Many articles have been written to address the current state of the single family housing market in the Seattle metro area. The region is diverse in community character, value levels and proximity to employment and services. Therefore, markets within the region adjust to economic events differently.
The market is changing dramatically for high-end in the Pacific Northwest. Sellers who acquired housing in the first and second quarters 2000 - at the pinnacle of the market for the region - will take a hit if forced to sell. There are several instances of current listings at asking prices well below previous sales of 2000.
This is not to say that all markets are feeling the effect. The low end (below $400,000) in Seattle is not feeling as great an impact. And, close-in communities where sellers offer all components prerequisite to achieving the highest probable dollar are not having the significant impact of the transition from a seller's to buyer's market. Those further distant from the urban core, or those with external, functional or physical characteristics that reduce market appeal are or will feel the market correction in a more dramatic way through longer marketing times and greater price reductions.
The stock market correction, terrorist attack, and its effect on the airline industry, will affect our local market. Buyers are bottom fishing looking for a good buy. They know that time is on their side and that patience will inevitably benefit their goal.
The cause of this transitional market is new, however, the trend is the same. Seattle real estate cycles from buyers markets to sellers markets through the course of each decade. Boeing layoffs and the gas crisis of the early 1970s, interest rates in the early 1980s, corporate restructuring the early 1990s, and the latest dot-com and terrorism for the new millennium have put a stop to rapidly appreciating home values in the latter part of each 10-year cycle.
If history continues to repeat itself, the real estate market will see a re-adjustment period over the next 3 to 5 years moving from a buyer's market to stability, gradually building during the mid-years of the decade, and a bullish real estate market will prevail during the latter 3+ years of the 10-year cycle.
The key to marketing real estate during eras where there are more sellers than buyers never changes. Sellers need to first stage their homes for resale, then price their housing based on current listing competition, not on what sold last week, month, or year. The seller or his agent looking to the past will chase property values attempting to achieve what was, rather than what is. The seller or agent who has vision will catch the market, selling their listing in a reasonable time frame.
Today's market is an opportunistic time to buy. Interest rates are favorable and home prices have adjusted downward allowing buyers to get more real estate for their money.