If you know anything about what’s happened to the Bellevue real estate market in the past couple of years, you know that it’s hardly been business as usual. In 2020, interest rates dropped to surprisingly low numbers as the nation wrestled with the proper response to the COVID-19 pandemic. This prompted many people to buy a new home, and sellers raised their prices to capitalize on the increased demand. Things began to shift back to normal in 2022 when interest rates started to climb back up. How will all of these trends impact the market in 2023, and what role does inflation play in all of this? You’ll get answers to these questions–and more–as you read this article.
1. Let’s get up to speed. What’s the current climate like?
The Bellevue real estate market continues to favor sellers. Home prices have fallen over the past several months but remain close to what they were a year ago. There are currently fewer homes on the market than there were one year ago, and most homes spend around 41 days on the market. The average home will sell for a final price close to the listing, but some homes will command a final price above asking. However, it’s more likely that a seller will need to lower the asking price at some point.
2. How does the Washington real estate market compare to the national market?
On the surface, the market in Washington provides a good glimpse into what’s happening at the national level. Home prices have fallen over the past several months in many areas, and it’s a trend that most people expect to continue into 2023. While a recession is likely, most experts don’t think that a repeat of 2008 is going to happen. There are a number of contributing factors to the current recession, but one of the top influencers is a national interest rate that recently rose above 7% for the first time. This presents challenges for both buyers and sellers. Buyers don’t stand to benefit much from home prices dropping because they may still have to make higher mortgage payments because of the rising interest rates. However, this also doesn’t mean that buying or selling a home in 2023 is a foolish decision. Average prices will be lower, which benefits buyers regardless of interest rates. At the same time, they likely won’t fall too far, and they should remain higher than pre-pandemic levels. This keeps sellers in a position of strength as well.
3. If I do decide to buy or sell my home, is there a certain time of year that’s better?
Sellers should aim to sell during the summer if possible. The market usually begins to heat up during late April and early May as people begin to receive their tax refunds. Families like to relocate during this time because they can move without having to pull their children out of school, and they can settle in before classes start again in the fall. It also helps that the weather is more pleasant during this time of year because many people don’t like to move in extreme temperatures or snow.
If you’re a buyer looking for a deal, try to wait to shop for homes until the market cools down in September or October. By this time, many people are busy with other activities like driving kids to extracurricular activities or pushing towards end-of-year targets at work. Homes still sell during these months, but some sellers have to drop their asking prices. You’ll experience less competition if you shop during these months, and you may be able to negotiate a better deal if the seller is especially motivated to move their property.
4. Is this a good year to buy a home?
Because home prices aren’t expected to rise much (if at all), 2023 could be a great year to buy a home, even if interest rates continue to rise. If you’re thinking about buying in the next few months, it’s important to make sure you have enough cash on hand to fund a down payment. Depending on which type of loan you might qualify for, you will need somewhere between 3.5% and 20% of the total price of your home. You’ll also be responsible for a portion of closing costs, which are usually somewhere between 2-6% of the price of the home. It’s never too early to begin talking with a lender about what sort of loan you might qualify for and if you’re in a good position to receive pre-approval for a loan before you begin shopping.
5. Is this a good year to sell a home?
Although home prices are unlikely to rise in the current year, they shouldn’t fall too far, making this a good year to sell a home if you’re motivated to do so. If you’re getting ready to sell, a good first step is to ask your realtor to put together a Comparative Market Analysis for you. This will give you a better idea of where you could price your home based on what similar properties in your area are selling for. You can also take some time to perform a few small repairs or upgrades to your home that will boost your ROI and help your home stand out on the market. If you have the time to order a home inspection before you list your home for sale, this can be a good way to ensure that you aren’t surprised by anything that comes up when the buyer orders their inspection before closing.
If you still have questions after reading this article, keep in mind that Jeff Reynolds has a deep understanding and awareness of current market trends. He’s spent nearly twenty years in the real estate industry, and he’s passionate about providing excellent service and attention to each of his clients. If you’re trying to decide if 2023 is the right year for you to test the market for homes for sale in Kirkland, Jeff would love to help you weigh your options.