As a Buyer's agent that is working with active buyers during these winter months, there appears to be a consistent theme resurfacing time and time again. A theme I feel is important to touch on, as it's one that can create negative implications for said Buyer.
It's impossible to ignore the media (albeit mostly national and not local, but nevertheless…) while shopping for a home. Buying a home is likely to be a person's biggest investment, and researching the market in which you are going to buy should be done. However, when all of your attention turns to the real estate market, the average Buyer tends to become incredibly savvy to who is saying what in terms of the status of the market. What a lot of Buyer's don't bother to do, is look to see where this information is coming from and if it relates to the market they are buying in. In my experience, this mistake seems to translate to a false sense of entitlement when going through the negotiation process of trying to arrive at mutual acceptance – and eventually become a homeowner!
Granted, winter months are historically slower than the rest of the year in real estate. It is the nature of it, real estate is cyclical. And yes, nationally, real estate values are dropping in other cities. True, lending requirements are tightening, which removes more Buyers from the equation. No, this doesn't mean you are the only Buyer out there and doesn't mean the Seller is going to sell it to you at whatever you deem to be the “market value”. The market value is where Buyer and Seller agree at what price the home is worth and should be sold at.
Sellers, developers, and builders are obviously feeling the pinch of the slow down in Seattle. There are price reductions, Buyer bonuses in form of closing costs paid, or credits toward home owner's dues, among other things. Maybe free upgrades in finishes or appliances or free home warranties…the list goes on. These are incentives and bonuses that Buyers were not typically receiving until just a few months ago! Abuse those incentives! Take them and run with it! They won't always be there, and in some cases, just since the end of December, I have seen developers take these bonuses away, as they know that the market tends to pick up around this time.
And while you are abusing Seller incentives, take the time to also abuse your Realtor (metaphorically please) and make them work! Before writing an offer, your agent should be finding comparable properties for you in order to determine how the list price compares with other sold properties in the area or building. This is key information and is information that should be used when trying to arrive at what you feel the market value is for yourself.
It is a great time to invest right now – before the incentives are few and far between and all the “going to wait and see what the market does Buyers” are back- which spurs competition! You don't want to lose out on a great investment because the Seller won't drop their list price by x amount of dollars. Of course, pay only what you feel is the true value, and utilize your agent and his or her resources to help you arrive at that number.