SEATTLE — A wild housing market is forcing many Seattle-area home buyers to pay $300,000 to $500,000 over asking price — in some cases, even nearly $1 million over asking.
Homes are getting snatched up hours after they go on sale. Open houses bring so many people, there are lines down the street.
“If you’re a buyer it’s tough. It’s pretty brutal out there. It’s been tough for buyers for the past four years, but in the last 3-4 months it’s just really felt like the most difficult market that we’ve ever navigated,” said Kendra Todd, a real estate broker with Kendra Todd Group at Keller Williams. “It’s fairly common — on the Eastside in particular — for people to be escalating $300,000, $400,000, $500,00 over list price.”
A quick search on Redfin shows many examples. This Kirkland home sold for $500,000 over asking. This house in Bellevue, listed at $1.5 million, sold for $2.4 million— about $900,000 over asking price.
It’s a “brutal” nearly-no-inventory housing market in the Seattle-area housing market, especially the Eastside.— Deedee Sun (@DeedeeKIRO7) January 25, 2022
This is the line to get into an open house in Redmond!
Million-ish dollar homes are regularly selling $500k above asking. Saw one in Bellevue sell $900k over. 😱 pic.twitter.com/qgEQ9AxmP6
Todd, who has worked in real estate in Seattle for 14 years, says she has never seen anything like what’s happening now.
“That’s just not normal. That’s not a balanced market,” Todd said. “It really is a crisis of housing inventory in our area,” she said.
It’s making for long and difficult experiences for home buyers.
“It is frustrating. It’s definitely frustrating,” said Zening Chen, a West Seattle resident. He and his fiance are expecting, and they’re looking to move out of their current home in hopes of finding a house with fewer stairs that’s a better fit for a baby. “The last house we put an offer on had 20 offers total, with several people paying all cash. It’s crazy,” he said.
Steph Giola and her husband are also house hunting. She said they’re trying to play the game, making offers that are hundreds of thousands over asking price but are still getting out bid.
“It’s not even close. It’s 20 people making offers and they’re going at a half million plus over asking,” Giola said. “It’s exhausting knowing there’s only so much you can do,” she said.
“It’s competitive like I didn’t think it could get,” Giola said. “It’s definitely pretty cutthroat and quite an experience,” she said.
Zillow’s senior economist, Jeff Tucker, says there are a few reasons driving what’s going on. He says one reason is that the omicron COVID-19 surge likely stopped sellers from putting their homes on the market.
“If you go on Zillow, there are hardly any homes of any type for sale,” Tucker said. He said Zillow data showed big cities with the most conservative responses to COVID-19 showed the largest shrinks in housing supply.
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Tucker also points to interest rates. They’ve shot up already this year and the Federal Reserve has indicated that rates will keep rising.
“This month in January, mortgage rates have risen about half a point. In this day and age, that’s huge. So I think for some people they’re saying I’ve got to get off the sidelines and get in there before they go even higher,” Tucker said.
Contributing toward the increased demand, people are just looking for more space.
“Being on lockdown for — how many years has it been? Really reminded us that having a home office is maybe more important than it was five years ago,” Giola said.
Tucker says we are not in a housing bubble — it’s just supply and demand. But he does add that the sharp increase in housing prices will flatten out as interest rates go up, and as more people decide to sell in the warmer months.
Todd’s advice for home buyers right now is to keep trying. She says the challenging conditions doesn’t necessarily mean it’s a bad time to buy, because housing prices will keep rising and higher interest rates will shrink the buying power of prospective homeowners.
“Buy a home when it’s the right time for you personally. If you’re planning to live in a home for five to seven years, you’re going to weather real estate cycles,” Todd said. “Don’t buy a home for the sake of buying a home — we still want you to love it. Be patient. You have to stick in there, stick with it,” she said.
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