5 Reasons for More Repeat Buyers in 2015 and how Current Homeowners should Prepare to Sell and Buy Again
by Realtor® and U.S. Army Veteran Ed Kunkel, Jr.
There’s no doubt, where I do business in Northwest Washington we have seen significant growth and stability in the housing market, and chances are your area is doing well too.
Seattle is one of the top 10 markets in the country right now, and much of that Seattle market momentum is being realized abroad. Thurston County has seen a 4 to 6 months supply on average, which leans towards being a seller’s market. The further North you travel from Olympia towards Seattle, the trend is even more in favor of sellers. Inventory has been low. Yet, the trend may change as more new construction and resale homes hit the market in a “bandwagon” effect.
It’s fascinating to see what market trends come about every year, and this particular year will involve an increase in repeat and move-up buyers. Here are some reasons why:
1. Homeowners that were once underwater are seeing positive equity. Unfortunately, some consumers purchased at the peak of the boom market in 2006, and have either done a short sale, foreclosure, or held on for dear life. It’s been a long and twisted road since then, and the market has been shifting for the better – offering a level of stability that hasn’t been seen for a long time. It may be enough for many current homeowners and ‘used to be’ homeowners to move forward as repeat buyers.
2. Foreclosures and distressed properties are continually on the decline. This is great news, particularly for Washington – as our distressed inventory is no longer dominating the market. Even so, our market professionals have had the time and experience to navigate and streamline the processes for closing on distressed properties. The activity of buying a short sale home or repo is not nearly as daunting as it was during the market crash, which contributes to the consumer confidence we have now.
3. Demand for resale housing is on the rise. As I mentioned earlier, the demand for housing is huge in our state right now- particularly in areas near the I-5 corridor. This will be even more important as repeat buyers will play a key factor in our market. Consumers wanting to bank on the resale market are in a unique position, and the most opportune time to take full advantage is before summer hits this year.
4. Investors and First-Time buyers will buy less. For the last few years, investors have been instrumental in helping contribute to the strength of the market we have now. Since distressed inventory levels are in decline, this will cause less market activity for investors. Resale non-distressed homes and new construction will control the next market shift, and consumers will likely pay more now to purchase a home than for the last several years.
This will be the ideal market for repeat buyers, since many of them will reap the benefits of higher prices as home sellers. It’s likely that First-Time homebuyers will also buy less this year due to the nature of this market, coupled with an anticipated climb in interest rates.
5. Mortgage rates will slowly climb this year, causing a ‘time is of the essence’ mentality. Resale buyers will not be as hesitant by this notion of a slightly higher interest rate as First-time homebuyers will. A modest climb to 5% is predicted for rates this year, that’s not even in the ballpark to discourage a seasoned buyer. It will however place an emphasis on the importance of ‘locking in’ at the right time, and taking advantage of housing that is within reach when the window of opportunity presents itself.
So, to my repeat buyer crowd – get ready, there’s a lot to prepare for to be successful in this market! First, take a good look at your financial picture with your lender, and discuss your options. Is it better to hold your home as an investment and buy again, or do you need to sell in order to move up?
With an understanding of your purchasing power, put your goals and plans together and take full advantage of the opportunities available in this market. Next, find out what your home is worth. If putting your home on the market is part of your plan, it is critical for your success to hire an experienced agent that understands how to effectively market resale homes that are not distressed.
An experienced agent is going to make recommendations on prepping your home for the market to include: de-cluttering, de-personalizing, cosmetic repairs, cleaning, staging, and landscaping. All of these are important to your success, and should not be taken lightly. Don’t cut corners, you want the best value for your home to be able to move up, so play to win. And keep in mind, prepping your home will usually be cheaper than your first price reduction.
Ed Kunkel, Jr. is a Managing Broker/Realtor® at Keller Williams Realty in Olympia, Washington. Visit Ed here. Ed’s Military History: Veteran – U.S. Army and Air Force Reserve; Highest rank, E5; 11 years combined military service.