Last week's economic news includes several reports about housing markets.The S&P Case-Shiller 10 and 20 city housing market indices, the FHFA House Price Index, New Home Sales and Pending Home sales reports suggest that the national housing market continues to grow, but at lower rates.
A first-time home buyer’s guide to succeeding in the red-hot Seattle real estate market.
The Seattle housing market has generated a lot of headlines lately, mostly due to its highly competitive nature. First-time buyers, in particular, face a lot of competition when buying a house in Seattle. This is the result of limited inventory and strong demand. But with a solid game plan, first-time home buyers in Seattle can still find a place to call home.
5 Steps to Success for First-Time Home Buyers in Seattle
Here are five things first-time buyers should know—and do—before entering the red-hot Seattle real estate market.
1. Expect a lot of competition, especially for starter homes.
Seattle is experiencing an inventory crunch at the moment that increases competition among home buyers. This is especially true at the lower-end of the pricing spectrum, with entry-level or “starter” homes.
According to a September 7th report from the Northwest Multiple Listing Service (NWMLS): “Buyers in the Seattle area are plentiful in all price ranges, but the entry-level housing demand continues to be the highest.”
On top of the existing demand from local home buyers, we are now seeing a surge in demand from abroad. Buyers and investors from China, in particular, have been flooding the market lately.
Over the last few months, Seattle has had more inquiries from buyers in mainland China than any other American city. This is based on a recent report from Juwai.com, a Chinese real estate website geared toward buyers seeking homes in North America.
Real estate professionals are reporting especially high demand for desirable properties in popular areas. The condo market, in particular, is drawing crowds of competing buyers.
The NWMLS gave an example of a condo that came onto the market in the South Lake Union neighborhood of Seattle, drawing more than 100 visitors in a single day. That’s an extreme example, and not all properties will attract such attention. But it underscores the point of this article: There is an elevated level of competition in the Seattle housing market, and first-time home buyers should be prepared for it.
But how do you prepare yourself? What can first-time buyers do to improve their chances for success in this hot real estate market? See items 2 – 5 below.
2. Get pre-approved for a loan, before shopping for a home.
Mortgage pre-approval is practically a necessity for first-time home buyers in Seattle. In a fast-moving real estate market like this, sellers expect buyers to have their financing lined up already. They expect cash buyers to have the money in the bank, and all other buyers to have a pre-approval letter from a lender. So if you’re planning to use a home loan, you’ll benefit from getting pre-approved before shopping for a home.
3. Be open-minded and flexible about what you want in a house.
In a seller’s market, it can be hard to find everything you want in a home within your price range. There’s a lot of housing demand right now, but limited inventory. So first-time buyers in Seattle should be flexible and open-minded. For instance, you might have to go with your second-choice neighborhood to get the square footage you want. Or you might need to choose a smaller home to get your desired location.
4. Review recent sales prices in the area where you want to buy.
Home prices have risen steadily in the Seattle metro area. The median home value in the city rose by double digits over the last year alone. It’s a different market today. As a result, first-time home buyers should spend some time getting up to speed on current conditions, before entering the market.
Property listing websites are a great place to start. Spend some time on Realtor.com or Trulia, looking at recent sales prices in the area where you plan to buy. This is a great way to increase your market awareness. The idea is to start the house-hunting process with a pretty good idea of what you can get for the money. Becoming market savvy now will help you later on, when it’s time to make an offer.
5. Work with an experienced real estate agent.
Things move quickly in a hot real estate market. Desirable properties tend to elicit multiple offers within days of coming onto the market. If you want to be competitive, you have to be ready to take action when the right home comes along.
A good real estate agent can help you submit your offer in a timely fashion, and negotiate as needed. This kind of efficiency can make the difference between purchasing the ideal home, and having it slip through your fingers.