2008 is starting with a whimper in Seattle. All agents/brokers are having to keep ears to the walls and it's the only way to hear anything right now. And yet, Seattle is one of the strongest markets in the U.S. . Our employment and quality of life picture is bright. What is really going on? Are we the last important market to begin feeling the pain? Or is the Seattle market creating it's own downturn, as factors here are so different from the rest of the country? Is this human nature at work and not the fundamentals?
Based on my regional tour of homes for the past two weeks, sellers and buyers have become enemies.
I've noted this in previous posts, but today it's becoming more obvious to a wider range of real estate professionals; sellers feel entitled to their profits. Buyers do not care one bit and are waiting for their moment to make those offers. Neither is correct. Unless crystal balls have suddenly become envogue.
From Seattle to Snoqualmie, sellers are on average 30k above sold comparables prior to August, 2007. They are dictating to a market that isn't writing anything down. As for buyers, they have suddenly become experts and are wringing their hands, waiting for a giant correction that won't be coming in quite the way they think.
One thing I know as absolute truth is that buyers and their representation simply do not know how to work around a list price. We are simply not seeing negotiation skill at work. For sellers, they do not understand that list price to many is THE PRICE. You won't find this happening anywhere else. But Seattle? Nobody is having this conversation.
I enjoy being a listing agent, but I have my sphere of highly qualified buyers too. Just this past weekend, I watched my clients view four very good homes in Redmond/Sammamish and come down to an interesting but misguided conclusion. "It's worth 40k less to us, but we will wait until the listing price changes, thank you". Wha??
Nevermind that my buyers also need to sell their homes in order to upgrade. Don't even think for a second whether or not they are considering how this pays forward when they list their own homes, "oh no, Karma has nothing to do with MY home". Meantime, we go through the motions, create the CMA's and make the presentation, only to see the buyer, who also needs to sell, raise their own listing price 30k - 40k above where it needs to be at.
The circle is complete and the market is creating it's own problem. It's like smog in the L.A. basin, just hovering until something from nature comes along and blows it somewhere else.
To paraphrase and tweak Gordon Gekko in Wall Street; Greed, for lack of a better word, is NOT good.
Win-Win is.
Most markets are trying to survive. In Seattle? We fight over 150k -200k gross profit for a three bedroom "war box" and how much of that pie from ownership during 2003- 2007 the seller can keep.
WOW!
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