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Bidding wars and what you can do about Seattle sizzling real estate!

July 7th, 2015 10:32 AM by Sam Kader

How much can you buy for $450,000 nowadays in Seattle? The answer depends on a few things. June's median price of single-family homes in King County was $500,000 - about 10.3% higher than a year ago. In Seattle, the median price is even higher at $559,950 - 14% higher than a year ago. The main culprit is inventory shortage. King County had less than a month's supply of singe family homes and condominium for Sale from March to May. Equilibrium point is between 5 to 7 months inventory.  Inventory is also at historic lows in Snohomish, Pierce, and Kitsap counties. In January 2016 - King County's inventory was 31% lower than a year ago. 


Another culprit for bidding wars is - Californians, specifically Silicon Valley refugees of brutal housing market with median price for a house in greater San Francisco/San Jose market has now surpassed $1 million. Seattle was listed as the No. 1 city in the country - according to Redfin.

Buyers have hit the gas offering premium prices, fearing higher interest rates and to beat other offers on the table. This might echo the bubble years. The different between this market and the pre-2007 bubble was that the underwriting guidelines for home financing now is more stringent than back then (sorry still no stated income loans). The run-up is also fueled by job growth, new demand from foreign buyers (particularly from newly minted Chinese middle class), and millennials.

Steps you can take to secure your house in a seller's market:

  1. Do have your Pre-Approval ahead of time and know what your maximum Purchase Price is. Tour a house as soon as you can and get your offer in quickly.
  2. If you really like the property, be ready for a bidding war. Include an escalation clause with your Purchase Offer. At the end of the day - money talks.
  3. Try to put down payment and earnest money as much as you can. (If you are not a cash buyer).
  4. Adjust your expectations. Be prepared to see the list price as a floor not a ceiling. If your budget is constraint - be flexible and widen your preferred locations to increase your chances. There are still affordable houses in Seattle.
  5. Have the property Pre-Inspected to eliminate that contingency. Some listings may include property inspection report already provided by the seller.
  6. As your realtor, I will get personal with the listing agent and make sure that your offer does not get lost in a pile of offers.
  7. Be a quick study. Learn from someone who have been through the process and becoming increasingly desperate. Notice what tactics they use and study the market intensely.
  8. Use your network to find pocket listings and avoid an auction altogether by getting an offer in before a house hits the market.
  9. Persistence is key. It's not an impossible market - it just takes a little bit of grit.
  10. Please click here for additional tips.
Have your wish list and checklist handy. However, at the end of the day, you may have to compromise since you can't have it all. 

 


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