So now that Puget Sound counties have been in a “buyer’s market” for around a year, there are probably some good deals to be found out there. But how do you find them?
To be clear, my personal opinion is that we’re still in for another year or two of declining prices. However, I’m sure there are some that see the drop we’ve had so far as “good enough,” and just want to buy a home now even if prices drop further. If that’s you, here are a few suggestions of how to start.
Look for houses that have been owned for a long time. Sellers that bought their house in the last 4-5 years are likely to have unrealistic expectations of price appreciation, while someone that bought in the pre-bubble years is more likely to accept a price that reflects 3-5% yearly appreciation. The bigger the equity cushion the seller is sitting on, the lower they can afford to drop their price.
Look in the weakest neighborhoods. The NWMLS publishes “neighborhood” data for King, Pierce, and Snohomish counties. You can also spend some time looking on Redfin, where they are now publishing nifty stats by city, neighborhood or zip code (full details on this post).
Look for houses that have been on the market longer. This one’s pretty obvious, but a lot of “casual” buyers tend to write off homes that have been on the market for a long time, even if they’ve had significant price reductions. Especially with the NWMLS recently allowing cumulative days on market (CDOM) to be published on public sites, it is difficult for a seller to escape the stigma of being on the market for a long time. If they really need to sell, they’re likely to take a lower offer.
If you are using an agent, be upfront about what you’re looking for. Some agents are happy to help you make lowball offers on as many properties as you want, but others will consider such a buyer to be a waste of their time. It’s better for both of you that you be forthcoming at the start about what you’ll be asking them to do. This goes for discount brokers like Redfin, too.
Those are some basic strategies I would use if I were actively in the market right now. What tactics would you suggest? What about those of you that are out there now or have recently bought? How are you finding good deals in what is still largely an overpriced market?
