July 2020 Recap
In July, we saw an influx of new listings—5% more than July of last year! That’s a signal that sellers are starting to list again, largely in response to 13% higher home values in Kitsap County (compared to last year). Even with this jump in new listings, there is still pent-up buyer demand, as the inventory (or number of homes for sale) is still down 43.4% year over year. Without a continued influx of new listings, we’d sell out of homes on the market in just over a month.
Pending sales are at an all-time high (almost 15% more than last year). People are increasingly moving out of urban centers around Seattle, and into the suburbs, since they can work from home. Homes priced at or below market value are immediately being snatched up quickly, often receiving multiple offers over asking price. And contractors are busy, as builders don’t yet have enough new construction projects to meet the demand.
Higher home values and limited supply mean great opportunities for sellers to take advantage of incredible equity (selling for thousands more right now). Even with all the new listings in July, it wasn’t enough to even out the market. Buyers are also benefitting from ultra low interest rates, helping them afford more than they could previously.
A Hot Seller’s Market
Homes are selling fast. Often times, a home is only on the market for 5-6 days because of an “offer review date” which agents use as a deadline for multiple offer scenarios. Otherwise, many listings would sell in a day or two! Especially in the mid-range market. On average, homes are also getting offers OVER the asking price, selling at 101.4% of the list price. In a seller’s market, buyers don’t have much negotiating power to get a better price, repairs, or help with closing costs. Sellers commonly get multiple offers and sell for more than the asking price.
In a balanced market, you have 4-6 months supply of inventory, based on pending home sales. Kitsap has just 1.1 months supply of inventory. Without any new listings, we’d sell out of all houses in less than 5 weeks!
Tips for Sellers
If you are thinking about selling your home, there’s never been a better time! Buyers are still out in full force, watching more virtual tours and setting records for online traffic, and taking precautions for in-home showings. Brokers and buyers should be practicing social distancing at all times, wearing face masks, using hand sanitizer and Clorox wipes, and allowing no more than 3 people in a home at a time (6 ft. apart).
Listing your home with a digital-savvy broker is critical, as open houses aren’t permitted right now… but with strong online advertising, you can get thousands more views on your home listing. And all the research shows that buyers start their home search online, especially during this difficult season. We don’t yet know the long-term economic effects of this pandemic, and home values may not continue to increase at the same rate in the future, if buyers struggle to afford housing.
Tips for Buyers
Mortgage interest rates are still historically low, and right now there may be a bit less competition because of the economic shutdown and tragic job losses. However, in some cases it can be more difficult to qualify for a loan, as lenders tighten their requirements due to economic uncertainty. And with homes selling fast, it’s never been more important to get pre-approved before you start looking at houses. Because of the stay at home order, only pre-approved buyers should be touring homes at this time.
It’s a tough seller’s market, so if you’re planning to buy a home soon, don’t wait to make a solid game plan with me and your lender. Talk with me first about recommendations for a trusted lender! Deals have been falling through due to poor lender practices, so an experienced and responsive mortgage broker can make all the difference in a successful closing.
Key Insights
Economists and real estate industry experts are predicting a strong and resilient real estate market, despite the economic downturn and rising unemployment. So far, that is proving true in our current Kitsap housing market, as demand is still much higher than the supply. Click here to learn more about the impact of COVID-19 on housing in Kitsap County. The current crisis is not like 2008, when the real estate market was unhealthy. But these are likely to be “bridge” months, where market activity is less predictable than usual.
P.S. Don’t forget to sign up for my VIP Newsletter to receive free reports, Kitsap County housing market updates, community news and events, homeowner tips, and occasional Dad jokes…
Thinking of buying or selling? Call or text me at 360-979-6411 to set up a free, no-pressure consultation. I am a skilled negotiator who will advocate for your best interests.