After a historic market run for Sellers, the pendulum swings.
Interest rates leave some buyers sidelined while others seize opportunity.
As interest rates continue to hammer affordability, housing inventory builds, days on market linger and prices continue to soften.
In theory, a slower market should be favorable to buyers, but higher rates (up double from a year ago) have many on the sidelines. It is widely anticipated that rates will come down in 18-24 months, or when inflation has been tamed. Until then, pent-up demand continues to build while some savvy buyers take advantage of long awaited opportunities.
How are home values being impacted?
The median sale price (residential & condo) is up around 7% compared to this month last year, but down from the market's peak in April 2022.
Year-over-year median sold price:
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Up 6.6% on the Eastside at $1.2M
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Up 7.6% in Seattle at $850k
Median sold price today vs. market peak:
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Down 30% on the Eastside from $1.562M
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Down almost 6% in Seattle from $899k
My advice for buyers:
As warren Buffet once said, "Be fearful when others are greedy. Be greedy when other are fearful". Be it recession fears or interest rates, a large swath of buyers are in a wait-and-see position. Buy in a soft market now; refinance to a lower rate later. Remember: you marry the price but you can date the rate.
The 2/1 buydown strategy can reduce the impact of higher rates now while you wait to refi. Learn more about the 2/1 buydown here.
My advice for sellers:
Yes, the market peaked in April but prices are still up year-over-year. And if you plan to buy and sell simultaneously, you don't need to "time" the market. You'll gain any perceived loss on the sale of your home when you buy at the same time. If you're buying at a higher price point, it can actually benefit you financially to buy and sell during a market lull. And remember, you can refi when rates come down.
Please reach out to learn more about what's happening in your neighborhood or to plan your next move. I would love to hear from you!
-Amber
