Will the Spring Sales Season Be Another Tough One for Buyers?
Spring is here and with it, we have officially entered the busiest sales season of the year in Puget Sound real estate. In preparation of the spur in activity, Seattle Times asked a question on many minds: are we in for another brutal spring for buyers? The short answer, according to the Times, Maybe not.
After seemingly endless months atop the nation in home price growth, the median price of single-family homes in King County slid by a total of 16 percent from May 2018 to January 2019, signaling the end of frenetic sellers’ market conditions. While some anticipated that 2019 would hearken in a new era, February caused many to pause, as prices rose by nearly $50,000 once more.
While seasonal trends typically tell us that spring is where peak median home prices will be achieved for the year, seasonal trends have also seemed to follow a slightly less reliable trajectory over the past couple of years, making it difficult to pinpoint what the growth ceiling could look like. Still, there is not reason to believe that prices will grow in spring. As the Times outlines, “they almost always do,” and did even in the midst of the recession and its aftermath.
What we do know, is that the unbalanced sellers’ market of 2016, 2017 and part of 2018, in which sellers held all of the power and buyers were at their mercy, has gone. Signs of a calmer market may be found in the data: inventory has doubled (because homes are taking longer to sell), the median cumulative days on market has increased from 8 days to just over a month, homes are selling for slightly below list price (rather than a few percentage points above), and significantly fewer homes are undergoing bidding wars during the transaction process.
As Daryl Fairweather, chief economist for Redfin, tells the Times, “I think in the long run we will see Seattle’s housing market continue to appreciate, and it will in the long term continue to be a sellers’ market. But in the short term I think there’s going to be a temporary period where it will be more favorable to buyers.”
Fairweather points to the unsustainability of the double-digit price growth figures reported in years past and says that the number of pending sales—which is on the rise—is a positive signal for those entering the market.
Would you like to know more about the implication for homes in your neighborhood? I’d love to chat!