Living and working within the Seattle area, perhaps the most common question asked by my clients, is “Should we wait for price to come down some more?”
A noticeable market shift occurred in the Seattle area during the past several months that has been significant enough to cause buyers and sellers to pause and rethink whether they should make the biggest purchase in their lives or sell their most valuable property.
It is important to consider several factors on this topic:
1. From an economic standpoint, people may expect a dramatic fall in the real estate prices that have skyrocketed in recent year. However, typically there isn’t any pattern to economic trends. Yes, the economy goes through good times, bad times, or plateaus at certain times, but no one can be certain that it will suddenly go from good to bad. Thus, predicting the exact time for the market to go through certain phases is truly guessing game.
2. From an investing standpoint, there are obviously risks involved with any type of investment. Investing in real estate is typically on the lower end of the risk spectrum. You are more likely to make money investing in real estate compared to other more risky investing ventures. According to Forbes, it’s common for real estate investors to see average annual returns between 7% and 10%, depending on the type of property and its area. However, some investors have been able to generate upwards of 20% annual returns in hot markets.
3. There is speculation that Amazon is planning to back out of Seattle at some point in the near future, which without a doubt would weaken Seattle economy. Amazon’s massive footprint in Seattle would be not only expensive to unwind, but also time consuming because of what they had built and leased within the city. As of June 2018, the company posted more than 1200 new opening jobs in Seattle, clearly indicating that a move from the city is not on the horizon. Still, what if that speculation is true? Aside from Amazon, Seattle is the home base to many big corporations such as Boeing, Microsoft, Starbucks, Nordstrom, and Alaska Airlines, just to name a few companies. The Seattle economy is strengthened by Amazon’s presence, but it’s not solely dependent on it. With the beautiful nature, mild weather, strong research and health care foundation, and the diversity of Seattle’s demographic, real estate in this city is as desirable as ever.
So, the question remains: “Is it good time in Seattle to sell or buy?”
For sellers, it remains a good time to sell. You still can get a great price for your property without too much of a hassle. Even though getting top dollar for your house is the main goal, it is not the only factor to consider. I have seen sellers who were overwhelmed with offers before being emotionally prepared to leave their homes before this shift in the real estate market. The same thing occurred on the buyers’ end. Buyers made bids before seeing the houses, waived all of the needed contingencies, took any risk in order to win houses. In my educated opinion, it is a healthy, fair market for both buyers to buy and sellers to sell right now. Nobody has to take more risk in the same transaction. On top of that, mortgage interest has been creeping up in the last few years, yet it is still in relatively low end now. So the answer to the, “Is it good time in Seattle to sell or buy?” question above is Yes! It is without question a good time. The only question for you is, “Are you ready?”
- Day, Matt and Mike Rosenburg. Amazon threatens to back of Seattle growth, but it wouldn’t be easy to leave/ Seattle Times, June 2018. https://www.seattletimes.com/business/amazon/amazon-may-threaten-to-ditch-seattle-but-it-wouldnt-be-easy-to-leave/
- Prosser, Marc. Forbes, July 2017. https://www.forbes.com/sites/marcprosser/2017/07/19/data-proves-reits-are-better-than-buying-real-estate/#620f3443d6b7