Whether you are wanting to buy or sell your home the best thing that you can do is educate yourself. Learn the process, hire a relator, and know your market! In Snohomish County these are the top 3 things that will help you succeed in your real estate transaction.
1. We are in a Seller’s Market
So what is a seller’s market and how do we know that we are in one. Currently in Snohomish County we are at about 1 months of inventory. And that is down nearly 16% from last month!! Typically anything that is 3% or less is a seller’s market. Anything 3-5% is a neutral market, and anything above 6% is a buyer’s market. This is so great for sellers! Less inventory, means less competition, which can drive home values up. Which is what everyone is seeing right now. So if you are thinking about or wanting to sell your home, now is the time to do it. So, that’s all good for sellers, but what if you are a buyer? Does that mean you are screwed and are paying too much for a house? Does that mean buyer’s should wait to purchase until more inventory becomes available? The answer to that is no. The reason the answer is no, is because a buyer’s purchasing power is still strong due to the low interest rates that we are currently experiencing and we do not know how long that will last, see #2.
2. Interest Rates are Still at Historic Lows
Currently the interest rate on a 30 year fixed is at 4.05%. To put that into perspective this same time in 1997 it was at 7.82%. Then in January of 2007 it was at 6.22%.
So, all of those numbers are great, but what does that mean for buyers? Simply put, this gives buyers more buying power, more bang for their buck! Lets break it down:
- Home price: $350,000
- 30-year fixed rate: 4%.
- Total payment: $1,503.86/month plus taxes, homeowner’s insurance and PMI
Now lets take a look at the same price with a higher rate:
- Home price: $350,000
- 30-year fixed rate: 4.5%
While $92 extra month does not seem like a lot, it is!That extra $92.20/month is $33,191.54 over the 30-year life of your mortgage. If rates climb to 5% the incremental cost jumps to $184.40/month and $66,383.08 over 30 years!!! Click here for link to article.
3. The Average Days on Market is 38 Days
Currently in Snohomish County the average days on market for homes is 38 days. This may seem like a long time. After all, we know we have a shortage of inventory and willing and able buyers so what gives? First of all, let me say that this is an average of all sales in all of Snohomish County, Including short sales, foreclosed properties and all price ranges & areas. I also believe this may be a result of sellers over pricing their homes, causing them to stay on the market longer. Click here for link to graph.
If you are a seller, the reason why you need to know this, is to make sure your price your home correctly. And more importantly make sure that your relator will tell you what price is too high. When homes are listed too high, they just will not sell, no matter what the market is like. And if you do get a buyer, the appraisal will not support the price.
If you are a buyer, the reason why you need to know this is because if things are priced correctly, they move fast in this market. It is not unheard of to have a home receive multiple offers on the first day of listing. Make sure that your realtor understands your market and knows the value of the home you wish to purchase.
Snohomish County Cumulative Days on Market
- $200,000-299,000- 38 days
- $300,000-399,000- 34 days
- $400,000-499,000- 37 days
- $500,000-599,000- 38 days
- $600,000- 699,000- 39 days
Being prepared for what to expect in the market will help you through the process, whether you are buying or selling. Hire the right professional to guide you through. And remember, the more you know, the better.