize that the home may not, in fact, be a comparable one
Knowing all the details when selling your home
What are some of the things that you can do to prepare your home for sale? As a home seller, the initial launch of your home for sale is a very important event. We want to make sure that all our clients give a great first impression to all home buyers who enter their homes. Here are some things you should look at when preparing to list your home for sale.
Home-improvements: Our local real estate agents and home stagers can provide you information on those items that provide the greatest return on getting your home sold quickly and for making a strong first impression.
Timing: We usually recommend listing your home for sale on a Thursday to maximize exposure to the weekend home buyers. Most people searching for homes will tour homes for sale on the weekends, so going live right before increases the chance these home buyers' will see your home.
Home Pricing: In a real estate market that is trending flat to down, it is important to price your home accurately to ensure you get your home sold in a reasonable period of time.
Photos: We work with you to get the best photos of your home and its surroundings to ensure it shows well on all the internet Real Estate marketing sites. First impressions matter, and photos are the first things a buyer sees. That makes great photography a must in any market. To showcase your home, we feature large photos that are sharp, bright, and look great anywhere a buyer sees them.
3D Walkthrough - Just imagine being able to immerse yourself in a home without actually being there. This is the 3D experience using Matterport's innovative technology. In real estate, images are a crucial selling point. They can make or break a home’s perception to potential home buyers. A 3D Walkthrough Showcase enhances the marketability of a listing by providing a great experience that static photography cannot match. It provides an engaging way of showing every room from multiple perspectives in a crisp, detailed, and realistic manner.
These are just some of the things that The Cascade Team can do to market your home. Contact me and get a free home evaluation and I will also let you know how else we can market your home