Recently the Seattle Times reported the Seattle Real Estate Market is hotter than ever. Home prices in King County have increased by over 18% on average year over year. What does this mean for you as a Seattle home-buyer or home owner considering selling?
Is the Seattle real estate market good for homebuyers right now? The answer is, “it depends”.
There are three different types of home buyers.
- Long Term buyers – those who plan on owning properties longer than seven years
- Forever buyers – those who plan to buy and keep property indefinitely
- Short term buyers – those who plan on owning for less than seven years
Long Term/Forever Buyers
Seattle real estate is like a stock that, over time, always goes up. This means, in the bigger picture, it doesn’t really matter when you buy property, since the value of it will always go up. When real estate values increase, you can weather all the ups and downs. Values always (eventually) increase. Buyers shouldn’t get too focused on timing the market. Instead they should focus on buying a good property in a good location. You don’t want to buy the most expensive house on the block, but if you do, it won’t really matter 30 years later.
In 2006/2007, Seattle/ King County property values had found a new peak. In 2008 it crashed into depths not seen in several generations. Eventually, it recovered and we’re now hitting new highs. Even if you bought at the peak in 2006/2007, by now, your investment likely has recovered above and beyond what you paid for. (Although you had to wait 8 years or so for that to happen.)
Short Term Buyers
If you’re looking for a short term real estate investment, honestly, Seattle real estate is risky right now. Buyers that are able to buy are having to pay over list (and sometimes considerably over list). If you have the most expensive property in the area, it’s a bit hard to predict what will happen in the market in the near term. Things could go up, or we could experience a pull back. If the Great Recession taught us anything, it’s that crazy things can happen in the short term.
If you think you need to sell in the next 5-7 years, you may be able to turn a profit if the market keeps going strong, but you might also be stuck with a property that hasn’t appreciated enough to cover your selling costs. The bottom line for short term King County buyers is that there’s more risk if you’re buying right now and you’ll be paying a huge premium.
In Seattle and King County t’s a great time to be a seller. That said, most sellers will also have to buy. That means it’s a double edged sword. You’ll make a killing selling your property, but you’ll probably have to pay a big premium in order to buy something to replace it. The best scenario right now is if you can sell without buying anything right away.
It’s a complicated real estate market and you have questions.
- Is this the best time to sell in King County?
- Should I buy a home now even though values are high?
- Should I sell or rent my Seattle home?
At VerraTerra we’re here to consult and educate to help you accomplish your real estate investment goals. We offer end-to-end real estate services and property management services. We’re based in south Snohomish county and serve customers in King and Snohomish counties.
Most important, we don’t charge ridiculous commissions based on the price or rental value of the property.