Seattle Real Estate Market Update | September 2020
Video Summary
Here are my latest thoughts on the Seattle Real Estate Market: The Seattle real estate market set a record high median sales price in August 2020! Despite all of the current events, we continue to see record-high home values. The average home sold above asking price. There are a large number of homes coming onto the market and they’re quickly being snatched up by buyers, so inventory remains low and the market continues to be highly competitive. Mortgage rates are still very low, which means homes are more affordable than ever.
- Last month’s market update – Seattle Real Estate Market Update August 2020
Video Transcript
Hey, I’m Zach McDonald your real estate agent with Real Property Associates and this is my Seattle real estate market update for September 2020. Lots of people have been asking about and just worrying about the upcoming election. And honestly, we have no clue what’s going to happen and who’s going to get elected. We also have no clue what is going to happen as a result of these elections. But I do want to spend a little bit of time at the end of the video talking about some of these fears and giving a little bit of insight. But before we get into some of these fears, I want to go through this video just like I do every other video. We’ll start off with a story, we’ll talk about some stats and we’ll talk about some applications for you, coming up.
This month’s story features the Gumke family. They’re friends of mine from church who sold a house in Lynnwood and decided to move up North a little bit farther and get a little bit more property in Snohomish. Gumke family, thank you so much for the opportunity to work with you. I really enjoyed getting to walk with you guys through this transition and it’s fun to see the kids really enjoying the new place as well.
One really cool thing about the Gumke situation is they were purchasing contingent on the sale of their house. And as you know, in a lot of my videos I talk about how almost practically impossible that is, but in their situation, they were moving farther out of the city and the suburbs. They were even farther North than before. And so if you’re somebody in that situation and you’re maybe in Seattle, Bellevue or the surrounding suburbs and you’re thinking we want to move even farther outside, it is possible to make a contingent purchase specifically at the higher price points on the North end. So if you’re in this situation and you want to talk a little bit more about it, please feel free to reach out.
All right, now let’s jump into the stats for the month. And this month, Seattle set a record high in the median sales price at $815,000. That was up 11.5% year over year. And we’re in August, so these stats are August stats that we’re recapping here September. And this is the first time in what I can see on record of hitting the record high and the highest for the year in August. Normally people are going on vacations in August, getting ready for school, starting to think about school again and here we are in August and heading into September with super low inventory and now the highest median sales price on record. So I’ve said it in previous videos this year that it’s just been a weird year with COVID-19.
And now, here in Seattle, we have massive wildfires that not specifically in Seattle, but in surrounding areas and the smoke blowing up into the area. We’ve been covered in smoke for a week now. So I’m just having these different things going on. I hope that 2020 can end a little bit smoother. It’s just interesting though, to see that despite everything we’re now hitting a record high median sales price and I think we’re going to continue to see the home prices remaining steady throughout the rest of the year here. And I’ll share a little bit more about the stats and talk about why I think that is here as we continue to move forward.
So the average house in Seattle sold over the asking price again, last month at 2.5% above the asking price. And interestingly, last year at the same time, we were seeing houses selling on average below the asking price. So we’re seeing above asking price and we’re also seeing this in the suburbs on the Northside and also on the Eastside. New listings in Seattle, we saw 72% more new listings this year than last year. So I’m going to read these numbers because I think it’s interesting. Last month in Seattle, we saw 1,321 houses come on the market. And last year we saw 769 houses come on the market. And if you look back to 2018, we had 859. So substantially more houses coming on the market this month, than the same time last year. And as I recall, we had the same thing happen last month.
And we talked about this, that I think the big reason we’re seeing more houses coming on the market right now than maybe normally we would is because of the COVID-19 situation. And specifically in Seattle, things were shut down, people were fearful, not sure what was going to happen. Kind of sitting still. And now we’re seeing some of those people maybe that would have listed their house in March, April, or May, which is traditionally the hot time of the year to list your house, not the actual hot weather time, but the springtime season. We’re seeing some of those people listing their house now. And interestingly, we’re still seeing a lot of these homes being eaten up if you want to call it that.
Buyers have been waiting. We’ve had a really, really, really low amount of supply and inventory of homes for sale. And so buyers have been waiting and competing over the same houses. And now that we’re seeing more houses come on the market, they’re going quickly. So we saw a 55% increase in pending sales in August year over year. So this year we had over 1000 houses. We saw 1034 houses go pending in Seattle last month. And in 2019, we had 667 houses go pending. So substantially more houses under contract this year versus last year. In closed sales, we didn’t see quite as big of a jump year over year. We saw a 16.9% jump in closed sales.
If you look at the homes for sale stat, we looked at all the new homes coming on the market. So many new houses coming on compared to last year, we saw that pending sales were up, but not quite as high as the number of homes coming in the market. But if we look at the homes for sale number, the number of houses that are currently for sale heading into September, that we find ourselves in now, we’re actually 10% down in homes for sale. So despite the flood of new inventory coming on the market and the large number of buyers sitting and waiting, we’re still seeing those supply numbers remain lower, which is why we’re seeing the average days on market hovering down still. In Seattle, 17 days on market, and in the suburbs, we’re seeing similar numbers.
The median days on market (so the middle number) is seven days on market in Seattle, which is substantially down. So in 2019, we saw 17 days on market, and 2018 we were at 10. So 2019, if you recall was a little bit of a softer year, a little bit more of a neutral market, still a seller’s market. But we didn’t have as much competition in 2019, but we’re seeing a return of that competition that we saw in 2015, 2016, 2017, and heading into 2018 right now.
Now really briefly, if we look at countywide numbers, King County was very similar to Seattle as a whole. We saw significantly more new listings, 37.4% new listings. We saw 54.9% more pending listings. And we saw the average days on market drops substantially, 37.9% down year over year. The median sales price in King County was also up 11.9% as a whole. And we saw the supply numbers plummet to 42.9%. So overall in King County, 1.2 months of supply of homes on the market. A Traditionally balanced market’s going to be somewhere between like four to six months of supply in the market. And that’s where there’s a lot more equality between buyers and sellers in negotiations. And we find ourselves definitely way skewed towards sellers.
If we look at Snohomish County stats, we’re seeing similar numbers again. Not quite as many new listings. So a 13.6% up on the new listings, but pending sales jumped still similarly 37% up in the pending sales. And we saw days on market dropping as well. And months of supply dropping down to 0.8 months of supply in Snohomish County as a whole. So really low supply numbers. These are the similar numbers that we were seeing In 2015, 2016, 2017. When you think back to the Seattle market being the hottest real estate market in the country for two years straight, these are the kind of numbers we were talking about. And we’re seeing that the average house selling above the asking price and that the median sales price in Snohomish County jumped 13.3% year over year.
So Snohomish County, King County, they’re the two counties that I service and that encompasses Seattle and most of the suburbs in the North, South, and East. We are seeing a really, really, really hot real estate market. And if you look back even a couple of weeks ago, there was an article published recently stating at Seattle out of all the large cities in the US is the best place to buy a house. I recorded a video on this talking a little bit more about it. If you’re curious to know why that is and to dig into that study a little bit further, feel free to go check out that video on my YouTube channel.
Now it’s time to talk a little bit about the why and the how, the application part. What does all this information mean? And I want to first start off by addressing some of the fears that people have about the housing market coming up into the election. So historically we do typically see a little bit less coming on the market. We see a little bit less buyer activity during election time, but it doesn’t always result in the real estate market in any drastic correction or anything like that. So I wouldn’t anticipate or be fearful of the housing market falling apart because of who is elected as the president. That’s not historical precedent.
If we look at the stock market, the stock market’s way more volatile than the housing market. And that’s where you start to see a lot more of the movement. So if I was somebody that was heavily invested in the stock market, I would talk to my financial advisor and get their thoughts based on the policies of the two different presidential candidates that are most likely to be elected and get their thoughts and what they think. I’m no financial advisor. I do talk to my financial advisor and get advice on how to best handle the situation. And I’ll say I have quite a bit of my money in cash, but I’m also still dollar cost averaging and putting money into the stock market. But I’m also holding onto some of it to invest. As the market dips, there is a lot of volatility in the stock market right now.
So buying in on the dips that we see currently, but also waiting and seeing if there’s going to be a little bit more of a correction to come. But I wouldn’t say that’s reason to be fearful on the housing market front. If anything, if there’s a big correction in the stock market, we’ll probably see mortgage rates continue to go down. And mortgage rates are already really low. Hitting an all-time low again last week. As of September 10th, Freddie Mac’s Primary Mortgage Survey show that we were seeing a 30 year fixed rate on average across the board, 2.86%.
So for some people that are even getting better rates, if you hit those income assets credit gold standards if you want to call it that. And just the fact that you can get money so cheaply is continuing to help fuel the real estate market specifically. And if we see mortgage rates drop, even more, I think we’re going to continue to see that sustained. And that’s partly why we’re seeing prices continue to push up because affordability is all of a sudden there for people. People that couldn’t maybe buy that next house in the Seattle market and the surrounding areas are now able to afford that house. So they’re taking that plunge now and getting and locking in a lower payment and some people would counter with, “Well, what happens if the housing market corrects? What happens then?” They bought a house that’s at the peak.
We just talked about that, the peak of the housing market. But when you look at historical data, usually except for our most recent situation from 2008 to 2012, when you see the housing market going down, you see interest rates going up, not down. And if we get some increase in interest rates and the market corrects, the housing market corrects, which is what we saw in 2018 when interest rates went up, the housing market in the more expensive areas specifically Seattle, definitely saw a hit and took a hit. But as they’ve dropped down, we’ve started to see the frenzy picked back up. So my guess is that if we see an increase in interest rates again, and the housing market corrects, we are going to see prices go down in the housing market, but at the same time, you’re going to lose affordability.
So the same house that you’re buying, maybe you buy it at $600,000. If you have a 30-year loan on it, and it drops in value, that same house is going to cost you just as much or more at $500,000 when you start to do the math and how much you’re going to spend over the life of the loan and in your monthly payment. So again, questions to talk about and things to talk about with your mortgage advisor, financial advisor. But I think that we’re in a good spot specifically in Seattle. And I don’t have any fears right now about the housing market in the Seattle area having any kind of dramatic correction or imploding. And that’s partly why Seattle was rated as one of the best places to buy right now, the best major cities to buy. Because in this study that was looking at 24 different metrics, Seattle ranked higher or high in a lot of these areas. And especially when you put them all together.
So things like working from home have helped Seattle sustain its economy, despite the COVID-19 pandemic. Of course, there were certain industries that were hit really, really hard, like the restaurant industry and service industries and that happened to everybody across the board. But many jobs were able to continue working remotely, specifically the jobs where you see the most amount of people buying homes. So I’m confident in the Seattle market. I think a lot of people are confident in it, and that’s why we’re seeing good things still said about the housing market, but I don’t have a crystal ball. I don’t really know what’s ultimately going to happen. I don’t think anybody does. We can predict and use the information that we have today to make our best guesses. We can talk about what’s actually happening right now, which is what we do in these market updates.
But if you want to talk more specifically about your situation and get my thoughts and how it applies to you, I’d love to dive into those numbers with you. I’d love to dive into your individual situation and talk a little bit more and come up with a game plan that works for you. So thanks so much for watching this video. I hope you got a lot of value out of it. And if you made it all the way to the end of this video, I know you got some value out of it. So please subscribe to my channel if you haven’t already done so, and please share this video with somebody you know that could benefit from it. Thanks so much.
