Now is a surprisingly opportune time to buy a new home in the greater Seattle area. Let me explain what tends to be a somewhat surprising trend in our local market, and what will likely make it even more dramatic this year.
I hear all the time from clients that "summer must be a really busy time for real estate, since people want to move when their kids are out of school". In fact, summer (usually July & August) are relatively slow months in our real estate market. The reasoning behind this is that buyers typically get reinvigorated for their home search sometime after the first of the year, following the dark, rainy winter months when very few homes are listed. Buyers tend to realize that very few homes are being listed, and also aren't overly enthused to tour homes when it's dark and rainy, and houses don't tend to look as appealing as they do when the flowers are blooming, and the sun is out, so November and December end up being the slowest months in our real estate market.
This typically changes dramatically in January. Many sellers that have held off listing during the holiday season are ready to get moving on to their next living situation, and many buyers think, "new year, new home!" This tends to make for a significantly more competitive market in January than in the previous two to three months of the year (most years homes listed in January and closing in February see the higher month to month appreciation percentage of the whole year).
Whether buyers begin their home search right after the first of the year, or wait until closer to the spring, most buyers have already succeeded in purchasing by the summer months, or are burnt out if they haven't. As many people have experienced in recent years, the search for a new home can be a fairly exhausting process. Touring multiple homes, deciding on one that you are excited about, crunching numbers, figuring out potential work that may be necessary, trying to envision your life in that home, and finally, strategizing on how to make a competitive offer, just to potentially lose to another buyer, and start the process all over again. If buyers have been actively searching for a new home and going through all of this for months, many decide to take the summer off and enjoy our incredible summer weather, go on summer vacations, and just generally pull back on their home searches. Savvy listing agents know this, and may encourage their sellers to wait out the summer months to list their homes, which makes the summer a slower time in Seattle real estate than many people might expect.
That brings us to where we are now. Similar to January, sellers tend to wait until after Labor Day to list their homes, and many buyers are ready to jump back into their searches after taking a bit of a break for the summer. The interesting thing is that home sellers tend to be more anxious to get their homes listed after the summer slowdown than buyers tend to be ready to re-engage with their searches, so we almost always see the highest inventory of homes in the month of September. As the buyers work through the available homes for the remainder of the year, the competition tends to be lower in the 4th quarter of the year than it is in any other time of year.
This may be a bit different this year because interest rates have slowly ticked down since their peak in May, but have come down the most in the last month. Here's a chart showing the 30 year fixed mortgage rate for the last year.
I anticipate a few more buyers this fall than normal being motivated by the improved interest rates, but with some economists predicting the rates to continue to improve (slightly) over the next 3-6 months, many more might wait for the new year like they almost always do anyway. This all means that not only is September through the end of the year a historically good time to continue to be diligent with your home search because of less competition, and a big influx of new listings, this year specifically, interest rates have improved, lowering payments before what will likely be the typical price jump that occurs after the first of the year.
For those that are looking to "move up", or just want to buy a new home and then sell their existing home, this could be an especially opportune time to do so because you may be able to capitalize on lower rates, have more options available, and less competition on your purchase, and then take advantage of the shift to more of a seller's market that typically occurs in January and February.
