New Rules for Buying a Seattle Condo
If you’re been looking to purchase a condo in the Seattle region, it almost seems as though the market changed overnight. Ever since the condo market crashed several years ago, and with an abundant supply of condo properties, buyers had been keenly aware that Seattle represented a strong buyer’s market. However, since the start of the year that has now changed.
Seattle is exhibiting seller market characteristics as the supply of available condo properties for sale constrict. Compared to last March, there are 40% fewer properties on the market today and since the peak in 2008, inventory is down 60%.
Demand has risen as homebuyers and investors take advantage of lower condo prices and mortgage interest rates. As a result, buyers are encountering more multiple offer situations and, yes, we’re even beginning to see bidding wars again.
How can buyers best position themselves to have their offer accepted at the best possible price?
Here are “new rules” for buying a Seattle condo in a seller’s market:
- Get your finances in order before venturing out. Work with a condo mortgage lender to get pre-approved, or if you’re a cash buyer, have your proof of funds on hand. You will benefit by knowing how much you can afford and you’ll be in a stronger position when making an offer. Buyer financing is the number one reason why transactions fall apart so sellers give greater weight to cash and pre-approved buyers.
- Know your limit. If you happen to encounter a multiple offer situation, know how high you’re willing to go. This will allow you to present your highest and best offer while keeping you from straying beyond your budget. The last thing you want is being caught up in a bidding situation and paying more than you should.
- Research in advance. Determine the neighborhoods and buildings that best suit your needs and lifestyle – amenities, transportation and commute options, crime rate, market sales activity, price trends and so on. By defining the areas you’d like to live in, you’ll be able to move more readily giving you an edge over the competition when properties become available in your favorite neighborhoods. You will know a good value and the perfect property when you see it.
- Be prepared to act quickly. When a condo that ticks off all the boxes comes on the market, be prepared to act quickly. Condos that are well priced for the market, in good condition and located in desirable neighborhoods are selling faster. Recently, in the hour it took me between setting up a showing with a buyer and arriving at the property the unit went pending. It was on the market less than 24 hours.
- Strengthen your offer position. In a multiple offer situation, consider minimizing contingencies and strengthening the other elements of your offer. This may include a larger down payment or earnest money deposit amount, pre-inspecting the property or being flexible with the contract terms such as the closing date or escrow preference.
Heading into spring, we are moving towards the high season for home purchases. The low cost to finance, better values and warmer weather offer a compelling opportunity for buyers to enter the market, and as they do they are experiencing dwindling inventory supply and greater competition from other buyers. To get the edge buyers need to be aware of the news rules in Seattle’s evolving condo market.
Are you ready to get your condo feet wet? Contact the Seattle Condo and Lofts team today to get started!
Move quickly or you will be priced out forever. Prices will never go down 30% for condos in Seattle. Rush now ….
Ah, but I wasn’t talking about prices. We we haven’t reached the bottom yet…there will still be fluctuations. What is happening, and you’d need to be actively in the buying process to experience it, the lack of inventory is resulting in disappointed buyers. Inventory is being snatched up fast. Today we have less than a 2 month supply. The current rate of sales is outpacing new listings, which we haven’t seen since the early 2000s.
The point of the post is to provide relevant tips for buyers to position themselves to get their offer accepted particularly when facing a multiple offer situation.
Here’s market activity for the past seven days (Seattle condos only)…sales (pendings) outpaced new listings by a nearly a 2 to 1 margin:
We’ve been seeing similar trends across many areas and price points. Downtown doesn’t seem to be an anomoly. Great info for prospective buyers…
Seems the market/prices are dropping again. My partner and I have been seriously considering Seattle for years. We’ve only just begun prelim research by perusing the listings on zillow.com. Not ready just yet to get with a realtor. I’m reading that quarter to half mill is pretty standard. Our limit is quarter. We’ve seen a few listings below the quarter mill mark, and they look amazing. Gorgeous neighborhoods. Amenities. We’re going there this summer after conducting our research. Can’t wait. Great, informative post, though I’ve only just caught it.
Although this was posted in 2012, I was wondering what the condo market is like now in 2014 in the Seattle area? I am moving to Seattle and plan to move to into the Wallingford region however I am unsure if it makes more sense to rent an apartment or buy a condo at this point. If I planned to have a career in this area (working for Google) do you have any advise where to look?
Thomas – the information is even more applicable in our current market, which continues to be a strong seller’s market. As of January 2014, the Seattle condo inventory supply rate dipped down to a 1.6-months of supply.
Part of that is demand combined with a 5-year drought in new inventory. The last condo building was completed in 2009. However, there are at least two condominiums under construction that are expected to be completed in Spring 2015. Both of those have foreign construction financing.
As for where to look, that is a personal preference. Though, you’ll find the bulk of condos are located in high-density neighborhoods such as Belltown/downtown, Capitol Hill, Queen Anne, Ballard, downtown Kirkland and downtown Bellevue.