Interest rates! Affordability! Supply Challenges! Policies! What’s A Would-Be Buyer Or Seller To Do?
Usually by this time in the new year the post hibernation home buyer and seller activity is in full swing as they come out of their slumber and get down to business. Things in our region are a bit slower than typical, but on the whole, still robust with the Eastside seeing a 17% year over year increase bringing last month’s median sale price to just over $1.7 million, while Seattle’s median sale price dipped by 1% to $857K.
There’s a LOT that has happened since this year kicked off contributing to an overall sense of confusion and insecurity. The country – and certainly our region - is in the midst of a housing inventory and affordability crisis. caused by an historic shortage of homes, pent-up demand, high mortgage rates and climbing prices. While the President’s campaign promises included increases in housing inventory and lower costs, experts worry that some of his policies—like mass deportation of migrants and significant tariffs on countries like Canada and Mexico—could increase the cost of homebuilding in the U.S., exacerbating the crisis.
But here’s what’s NOT likely to happen: a housing market crash. In fact, the last housing crash helped cause today's lack of supply, which is what's keeping prices from falling. Currently, the U.S. is between 2.3 and 6.5 million units short of a healthy housing supply. Even if something happened to cause a lot of homebuyers to drop out of the market, demand wouldn’t go low enough to push prices down significantly. As NAR’s economist Lawrence Yun explains: “In the economics of supply and demand, .if there's a supply shortage, prices simply cannot crash."
Policies! Affordability! Supply challenges! Interest rates!....What’s a would-be buyer or seller to do? Here’s where I will take some liberty with a famous Warren Buffet quote that says: “Be fearful when others are greedy and greedy when others are fearful.” Greedy might have negative connotations but the concept here is still wise: at a time where many buyers and sellers are hesitating because they are fearful of what’s happening in the market now could be an opportunity in disguise.
For sellers, the law of supply and demand works both ways - low supply and high demand is better than the reverse because when there are several homes similar to yours in a comparable area and price point, buyers have more leverage and negotiating power. Meanwhile buyers would be wise not to assume - much less wait - for a dramatic drop in interest rates because when that happens, you’ll be competing with the other buyers who also waited only to find continued affordability challenges because despite the lower rates, home values and therefore listing prices, have continued to rise.
Admittedly I’m a glass half full kind of person, always looking for the positive or opportunity in any situation and I’ve helped hundreds of clients navigate a variety of market dynamics to successfully buy or sell their home. Reach out today to discuss how I can help you, too!
𝙄𝙛 𝙮𝙤𝙪’𝙙 𝙡𝙞𝙠𝙚 𝙩𝙤 𝙡𝙚𝙖𝙧𝙣 𝙢𝙤𝙧𝙚 𝙖𝙗𝙤𝙪𝙩 𝙩𝙝𝙞𝙨 𝙤𝙧 𝙤𝙩𝙝𝙚𝙧 𝙬𝙖𝙮𝙨 𝙩𝙤 𝙗𝙚 𝙨𝙪𝙘𝙘𝙚𝙨𝙨𝙛𝙪𝙡 𝙞𝙣 𝙤𝙪𝙧 𝙨𝙝𝙞𝙛𝙩𝙞𝙣𝙜 𝙢𝙖𝙧𝙠𝙚𝙩, 𝙥𝙡𝙚𝙖𝙨𝙚 𝙧𝙚𝙖𝙘𝙝 𝙤𝙪𝙩 𝙖𝙣𝙮𝙩𝙞𝙢𝙚. 𝙄’𝙢 𝙝𝙚𝙧𝙚 𝙩𝙤 𝙝𝙚𝙡𝙥!
Questions about buying or selling? Reach out today, I'm here to help.
Call/text 425-495-0926 - or email me anytime! ginam@windermere.com.
