SEATTLE (AP) — Prospective home buyers in Seattle as late as last year faced the prospect of entering bidding wars or getting edged out by competitors with cash. That’s not the case anymore.
At one point in 2017, 92 percent of homes sold in the city featured multiple bidders, the Seattle Times reported . Since then, there's been a cooling of the market.
Just 21 percent of homes sold in Seattle in November had multiple bidders, according to the Redfin real estate brokerage firm. It's the lowest rate since the firm began tracking in 2011.
Seattle now has the lowest rate of bidding wars among cities tracked by Redfin, the company said.
Across the broader Seattle metro area, 79 percent of homes had multiple offers in 2017. That has fallen to 25 percent, also the lowest on record.
For buyers, finding a home in the overheated market could be depressing. Some made offers and were immediately outbid, sometimes by $100,000 or more, or lost out to competitors offering cash.
Home buyers sometimes had so sign away rights, such as backing out of a sale if the home was damaged.
As late as February, Seattle led the nation in home sales with more than one bidder, but the change has been rapid.
The number of buyers continues to fall and more sellers are seeing homes stay unsold for weeks, prompting them to cut list prices.
The new scenario gives prospective buyers several advantages. With homes selling on average in three to four weeks, up from one week a year ago, buyers have more time to think over one of the biggest purchases of their lives.
Sellers largely no longer "offer review dates," a deadline for buyers to submit their bids, usually a week after the listing goes live, said Peng Tea, a broker for John L. Scott. Instead, they take bids on a first-come, first-served basis.
Buyers also are getting a break on terms. Fewer are being asked for nonrefundable earnest money and sellers have been more willing to fix things such as defective plumbing.
"You'll have a much higher likelihood of keeping some protections for yourself as a buyer," Tea said. "It's a much more favorable market for a buyer today, especially as you go toward the higher price points. You have more power to negotiate."
Several reasons are behind the cooling market. Interest rates rose, which cut into buyers' earnings power. Rents in the past year stayed flat, lessening pressure on people to buy. Prices grew more than twice as fast as incomes for half a decade, making it harder to purchase homes.
Brokers also report reported less investment money from Chinese buyers more likely to make all-cash offers.
Seattle reflects a national trend. Markets are cooling in other areas, especially in pricey West Coast cities.
The national rate of multiple bids was 22 percent in November, the lowest in at least seven years, and down from 59 percent at the start of the spring, according to Redfin.