Summary: Over the past few months, the Seattle-area real estate market has gone through a cooling period. Price reductions were more common, relieving some of the sky-high prices that buyers have had to deal with. In an effort to give buyers more incentive, some sellers may have chosen to pay for buyer closing costs. But is that still what’s happening in Seattle?
The market has picked up over recent months in Seattle, after a period of declining prices. But with the coronavirus pandemic hitting Washington and the nation, there may be ongoing cooling in the city’s housing market. If things cool, home sellers in Seattle might once again resort to paying buyer closing costs.
Will ‘Sellers Concessions’ Make a Comeback?
Closing cost contributions and other seller concessions are rare in a red-hot real estate market. That’s because sellers have plenty of competing offers to choose from. That has been the case in Seattle for several years now.
In a seller’s market, homeowners are often reluctant to pay buyer closing costs for the simple fact that they don’t have to. In a multiple-offer scenario, a seller can choose the best offer from several. And that’s usually the one with the strongest financing and the fewest “strings” attached.
But the market slowed from mid-2018 to mid-2019. Homes were staying on the market longer than in the past (on average) and price cuts also became more common in the Seattle real estate market during that time. Things have since perked up, with home prices having increased 2.2% over the past 12 months, according to Zillow. But with the health crisis still looming, Seattle could see a cool housing market continue.
Reducing the asking price is one of several strategies sellers use to expedite the sale of their homes. Offering to contribute money toward the buyer’s closing costs is another such strategy.
Most of the mortgage programs available today allow sellers to contribute a certain amount of money toward the buyer’s closing costs. Homeowners sometimes use this strategy as a way of attracting more offers, in order to sell faster.
Related: Who pays which costs in Washington?
Changes in the Seattle Housing Market
Such concessions have been rare over the past few years, because the market largely favored sellers over buyers. But there was a slow-and-steady shift that took place in the Seattle housing market during the time frame mentioned above. And while prices have picked up over the last few months to make Seattle’s housing market very competitive right now, there is some speculation that things will cool again over the coming months because of COVID-19’s impact on the market.
It’s reasonable to believe that sellers may start to use closing cost contributions to attract buyers if the market cools.
Right now, the average home price in Seattle is $767,900. Prices have increased 2.2% over the past 12 months, but are expected to dip slightly over the next year into early 2021, according to Zillow.
The bottom line is that the Seattle real estate market of today may be very competitive, but there are fears of a slowdown over the coming months as a result of the current economic climate. If that happens, sellers may want to consider incentives such as paying for buyer closing costs.
Need a Home Loan in Seattle?
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