August 2022 - Time to Recalibrate Real Estate Expectations in Washington State?

Dated: August 7 2022

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Washington state real estate market price change 

Brokers say all parties in housing transactions need to recalibrate during shifting market

Partial data from NWMLS Latest Press Release - July 2022 Statistical Data

Kirkland, Washington (August 4, 2022) - New statistics from Northwest Multiple Listing Service confirm reports of a shifting housing market, prompting one industry leader to suggest "all parties involved in a transaction today have to recalibrate."

While the majority of active, hands-on Brokers saw this change back in March-April of 2022, Multipe Listing Services are governed by just a few people who determine the timing of the release and type of information reported to the public.

"Today's buyers have their cups finally overflowing with options as residential inventory grows to about two months of supply," said a managing broker in Gig Harbor, WA. The MLS report summarizing July statistics show 2.01 months of inventory system wide.

Inventory of single family homes and condominiums across the 26 counties served by Northwest MLS has not exceeded two months since January 2019 when there was 2.3 months of supply.

Commenting on the "many moving parts" of the market and the need to recalibrate, the Broker said sellers "are starting to see that overpricing just ain't in the cards right now." He also noted buyers still have to compete with other would-be homeowners, and depending on the property, some sellers are receiving offers over their asking price. "Buyer and seller expectations have changed. It feels like things are starting to normalize."

Active listings have nearly doubled from a year ago, jumping from 7,948 offerings of single family homes and condos to 15,381 (up 93.5%). The addition of 11,805 new listings during the month contributed to the boost. Compared to June, the selection expanded by 1,976 listings (up 14.7%).

Interestingly the NWMLS press release does not report that in June, there was a slightly higher number of homes that fell out of contract once consumated; that percentage was 14.9%.  This indicates that buyers are able to appropriately leverage their bargaining power in the market and know that they have choices coming up everyday that may be a better deal for them. 

More than ever, sellers need to hire seasoned hands on brokers to assist them with the pricing, staging, marketing, negotiations and sale of their property.  The days of hiring large teams of real estate professionals who are often disjointed and slow the flow of important timely communication between seller and broker will be fading away.  Consumers need real help, from real people, who are really committed to them and their goals or they just are not going to fair as well as they should.

Consumers are complaining that they sign with a well known discount organization who runs commercials claiming (with zero data, btw) that they sell homes 5 days faster than other brokerages.  Yet their listings come up in the NWMLS every single day as canceled and expired after 45, 60 even 90 days on the market, a much longer average time frame than the full service professional Broker.  This type of misinformation hurts consumer confidence as well as that particular seller's bottom line.

Consumers are also starting to see that the 'team brokerage' model is mostly about 'the team' and much less about them.  The team model simply does the exact same thing for every property listed, which is fine in a boom market where little finesse or experience is necessary. 

The team model can simply have anyone take the order (the listing agreement,) process it and receive a fee.  However, when the market experiences a shift, or is continuing to shift, we notice that these team models have a very high attrition rate and fail to sell 50% or higher of the properties that they put under contract to list more often than not.  This can be extremely costly to the consumer's financial health.

Evidence of slower activity appears in the sales figures. Pending sales retreated about 24% from a year ago, dropping from 11,567 to 8,775 mutually accepted offers. The NWMLS report shows a nearly 30% year-over-year decrease in closed sales (declining from 10,919 closings to 7,645).

In review, the selection of available listings is up 14.7%, listed homes under contract with a buyer are failing to close at a rate of 14.9% and pending sales are down 24% compared with last year.

That is a 53.7% overall change in the superior seller position from just 12 months ago. The shift I have been talking about is undeniably here.  That's okay, we can intelligently work around the statistics to make your property stand out.

The days of the mediocre, bargain box approach to real estate wealth is over for wise and discerning property owners.  It has never been truly healthy but it could be camouflaged as home sellers really couldn't see that they did not capture full value of the property when it sold at 105% of listing price even though true market value was more likely 115%. It was a matter of perspective.

Consumers were told they saved 1-2% on the real estate service commission... but they lost 10% or more on the sale.  There is no mathematically competent scenario where it is better to lose 8% or more of equity due to some slippery language by an inexperienced, or even experienced, script-trained Broker that regurgitates the same diatribe to everyone they speak to.

Today, home and property sellers need the assurance that they are working with a Broker who will truly assist them, walk them through the fine details, is quickly available for questions.  They need an experienced professional who will not put them in an algorithm type system that will fail them in so many ways that they may not be aware of until it already has.

I highly value my clients and take their goals very seriously, which is why I do not personally work with every person who contacts me for service. 

My active client base tends to be those who are serious about being economically focused in regard to their hard earned assets.  They are interested in building and retaining wealth, maximizing tax shelters and deferment, leveraging equity, maximizing profit margins on every sale and purchase we engage in together.  They are owners of single family homes, vacant land, farms & ranches, condominiums, small businesses and commercial properties.  They tend to value every dollar they have earned and take good care of their assets whether large or small.  They have a certain integrity about them and go after what they want in life. They also value solid professionals who help them make it happen.

If you are wondering if we are a good fit for each other in today's shifting market, give me a call at (253) 961-3613 and we will discuss your goals and needs. 

Quick Resume:

American Land and Title Inspector

Residential and Commercial Appraiser

Title & Escrow Account Territory Manager

Residential Mortgage Loan Officer

Real Estate Broker

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Meg O Harrison

Serving my clients with diligence and integrity throughout our relationship is the cornerstone of my business and always will be. The relationships with extraordinary people under seemingly  ordi....

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