Wednesday, December 11, 2019 / by Ariadne Gold
If you live in the Spokane area, you’ve probably heard that we are in a crazy seller’s market! (And if you haven’t, what rock have you been living under??) But what does that actually mean?
A seller’s market is a market that is financially better for sellers than for buyers. In technical terms, a market is a seller’s market if there are less than 5 months of inventory. This means that if no new homes came on the market, the current ones would sell in 5 months. Spokane is currently at 1.3 months, so that should give you an idea of the situation for buyers and sellers right now! This means that the demand is higher than the supply of homes (remember economics class?) and is great for sellers, but not so much for buyers.
In a seller’s market, many homes are getting multiple offers and are selling for thousands, if not tens of thousands, above list price. Buyers have less room for negotiation, and are having to move fast in order to put an offer in before homes leave the market. The average buyer right now makes five offers before they find their home. Five! That’s a lot of heartbreak and frustration.
This is great for sellers, because not only does it net them more money but it also allows more room for negotiation on things like closing dates, appliances, and the type of financing. In the Spokane market we are getting a lot of cash buyers, because there is a flood of people moving here from Seattle and California, where prices have skyrocketed in the last few years. Those who bought homes in those areas five-plus years ago are selling them, taking the cash equity and buying cheaper properties in Spokane.
There are a couple of things to keep in mind as a seller in a seller’s market. While you have more negotiating power in the beginning, buyers may be less likely to negotiate on repairs. When they’re paying what they feel like is above value for a home (they usually aren’t, but its hard to forget home prices as they were two-plus years ago) they will want the home to be move-in ready and to not have any additional expenses. You will also want to make sure you or your agent are doing all of the calculations if there are multiple offers; you may net more on an offer with a lower purchase price depending on the closing costs, closing date, pro-rated charges, and excise tax.
As always, if you have any questions I’m here to help. (509) 217-7172