The first five months of 2021 have seen a hot local real estate market, with rising prices, low inventory and plenty of competition among harried buyers. It has been such a seller’s market that, despite the incentive of sensationally low interest rates, many buyers have hit the double wall of fatigue and frustration.
But good news may be lurking around the corner for still-motivated buyers and even for those who may have opted out of this spring’s peak frenzy.
In a typical year, spring’s manic market gives way to a more languid pace of home sales and buyer activity. As the weather warms and school ends, many buyers leave the market and focus on their summer plans. At the same time, sellers often take their time getting to the party and begin to put more homes on the market, bringing an influx of inventory.
Will 2021 be a typical year in this regard? We went looking for insights from some of Windermere’s local leaders about whether the next few months might bring buyers better opportunities and fewer frustrations.
“We typically see more homes listed between now and September,” says Pete Richmond, owner of Windermere’s Greenwood and Magnolia offices. “There’s no reason to believe this summer will be any different than the historical pattern.”
This could be welcome news for buyers who have scoured scant supply for months. According to Richmond, the late spring trend of increased inventory has already begun.
“May this year is matching recent years in terms of expected new listings,” he says.
D’Ann Jackson, who manages Windermere East Inc.’s Bellevue office, sounds a slightly more cautionary note about the supply of homes in the scorching Eastside market.
“I don’t think we’re going to see big increases of inventory in single family homes,” she says, “at least not enough to make a dramatic change.” But Jackson does see supply increasing in another Eastside housing segment — condos.
Pete Richmond also sees the Seattle condominium market offering buyers strong options.
“Condos haven’t experienced the price growth that the residential market has, so they are the affordable option.” Richmond says. He notes that condos often appeal to buyers wishing to live close to restaurants and shops and predicts that having COVID more under control will further motivate these buyers.
“These places will begin opening at capacity, and this will bring energy back,” Richmond says.
Windermere’s Chief Economist, Matthew Gardner, believes that an increase in inventory could help reduce listing prices. From March to April 2021, King County saw the average listing price for single-family homes fall by about 7% — welcome news for buyers who have been contending with rising prices for months now.
On top of the growing supply that slows price increases, there may soon be a dip in demand. According to Joe Easterday, owner of Windermere Mount Baker, this can be credited to both existing buyers stalling out and fewer new buyers entering the market.
“There is definitely buyer fatigue that’s caused some buyers to take a pause in their housing search,” Easterday says. He also notes that between January and April there were considerably more closed home sales than at any point during the last ten years over the same span of months.
“So a lot of people – more than usual – have been in the market and already bought homes,” Easterday points out.
There are other factors at play that may reduce the pool of buyers in the market.
“With people getting vaccinated and now able to travel and attend functions they’ve missed out on over the last year, I think there will be less focus on housing searches over the next few months, and more focus on social events and travel,” Easterday says.
Laura Smith, co-owner of Windermere Real Estate Co., agrees.
“As we further open up life in the waning stages of the pandemic, what will people choose to focus on during the summer months? I think we’ll see that choice in gatherings, connectivity to people and fun,” she says.
Easterday sums up the predictions of his colleagues at Windermere Mount Baker about quieter buyer activity in the months ahead.
“The combination of an extremely busy housing market this year plus upcoming opportunities to travel and socialize may cause demand to drop off a bit,” he says. “In my opinion, it’ll be nothing drastic, but I don’t foresee demand over the next three months matching what we saw in the first part of the year.”
Less competition from fellow home shoppers means increased opportunity for those buyers still committed to making a purchase. So where are the greatest opportunities?
D’Ann Jackson sees opportunity for buyers focused on either closer-in condos or homes in the King County exurbs. “To be able to get into the market, first-time buyers still have to consider condos or go a little further out.”
Jackson specifically sees options for buyers searching for homes in communities like Carnation, Renton, North Bend, Maple Valley and Covington. In the urban core, she sees buyers who’ve lost out on single family homes in multiple-offer situations being well-prepared to come out ahead when they switch to buying a condo.
Will any of the predicted changes in the intensity of our market translate to less opportunity for sellers this summer? Our experts don’t think so.
“To me, there seems to be depth in the buyer pool that may be deeper than normal,” says Richmond. “And buyer fatigue doesn’t really seem to be there for the well-positioned homes.”
Laura Smith thinks sellers still have time to list with success. “They’ve seen for some time how the market has favored them, and I think this confidence will lead to more listings this summer.”
For prospective sellers currently debating about listing their home, Jackson thinks they’d be wise to seize the moment.
“If I were a seller, I’d jump in now because of what’s happened with escalated prices,” she says. “I would take advantage of now.”
