Knowing how much your home is worth is important, even if you don't plan to sell any time soon. Here are some tips to help you determine how much your home is worth in today's market.
Summary: The Seattle housing market traditionally has the highest rate of home bidding wars among U.S. cities. It’s just one more reason why home buyers should be pre-approved for a mortgage loan, before making an offer on a house. This article will explain more.
There’s a high level of demand for homes in the Seattle metro area. That’s an understatement. In fact, demand is so high that many properties receive multiple competing offers within days of coming onto the market.
This is known as a real estate bidding war. And according recent data, Seattle bidding wars occur more commonly than most cities.
Bidding Wars Common in Seattle
In the Seattle metro area, there are far more buyers shopping for properties than there are homes for sale. This imbalance has become more pronounced over recent years, and it’s resulting in stiff competition.
According to recent data by the national real estate brokerage Redfin, 41% of homes listed for sale in the Seattle area in April ended up in a bidding war between multiple buyers. While that’s not the highest level ever seen, it’s still pretty impressive given the current state of the market due to the coronavirus pandemic.
Redfin tracks real estate trends for hundreds of cities nationwide, including many hot real estate markets like Portland, Denver, and Seattle.
Competition High Among Home Buyers
By definition, a real estate bidding war occurs when there is strong demand for a property listed for sale. This often coincides with housing inventory shortages, which results in an imbalance between supply and demand. This is the case in Seattle.
Right now, Seattle is in the middle of a shortage in inventory, and has been for quite some time. Not only has this driven up demand, but’s also driven up home prices, too. There simply are not enough homes available for sale to meet the demand among interested buyers.
In these scenarios, homes receive multiple offers from competing buyers who try to outbid one another in order to get their offers accepted. In real estate markets like Seattle, home bidding wars can occur within days of a property being listed — or even the first day it comes onto the market.
Related: Tips for buying in the Seattle area
All of those competing offers tend to drive home prices up, which is what we’re still seeing to some degree in the Seattle real estate market. According to Zillow, the median home value in and around the city rose by 2.2% over the last 12 months (as reported in June 2020). Within the city itself, the median price for a single-family is now $767,900.
A Good Reason to Get Pre-Approved for a Mortgage
In a hot housing market like Seattle, where bidding wars are common, home buyers need to bring their ‘A’ game. Among other things, this means having your financing lined up before you start shopping for a home.
Buyers making cash offers should have sufficient funds in the bank, with bank statements to prove it. Buyers using mortgage loans should get pre-approved by a lender.
Pre-approval is when a mortgage company reviews your financial situation to determine if you’re a good candidate for a home loan, and how much you’re able to borrow. Sellers have come to expect pre-approval letters from buyers, especially in active real estate markets like Seattle. If you make an offer to buy a house in Seattle, but you don’t have your financing lined up, the sellers will be more inclined to reject it.
Your best bet is to visit with a mortgage lender first before you even start searching for a home to buy in Seattle. Not only will this help you get a leg up on the competition and help you stand out to sellers, it will also tell you how much you can afford to pay for a home. That way, you’re not wasting your time and can focus only on properties that fit within your budget.
Get Pre-Approved Today!
Are you looking to get pre-approved for a mortgage? Sammamish Mortgage can help. We are a local, family-owned mortgage company based in Bellevue, Washington. We have been helping borrowers apply for mortgage programs in the Seattle metro area as well as Oregon, Idaho, and Colorado since 1992, and we can help you as well. Please contact our staff if you’d like to get pre-approved for a loan, or if you just have mortgage-related questions.