Seattle Real Estate Market Update | October 2020
Here are my latest thoughts on the Seattle Real Estate Market: The Seattle real estate market had a high median sales price in September but dropped slightly since August. We continue to see high median sales prices that we would normally see during the springtime. There are a lot more listings on the market than in previous years, but overall, fewer homes for sale because pending sales increased dramatically. This means there will be many closed sales in the coming months. Due to the continued low mortgage rates more people have decided to make moves in the market, including refinancing or selling/buying. For sellers, competition is heating up and for buyers, there continues to be an opportunity to capitalize on the low mortgage rates.
- Last month’s market update – Seattle Real Estate Market Update September 2020
Hey all, it’s Zach McDonald your real estate agent with Real Property Associates, and this is my Seattle Real Estate Market update for October 2020. In this update, we’re going to share a story, talk about some stats and get into a little bit of application for you. Coming up.
This months story features the Zajdel family, they’re repeat clients of mine. They bought their first house about three years ago in Everett, and recently decided that they wanted to get a little bit more space, and maybe like you’re hearing in the news, people are starting to think about the things that they don’t have in their house because of COVID. And if they’re working from home, maybe needing a little bit more space or a different living arrangement. The Zajdel family definitely fit into that category. They ended up moving farther out to Lake Stevens and they bought a bigger house with bigger property and a lot more space so that they can run around and also have a place to work conveniently from home.
In the last three years, they bought a house, they bought another house and then they just sold their house in Everett with me. So Zajdel family, if you’re watching this update, thank you so much for the honor of being your real estate agent. Not only once twice, but three times. If you find yourself in the same situation as the Zajdel family, where you’re thinking you might want a little bit more space, please don’t hesitate to reach out.
Now let’s dive into everybody’s favorite part of this video, the stats. Last month, the median sales price in Seattle was $799,000. And last month, if you recall, the median sales price in Seattle was up at $815,000. It was the record median sales price in August. And as we’re looking over September’s numbers, we’re looking at $800,000, pretty much as the median sales price.
And interestingly, we are looking at numbers that we’re used to seeing in the springtime. So normally in the year we see the highest prices in April, May, June, and this year we’re seeing the highest prices in August, September, and we did see them earlier in the year, and then we saw a little dip. Now we’re seeing prices back up. And as we look through the rest of this update, I am noticing as I’m looking over the stats, that we’re almost seeing a little bit of an inverted year.
Normally we see a peak in the spring, summer, and then a little bit of a trough and a level off come the fall and winter. But right now so far, what we’ve seen is the opposite. We saw the peak and the early spring, and then we saw a dip and now we’re seeing prices climb back up again to wrap up the year. It’ll be interesting to see how the rest of the year pans out, but so far we’re seeing a little bit of an anomaly, and I think it’s mainly related to COVID. It’s partly also probably related interest rates, and we’ll talk a little bit more about that as we keep going through these stats.
The two counties that I service, we’re talk about city of Seattle, but the two main counties that I serve as King County and Snohomish County also hit all time highs. King County was at $750,000 median sales price this year up 13.6% year over year. And Snohomish County was at $560,000. Again, up substantially 14.3% year over year. Last month new listings were up considerably in Seattle, 25.9% and homes for sale interestingly, we’re actually down at the end of the month, down 11.8%. And I think the main reason is because pending sales went up dramatically.
And pending sales if you’re not familiar, are the homes that have been brought under contract, but haven’t closed yet. So last month pending sales were up 50.4% year over year. We’re talking about September 2020 versus September 2019. And when we look at closed sales, we also saw a dramatic amount of closed sales. We saw a 58.3% jump in the closed sales. And as we look back over data, MLS data back to 2006, which was another really hot real estate market, we had the most closings in a month dating back to 2006. I don’t have data in front of me for prior years, but we had a ton of closings in the City of Seattle. And there were large numbers of closings up 40% in Shoreline, up 40% in Lynnwood, up 61% in Edmonds. So tons and tons of houses that are coming off the market. And as we look at the pending sales, we’re seeing that trend continue. If a majority of these pending sales do end up closing, which usually is the case, we’re going to see a very, very substantial amount of closings again, as we look back at the numbers next month.
I want to add a little bit of perspective as we’re talking about the amount of listings coming on the market, amount of listings coming off the market and I think this will be helpful. As we look at homes for sale, we had 1,241 houses for sale at the end of September, heading into October. And if we look back at prior years, and this is the previous peak of the market, hottest time in Seattle, back in 2015, we had 841 houses on the market, in 2017, 784 houses on the market. There are a lot more options on the market right now than there were back then. Anybody who bought a house three, four years ago and remembers how crazy it was, it’s not quite as crazy as it was back then, but it’s still very, very competitive.
And as we look at pending sales, we talked about how pending sales were up a considerable amount. If we look back at the previous few years, this year for perspective, 1017 pending sales, pending residential sales in the City of Seattle. And if we look back at some previous years back when it was really, really hot, 2015, 738, 2016, 738 and in 2017, 720. And these are all looking back at prior September. So again, we’re seeing a considerable jump from all of those numbers to where we’re at now. We saw a whole bunch more homes for sale, we also saw a bunch more pending sales. And as we dive in to this, I think the biggest reason we’re continuing to see movement and why we’re seeing movement at such a high rate. I think it boils down to a few things.
First of all, I think there’s some serious pent up demand from the springtime. I mentioned the dip earlier, and we had a substantial dip in amount of homes on the market and closed sales and pending sales. I was talking about maybe a 30, 40% deficit in those different statistics, new listings, homes for sale, which normally in the springtime, you see those numbers rising. And in this case, we’re seeing those numbers at an odd time of the year. And so I mentioned an inverted year. I think these numbers that we’re seeing in the fall are not abnormal for the springtime, but in the springtime we were seeing the lower six, 700 people buying a house or selling a house. And now we’re seeing the higher numbers that we’re used to seeing in the springtime.
So, why is this? Why are we seeing the type of activity in home sales that we’re seeing in the fall that we’re used to seeing in the spring? First thing, I think a lot of homeowners decided to refinance in the spring and early summer that maybe would have sold under a different situation, in a different market without COVID-19 going on. And I think a lot of people decided to cash in on the record, low interest rates. I know I did personally and mortgage rates right now are hovering right around an all-time low. They’re not continuing to drop at this point, but they’ve been in the same ballpark for the last month as we record this video, the Freddie Mac Primary Mortgage Market Survey that I look at frequently is right at 2.87 for a 30 year fixed mortgage, which is super, super low. Even when I got my first mortgage on my Edmond’s house, it was 4.25, which I thought was an amazing rate, and now I’m sitting at 3.25. So some people right now are getting even better rates than I did.
And then I think what we’re seeing as a result of these low interest rates is a few other things. First of all, there are a lot of first-time home buyers that are jumping into the market, people that were sitting on the sidelines, and were trying to figure things out and they’re seeing how low interest rates are right now and how far their money goes, and they’re able to jump in and maybe get the house that they’ve always wanted to get, or just get their foot in door. People are taking advantage of this opportunity.
And then there’s another group of people that maybe owned a house already, and we’re hoping to buy something different, but they were trying to figure out how to make that jump. Or essentially, I think they were forced into it now to look at the refinance numbers and say, “Okay, do I want to refinance right now, or do I want to buy?” So there is this decision point they were forced into because rates are so low. If you refinance, you’re essentially spending money to get that lower rate, at least most people do. And you want to stay in your house for at least a year, at least in my situation, at least a year for that cost to make sense. And for you to start seeing the savings over the longterm. People are having to decide whether they want to stay put, or they want to buy something. And if they decide they want to buy something, there’s this sense of urgency that’s created.
So not only did a lot of people decide to refinance earlier in the year, but now people that didn’t refinance are in the market and looking to buy that next house. And I know myself, I’ve had multiple clients do that this year, and I also have a few that are waiting to put their house on the market once they find something different. I think you’ve got these buyers that are new coming into the market, the millennials, if you want to call them that, the younger generation, but you also have a lot of people that already owned houses that are also jumping into the market and not only buying a house, but also bringing another house to the market. So you’ve got a lot more houses coming on, but you also have all these buyers that were previously sitting on the sidelines jumping in.
For sellers right now, that’s a good thing because you see the competition again, that was maybe missing over the previous few years. And this market that we’re in Seattle is by no means as competitive as it was back in 2015, ’16, ’17, even beginning of ’18, it was crazy, about half the amount of inventory and yes, fewer buyers than we’re seeing right now, but it was insane. And right now what we’re seeing is nothing compared to that, but it’s starting to inch back in that direction. We’re starting to see 10, 20 offers on a house and that wasn’t happening over the past few years. So for sellers, competition is heating up. And for buyers, you have an opportunity to capitalize on the lower interest rates and have more purchasing power. I think both people are seeing the opportunities here and trying to capitalize on them.
Thanks so much for watching my Seattle Real Estate Market Update. I know you got some value out of this video, if you made it all the way to the end. So please give it a thumbs up. And if you want to see more content like this, please consider subscribing. Oh, and really quickly, if you want to talk about your own situation and talk a little bit more about what it might look like to buy or sell in this market, I’d love to be a resource for you.