Market mayhem wreaks havoc for Mercer Island homebuyers | Real Estate Pulse

The inventory shortage continues to fuel the quick market on Mercer Island.

Listings coming on the market continued to trend down month over month. In April, the number of new listings dropped 9.5 percent compared to March, and from a historical perspective, they are down 24 percent from last year. Fortunately for sellers, homes placed under contract are still rising, as pending sales rose 33 percent year over year. That means those new listings were snapped up quickly. Buyers are making offers with fewer to no contingencies and very quick closings.

There are several factors as to why new listings are down 24 percent from April 2016. First, in a “normal” yearly real estate cycle, the market more listings come on the market in April because it usually takes a while for homes to sell, and if homeowners wanted to sell a home and move during the summer, they would need several months in order to close by June. Now, because of the extremely quick, frenzy market, sellers know they have the power to wait and not disrupt their families until the 11th hour.

Second, there just aren’t any homes for sellers to transition to.

Third, last month there were two less MLS reporting workdays.

Lennox Scott, chairman and CEO of John L. Scott Real Estate, said, “If you’re a seller, you are in the enviable position to be able to ask for concessions such as rent backs and longer closing times in order to design your own exit strategy from your home.”

He also says buyers shouldn’t discount the power of the back-up offer because the frenzy market has created situations where offers sometimes don’t appraise.

“Being next in line is a fantastic place to be.”

Sandra Levin, office leader, John L. Scott Mercer Island, says her office continues to have strong buyer demand but the competition to buy a home is fierce due to low inventory levels and the amount of people wanting to move to the area.

“Brokers representing buyers consistently have to compete with all cash buyers who are willing to pay far over the listed price for the home and cater their terms and closings to what the seller is looking for,” she said. “Sellers are in a conundrum. They’d like to take advantage of the seller’s market to cash out their equity at a premium price but they are faced with the concern about where they will live next.”

Mercer Island’s months of inventory is down 10.6 percent from last year, with the healthiest inventory in the $2 million to $5 million range. As the summer approaches and the warmer weather rolls in, realtors expect more inventory to come on the market over the next several months.

“There is a great likelihood that these market conditions will continue for the balance of 2017 and into 2018,” Levin said. “This makes buying now, in spite of market conditions, a better decision than waiting to pay even higher prices and risk losing the low rates.”

Sandra Levin is the office leader for John L. Scott Mercer Island.

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