Thoughts on the Seattle Home Market time to buy or sit tight ?

[takara159]

For those Mustachians who live in the Seattle area, I am interested in your thoughts on the current situation of the housing market.  My wife and I have been looking recently for a home closer to our works or at a minimum nearer the major bus lines.  We have been watching as house after house is bought for 102% or higher above asking, with inspections waived and a lot of times multiple bids with large cash offers.

Is this just irrational exuberance that is about to come to an abrupt halt or is a sign of the ongoing strength of the Seattle area economy ?? Is this similar in other places around the country ?

Thanks all, appreciate your feedback.

[sol]

http://seattlebubble.com/blog/ says prices are bouncing right now due to a pretty severe supply shortage.  Read up on it.

[Nate_D]

My wife and I, also Seattleites, are watching the housing market from the sidelines. I read Seattle Bubble as well, and all indications are that it's a very frustrating time to be house hunting, especially in the neighborhoods north of the ship canal, where we're interested in living. Frankly, I refuse to get involved in a market like this. Seattle has had a pretty high buy vs. rent ratio for at least the past decade, so I see no reason to rush into buying when renting is comparatively cheap.

Theoretically, there is some pent up supply from underwater or low-equity homeowners waiting for home values to increase, and these folks should consider listing as the lack of inventory nudges prices higher. We'll see if that actually happens.

I don't see us seriously considering buying for a few years. My only hope is that mortgage rates haven't increased too much by then.

[yolfer]

I don't see us seriously considering buying for a few years. My only hope is that mortgage rates haven't increased too much by then.

I'm in Seattle and thinking the same thing. My hope is that by saving for a few more years, my larger down payment will more than offset any rise in rates. But who knows what rates will do...

[Joel]

It's very interesting that the Sacramento market is identical to this right now. Very much interesting that both cities are fighting over the Kings at the same time! I think most cities are in this situation as foreclosures and short sales are drying up, and not many new houses are being built to help the supply.

[Nate_D]

The trend for new construction in Seattle seems to have switched over to rentals at this point. Huge apartment complexes are popping up like crazy in my neighborhood, and there has been talk that the market has already overheated to the point of oversupply (or will within a couple years). Perhaps one more reason to stick with renting for the time being!

I have to admit, I kind of don't understand why more potential sellers aren't listing in this climate. If was on the fence about selling a house, all this talk about homes selling for over 100% of asking within days of listing would spur me to action. Maybe everyone is so equity-starved that they wouldn't be able to "trade up" if they sold, so what's the point of selling?