How can the Greater Seattle Real Estate Market be summed up? In one word: recalibrated. Today, I am giving a quick synopsis of how the market looks right now. Let’s dive in!
Ok, I said the real estate market is recalibrated. What does that mean? It means that market is very different compared what we experienced over the past 2 years. Just 5 months ago we were in a sizzling, white hot market. Now, home buyers and sellers are in a totally different climate, and we need a new point of reference.
It’s no secret buyers finally have more homes to choose from. And sellers are not receiving a dozen or more offers. You could say, we are practically in a “balanced market.” Now, each month on our YouTube channel we provide in-depth market update videos that go into detail regarding all the numbers, so be sure to subscribe to our channel so you remain informed. In the meantime, let’s look at something interesting, and this is the famous MONTHS OF INVENTORY that we as real estate professionals constantly reference.
When brokers and agents use the term “months of inventory,” we are referencing the absorption rate. It’s a way to measure supply and demand. “Months of inventory” tells us the number of months it would take to sell ALL properties actively for sale at the current pace they are selling. A normal or balanced market is 3 – 5 months of inventory. When you have less than 3 months of inventory, this favors sellers. When you have more than 5 months of inventory, this favors buyers. Just 1 year ago, we had only half a month of inventory. To put this in perspective, this is the lowest supply our Northwest Multiple Listing Service has ever recorded.
Fast forward to Spring 2022 and we know the Feds raised interest rates. This made it much harder for buyers to afford homes. As a result, buyers have been forced out of the market, or to purchase a home with a lower price tag. Because of the lower demand amongst buyers inventory levels started rising.
And that’s where we are today. Does this mean we are in a buyer’s market? No. Right now, the current months of supply in Greater Seattle is hovering around 2 months of inventory. We haven’t had this much inventory since January 2019 when there was 2.3 months of supply. Technically, the market we are in still favors home sellers, but this is so slight. The number of homes for sale continues to increase and many sellers are dropping their prices in order to get their properties sold. Needless to say, sellers don’t have much of an advantage. If inventory levels or interest rates rise much more, then the pendulum could easily swing further to the buyer’s favor.
Yes, we do have more inventory. And yes, homes are taking a bit longer to sell. But I’ll repeat what I mentioned earlier – and this is a broad stroke statement. At the moment, we are more or less in a balanced market. Buyers, you have more options. Sellers, you can’t take anything for granted.
For your specific real estate questions, please reach out. Talk to you soon.