Tips to Buying an Affordable Home in the Pacific Northwest
My seller’s three-bedroom, 1.5-bathroom home in Tacoma received 30 offers in one weekend after hitting the market. Even in the highly-competitive market we’ve been navigating in recent months, a total of 30 offers is remarkable. So, what brought on this frenzy? For starters, it was a single-family home in the Puget Sound region listed for under $400,000. Perhaps in other regions that wouldn’t seem such a rarity, but given the area’s current low supply and high demand, this listing was unique. Affordability has become a key selling point and buyers who have been diligent about scoping out current inventory are quick to make a move on such gems. Read on to learn more about the tools and tactics buyers can equip themselves with during the home-buying process.
How to Keep Your Cool in a Hot Market
The best advice I can offer buyers entering the market is to enter with confidence. If you know what your must-haves, negotiables, and everything-in-between’s are, you won’t be faced with moments of indecision where you’re not sure if you should make a move or not. Plus, by doing research beforehand in terms of what you can afford—factoring in loans and programs, getting preapproved, and vetting interest rates ahead of time–you’ll be prepared to make an offer with all of the tools and knowledge necessary to score a home exactly right for you.
The good news is that prices are stabilizing and, in some markets, we’re seeing properties in lower price ranges than before! For instance, I’m seeing more and more condos in both Seattle and Tacoma in the $300’s, where for months there was nothing under $400K. I don’t believe prices have come down, but I do believe sellers are being prompted to list now, and they are pricing to sell! Despite it being a seller’s market, owners listing their homes are realizing that pricing is important, and over-pricing, even slightly, will cause buyers to pause.
Managing Increasing Interest Rates
Buyers who are working with a smaller budget when searching for their home are faced with the difficult reality that interest rates are on the rise. This could calm the competitive market, but it also means buyers looking for homes have to contend with yet another financial obstacle. Essentially, the higher the interest rate, the less you’ll be able to spend on a house. That means it’s more critical now than ever to make a smart offer.
My best advice to accomplish this? Make your offer stand out. Have your agent find out what’s important to the seller and tailor your offer accordingly. In the case of my Tacoma seller, our buyer offered a one-month post-closing rent back and was willing to forego most contingencies. If you’re open to waiving certain contingencies, be sure you understand the full scope of what you’re agreeing to and that the reward outweighs the risk. A knowledgeable real estate agent will be able to guide you through this decision. Strong earnest money is also comforting to a seller. It implies financial strength. Whether you’re putting 5, 10, or 20 percent down, you may want to consider depositing some or all of your down payment as earnest money, but make sure you speak with your agent to ensure it’s protected. If you deem it non-refundable, make sure you’re fully qualified and fully committed to the purchase!
Buying a home for the first time can feel especially daunting right now but there are loans and programs available to help with this brand-new financial undertaking. Loans can assist with everything from down payments, credit scores, and the underwriting process. Washington programs like WSHFC Home Advantage can help first-time buyers receive lower interest rates as well, depending upon factors like income, credit score, and more.
Ultimately, the best place to start when figuring out your buying strategies is by having a conversation with an experienced, savvy agent. Identify your strengths as a buyer. Don’t be afraid to get creative. Do you have a relative who’s a contractor or handy around the house? It might ease the pain of buying without an inspection. Is there a parent or other family member who can gift you a portion of the down payment or money to go towards a 22AD? Appearing financially strong on paper is always attractive to a seller. Be flexible about time frames, especially closing or possession dates. Make sure you are working with an experienced lender who has been successful in helping buyers win in this market. Ask them if paying down credit card balances to improve credit scores would be helpful, or if borrowing from a 401k would better position you to win in a competitive offer situation. Light-Filled Manhattan Loft
This 2,056-square-foot condominium home has an ideal floor plan for enjoying timeless New York loft living. The anchor of the floor plan is a living room where a wall of windows faces north, providing a quintessential view and floods of natural light. Other highlights include a kitchen with appliances from Sub-Zero, Gaggenau, and Miele and a very private primary bedroom suite with a south-facing balcony. The pet-friendly building offers a virtual doorman, a fitness center, and a convenient location near public transportation, galleries, and restaurants.
Affordable Areas That Check Off Your Boxes
East Tacoma | Average Sales Price: $493K
As one of Tacoma’s most affordable neighborhoods, East Tacoma tops my list as an area to pay special attention to when searching for your home. It boasts beautiful views from atop its high hills, parks perfect for summer picnicking amongst lush trees and peaceful creeks, and is known for its notable architecture—including Craftsman and Victorian homes. Finally, and perhaps more importantly, East Tacoma prides itself on fostering a strong sense of community, so new residents are sure to feel right at home in the welcoming and lively neighborhood.
South Tacoma | Average Sales Price: $447K
Make your way a little further south for another affordable, vibrant neighborhood in Tacoma. South Tacoma has it all. For those who value convenience and accessibility, your proximity to a myriad of shops, restaurants, parks, and a mall means you’ll never lack for something to do and you won’t have to travel far to do it.
Lakewood | Average Sales Price: $596K
A neighbor of Tacoma, Lakewood is a bit more of a suburban, younger version. Unsurprisingly, Lakewood is known for its lakes—10 to be exact. This makes the city perfect for those who enjoy recreating on the water—whether you’re a kayaker, paddleboarder, or just someone who likes to take in the scenic views, being so close to so much natural beauty is a huge perk of the location.
Browns Point | Average Sales Price: $931K
A sublime waterfront neighborhood encompassing Browns Point, and often by description including a greater piece of Northeast Tacoma, this quiet community offers suburban appeal with a serene landscape. Overlooking Commencement Bay with Olympic Mountain vistas, residents of Browns Point often commute to the business centers of Tacoma for work, and recreation opportunities are minutes away at North Shore Public Golf Course or Dash Point State Park.
Steilacoom | Average Sales Price: $513K
Steilacoom was the first town to be incorporated in the Washington state territory, and while it had early aspirations to grow to a bustling port town like San Francisco, it never reached that level of industry. With a population hovering around 6,000, Steilacoom is a community that treasures its history of “firsts” with a serene waterfront that looks out over Puget Sound, Fox Island, McNeil Island, and Anderson Island—where you can also catch a ferry.