Seattle Real Estate Market Update | December 2020
Video Summary
Here are my latest thoughts on the Seattle Real Estate Market:
The Seattle real estate market median sales price has leveled off in the past few months but still remains record-high. In November, we saw considerably more homes come on the market than usual for this time of year, but it was still almost half the amount that came on the market from the month before. This looks like a backlog of homes selling that would usually sell during the springtime in a normal year. Pending and closed sales have increased as well and are even higher than in the springtimes of 2018 and 2019! Overall, inventory remains low at a little over one month of supply. Typically homes sell below the asking price this time of year, but this year homes are selling above the asking price.
- Last month’s market update – Seattle Real Estate Market Update November 2020
Video Transcript
Hey, y’all. Zach McDonald your real estate agent with Real Property Associates and this is my Seattle real
estate market update for December 2020. Before we jump into the meat of this update, I want to take a
brief moment to wish you and yours a happy holidays. Keeping with tradition, I want to start this market
update off with a story. And last month’s story features the Galbraith family. They’re friends of mine
that I’ve had the privilege of helping a few different times. About three and a half years ago I helped
them purchase a small house in Everett, their first house, and just recently they closed on the sale of this
house, closed that chapter of life and walked away with a pretty nice profit here after only three and a
half years. So really excited for them to be able to move on from this house and get ready for that next
home purchase.
And what’s next for them and their family. Galbraith family, thanks again for the opportunity to work
together. Let’s jump into the stats now, which I know is the main reason that you’re here and this
market continues to astound me and be different than it has in previous years, but there are some
things that we’re used to seeing this time of year that are coming back. But first let’s talk about the
median sales price in the city of Seattle. We’re at $799,000 and we’re talking about numbers, if you’re
new to these updates numbers from the previous month, so November 2020 stats, $799,000 was the
median sales price in the city of Seattle, which has leveled off over the past few months. We were at
$815,000 a few months back, but we’ve leveled off around $800,000 the past three months or so. The
prices we’re seeing now are record highs.
We saw these prices back in 2018, right before the market took a pretty good dip and then we also saw
these prices very early in the spring before everybody got freaked out and afraid really with the COVID
situation, and rightfully so. And we’re now back up to these highs in the fall heading into the winter,
which is really abnormal, but I think this whole year has been really abnormal, so let’s be real. It’s
interesting though, to see what we’re seeing in the market. In the springtime, we saw record lows or at
least not record lows, but really, really low inventory in the springtime when we normally see a lot of
inventory. Ironically or not ironically, just because of the pandemic, we also saw less demand. So the
market continued moving forward, but not at a crazy pace. And then in the fall, when we typically see a
slow down in inventory, fewer houses coming on the market, fewer buyers looking, we’re seeing a
record number of buyers.
And for the time of year, record number of houses coming on the market, and even more so the buyers.
And we’ll talk a little bit more about why that is, but this market that we’ve had this fall has been a lot
different than what we’re used to seeing. But I think we’re going to see a little bit of a shift back to what
we’re used to seeing at least as far as the number of houses go. But for everything that’s gone on this
year in spite of everything, Seattle housing market from year over year. So November to November up
10.6% median sales price. So up substantially at this point in the year. In Bellevue, if we look over at
Bellevue, 13.1% increase in median sales price from last November to this November. And if we look
across the board, Shoreline, Edmonds, Lynnwood, all over, all the suburbs are also up considerably year
over year. Countywide, King County, up 13.1% median sales price and Snohomish County up 15.7%.
So as we head into more of these affordable neighborhoods, affordable cities, we start to see the prices
climbing even faster in those locations. Earlier on in this update, I mentioned that we’re seeing more
and more houses coming on the market than we’re used to seeing this time of year. And even in
November, we saw considerably more homes than normal. We saw 41.3% more houses come on the
market in Seattle than we normally do in the month of November. But we were down considerably from
last month. Last month we saw 1,154 houses come on the market in Seattle. And I know that number
probably doesn’t mean too much to you, but that was a lot of houses for the month of October. And we
saw a really steep drop down to 647 houses coming on the market. So almost half the amount of houses
came on the market this month than last month.
So yes, we’re up considerably in the amount of homes that normally come on the market this time of
year, but we’re seeing that seasonal slowdown that we normally see. We’re just seeing elevated
numbers, and I think a lot of it’s just a backlog of inventory or homes that would have sold in the spring
that are now selling here in the fall. Interestingly, even with all the new houses coming on the market,
people are buying these houses up left and right, and we’re seeing a substantial increase in pending
sales. So 29.2% more homes going pending this November versus last November and closed sales almost
25%, 24.8% more houses closed in November than last November, November 2019. And as we look at
the number of closed sales, 830 in the city of Seattle, we’re seeing more homes closed in November this
year then were closed in any month in the summer of 2018 or 2019.
So at the peak of the market, the hottest times of the year in 2018 and 2019, we saw more houses
closed in November than we did during that year. It’s been a really crazy year and I know I’ve mentioned
that a few times in this update, but as we’ve all known, 2020 has been a year that we haven’t expected.
Homes are still selling quickly, right around eight days on market as the median, around 20 days on
average in Seattle. If you head out to the suburbs we’re seeing in Snohomish County suburbs, 10 days in
Lynnwood, 12 in Edmonds, so really low numbers of days on market. And when you think about it
averages the highest and the lowest altogether, so everything’s just going quickly. Supply numbers, we
have 1.3 months of homes on the market in Seattle, which is down from last year. And as we look at the
suburbs we’re seeing in Shoreline, just a few of the ones that I’ve written down here, Shoreline 0.7
months of homes on the market.
Lynwood has 0.3 months of homes on the market. That just means if nothing comes on this next week,
there’s going to be no houses to sell and Lynnwood and in Edmunds 0.6 months. So just really not very
much on the market. And that’s what we’re used to seeing this time of year because of the low amount
of buyers we’re still seeing a really, really low amount of supply. And interestingly, normally this time of
year is when you start to have an opportunity as a buyer to maybe get a little bit of a discount from the
high prices in the spring. And homes typically are selling below the asking price this time of year, just
because the people that are selling have to sell, and there just usually aren’t as many buyers out in the
market to fuel the demand. And supply and demand is pretty simplistic when it comes to real estate, but
it is a huge factor in the local markets specifically. And if we look at 2019 and 2018 homes were selling
below asking, 1-2% on average.
And right now homes are selling almost 1% above asking in Seattle on average and even more so in
some of the suburbs. So we’re seeing home prices going above asking and increasing this time of year
versus decreasing, which again is abnormal. A few takeaways or applications as we conclude this
update. Number one, inventory is really low. There really are not enough houses on the market to
supply the amount of buyers that are interested. And there are a few reasons for that. I think the first
one is the new shutdown that we have here in the city. We’ve had another four week lockdown. We’re
getting close to the end of that period here in Seattle. I think we’re going to see another one, it’ll
probably extend us through the new year. That’s just my speculation. I couldn’t imagine having
Thanksgiving gatherings shut down essentially and then having Christmas ones open, that’s just my
thought. But the other factor, I think, is the traditional slowdown during the holiday season.
People are taking time to spend with family, they’re busy, and the last thing most people’s mind is I
want to put my house on the market in a week. So myself, I’m having conversations with sellers and
they’re talking about new year, we’re talking about 2021 January, February timeline. And I think that’s
what a lot of other people are doing as well and that’s just typical. Now, there are always sellers that
have to sell during the holidays. For whatever reason, maybe it’s a death or a
divorce or they’re relocating and or maybe they just really want to get their house sold. But usually
there’s a reason that they’re choosing to sell during the holidays. And there’s always buyers that have to buy, maybe their lease is up or whatnot. But other times buyers will wait as well and plan for 2021, but I
think the thing we’re seeing right now are the interest rates. Interest rates are still hovering at all-time
lows, which is continuing to fuel the buyer demand because buyers don’t want to miss out and interest
rates change every day.
So right now, if you’re a person that’s financing your purchase at super low-interest rates, you’re locking
in a super low-interest rate and you’re also locking in your payment. And what happens is as interest
rates rise, your monthly payment becomes substantially more and you actually end up paying more for
your house in theory, even at a lower price than you would at current prices even if the market did
adjust a little bit. Now for a cash buyer, completely different situation. Cash buyers just want to get the
lowest price for a house. But if you’re financing your purchase, you can get a low interest rate. The
amortization schedule over time is drastically, drastically different at a lower interest rate even if the
price is a little bit higher. For sellers, I don’t think there’s ever been a better time to sell and that’s weird
to say in the holidays.
And by no means do I think you should necessarily do it right now, get your house on the market. But
the amount of inventory is super low and the amount of buyers is really high out there and interest rates
are low. And what we’ve been seeing is homes are selling above asking right now. And we’re also at all
time high prices. So as a seller, it’s the perfect storm. You’ve got the highest prices, you have multiple
offers, which continue to drive the prices even up further. I’m starting to see appraisal issues again. I
haven’t seen appraisal issues in quite some time to be really honest. Appraisers have had a pretty easy
time justifying values on appraisals, but as we start to see multiple offers, situations coming in and
houses going 5, 10% above asking price again, we’re starting to bump into some of the issues that we
saw back when the market was super, super hot.
And that is appraisers, they’re like, “Sorry, I really wish I could, but there aren’t any sales to support this
new price.” So they have a harder time justifying the value for the lenders. All this to say, if you’re a
seller right now and you do need to sell, I think you’re in a good spot. And if you decide to sell in January
or February as we head into the new year, I think you’re going to see quite a bit of competition for your
house and potentially multiple offers. Thanks so much for watching my December Seattle housing
market update. I super value your attention. If you made it all the way to the end, I know that you, first
of all, got a little bit of value out of this. So please consider subscribing to my channel, drop a comment
down below. I’d love to hear your thoughts as well. And if you want to talk a little bit more about your
individual situation, I’d love to be a resource for you.
