King County Real Estate Market Update | June 2023

What’s up King County? It’s Zach McDonald, your real estate agent, and this is my King County real estate market update for June 2023.

Three months in a row. Now we’ve seen housing prices continue to increase in King County and to the tune of about 14% increase since the end of January. We’re at the end of May. So a five-month period, we’ve seen home prices jump from in January 7 99 9, all the way up to $912,000 as a median sales price. Now that’s positive, right? It’s exciting or it feels good for people that own homes in King County and maybe it’s just encouraging in general about the economy. But if we look at the, I guess, numbers compared to last year, last year we were at a million looking at May, so we’re down about 8.8% in King County year over year, but up again for the third month in a row. And last month we were at 8 75. So 8 75 to nine 12. Not bad. The uh, average, uh, percent of list price right there, uh, 1,000,130 3001 32 down about 9.1% year over year and about the same as last month.

But I, I want to point out a couple things here. And the first one is that the percentage of list price is now above asking price. In King County houses are selling above, asking price, yes, down 6.1% as far as the amount over asking price, but 2% above asking price is significant, especially given that we were seeing house is selling below, asking price not even five, six months ago. If we’re looking at the inventory, I want to point out that we’re seeing a decline right now in housing inventory in King County. So year over year, 2022 to 2023, 14.7% decline in inventory, less houses. Now when we calculate our months of supply number, that’s different and we see that that’s gone up. We’re at 1.3 months of supply versus one month. And the question’s why, to me, that’s the question I’m asking. So I figured you probably have the same question and I think the answer is fairly straightforward.

I think we have a lot fewer new listings. So we have 32% fewer listings than we did last year at the same time in May. And I wanna put a number to it, that’s 1,112 fewer houses that were listed and there were 2,361 listed this year. That’s a huge number. That’s almost 50% more houses available now, calculated backwards, right? 32% drop. But in order to get to that number, you’d almost have to add 50% pending sales up from last month, but down, down about 541 or 21.1% and the close sales down 926, again putting a number on it, 36.1% down. So we’ve seen a decrease in buyer activity, but the decrease in seller activity has been larger. So we’re seeing fewer houses available, but the amount of buyers right, is less. So that calculation gives us a higher supply number, but not an actual amount of houses just in relation to the amount of buyers, but similar one one month versus 1.3 months.

Not a massive difference. And that’s what’s concerning to me for the housing market and not concerning in a negative way as far as values go, but concerning in a how are buyers gonna make this happen? What happens if, what happens if interest rates actually get better because they’ve gotten worse since January, they were around six and a half percent, now they’re at about 7%. What happens if they get better? What’s, what’s, there’s not, there’s even less houses available. So if more buyers are coming back in, what’s that gonna do to prices? They’ve already bounced quite a bit. We talked about 14% and yes, year over year they’re down. But by the end of the year, are they gonna be positive? I predicted that at the beginning of the year that I thought by the end of the year we might actually see positive year over year numbers, which we’re not seeing yet.

So it’s not in the news, but I think we might be there. We’ll see, we’ll see. But that’s what I think we’re heading towards, which is going to be rough for home buyers with higher interest rates. And if they do drop again, that’s just gonna put a lot of upward pressure on prices. All of a sudden people have more money to spend those monthly payments come down, the pocketbooks open up and that money gets spent. So I think we might see a wild and crazy 2024 housing market again, if interest rates remain higher, maybe not, right? That keeps things somewhat in balance, but any adjustment in those in a downward level is gonna have a significant effect on the prices and in a, in a positive direction, right? As far as the, the numbers. But I think a negative direction for buyers. So I would just share that as a caution for people that are thinking like, am I gonna get a better opportunity later? Should I wait?

I don’t know. But historically speaking, the housing market gets better over the long term and we’re in a place where we’re not seeing what would’ve helped continue to put pre downward pressure on prices. We’ve seen fewer listings, which we talked about so far this year, considerably and fewer sales, but we’re not getting any more correction happening. It’s just actually going the opposite direction prices are going up. So I just wanted to share that with you. I think that we’re so far trending in the direction I thought we would through the year based on my earlier predictions. Um, as far as condos though, I, I don’t talk about condos all the time on these cuz we usually cover the residential stats, but a few times a year. I like to highlight the condo market in King County as well. And the majority of the condo market is going to be in the larger areas.

Uh, specifically the big cities, Seattle and Bellevue, they have a large portion of the condos, but there are condos throughout King County. And looking at the condo numbers, they’re similar but different at the same time. Fewer listings, 23.5% fewer listings for condos, 19.8% fewer pending sales, close sales down 36%. So we’re talking about the same things here, but days on market, 27 versus 20 for the residential sales. Interestingly, prices for condos are only down 3.7% year over year, five 15. A lot of times you think condos are gonna correct wor they did last time, by the way, in the great downturn that we had, 2008 to 12 condos really took it hard. Everybody took it hard, but condos really took it hard and had a hard time recovering. But right now condos are actually doing, doing pretty well and average price for condos only down 1.5% year over year.

So if you bought a condo at the peak of the market, you’re actually doing better than buying a single-family house at the peak of the market. Interesting, right? But they’re not selling as much over asking only 0.1%. So pretty much right at asking price for condos right now in King County inventory is up 14 point a 5%. Whereas you have inventory down, and when I say inventory, I’m talking about the supply of condos. So the supply of condos is up year over year versus down. And the inventory number supply based on the buyers is actually close to two. So that’s why you see that things are selling around asking price. When you start getting around one and a half per months or less of supply, that’s where you have a lot more upward pressure on the price. You get to that one end that you one and a half to two, you start to see asking price and start to see things.

You know when you get up around two start to sell below asking price. So right now condos are not as exciting when you’re making offers. And I’ve had a couple condo offers recently that were in that asking price range, right? It was more competitive on terms versus price. But single-family, you certainly have both going on competitive terms and competitive pricing. So overall, king County is certainly heating up and the housing market is not at its lowest point, but it’s also not at its highest point yet. But I think it’s heading in that direction. Thanks so much for watching this month’s King County Real Estate market update. I hope that you got some value added this video. If you did show me some love, please with a thumbs up or a comment. And better yet, if you have a real estate needs in King County and you wanna connect, I’d love to be a resource for you.