Seattle Real Estate Market Update | September 2019
Here are my latest thoughts on the Seattle Real Estate Market: As expected, Seattle home prices are down slightly again this month. In this video, I discuss where I see the local real estate market heading for the remainder of 2019.
- Last month’s market update – Seattle Real Estate Market Update August 2019
Hey all, Zach McDonald, dual real estate agent with Real Property Associates, and this is my Seattle real estate market update for the month of September, 2019.
Now, if you’ve been following these videos, we’ve been making these since 2016, so we’ve been following the Seattle real estate market here on YouTube for quite awhile now and excited to continue doing that here for you for years to come. So if you haven’t yet subscribed to my channel, go ahead and subscribe as you can get these market updates on a regular basis.
This one story features Jenn and Ryan. They recently relocated here for work. And they were referred to me by Chris, one of my friends. So Chris, thanks so much for the referral. To Jenn and Ryan, I really appreciate it.
Now Jenn and Ryan’s situation was unique. Every home buying situation is unique, but there’s a few interesting aspects to this sale. First of all, the timeline that they had to purchase was extremely tight. We had a couple of weeks to find them a place and get under contract. And then we also had to close quickly in order to make the deal happen.
The other part was the inspection turned up a couple of things that really needed to get taken care of by the seller. And thankfully we were able to negotiate those inspection items and also find and locate the property and close really quick. So now we had a happy ending, right? They’re not always happy endings like that, but in this case we’re able to execute on the short timeline and also get those inspection items taken care of. I’m super excited for you guys, Jenn and Ryan. Thank you so much for the opportunity to work with you. And I know you love these market update videos. Actually, Jenn was giving me a hard time about this, so this is for you. You are on the video officially.
Let’s transition over to the stats for the month of August, 2019. We recap the stats from the previous month in these market updates. The median sales price in Seattle was down year over year, 1.4%. So just slightly over last year’s numbers. Now, a few other interesting stats, I’m not going to read them all off right now. I don’t want to bore you. The few of the noteworthy stats though here. Number one, we had fewer listings come on the market than we did last year. We also saw more pending sales significantly than we did last year. And then we also saw more closed sales than we did last year. So, fewer listings, more pending sales, more closed sales. And what that’s going to translate to in September is a drop in supply and potentially the amount of homes for sale on the market.
Now, generally speaking, what we see over the end of the summer is an increase in, at least what we saw last year, was an increase in the amount of homes on the market. And we saw more listings than we previously. We saw fewer pending sales and we saw fewer closed sales. And I think looking at last year to this year, what we’re seeing is a change in the psychology of sellers and buyers. I think last year people were a little bit panicked and freaked out to be honest. We saw mortgage rates climb significantly from where they were at. And we also saw inventory numbers starting to rise and I think people fed into that by putting their homes on the market. And that’s where we saw those supply numbers increase, which then, it’s almost a self fulfilling prophecy. We see home prices decrease as a result, right? You have more homes coming on the market, you have interest rates going up. Buyers are like, “Should I buy right now? Is this a bad time?” And consequently we see home prices dip significantly.
So if you were following these videos, even if you weren’t, back last year, go take a look at the August, 2018 video for a little perspective and where we are at then versus where we’re at now. It would almost be interesting to watch some of those other ones into the fall.
This year, I think we’re seeing something different. I think people have adjusted to the way the market is, almost a new normal. I think really adjusted is the right word here. Sellers aren’t expecting to see their homes sell in a week. They’re not expecting to see multiple offers. And buyers are also seeing interest rates again that are exciting to them. So we have a little bit different of a situation this year. So, my thoughts here, we’re going to see those inventory levels potentially go up a little bit in September, which is normal. I think we’re going to see a lot more new listings.
Now what’s going to be interesting to see, is if the buying season continues. The last few months we’ve seen more pending sales. We’ve seen more closed sales than the previous year. And what I’m thinking heading into the fall, what we’re going to see is a strong buyer season, and the big reason here is because we have low interest rates. And according to Freddie Mac’s primary mortgage market survey, they do this every week, they’re stating that we’re seeing interest rates almost an entire point below where they were at the same time last year. And this has been the trend on the mortgage side here over these last few months. A lot of people were thinking that we would see mortgage rates still hovering up around the fives, but really what we’re seeing is mortgage rates hovering in the low to mid threes according to the Freddie Mac data, which is a significant boost to the housing market. And I think that’s a big reason why we’ve seen a, what’s the word, a little bit more buying action here over these last few months. People are trying to take advantage of the lower interest rates.
Now, there are people predicting in the next 12 to 18 to 24 months, and again, everybody gives a really big broad spectrum here. They are predicting that home prices might dip again. And the big reason being some kind of a correction in the stock market, fears I think over the presidency and economic policies, things like that. Again, these videos aren’t meant to be a prediction of what’s going to happen over the next few years. These videos are a recap of where we’re at and where I think we’re going in the short term. I do think in the short term, what we’re going to see by the end of the year is home prices being above where they were at at the same time last year and I think for some of the reasons I was talking about. We’ve got lower interest rates, we’re seeing fewer homes. We don’t have the panicked sellers freaking out trying to get their home on the market before some kind of a crash. I think that gives us a good footing heading into 2020.
As far as what’s going to happen in the next 12 to 24 months in the market, I’m not a prophet, I don’t have a crystal ball. I wish I did. It would be really nice to be able to tell you all those things, but my guess is as good as the next one and I prefer not to guess.
My advice to you if you’re a home buyer, is to consider your own situation. How long do you plan to live in your house? If you’re trying to speculate on the market, maybe buy a house and live in it for a year or two, it’s probably not the best idea generally speaking, ever. Because historically the amount of costs to sell your home, the taxes, all that stuff along with historical appreciation numbers, it doesn’t make sense to buy and sell a house within a couple years unless you’ve got a crazy hot real estate market like we’ve had over the previous few years. But that’s just not the reality that we’re in right now. So, if you’re a buyer, you’ve got to take stock of your situation. “Am I planning to buy a house and then relocate in a year or two?” If that’s the case, you probably shouldn’t buy a house.
Now again, each individual situation’s different and I’m happy to talk with you more about that. But that would be my advice to you as a buyer. Don’t be buying for a short term gain. You want to be buying more for the long term.
Now, if you’re looking at a five to seven year time horizon, it doesn’t really matter what happens to the market in the next couple of years because you’re going to be in your house for a while and you’re going to ride out whatever bumps happen. Rarely do we have bumps like we did back in 2008-9-10. Those are not common bumps. A lot of times what we see is bumps like last year where home prices went down significantly. I’m talking about like 16%. That’s a lot. But now what we’re seeing is those prices have pretty-much recovered back to where they were before. So, we are down slightly from the same time last year but not significantly. I think we’d have definitely seen more of a balancing out, stabilizing in the market and a lot of that has to do with interest rates I think, and also psychology of the buyers and sellers in the market.
Stay tuned here over the next few months because I think we’re going to see a strong buyer season heading into the fall and early winter. But again, the market’s going to tell us whether that’s the case or not.
Thanks so much for watching this market update. I really appreciate your attention and I’m so thankful that you watched this video all the way to the end. If you did watch this video all the way to the end, please subscribe to my channel and consider writing a comment or giving a thumbs up to this video because I know you found value in it. And if you know somebody who could benefit from this information, please share it with them and help get the word out. We’ll talk soon.