There are many stages in life where the mindset of temporary housing or a rental phase makes sense. However, Kitsap County home sellers should know that while it would have previously been the norm, these people are now more focused on finding permanent housing situations and increasing the number of buyers competing for homes in the Kitsap County real estate market. Part of this drive may be due to many company’s business models rolling over into home-based work. This has been especially true for those commuting from the Seattle area. Another phenomenon that has come to light, more wealthy investors are updating their investment plans to move with the market, making their second home purchases for retirement earlier than previously planned, increasing the shortage of available properties on the market.
Riding the Wave
Like a wave still rolling from the 2008 national trend of slowing new housing production, the backlog of completed units has yet to be met, let alone the surge in demand that has emerged since the pandemic. Low-interest rates are also pushing buyers into the market that may not have otherwise been able to afford as much housing. There is also a migration of buyers from high-tax states brought on by changes in federal tax guidelines, which means they can no longer write off their property taxes.
The National Association of Realtors reported in October of 2020 that there were fewer homes for sale now than ever. If no other homes were listed on the market starting now, there is just over a two-month supply of inventory available. There has also been a stall in the number of homes listed by sellers that would typically be making an upward move in housing, such as moving up from a starter home. Many homeowners choose to stay in place to see how they are involved and settle out before risking what they have in place. These factors have combined to create an epic seller’s market, with the surge in demand and shortage of housing units available, causing prices to soar. Read on to discover what Kitsap and Port Orchard home sellers should know about the real estate market in Kitsap County.
The Trouble With Bidding Wars
While a seller’s market may sound like a perfect scenario, Kitsap County home sellers need to understand how bidding wars affect the real estate market in the Kitsap area. The problem comes when buyers bid above the amount the home will appraise while needing to remain below the typical 80 percent of the loan to value the mortgage. There is a potential to lose your buyers, should they find themselves in a bidding war. They may not have the finances to afford the higher monthly payments and a higher principle, let alone the additional cost of mortgage insurance. And may not have enough cash on hand to cover any shortage between the appraisal and the final purchase price. This greatly reduces the numbers of potential buyers for your home.
At the same time prices are driven up all around the Kitsap area in all levels of homes. Think of it this way. If the typical three bedroom / two bath homes are selling for what a four bedroom home was selling for, that means that the four bedroom home will now sell for more. This is all relative to each situation. Not that it exists, but in a perfect appraisal of the property every difference and similarity to other properties sold in the area affects the appraisal.
What Goes Up Must Come Down
All good things come to an end. Housing prices had already begun to trend upward before the pandemic and continue to rise. Under the current conditions, most first-time homebuyers facing the rapid jump in listing prices cannot afford the average home. Kitsap County home sellers should be acutely aware that the current rising price trend on the real estate market in the Kitsap area cannot continue indefinitely, and the real estate market may crash. Even if it is not a harsh crash, it must adjust eventually. The balance of the market is just too one-sided right now. Indicators are that foreclosures, which are on hold now, will rise among lower-income households. Around 2.75 million mortgages are in forbearance under the CARES act’s protection at this time, with approximately 10 percent of all FHA-backed mortgages more than three months behind on payments.
Avoiding the Risks of Selling
Avoiding selling for too long may mean that sellers miss out on this rare opportunity to strike while the market is at or near its peak. When it comes to traditional listings, a significant number of people simply do not want to take the risks of meeting with strangers to negotiate or do business. Many would prefer not to have showings during the pandemic because of potentially ill buyers walking through their homes. With stress already at an all-time high for many, the mere thought of the additional pressures of selling a home, especially when school and work are home-based, is too much to consider. Kitsap area home sellers should know that there is another way to sell their home on the real estate market in Kitsap County, by selling to a direct buyer like Kitsap Home Pro.
Ready to learn more about what Kitsap County home sellers should know about the real estate market in our area? At Kitsap Home Pro, we are here to listen and help you handle all of your problems. With fair prices, straightforward easy to understand contracts, and quick closings. Working with Kitsap Home Pro means there’s no need to delay selling any longer! Kitsap Home Pro will walk you step by step through the process and help you determine what is best for you! Send us a message or call Kitsap Home Pro at (360) 329-4331 or Text 360-542-4113 today!