October 27th, 2018 – If you are a person with your finger on the national or regional real estate pulse, or if you are thinking of buying or selling a home this fall, you have most likely heard the phrase: “The market is shifting”. For most people, their minds immediately go to a dark or semi dark place, where images of 2009 or even as far back as 2000 reside. Potential sellers begin to imagine losing the equity they have earned over the last few years, taking longer to sell their home and encountering buyers who only want to wheel and deal their way into a home they have ‘stole’ away from the seller. Buyers begin to imagine….well often times they imagine, “I am going to wheel and deal myself into a steal!” However in Yakima, a shift in the market most likely won’t mean either of those options.
What is a shift in the market?
It is when the market moves from a sellers market to a buyers market, or visa versa. Homes that are for sale and listed by a real estate broker or company are the Real Estate Broker/Agent’s inventory. When inventory levels are are 8 or more months, you have a market where the buyer has the upper hand. When you have less than 5 months, it is a sellers market.
In Yakima we have averaged about 2.5-3 months of inventory all of 2018 making it a very strong sellers market. Multiple offers have been very common and homes have been selling at an average of 98% of the listing price. It has been very common for homes to go under contract within 72 hours of being listed on the Yakima Multiple Listing Service. Many buyers have had to make offers on several homes before they have gone under contract.
What is most likely is that the Yakima market will shift into a normal market and stay there for awhile before it ever moves to a strong buyers market. A normal market is one where there are close to equal buyers and sellers and inventory levels are around 7-5 months. This allows for good competition, but reduces or eliminates multiple offers on one property. In a normal market housing prices climb at a reasonable rate (historically in Yakima 3-5% per year) instead of 9-12% year over year like we have seen 2016-present.
What are the indicators of a shift in the market?
- Existing home sales slow down
- Prices start to drop
- New construction slows down
- Reduction in multiple offers
- Longer time on market
One other thing to consider is the 2018 tax season. Remember all the changes in tax law? Well some people are going to do better than they originally thought, and some are going to do worse. Yakima’s Rescue Realtor believes that after people have their 2018 taxes completed, that this along with the potential for interest rates to have gone up even more than the current tax rate , we will begin to see the Yakima housing market SHIFT to a NORMAL market.
Here is what a shift in Yakima might look like:
A true shift in the Yakima market could potentially be felt by fall of 2019 – a year from now. In a normal market for Yakima, home buyers and sellers should both happy, as would real estate brokers, lenders and many other real estate industry professionals. A normal market is what you want to see, an ideal market. So live it up Yakima once it gets here, and pray it sticks around for a long time.
If you have any other questions regarding a shifting market, or to find out the current market value for your home contact Amy Maib today. Sellers click here to contact Amy Maib