First-time homebuyers, sellers face a crazy competitive market

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By Olivia Palmer

For first-time buyers like Miranda Dancik, the home search process is a maze of rising prices and bidding wars. After six months, his search in West Seattle has still ended in dead ends.

West Seattle has traditionally been one of the cheapest areas in the city. Dancik said her affordability and location between her and her husband’s workplaces were two of the most important factors in their decision to start looking for a home there. But the stiff competition meant that they outbid every offer they made.

“Now is the time when we have enough money saved for a down payment,” Dancik said. “Were excited. We want to buy a house. And it was kind of a rude awakening when we saw the reality of the situation.”

West Seattle Mortgage Mortgage Broker Rob McAlister

Rob McAllister, mortgage broker at West Seattle Mortgage, said first-time buyers like Dancik are often at a disadvantage because they tend to have a lower down payment. Competing with cash offers, it is almost impossible to secure a home.

Dancik recalled a house that had 37 offers on it. She and her husband were number 37.

“People are offering hundreds of thousands of dollars above the list price and have that money to pay the difference between the appraisal and their actual offer,” Dancik said. “And, you know, two young people in their twenties who don’t work in tech don’t necessarily have all that extra money.”

Katie
Katie Melton of Every Door Real Estate

Dancik’s situation is not uncommon. Katie Melton, a West Seattle real estate broker, said 15-20% off the asking price is the baseline in some neighborhoods.

mara
Managing Broker at Compass Real Estate Mara Haveson

Mara Haveson, management broker at Compass Real Estate, saw a home in North Admiral jump 5% to 30% from the listing price and sell in just six days.

Since it closed in March 2020, Melton has said she has had clients who view the West Seattle Bridge as a big obstacle to buying a home in the area. Despite this, the West Seattle housing market remains very competitive.

Haveson said one factor that could have lessened the impact of the bridge closure on the market was the accidental start of the pandemic. With fewer people going to work in person, commuting from West Seattle has become less of a consideration for some.

Haveson said she also believes the pandemic may have made it possible for families to consider buying a home when they might not have done so otherwise.

“For a year of COVID, no one was really traveling. No one was really spending money on going out to dinner, ”Haveson said. “People were spending a lot of time at home and realizing that they really needed a better house. ”

Low interest rates have been a motivator for many who are looking for a home. McAllister said buyers don’t necessarily buy value; they buy a payment. Low interest rates block low payments, so many buyers are willing to invest more for a down payment at a time like this.

Another driver of competition is the low inventory in the market. Haveson said she estimated about 50 single-family homes were on the market in West Seattle as of early spring 2021. Although availability has since increased, it remains low, maintaining a competitive market.

“The reality is that once the bridge is restored, it will become even harder and harder to enter a house here,” Haveson said.

As for the West Seattle housing market landscape, Haveson said homes west of 35th Avenue southwest tend to be more expensive than homes east. In neighborhoods to the west, like Belvidere or Genesee, she said an average small house would likely cost around $ 800,000. In neighborhoods to the east, like the Westwood area, that figure could be closer to $ 600,000.

Neighborhoods on the east side of West Seattle aren’t just more affordable. Melton said areas like Delridge and Highland Park also have higher inventory, more construction, and more variety (a mix of single-family homes, condominiums and townhouses). These are often neighborhoods for “starting houses”, resulting in higher turnover.

Melton said she wouldn’t necessarily call any part of West Seattle a “hot zone” for real estate.

“It’s a bit of a running joke, every house is a hot house in Seattle. There is nothing available, ”said Melton. Nonetheless, she and Haveson said they have noticed that certain neighborhoods seem particularly popular in West Seattle.

Haveson said traditionally popular neighborhoods like North Admiral and Alki remain competitive. However, areas in transition like the White Center are also becoming increasingly competitive due to their room for growth and appreciation.

“The flip side of a crazy market like ours is that once you’re able to get – no pun intended – your foot in the door, then it’s like instant equity,” Melton said. “And so you benefit from that rapid growth once you own it. “

Dancik and her husband were looking for a house in Highland Park, Delridge or White Center. Even limiting their search to these more affordable neighborhoods, however, she said she began to fear they might be left out of Seattle altogether.

“We would like to stay in Seattle proper. This is where our friends are. But it’s getting a little out of reach, ”Dancik said.

Here’s an interactive map showing market statistics for different neighborhoods in West Seattle, using Redfin data.

You can consult the map here

Rachael Morris faces a similar dilemma.

Morris bought his parents’ townhouse near Fairmount Park 10 years ago. At the time, it cost about $ 270,000. Over the course of a decade Morris said its value had roughly doubled, now standing at around $ 550,000.

As Morris’s property value increases, so does his property taxes and insurance. She said these rising costs had become a problem for her and her neighbors, but when she looked for places to move, she struggled to find something affordable. Competition and the bidding wars now woven into the fabric of the marketplace have put many options out of reach.

“I want to move but I don’t know where to move. Because the more I watch, the more I have to move to Puyallup to afford something decent with a yard, ”Morris said. “Even the houses I could afford now are overpriced. “

Due to high demand and low inventory, McAllister said sellers have the freedom to be more selective, requesting full income documentation, credit surveys, employment history and asset information and buyers’ bank accounts. As Morris discovered, however, this freedom often does not last after a sale.

“They hear the same thing they’re told, hey sell your house, we can sell in five minutes and you’re going to get a bunch of offers and you’re going to make a ton of money,” McAllister said. Well, then you’re a buyer, and then none of that is good news for a buyer.

As competition pushes many buyers further south, it also has an impact on the residents of these communities.

Peter Kwon, deputy mayor of SeaTac, said he himself was kicked out of Seattle. Now, SeaTac, one of the cheapest areas in King County, is also becoming unaffordable for its residents. When people are displaced, they usually have to move to an entirely different county.

“I’m still watching the local real estate market, just out of personal curiosity, and I can’t even afford to buy my own house today,” Kwon said. “The SeaTac people are moved because the people from Seattle are moved, and then come here to SeaTac. It’s disappointing to see that; it’s like a domino effect.

For West Seattle residents like Morris and Dancik, a reluctance to move south has less to do with affordability, and more to do with community.

“We love West Seattle,” Dancik said. “It’s kind of a nice little oasis away from the big city, even though it’s Seattle, it feels a bit out of the way.”

Morris felt the same.

“We still have a small town feel, and that’s a big thing,” Morris said, noting the convenience of having grocery stores, a vet, and a mechanic so close to her home. “Neighbors are always neighbors; real neighbors.

As Dancik continues to search for a home, she said she worried that moving south might not just add to her commute; it would also isolate her and her husband from their friends and community. The future is uncertain, but she hopes they can stay in West Seattle.

“We’re not too picky. We are looking for a home that will suit us and our dog and that we can hopefully add a few family members to in the future, ”said Dancik. “Two people who work and have progressed in their profession should be able to afford accommodation in the city where they work. “


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