Seattle Real Estate Market Update | January 2020
Here are my latest thoughts on the Seattle Real Estate Market: It looks like the market may get off to a hot start in 2020 due to low housing supply and increased buyer demand over the past few months. Look for buyer competition to start heating up and multiple offers to make a comeback.
- Last month’s market update – Seattle Real Estate Market Update December 2019
Hey, I’m Zach McDonald, your real estate agent with Real Property Associates and this is my Seattle real estate market update for January 2020, first one of the new year. Super excited to be bringing you a new update.
We’ll start this update off with a client story just like we do every single update. And this month, we’re going to feature the Barnes family. Now this family reached out to me on YouTube, so another YouTube success story. Super excited to make new relationships off of this channel and it’s fun to see the effort that I put in here paying off and bringing value to people, so much so, that they want to do business together. Now in the Barnes family situation, they were relocating from Alabama. They came out here on a little bit of an exploratory sightseeing tour in the spring just to check out Seattle and see if it’s a place they wanted to move to.
And ironically they had visited Carkeek Park at the end of their trip and saw that I had done a video on Carkeek Park, one of my favorite parks in Seattle, and they’d been following my YouTube videos, learning about the housing market as well. They reached out, we had a very casual conversation about real estate in Seattle and what it’s like to live here. And I actually cautioned them against buying at that point and just go ahead and rent. So they’ve rented for a little while where they thought they wanted to live. And long story short, full circle, we ended up getting them into a house here just to close out 2019. So Barnes family, congratulations on your new house in Bothell. Really excited for you guys, super thankful for your business.
And if you’re watching this video and you’re thinking about buying a house in 2020 or maybe you’re thinking about relocating to the area and you just want to have a conversation, low pressure, casual conversation about real estate, I’d love to be a resource for you.
Now let’s dive into the Seattle stats from December, closing out the year strong. Median sales price was down just slightly here, ending the year at $700,000, down roughly 2.3% from the same time last year. Heard me talking about how I think that prices will end the year just ahead of where they were and looks like we ended just below. Now interesting fact on the average sales price, average sales price for single family home… and in this video I talk about the single family stats in Seattle. The average price was actually 4.4% above. So depending on which metric you use will give you either the answer that I was looking for or not. But I typically talk about median sales price, so that’s the one we stick with.
Home sales, and this is interesting. Homes for sale at the end of 2019, 557 which is down 32% from last year when we had almost 821 homes for sale. So last year, if you remember, end of 2018, homes were sitting on the market for a long time. People were scared about housing bubble bursting. There were a lot of fears. People were not buying and people were also listing their house just to hopefully get it sold. And this year we saw a lot of changes from those stats.
Pending sales, another evidence here, 445 pending sales and that’s a lot for this time of year and that’s almost 30% up from the same time last year. And closed sales, so these are homes that closed in December, 629 which is also up about 30%. Last year we had 484 homes close in the city of Seattle.
Now the biggest thing you’re going to see change here now is the supply numbers. So we had fewer homes come on the market, 280, in Seattle last month, residential, single family homes. And then we had 445 go pending, which is one and a half, almost getting close to two times the amount of homes that came off the market versus going on the market. So what you’re seeing is that supply number going down again. And I predicted last month that we would see the supply number of housing go below the one month of inventory and we did. We are now at 0.8 months of supply and it’s the first time we’ve seen supply numbers below that one month of supply since the spring of 2018, which is kind of right at the height of all the frenzy in the Seattle market and before we saw the pretty hefty correction on the second half of 2018.
So what does that mean? Application for buyers. First you’re going to see a lot more homes coming on the market in the next month or two. This is a seasonal trend. Typically in November, December you start to see inventory numbers declining, fewer homes coming on the market. We saw even fewer this year and more activity than normal. But you’ll see more homes coming on the market as weather starts to get nicer and people start to get ready for the spring selling season.
Now as a buyer though, I would also get started with your home search now and I would say it’s a great time to start this process if you’re thinking about buying in 2020 and here are a few reasons. First, there are just fewer people out in the market, so there’s a little bit less competition on the buyer side. Additionally, there aren’t as many homes on the market so you don’t have to fear that you’re going to miss out. It’s a good time to kind of get your feet wet, start seeing what houses are for sale in which neighborhoods. And the process does typically take three to four months I’ve found with people to go from just kind of thinking about it, trying to figure out how to go from, “I want to a house,” to learning about the process, getting approved for a loan if you need financing. There’s a lot of things that go into it and then it just takes time sometimes to find that ideal house, especially if you are a little bit pickier.
So if you’re somebody that’s thinking about buying in 2020, this would be a good time to kind of start having those conversations about real estate and talking to people that can help you with that process.
Sellers, here are a few applications for you. First of all, the supply of housing inventory is dwindling. We are now down below, as we talked about in this video, one month of supply. So there just aren’t a lot of homes for sale in the Seattle area. And what that means for you is there’s likely going to be more competition for your home. And what we saw over the last few months is way fewer listings coming on the market than people buying houses. So we’re seeing the amount of homes coming on the market being eaten up really fast, plus some of that backlog inventory. So expect for any new home that comes on the market to be treated with some pretty big excitement.
And what this also means is that you’re going to see increased competition most likely for your house. So not only is your house going to be new and exciting, but there are quite a few buyers we’ve seen in these last few months that are looking and so I suspect that over the next couple months we’re going to start to see that competition picking up even more, especially with the low amount of inventory. And then what this means for you is that prices will likely increase and part of that is a seasonal trend where we’re going to see home prices rise up through the spring, early summer and then kind of dwindle at the end of the summer and fall. That’s a normal thing, but I think what we’re seeing right now with the decrease in inventory and the amount of buyers in the market and the consumer confidence is that we might start to see those prices jump up a little bit more than what we saw in 2019.
So predictions, I’m going to spare those for my 2020 predictions video as a whole, but I do think we might see some kind of return to a little bit more frenzied market here heading into 2020. I wouldn’t be shocked or surprised to see home prices take off here in the first half of 2020, especially given the amount of buyers that are jumping into the market. I’m having a lot of conversations with new buyers and just also sellers, right, and having those conversations. People getting excited about 2020, there’s a lot of excitement in the air, so I wouldn’t be surprised to see a pretty hot start to 2020.
Thanks so much for watching my Seattle real estate market update for January, 2020. I really appreciate your attention and if you stayed all the way to the end, I hope that means that you enjoyed this content, so please consider giving me a thumbs up on the video and subscribing to my channel. It helps the algorithm out. It helps more people like you see this video and benefit from this content. We’ll see you soon.