Shifting to HOT Real Estate Market! What you'll need to know for Q1 2024

Issaquah Highlands and surrounding areas are seeing a surge in buyer demand. The new year has started off with a BIG bang when it comes to Real Estate. 2024 has shifted into a strong seller's market with multiple offers and escalating prices. Visit just about any open house and it's undeniable that buyer demand is at an all-time high. So what's driving demand, how does one navigate such a market, and will this blazing hot market last all year?

What exactly is driving so much demand?   The #1 reason why we're seeing buyers out in full force is the potential of mortgage rates dropping in 2024.  The reasoning is "buy now, refinance later." Buyers fear that as rates drop, the market will become more competitive, and prices will shoot through the roof. Their strategy is to be ahead of the game and nail down a home as early as possible this year. Currently, there's an overarching "fear of loss" sentiment among buyers as they submit offers only to be outbid. Moreover, open houses are exceptionally busy, and some agents are reporting 70, 100, and even 150 people through over a weekend. When a lot of buyers are making offers and a lot of people are at open houses, buyers feel more confident about market conditions. The trend and momentum kind of builds on itself.

How does one navigate this type of real estate market?

If you're serious about making a home purchase before July 2024, there are a few techniques to get you in the door:

A standard pre-approval letter won't cut it. Buyers need to get fully underwritten by their lender before making offers. Being fully underwritten means that you've submitted all of your income, assets, tax returns, and your credit is verified by not just your lender, but also by the underwriting team. Getting through underwriting enables a buyer to close faster because all the lender needs is an appraisal to process the loan. I've never met a seller who didn't want their money sooner rather than later. Being fully underwritten may also give you confidence to waive your financing contingency, which is a common strategy when the market heats up. Be aware that low appraisals are a possibility as there hasn't been a lot of sales over the winter for appraisers to go off of. Not only that, sales in Q4 (the sales that the appraiser uses) are going to be a lot lower in price. Talk to your lender in-depth about low appraisals and additional down payment scenarios so you're not caught off guard.

When a home comes online and looks like a great fit, you MUST see it within the first 24-48 hours. Listing brokers are setting offer review dates, but often, they get an offer that's too good not to take. Many homes don't make it to the review date.

• It's always best to find a way to do an independent inspection with a professional that you choose! 

• Be aware that you're assuming some risk when relying on a seller-procured inspection report. It's become common for sellers to provide buyers with their inspection report. There are a few good reasons for this. A seller-procured inspection can be helpful to buyers who might not have time to do their own inspection or can't book a long enough time slot because the showing schedule is full. Furthermore, inspections can get really expensive if a buyer has to do 5 or more of them before finally getting a home. In a supercharged seller's market, the majority of buyers waive inspection and rely on the seller-procured report. If you're going to rely on a seller procured inspection report you may want to print it out and review it while walking through the home .  That way you're fully informed about what's been repaired and the quality of the repairs. 

  The most important piece of advice I can give is try not to get carried away with your price and terms.- Stay within your pre defined limits on the review day. Remember...there will always be more homes coming to market.

  
  Will this hot market last all year?

  No one knows! In addition, despite what the headlines say, no one knows if interest rates will actually decrease in 2024. All we know for sure is what is happening right now. If I had to guess, I think things will stay pretty hot for the next few months, and then we could see some buyer fatigue in late Spring/early Summer. If rates actually do decrease and the media keeps reporting that more cuts are probable, the market will stay extremely strong all Summer. However, if rates don't decrease or if they go up , the market might stall out in Mid-July and stay sluggish as we creep toward the 2024 presidential election.  From my experience the market tends to slow down the closer we get to an election!I hope you enjoyed this blog post!

  Please call me if you're thinking of buying or selling a home at 206-890-6347 or email me at kristamehr@gmail.com