Rarely does a day go by that one of us doesn’t get asked if this is a good time to buy or sell a home. Some people might think that our response is always an emphatic “YES!” because we work in real estate. But there really is no right or wrong answer. Everyone’s situation is unique, so in some cases the answer might be yes, but for others it might make more sense to wait.
The good news is that we’re finally coming out of the housing slump of the past five-plus years. Housing is a major driving factor of the U.S. economy, so regardless of whether or not you own a home, a stronger housing market is good for everyone. For some would-be home sellers, this positive momentum, combined with a rise in home prices and buyer activity, is enough to compel them to list their home. And right now the numbers appear to be on their side.
According to the Northwest Multiple Listing Service, there is currently a 1.2 months’ supply of homes in Seattle. “Months’ supply” basically means that if existing homes were to continue selling at the current rate, the inventory of homes would be sold by that many months. A “normal” market has about six months of supply; therefore lower numbers mean a shortage of inventory. If demand is greater than supply, this leads to a seller’s market, like we’ve seen in Seattle.
So what does this mean for buyers and sellers? It means as long as inventory levels and interest rates are low, competition amongst buyers will remain high, and home prices should continue to steadily rise – albeit at a healthy rate, not like what we saw during the housing boom.
With these types of projections, one might wonder why there isn’t a flood of homes coming on the market. The biggest concern we hear from many would-be sellers is that they’re going to lose money because their home is worth less today than it was at the peak of the market. A valid concern, to be sure, but remember, you’re buying and selling in the same market conditions, so if your home has lost value in recent years, it is almost certain that the next home you buy has as well.
It goes without saying that nobody wants to sell at the bottom of the market, yet at the same time, everybody wants to buy at the bottom. Obviously these two scenarios can’t exist at the same time, but for those on the fence, we’re here to tell you that there are definitely opportunities to be had by both buyers and sellers that are worth considering.