Brokers with Northwest Multiple Listing Service (NWMLS) are reporting a return to some creative financing methods as motivated home buyers and sellers grapple with higher mortgage rates. Despite that, and the seasonal slowdown in activity, 6,435 hopeful homebuyers succeeded in having sellers accept their offers to purchase during October.<\/p>\n\n\n\n
\u201cBuyers are benefiting from more choices in inventory and less competition, while sellers are more negotiable when it comes to contingencies,\u201d reported NWMLS director Meredith Hansen. \u201cWe are seeing more 2\/1 buydowns and adjustable-rate mortgages with buyers planning to refi when the rates come back down,\u201d added Hansen, the founder and operating principal at Keller Williams Greater Seattle.<\/p>\n\n\n\n
The latest Northwest MLS shows 6,435 pending sales last month, and about the same volume (6,464) of closed sales. Both figures were down from the year-ago totals, with pending sales dropping about 39% and closings declining around 35%.<\/p>\n\n\n\n
Median sales prices still rose year-over-year in most of the 26 counties on the report. Area-wide, the median price on last month\u2019s completed sales of single family homes and condominiums was $595,000. That was an increase of about 3.5% from twelve months ago, but a decline of approximately 9% from May when prices peaked at $660,000.<\/p>\n\n\n\n
Homes and condos in San Juan County commanded the highest prices, with a median sales price of $911,000 \u2013 and that was a 7.5% decline from a year ago. Last month\u2019s closings in King County had a median price of $811,000, up more than 8% from the year-ago figure of $750,000.<\/p>\n\n\n\n
A comparison of counties shows price drops in nine of them. Seven counties had double-digit gains, but improved inventory and interest rates were the storyline for many of the brokers who commented on the NWMLS statistics.<\/p>\n\n\n\n
NWMLS director Jeff Pust said, \u201cThere is no doubt the market has changed with higher interest rates being the main culprit.\u201d He acknowledged some buyers are waiting to see if rates and home prices drop. \u201cMy fear is that buyers who take this approach may miss out on the perfect home as some fantastic properties have come on the market that have sellers who are determined to sell and move on,\u201d added Pust, the owner\/designated broker at Van Dorm Realty, Inc., in Olympia.<\/p>\n\n\n\n
Brokers added 7,260 new listings during October, down about 21% from the same month a year ago. At month end, the selection included 14,214 active listings of single family homes and condos system-wide. That was more than double the year-ago inventory of 6,588.<\/p>\n\n\n\n
The uptick in supply boosted the months of inventory figure to 2.2. That is the highest level, based on this metric, since January 2019.<\/p>\n\n\n\n
\u201cBuyers\u2019 opportunities abound,\u201d proclaimed Gary O\u2019Leyar, owner\/CFO at Berkshire Hathaway HomeServices Signature Properties in Seattle, noting inventory in several counties is two-to-three times larger than a year ago.<\/p>\n\n\n\n
\u201cAs for the interest rate \u2018elephant in the room,\u2019 the time has come for buyers and sellers to revisit financing methods from previous markets,\u201d O\u2019Leyar said, mentioning the use of buydowns, adjustable-rate loans, carrying back second deeds of trust, and closing cost allowances as possible options.<\/p>\n\n\n\n
\u201cInterest rates can and will change. When they drop, refinancing is an option or taking out a shorter term 5\/1 ARM. For buyers with foresight and market savvy, here is their opportunity.\u201d<\/p>\n\n\n\n
\u201cInventory continues to grow,\u201d said Frank Leach, broker owner at RE\/MAX Platinum Services in Silverdale and a member of the NWMLS board of directors. He described the market in Kitsap County as \u201cstrong and competitive. Open house traffic continues to be very active and buyers are being offered a number of seller concessions to soften the blow of increasing interest rates, especially on new construction,\u201d he reported. \u201cMortgage programs are offering below-market rates with various buydown options \u2013 something we have not seen for years!\u201d<\/p>\n\n\n\n
John Deely, executive vice president of operations at Coldwell Banker Bain, also commented on building inventory and strong open house traffic. \u201cWe are continuing to move into a more traditional market. Buyers are out looking and watching the market, and they have more time to make informed choices with the help of seasoned brokers.\u201d<\/p>\n\n\n\n
Unlike the recent past, when buyers encountered multiple offer situations and not being able to get into a property because they were outbid, Deely said the question for them now is affordability in the neighborhoods where they want to live. \u201cWe are seeing sellers who are concerned about further rate increases come to the market now to beat the traditional build-up during the first of the year and in the spring. With less competition, now is the time to get into the market.\u201d<\/p>\n\n\n\n
Dean Rebhuhn, owner of Village Homes and Properties in Woodinville, echoed those comments. \u201cWe\u2019re seeing buyers find opportunities, with sellers offering good pricing,\u201d he stated. \u201cLifestyle decisions continue to drive sales. Even though rising interest rates make it more difficult for some buyers, pent up demand continues.\u201d<\/p>\n\n\n\n
Describing the market as bifurcated, with some listings coming on the market and sitting for several weeks and others that come on and immediately get multiple offers or above asking price offers, broker Frank Wilson said both buyers and sellers need to be prepared.<\/p>\n\n\n\n
\u201cBuyers still have to act quickly and put their best foot forward when making an offer,\u201d stated Wilson, branch managing broker at John L. Scott, Inc. in Poulsbo. He also recommended relying on their real estate broker\u2019s expertise in determining the value of the home that interests them in today\u2019s market.<\/p>\n\n\n\n
Sellers need to be \u201claser focused on price and condition,\u201d advised Wilson, adding, \u201cWhat your neighbor\u2019s house sold for six months ago has very little bearing on your home\u2019s value today.\u201d<\/p>\n\n\n\n
Wilson also noted buyers tend to focus more on their monthly payment instead of the price of the home. \u201cIf they need a home today, they may need to budget for higher monthly payments until they can refinance to a lower rate a year or two from now, when hopefully rates will begin to go down again.\u201d<\/p>\n\n\n\n
\u201cEven with more choice on the market than we\u2019ve seen in several years, pending sales fell last month,\u201d remarked Matthew Gardner, chief economist at Windermere Real Estate. \u201cThe cause is almost certainly rising mortgage rates, which rose from 6.65% early in the month and ended above 7.1%; this is clearly having an impact on buyers,\u201d he added.<\/p>\n\n\n\n
Gardner believes many buyers may remain sidelined until mortgage rates stabilize, but added he had \u201cbad news for those buyers who are sitting on the fence waiting for home prices to implode.\u201d He expects regional home values will turn modestly negative in 2023, but said, \u201cthose who hope to pick up a home \u2018on the cheap\u2019 are likely in for a long wait.\u201d<\/p>\n\n\n\n
\u201cReal estate pros like this kind of market,\u201d proclaimed Dick Beeson, managing broker at RE\/MAX Northwest in Tacoma\/Gig Harbor, explaining \u201cThey get to display their negotiation and marketing skills,\u201d he explained.<\/p>\n\n\n\n
Beeson believes \u201cWe are now experiencing a balanced market. I said the new normal was 2-to-4 months of supply back two or three years ago. We\u2019ve finally reached that point. This is the new normal until interest rates go down.\u201d<\/p>\n\n\n\n
A few of the Northwest MLS spokespersons commented on new construction.<\/p>\n\n\n\n
\u201cHomebuilders are lowering prices and some are offering incentives such as interest rate buydowns to attract sales,\u201d reported Rebhuhn.<\/p>\n\n\n\n
\u201cWhile we don\u2019t track land on these MLS reports, we are seeing a definite uptick in activity with undeveloped land,\u201d stated Leach. \u201cRentals now under construction and being completed are at the highest numbers in Kitsap County\u2019s history.\u201d While rental prices should be more competitive with expanding choices, he said landlords may offer concessions, but he doesn\u2019t expect rents to be reduced. Nevertheless, he remarked, \u201cThere should be ample housing for every budget and lifestyle in the coming year.\u201d<\/p>\n\n\n\n
Also commenting on interest rates was the National Association of REALTORS\u00ae, which noted the slight dip in mortgage rates this week despite the Federal Reserve approving another 0.75% rate hike for the fourth time this year.<\/p>\n\n\n\n
NAR cited Freddie Mac\u2019s 30-year fixed mortgage rate that fell to 6.95%, down from 7.08% the previous week. \u201cIt seems that rates have already priced in some of the effect of the Fed\u2019s higher interest rates. It is also promising that this was likely the last rate hike of this magnitude, as indicated by the Fed,\u201d wrote Nadia Evangelou, NAR\u2019s senior economist and director of forecasting.<\/p>\n\n\n\n
Evangelou also speculated \u201ca return to the sky-high interest rates of the 1980s isn\u2019t likely in today\u2019s economy\u201d and drew comparisons to payments now with those of 40 years ago in today\u2019s money. \u201cIn real terms, after adjusting the median home price for inflation, the monthly mortgage payment was about $450 higher in 1982 than it is now,\u201d she wrote in a blog, adding, \u201cIf mortgage rates were currently 9% the monthly mortgage payment would be comparable to 1982 rates. Thus, in real values, current buyers pay less for their home purchase than buyers who purchased their home 40 years ago, although home prices are significantly higher now.\u201d<\/p>\n\n\n\n
About Northwest Multiple Listing Service<\/p>\n\n\n\n
As the leading resource for the region\u2019s residential real estate industry, NWMLS provides valuable products and services, superior member support, and the most trusted, current listing data and industry information for real estate professionals. NWMLS is a member-owned, not-for-profit organization with more than 2,500 member offices and 32,000 real estate brokers throughout Washington state. With extensive knowledge of the region, NWMLS operates 20 service centers and serves 26 counties, providing dedicated support to its members and fostering a robust, cooperative brokerage environment. nwmls.com.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":" Brokers with Northwest Multiple Listing Service (NWMLS) are reporting a return to some creative financing methods as motivated home buyers and sellers grapple with higher mortgage rates. Despite that, and the seasonal slowdown in activity, 6,435 hopeful homebuyers succeeded in having sellers accept their offers to purchase during October. \u201cBuyers are benefiting from more choices […]<\/p>\n","protected":false},"author":1,"featured_media":711,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","footnotes":""},"categories":[1],"tags":[],"class_list":{"0":"post-710","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-uncategorized","8":"entry"},"featured_image_src":"https:\/\/johnsonteamrealestate.com\/wp-content\/uploads\/2022\/11\/Mike-Bredeson-10-600x400.jpg","featured_image_src_square":"https:\/\/johnsonteamrealestate.com\/wp-content\/uploads\/2022\/11\/Mike-Bredeson-10-600x600.jpg","author_info":{"display_name":"fawn","author_link":"https:\/\/johnsonteamrealestate.com\/index.php\/author\/fawn\/"},"_links":{"self":[{"href":"https:\/\/johnsonteamrealestate.com\/index.php\/wp-json\/wp\/v2\/posts\/710","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/johnsonteamrealestate.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/johnsonteamrealestate.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/johnsonteamrealestate.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/johnsonteamrealestate.com\/index.php\/wp-json\/wp\/v2\/comments?post=710"}],"version-history":[{"count":1,"href":"https:\/\/johnsonteamrealestate.com\/index.php\/wp-json\/wp\/v2\/posts\/710\/revisions"}],"predecessor-version":[{"id":712,"href":"https:\/\/johnsonteamrealestate.com\/index.php\/wp-json\/wp\/v2\/posts\/710\/revisions\/712"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/johnsonteamrealestate.com\/index.php\/wp-json\/wp\/v2\/media\/711"}],"wp:attachment":[{"href":"https:\/\/johnsonteamrealestate.com\/index.php\/wp-json\/wp\/v2\/media?parent=710"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/johnsonteamrealestate.com\/index.php\/wp-json\/wp\/v2\/categories?post=710"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/johnsonteamrealestate.com\/index.php\/wp-json\/wp\/v2\/tags?post=710"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}