Most buyers had a similar story: They’d find their dream home, fall in love, put in a good offer … and immediately get outbid by someone, sometimes by $100,000 or more. Maybe the winner was offering all cash; often, winners signed away all their rights, like the ability to back out of a sale if it turned out the roof was falling apart.
It created a vicious cycle – those who got outbid then had to resort to the same tactics to beef up their offer on the next home they targeted, and so on. At one point last year, a whopping 92 percent of homes sold in the city of Seattle featured multiple bidders.But with the market turning, those days are gone.
Just 21 percent of homes sold in the city of Seattle in November had multiple bidders, according to Redfin. That’s the lowest rate since the Seattle real-estate company began tracking in 2011.
Across the broader metro area that stretches from Pierce to Snohomish County, last year 79 percent of homes had multiple offers; now it’s down to 25 percent, also the lowest on record.
Now the opposite is occurring: The number of buyers out there keeps dropping, while more sellers are seeing their homes sit unsold for weeks, prompting them to cut list prices just to attract a single buyer.
Practically speaking, this means people who are out there now shopping for homes have several advantages.
First is time. Homes are selling here in about three to four weeks on average, up from just over one week a year ago. That allows buyers to do due diligence and think over the biggest purchase of their life – and to negotiate with a relative sense of calm.
The second advantage is on terms. Previously buyers were doing uncomfortable things, like handing over large sums of nonrefundable earnest money, to outshine other bidders. Now, with the power swinging the other way, sellers have been more willing to fix things like plumbing at their own cost, or to approve a delayed sale contingent on the buyer’s ability to turn around and sell their own home.
“You’ll have a much higher likelihood of keeping some protections for yourself as a buyer,” Tea said. “It’s a much more favorable market for a buyer today, especially as you go toward the higher price points. You have more power to negotiate.”
The lack of competition is just the latest indicator of a real-estate market that has been cooling for the last six months. Inventory is up, prices are down and sales volumes have declined.
There are several reasons: Interest rates had climbed significantly, eating into buyers’ earnings power, before dropping back down a bit in the past month. Rents have stayed flat in the past year, putting less pressure on potential buyers to act now. The barrier of affordability has reached new heights as prices grew more than twice as fast as incomes for half a decade.
And brokers have reported less investment money pouring in from buyers in China, who are more likely to make all-cash offers that typically win bidding wars.
Seattle is also part of a national trend: Even though the market is changing faster here than just about anywhere, markets are cooling in other areas, especially in pricey West Coast cities.