In the winter time, we expect the real estate market to slow down. People don’t want to move during the holidays, it’s cold and wet outside, and yards look prettier in the spring.
But even in the warm months, there’s a shortage of inventory, or homes for sale, in Kitsap County… despite rising home values and plenty of motivated buyers. So why are homeowners holding onto their properties?
New construction can’t keep up with the increasing demand for housing, and homeowners are staying put.
Many millenials are entering the market to buy homes for the first time, due to strong job growth, low mortgage interest rates, and increasing rent costs. (See my 2020 Housing Market Predictions for Kitsap County here.)
And according to Redfin, today’s homeowners typically remain in their homes for 13 years, five years longer than they did in 2010. This is contributing to the inventory shortage, as available housing has dwindled to its lowest level in decades.
Homeowners are usually hesitant to sell for several main reasons:
- They have nowhere else to go.
This is a common concern right now in Kitsap County. Homeowners have watched their home values appreciate in recent years. But even after applying that equity toward the cost of a better home, they find it difficult to afford to move (because the price of other homes has also gone up). And there isn’t enough new construction to meet the demand; labor is strained and permits are getting delayed. Or they may be worried they won’t find something else to buy, and want to find a new home first before listing theirs.
- They are waiting for maximum returns.
Some sellers don’t have a specific timeline in mind. Instead, they are waiting for prices to “level out” so they can sell at the height of the market… and maximize their profit.
- They would rather refinance.
Homeowners want to take advantage of low interest rates to reduce the term of their loan, pay less interest, build equity faster, fund home improvements, or consolidate debt.
- They opt to remodel, expand, or rebuild.
As home prices increase and vacant land becomes harder to come by, homeowners may look at their existing property and decide to simply make edits, especially if they’re locked into a good interest rate and a low mortgage payment.
- They rent out the home instead.
For homeowners looking to build their wealth portfolio, a second home can be a great investment. And with a strong demand for rentals in our market, combined with appreciation in home values, it makes financial sense.
Advice For Homeowners
As your agent, I always want to emphasize doing what’s right for you and your family. Do you need to sell your house in order to upgrade, downsize, get into a better school district, reduce your daily commute, or be closer to family? Then make it a priority to sell, and take advantage of this hot seller’s market. Don’t get too hung up on the dollars (for example, waiting until the spring to list your home—because your competition will also increase dramatically!). And lastly, I can help you estimate your net proceeds, or how much you’ll make from selling your home. It’s a great time to be a seller in Kitsap County!
Advice For Home Buyers
The best thing you can do is be prepared to jump on a great listing as soon as it hits the market. That includes getting a pre-approval letter from your lender, which makes your offer more serious and attractive to sellers. This isn’t the market to make a low offer or ask for concessions, such as closing cost assistance, if it isn’t absolutely necessary. When you find a good property, put in your strongest offer up front—know your max budget and be willing to walk away. And consider including a heartfelt letter to the sellers to make your offer stand out. As always, I will help you research the market in your desired neighborhoods, to get the best deal.
The Bottom Line
I can work with you and your lender to make a solid game plan, and discuss various approaches to buying and selling at the same time. Talk with me about your concerns, and ask someone you trust to help you evaluate all your options.
Whether you are buying or selling… Don’t let fear of the unknown be the thing that keeps you from making a positive or necessary change in your life; it may be easier, faster, or more cost effective than you might think.