Summary: The Seattle housing market has been rather cool lately, but things are picking up in the city, making it more competitive for first-time buyers over the next few months. This article will fill you in on the market to help make your first homebuying experience a successful one.
The Seattle housing market has generated a lot of headlines over the past few years, mostly due to the rapid increase in prices. Though prices plateaued over the past year, they are picking up the pace once again, and first-time buyers 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 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 recent 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 many inquiries from buyers in mainland China. 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.
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 spiked quite a bit from 2017 to 2018, but then cooled down and even dipped for a few months. It’s a different market today, as prices in the city are expected to increase 3.8% over the next 12 months. 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.
Ready to Get Pre-Approved For a Mortgage in Seattle?
If you’re ready to buy a home in Seattle, Sammamish Mortgage can help you get pre-approved. We have been helping first-time home buyers in Seattle for many years and offer a variety of mortgage programs, including both conventional and FHA loans. We’ve been serving Washington, Oregon, Colorado, and Idaho homebuyers for about 28 years, and we’d love to help you too. Please contact us with any questions you have, or to receive a rate quote.