You know how I keep saying Seattle real estate is crazy right now? Well, an 1,110sqft home (with 800sqft unfinished basement) went on the market yesterday for $275,000. I called my agent to schedule a viewing for this morning. Turns out, I wont be able to see the house. It received 10 offers in about four hours and they aren’t accepting any more. My agent guesstimates the house is going to sell for no less than $350,000 as a result of the competition.
Now obviously the house is under-priced (it’s part of an estate sale). I knew that it was going to sell for above asking. Heck, I even ran the numbers on the property assuming we paid $30,000 above asking. The math looked good. But at $350,000 it’s not so appealing. Buyers in Seattle are like piranas right now. Snapping up anything and everything that comes up on the market.
It doesn’t make any sense to me.
The housing market is up over 15% since last year. I get that interest rates are at all time lows, but a 15% YOY growth is not sustainable. Especially not when interest rates are being artificially kept low by the fed. Interest rates will have to begin creeping up, and when they do, I suspect property values will creep down.
Seattle is in another real estate bubble.
A crappy house shouldn’t receive 15 offers in two days and sell for thousands above market value. You’re suppose to buy low and sell high people, not the other way around.
Inventory in Seattle has never been this low (1.6 months). That tells me we are in a sellers market. When it comes to making the largest financial decision of our lives, we’d like to have a healthy selection to pick from. That’s not the case right now and it sucks.
I’m skeptical that we will be able to buy anything in our target area. If a decent house is listed for a reasonable price, it’s going to get dozens of offers, within a few days, and probably sell for more than it’s worth. I’m not willing to play that game. Our current living situation is flexible; we can move out next week or next year. Once inventory reaches more normal levels (like 4 months), and quantitative easing is a thing of the past, I’ll have a better idea of how much a Seattle house is actually worth.
How’s real estate in your neck of the woods? Anyone else feeling like we are experiencing a mini-bubble?