Oct 05

Buyers slow to accept new housing market

A combination of low inventory and more homes selling than last year have surprised many potential buyers and created disappointment for those who are slow to accept the reality of a recovering housing market.

Low ball’ approach not working

Buyers who make unrealistic offers and requests can find themselves back on the street looking at their second choice home, while some sellers with well-priced, well-prepared homes are receiving multiple offers.

Home sales up almost 15% from 2011

Through three quarters of 2012, closed sales are up 14.6 percent from a year ago (48,022 versus 41,906). Prices on last month’s closed sales rose 9.2 percent from twelve months ago. The Puget Sound area-wide median price on single family homes and condominiums sold in September was $255,500.

Most expensive homes

Prices on single family homes (excluding condominiums) increased more than 12 percent, rising from $240,000 to $269,000.  The most expensive homes sold in San Juan County, which reported a median sales price of $380,000, and in King County, where the median selling price was $375,000.

Low inventory of homes for sale

The rapid pace of sales in some areas coupled with dwindling inventory means below-average months of supply in some counties. The area-wide supply of homes for sale is about 3.4 months of supply, well below the five-to-six months considered to be average.  King, Pierce and Snohomish counties all report levels below three months.

Buyers weighing the pros and cons of renting or buying

The biggest obstacle facing buyer today is  the ‘rent versus buy conundrum.’ New reports on recent and planned rent increases plus low availability of good rentals in some areas make home ownership “a better investment in many areas even if buyers are thinking of holding the home for a relativity short time frame.”

After having the freedom of a larger home it’s often difficult to downsize into an apartment. Thus displaced home owners are looking to rent homes first – which is driving investors back into the housing market. Many are paying cash, even for million dollar plus homes.

The magic mix

What’s the magic mix fueling this resurgence of home sales? Low interest rates, lower home prices than in past years, rising rents, and the improving economy in the Northwest. Take all these ingredients and add in the old-fashioned value of home ownership.

Some information from News from the NWMLS and Seattle Times, Eric Pryne, October 4, 2012

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