The media is finally catching up with the condition of the real estate market, and just in time for many frustrated home buyers who find themselves in bidding wars for a constantly shrinking supply of homes.
The Seattle Times is reporting that homes are up 2.6% in May from a month ago. For the median home price in King County (July Medium $340,000 according to the NWMLS) that translates into a gain of over $8000 per month in increased equity.
While this sounds like everyone should be singing a happy tune, the result is a mix of frustration among prospective home buyers, REALTORS and other industry professionals being over-whelmed at the work load, and depressed home sellers happy to have offers but considering they are having to let go of their homes at near bottom prices.
The average home price in King County fiver year ago (July of 2007) was $599,000 compared to now (July of 2012) the average sold price is $446,000. That’s a loss of over 25% of a home owner’s equity from 5 years ago.
Buyers are entering the market feeling the seller’s have the upper-hand and often feel resentful that the sellers aren’t willing to come down more and on the opposite side of that equation you have seller’s who are taking huge loses in order to move to the next phase of their lives.
The mortgage process also adds fuel to the fire with low rates causing a rush to the banks to both purchase and refinance which is taxing the workload for appraisers, underwriters, and mortgage brokers. To make matters worse, underwriters and appraisers find themselves needing to scrutinize loan applications and house values to ensure they don’t make the same mistakes of the past boom and bust cycle.
To make matters worse, industry professionals are working incredibly long work weeks and are feeling frazzled and often find that on top of the long hours, they are pulling on all their skills as sales persons to keep those volatile emotions from ruining the entire real estate transactions.
Bottom line, if you find yourself in the real estate market, you’ll be wise to understand the restraints of all the parties involved and know that you may be entering a market that can be very stressful at times. That being said, I’ve personally never gained anything of value without a little bit of stress. Anything worthwhile takes a lot of work and patience. Hang in there, we are all in this together.