To say it’s a tough buyer’s market is putting it mildly. The last few years we’ve seen bidding wars and all-cash offers push many potential home buyers out of the market. Luckily, this trend appears to be changing.
Recently, Sam DeBord reported on Market Watch that the number of homes available in the Seattle area only shrunk by 13%. While this number may seem staggering, it’s a trend worth celebrating in comparison to the 20% drops the market’s inventory had been seeing.
Yes, some potential sellers remain timid. They’re concerned they won’t be able to buy a home once they’ve sold their current home. However, sellers are also beginning to respond to buyers. The rate at which inspections are being waived has dropped. Escalators (a buyer’s pre-determined bidding war maximum) have decreased. And, foreign investors have lost some of their all-cash purchasing power.
(The decrease in foreign investor’s all-cash purchasing power is linked to a change in China’s laws concerning overseas withdrawal maximums. In 2015, they began restricting overseas withdrawals to a maximum of $50,000 per individual.)
Is Another Housing Market Bubble Forming?
DeBord says no. More than 10,000 new technology workers have come to the Seattle area in 2016 alone. These techies are making good money. And, they are buying homes with large down payments.
The previous bubble was built on false credit. Unqualified buyers were being extended an immense amount of credit they had no hope of repaying. Today’s buyers now face stringent evaluations of their income, employment, assets, and credit history.
What Does This Mean For You as a Buyer?
The slow down is good news. While inventory is beginning to even out, the interest rates currently remain near historic lows. As a buyer, this gives you more opportunities.
Additionally, the mad dash to make an offer isn’t quite as extreme. There isn’t the same necessity to waive inspections, promise a large percentage of earnest money or engage in a massive bidding war.
Ready to see what sort of interest rate you qualify for? Contact me today.