Multi Year High RE Activity with Kyle Bergquist

Puget Sound Real Estate:  Multi Year High RE Activity

For the first time since August 15th, 2022, Pending Transactions to Purchase a Home in Seattle have surpassed 600.  As of Wednesday, there were 625 Pendings.  For context, the highest number of Pendings at any one point in time in 2023 was 580.  Despite rates being stubbornly stuck in the low to mid 7s on a 30 year fixed rate mortgage, it appears that Buyers can no longer wait to buy.  Or does the credit go to the sellers???  The number of homes either actively listed or in contract is higher now than at any point in 2023!  Either way, with overall activity picking up every single week so far in 2024, it’s anyone’s guess if things will continue getting busier, or if we’re near peak busy-ness for the year. 

It appears Seattle isn’t the only market with buyers and sellers alike fed up with waiting for the Fed.*  According to a recent Wall Street Journal report, the uptick in activity isn’t just a Seattle thing.  It turns out that across the nation, many sellers are just tired of waiting – Which has been one of, if not the biggest reason for our sluggish real estate market over the past 18 months.  Said another way, buyers aren’t exactly pumped to pay today’s interest rates, but if the right home comes along, they’ll do it.  It’s that whole “if the right house comes along” that’s been the problem.  Sellers haven’t been selling!  But as they’re beginning to bite the bullet and begrudgingly list their homes for sale, buyers are happily greeting them at the negotiation table.   

Humans, by nature, like to be free.  They don’t like being stuck or put in a box – it’s one of the major reasons why Shelter in Place got as old as it did as quick as it did, and why threatening my 8 year old to go to his room (even though he has a baller room) is so effective.  Sure, we all sheltered in place for a little bit just fine, and I’m proud to say that my 8 year old has survived every one of his 15 minute time outs, but at some point we like to be free.  So here we are, almost two full years since interest rates first hit 6% on June 14th, 2022 – Rates are still high, but it looks like maybe, JUUUUUUST maybe, we’re starting to see some cracks in home-seller patience.

The Six D’s of Real Estate…or life in general are:  Degree, Diamonds, Diapers, Divorce, Downsizing, then Death.  The market has been stuck for almost 2 years due to high interest rates, but life has not.  Life has evolved.  Life has gone on.  And those Six Ds combined with the fact that we as humans flat out don’t like being constrained - it looks like maybe we’re getting to the point where homebuyers and sellers have accepted today’s high interest rate reality, and are forging ahead with Purchase and Sale Agreements anyway. 

Take it Home

54% of Baby Boomer homeowners own their homes free and clear.  28% of all large homes in America are owned by Baby Boomers, compared to 14% of large homes owned by Millennials with kids.  So even though rates have continued to remain elevated, the human desire to be unconstrained and free + the Six Ds of Real Estate and Life are beginning to have an impact, and helping our current real estate market to hit multi year high levels of activity. 

* To be fair to Jerome Powell and his buddies, the Fed isn’t in control of mortgage interest rates…they’re in control of short term rates, and the only reason the Fed is keeping those high is because inflation has been persistently high. 

SOURCE: Kyle Bergquist