Hello 2019! Time To Get Started.
After a funky second half of 2018 it is anyone’s guess what 2019 will bring! But we’ll do our best to give you a framework for thinking about things.
To re-cap, after a roaring start to 2018, the Seattle real estate market peaked in May, but then prices tumbled a little over 11% (median price peaked at $750,000 in May and dropped to $665k in December) as inventory grew (inventory peak in October with 2,459 listings, more than double the 1,066 listings on the market in October 2017). There are many factors people point to in order to explain this – buyer’s just got fed up with high prices, interest rates went up, head count tax scare, stock market pull back, foreign buyers have left the market and rents have dropped. We definitely saw several savvy buyers score good deals in December as sellers who had been on the market awhile were fatigued and willing to discount in order to be done.
What will 2019 bring? After a slow December, we’ve already seen a lot of new listings hit the market. About 175 so far in the last week. A lot of those are new construction as developers sat on inventory in Q4 waiting to list until now hoping they could put the bad second half of 2018 behind them. There’s now a total of about 1200 total listings on the market which is about double what we saw in January 2018 (at the end of the month). While on paper inventory is up, in our experience, for many of our buyers inventory is either not up for the type of home or it is up, but what is available, isn’t good. So great homes can still sell fast, and sell for more than asking.
Given 2018 was funky, what should you expect and what should you do in 2019? This is what we’d advise friends over beers or coffee:
What to Expect
It is hard to predict the future! Very few people who have predicted the real estate market was going to peak in terms of pricing last May and or that inventory would peak in October. That said, here’s what we’re expecting:
- Good homes will still go quickly: we saw this in December and are already seeing it now in January. Good and great homes that are move-in ready, in great locations, etc will sell fast and likely for over list price. So yes, buyers are in the drivers seat generally, but not always.
- Sellers will list earlier than normal: usually we see sellers list in April, May and June. Last year as the wheels were coming off the market, many sellers listed in September and October. In 2019 we expect that sellers are going to try and get ahead of their competition by listing in the first half of the year.
- New construction inventory spike in January: we heard that many developers were holding off listing their newly completed inventory in late 2018 because the market was so funky. We expect to see many developers list those homes in early 2019.
- Pre-sales will be back: In 2017 and 2018, developers stopped doing pre-sales because they felt that the longer they wait, the more what they’re going to sell will be worth. That is no longer the case and we’re seeing developers happily offer their work up for sale before they’re done
How to Get Started Buying
Planning on buying this year? In our experience it’ll take you 2 to 4 months from when you actively start looking to getting in your new home. Unlike past years, you’ll likely only write 1 or 2 offers instead of the 3-5 offers you would have to write in a hot market. And you’ll be able to write an offer with an inspection contingency and financing contingency, which is really nice.
We typically see the most new listings in April, May and June, though this wasn’t true last year! I expect in 2019 that sellers will be trying to get on the market sooner rather than later. So I’d start looking now, as you never know when your dream home is going to come up. To get prepared:
- Understand the big picture: check out our home buying guide so you understand the important milestones for buying a home. Don’t fret the details so much, that is what your agent is for. We’ll guide you every step of the way.
- Get pre-approved: yes, it is good to know what you can afford, and fix any credit issues sooner rather than later, but more important, it is good to have it in place so we can move quickly on putting an offer together when your dream home pops up. As mentioned, great homes will still sell fast. And many sellers aren’t doing offer review dates, which means great homes might sell in just a couple of days. Here are the lenders we work with the most.
- Find an agent: figure out who you want to work with before your dream home pops up. Of course, we’re agents and would be happy to help :). Whether you work with us or someone else though, be sure to ask potential agents these questions.
- Get alerts: sign-up on Redfin for email or iPhone/Android alerts so you know as soon as home hits the market that meets your criteria
Buying New Construction
If you’re thinking of buying something new, it is already under construction right now but likely not listed on sites like Redfin just yet. Get in touch and we can help you find out what is being built before it goes for sale.
How to Get Started Selling
Planning on selling this year? Sadly sellers are no longer in the drivers seat like they have been for the past 3-5 years. But you’re likely still doing very well as long as you didn’t buy your home in the last year. Keep in mind that you likely won’t have multiple offers and the only offer you get will have an inspection contingency as well as a financing one.
To get prepared:
- Talk to an agent first: before you lift a paintbrush, or do a big remodel, find an agent you trust and get their advice on what you should and shouldn’t do to get your home ready. You might be surprised by what they recommend.
- Get your place ready: with your agent’s checklist in hand, get your place looking sweet. It’ll likely take you longer than you think.
- Sell sooner rather than later: to sell your home quickly and for more money, we recommend getting ahead of your competition and selling sooner rather than later. Think February to May. And keep in mind that in July and August buyers disappear to enjoy a summer vacation.
Need to Sell to Buy?
Start by talking to your lender and confirm that you really will need to sell before you buy. If that does prove to be the case, talk to your agent about how you could sell your home to someone but then rent it back from them for a few months while you find the place you want to buy. You can typically get 90 days doing this (30 day close, 60 day rentback).
I’m always happy to get together over coffee or beers to talk about your home search or swing by your home to talk about selling.