by Dorothy Driver
Anyone who has Seattle Real Estate on their radar is aware of one big overwhelming issue.We are woefully short of available housing. For the foreseeable future, home buyers will be scrambling for houses as soon as they hit the market. Several factors are contributing to the shortage:
- We have a booming job market in Washington State. The unemployment rate in Washington in November 2015 was 5.2%, down from a high of 10.2% at the end of 2009. The Puget Sound region is a particularly attractive job market, with expanded employment opportunities in the aerospace, technology and bio-medical industries. Plus, we are a popular place to live because of our temperate climate and our close proximity to both the ocean and the mountains, which afford such a wide variety of year-round recreational opportunities. Demand for housing will continue to grow as long as the job market is booming.
- New construction is behind, too. New housing starts relieve pressure in the housing market as people decide to move outside the city core in order to solve their housing needs. Typically, homebuilders nationwide put up 1.5 million homes per year. Since the crash in 2009-2014, home building is short by nearly 4.5million-that is a lot to make up for and it won’t happen for several years.
- Several builders and trades people left the industry in 2010 and are not returning to the profession. Builders are constructing new homes, but the developed lots are smaller in number and the construction loans are more difficult to obtain. It is anticipated the new housing starts will increase by 1.4million in 2016, which should relieve some of the housing shortage.
- The rental market is super silly good for Landlords. I know I have beat this drum before, but if people can afford to buy their next home without selling their existing home, they are taking equity out for their next purchase and using it as an investment property, delaying the marketing of inventory that would naturally be available when a buyer “moves up.” If interest rates rise, it may not be as profitable to convert a residence into investment property and we may see some additions to starter-priced inventory.
A Buyer’s best strategy has two critical components:
- Work with an experienced seasoned professional who knows how to implement a winning strategy in a competitive market, is familiar with home values in the areas you want to buy in, and knows how to work well with the Listing Agent prior to submitting the offer.
2. Form a relationship with a Lender who can help get financing completely ready to go with only the appraisal detail of the loan process to complete prior to closing a loan. That will allow a Buyer to close quickly if they need to convince a Seller to select them as their Buyer over another offer. Sometimes being able to ensure a quick closing will afford the Buyer the possibility of beating out an all cash offer, but everything needs to be ready to rock and roll as soon as the appraisal is completed and back to the Lender.
The instances of properties that receive a gazillion offers and sell for 20% above asking price always get the biggest headlines. But there are way more that sell at asking price or up to 5% above asking price. It is possible to win. Just make sure you have the right tools and they are sharp.
Dorothy Driver is a South Seattle based real estate agent