Northwest further exemplifies growing trend of buyer’s market
The U.S. real estate market has been slowly trying to become a buyer’s market after years of allowing sellers to benefit from abnormally high inflation and sales rates.
Single-family home sales declines have been breaking records in many coastal regions. But home prices had not yet dropped, leading to a pause on a buyer’s market. Even though home prices have only slowed and not quite decreased, this slowing price inflation has gained the awareness of many home buyers.
The article, “Northwest ‘edging toward buyer’s market’” posted on the October 10, 2006 edition of Inman News, explains how the abundance of vacant properties for sale and slowing prices have led much of the northwest to indeed experience the beginning of a buyer’s market.
“Home sales in western Washington fell for the seventh straight month in September, as rising inventory slowed price appreciation, according to the latest report from the Northwest Multiple Listing Service.”
“Brokers reported 7,906 sales last month, down 15.7 percent from a year earlier when 9,380 sales were recorded, according to MLS statistics.”
As home sales decline faster and harder each passing month, more available properties will leave buyers a wide array of choices. As a result, sellers will have to lower prices or offer other incentives such as “buydowns” or pay the first six months of a mortgage in order to separate themselves from the other listed properties.
“In September, the median price paid for single-family homes and condos (including those in Okanogan and Whatcom counties) increased 9.4 percent from a year ago, rising from $282,500 to $309,000. This is the first time in 24 months that year-over-year price growth has not been in double-digit territory.”
It is intriguing that a 9.4 percent price increase is actually viewed as a decline, resulting from many years of double to triple digit gains.
“Brokers added 12,656 new listings to inventory during September, nearly matching the year-ago volume when they reported 12,929 new listings. Last month's additions included 10,697 single family homes and 1,959 condominiums to boost the total inventory to 34,443 listings, a 41 percent increase in supply from a year ago.”
This emerging buyer’s market is going to increase by leaps and bounds if sales decrease at its current pace (which has also grown larger by every month since February). The more available properties equates to the lowering of seller’s prices to advertise for a quicker sale.
“The growing inventory is giving buyers a ‘much better chance to selectively and judiciously make buying decisions without the frenzied attitude of the last four years,’ according to Dick Beeson, broker/owner of Windermere Real Estate/Commencement Associates in Tacoma.
The market is no longer testing buyers to see how much and how quickly they will pay, but rather sellers are being tested against one another to see how low they will go for a sale.
Many buyers can now feel relieved as the tables are turning.
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