BY BRANDON MACZ and LINDA BALL
REPORTER NEWSPAPERS
The Eastside housing market has been a seller’s dream for more than a year now, but a lack of availability and fierce competition is making it challenging for many looking to strike a deal for a new home.
Northwest Multiple Listing Service brokers reported 75,517 sales in King County closed in 2013, valued at $25.5 billion. The median price for a single-family home was up 10.2 percent over 2012 at $270,000.
Bob Papke, owner/broker of Re/Max in Sammamish, said the tide turned from a buyer’s market to a seller’s market around February 2013.
“Things were down 30 percent from the peak,” Papke said. However, he added, “We picked up 15 percent last year and are up another 7 to 10 percent this year.”
But many first-time and move-away buyers are finding themselves faced with stiff competition for a limited inventory of homes, Realtors say.
For Papke, the problem is there are people, himself included, waiting for the market to come back to the level it was in 2007 before selling. That has fueled new construction, which was stagnant from 2007 to 2012.
“People who have to move or newly constructed homes is the inventory,” Papke said.
“The big challenge with new construction is when the market went into decline there were so many home builders caught with that standing inventory,” said Realtor Teri Herrera, adding builders scrapped development projects and land options at that time. “What’s happening now is those builders are scrambling to find land, and everyone’s competing for the land that’s out there.”
Builders can barely keep up with the demand now, Papke said, and in both Issaquah and Sammamish big houses are going in on small lots.
Also fueling new construction are international buyers, who like a newer product. Papke said 40 percent of them are paying cash, and in multiple offer situations, they win.
And it’s testing Realtors and buyers.
“These multiple offer situations are hard on everyone,” Papke said. “They are not for the faint of heart.”
In Herrera’s experience, move-away buyers are hesitant to put their homes on the market, worried it will sell quick and leave them looking for interim housing. Competitive bidding for homes in Bellevue has resulted in purchasing prices as high as $200,000 over the original asking price. One client, a foreign investor, buys properties for rentals and recently competed in three negotiations totaling 32 competitive offers.
“In each case we were the winning offer, but we also were offering cash, no inspection, no finance contingency and 10-day closing,” Herrera said.
Many homebuyers worry they won’t be able to compete.
“There’s just not a lot of good deals to be had,” said CoCo Fulton with Windermere, who said alternatives include short sales and auctions. “They come at just such a risk.”
Appraiser Daren Nelson said this market is not making his job any easier, either. With less inventory and less historical data (appraisers should not use data older than six months) and with multiple offers, it’s harder to support the sales price he said.
“We don’t always have the data to support that price, so the sale either falls through or they have to renegotiate,” Nelson said.
Nelson said he’s heard both sides – where a seller will come down, or a buyer will pay above appraisal. In the case of a cash sale, no appraisal is needed.
Nelson said the average price east of Lake Sammamish Parkway was $580,000 in April of 2013 compared to $656,000 in April this year.
Papke said last year in August, frustrated buyers gave up and that could happen again.
Fulton advises homebuyers to be flexible entering the market. A new listing may seem appealing, but she said buyers can expect to pay 2-4 percent more than the asking price.
Brandon Macz: 425-453-4602, bmacz@bellevuereporter.com
Linda Ball: 425-391-0363; lball@issaquahreporter.com
