February 2021 Housing Market Recap
This spring, buyer demand remains strong in Kitsap County. Real estate prices continue to rise, as home values are up 12% year over year, and inventory is down 64%. (Note: The demand for condos isn’t as high as single family homes now). We saw some uptick in mortgage interest rates recently (above 3% for the first time since July!), but they remain low. There’s never been a better time to sell a home! So what does that mean for buyers and sellers? Here are some answers to common questions.
Is the housing market going to crash?
No, that’s not likely to happen any time soon (at least, not like we saw in 2008). Experts predict a strong spring and summer market, but we might start seeing a “market correction” in the later half of the year. Read my comprehensive 2021 Housing Market Predictions for Kitsap County for more insight. That being said, the rate of these price increases isn’t sustainable, so it might be the best-ever time for potential sellers to maximize their proceeds. The 2008 market crash was caused by poor lending practices. Today, our lending practices are better, and we have a true shortage of housing to meet the pent-up buyer demand.
Is it a good/bad time to sell my house?
To be clear: this is an AMAZING time to sell your home! If you have been thinking of selling, please take advantage of the best home values in history and call me to make a plan. We can get your home on the market soon to maximize your net proceeds. That being said, you should always do what makes the most sense for your family; whenever you decide the time is right to sell, we will adjust our strategy based on your top priorities. The longer you wait to sell, the more likely you are to see the market shift back in favor of buyers.
Should I wait to buy until prices go down?
This questions is tough. As your agent, I always want to act in your best interest. And truthfully, market prices are high right now. If you’re a cash buyer, you might see some price improvement by waiting. But if you’re financing a home purchase, interest rates are still incredible right now — which means you have more buying power (your budget goes a lot further). Yes, prices might level out a bit over time; but interest rates are expected to rise a bit, and your situation may not be any different due to higher mortgage costs. Finally, building equity in a home is usually preferable to renting, and home values tend to hold their value if you can stay put for a while. Every situation is different, but both buyers and sellers can be successful in this market.
Why is Kitsap County a seller’s market?
Inventory is currently very low. There were just 128 homes for sale in February (64% less than last February). A balanced market has 4-6 months of inventory. In our market, without any new listings, we’d sell out of homes in just over 1 week. Single family homes are selling faster than ever because so many buyers are in the market.
How common are multiple offer situations?
For homes that are priced right, you should expect to see multiple offers and high competition, as the bidding wars continue. The most competitive buyers often have to be aggressive, offering well over asking, sometimes waiving inspections, making earnest money non-refundable, offering the seller more time to move out, or agreeing to pay the difference in cash if the appraisal doesn’t match the sale price. Not every negotiation is this tough; but you should generally expect competition.
What restrictions are in place with COVID-10?
The protocols that must be followed for permitted in-person activities (previews, showings, listing appointments, inspections, walk-throughs, appraisals, etc.) include:
- In-person activities must be by appointment only;
- Face coverings are required to be worn at all times by real estate brokers, their clients, and industry partners (e.g. appraisers, inspectors, photographers, stagers, etc.). Brokers may not provide services to any client who does not wear a face covering;
- No more than five (5) people, in addition to the broker, may be on site at any one time; and those persons must strictly follow social distancing guidelines by remaining at least six feet apart at all times.
Why are there so many more buyers right now?
COVID-19 has forced many people to spend more time at home, and reevaluate their needs. In addition to accommodating remote work and school, residents are spreading out from urban centers (like Seattle) and moving into more suburban communities like Kitsap County. So while the winter is normally slower for Kitsap County real estate, we saw intense buyer competition in the residential market. That means buyers are paying well over asking price, waiving inspections and financing contingencies, and making earnest money non-refundable to stay more competitive. Low interest rates are attracting more and more renters, who find a fixed-rate mortgage to be more affordable than their ever-increasing rent.