Seattle Real Estate Market Update | May 2020
Video Summary
Here are my latest thoughts on the Seattle Real Estate Market: Many are wondering how the Seattle real estate market is fairing amidst the Coronavirus pandemic. Well, Seattle median sales prices for residential homes in April were the third highest in Seattle’s history dating back to April 2018, which was the highest the housing market has ever reached. So amidst COVID-19, we are still seeing high sales prices.
At the same time, we are seeing a decline in listings, fewer pending and closed sales, and listings selling fast, which has left us with around one month of supply. Also due to the oversaturation of mortgage applications with the low rates and forbearance being discussed, mortgage companies have had to make adjustments, so the higher-end market has been impacted and is slowing down. In the middle-range market, there’s still a lot of activity and multiple offers. We don’t know exactly how the economy will transition after this, but I’m hopeful the market will continue moving forward. For sellers, there are still buyers out there and homes are selling fast. For buyers, it is a good time to start discussing your plan while mortgage rates are still on the lower end.
Relevant links
- Last month’s market update – Seattle Real Estate Market Update April 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 May 2020. Many people are still asking me what’s going on with the real estate market? How’s the housing market doing? Especially given that we’re still walking through the coronavirus pandemic. Washington still has, as I’m recording this video, a stay at home, stay safe order in place, which is impacting people’s jobs, and people’s livelihoods specifically in this area. And it’s a fair question that people are asking how is this going to impact not only our economy but the housing market?
Recently, I’ve made some other videos talking about what’s going on during the COVID-19 pandemic. Last month’s market update, I talked about how the market was starting to be impacted. And then even more recently, I recorded a video that was discussing what showings look like during the pandemic, but before we get into the stats and what’s going on in the market, I want to share a story with you, just like I do in every other update. This month’s story features Drew and Jenny. They’re some personal friends who happened to live in my neighborhood. Well, they did live in my neighborhood until recently. They decided that they wanted to buy a bigger home. They’re building a new construction home, which is super exciting for them, but it also meant that they needed to sell the home that they’re currently in. And so in the midst of all that’s going on, we put their house on the market about a month and a half ago, and a few weeks back their house closed. And they were able to move into a temporary apartment for the next few months as their new construction home is being finished up. And thankfully for them, construction is able to continue now in Washington and the work on the house is continuing and progressing. So for them, I think they’ve still got their fingers crossed, but we’re hoping that they can move into their brand new house here in the next few months.
So Drew and Jenny, if you’re watching this, thank you so much again for the opportunity to be a real estate agent, and I’m really excited about your future in your new home. Seattle’s median sales price for residential homes last month, according to the Northwest Multiple Listing Service was $800,000. Guys, this is the third-highest median sales price in Seattle history dating back to April 2018. And if you recall, April 2018 was the highest point that the housing market ever reached, $802,000 median sales price, according to Northwest MLS data. And after April 2018, we saw a correction in the market for eight months straight. We saw home prices decline in Seattle, and at this point now, even in the middle of the coronavirus pandemic, we’re seeing home prices continue to climb, specifically in Seattle, and we are up, year over year from last April 7.4%.
Interestingly in Edmonds, which is where I live with my family, Edmonds set a record median sales price in the month of April. Additionally in King County and Snohomish County, the two counties that I service, home prices were also up year over year. A few other stats you might find interesting, in Seattle last month, new listings coming on the market, we had 709 new listings come on the market, which is 36% lower than we saw last year in 2019. And in 2018, we had 866, which is quite a bit less than last year as well, but still considerably more than we had this year.
What we’ve seen is inventory has declined severely, and so has buyer interest. So we look at that when we see pending sales. So in Seattle pending sales, as we wrapped up April 544, which is 32% down year over year. I think that’s interesting to note because you’re seeing a decline in new listings coming on the market, and you’re also seeing a decline in pending sales, but both of those are very similar stats. We had a 39% decrease in new listings and a 32% drop in pending sales. So we’re seeing that the buyers and sellers are both taking breaks at about the same rate. Close sales as well, sales that would have gone pending in March and closed in April were 512, which is 33.2% down year over year. In 2019 and 2018, we were in the seven hundred there. So we’re seeing fewer close sales as well. But again, we’re in that same ballpark in that 30% range decline in new listings, pending sales, and close sales.
So where does that leave us with current homes on the market? At the end of April, there were 795 houses for sale in all of Seattle and single-family houses are what we’re talking about. 30.7% down year over year. Last year, there were 1,147 houses for sale in Seattle. And in 2018, there were only 578. So we’re down year over year, but in 2018, when the market was at its frenzied pace, we had a couple of hundred fewer houses that were on the market than we have right now. So inventory levels are definitely down as we’ve been talking about, but not as low as they were back in 2018.
So how fast are these houses selling? The median days on the market in Seattle this year in April, six days on market. And the average days on market in Seattle in April was 14 days on market. Last year, 22 was the average. So down year over year. So homes were selling quicker than they were doing last year. To wrap up the stats portion, all this combined gives us about 1.2 months of supply in Seattle, which is an extremely low amount of homes on the market. Again, there have been fewer homes coming on the market, fewer homes going pending and selling, but again, those ratios are remaining about the same, which is why our inventory numbers remained so low.
Before we jumped to the application part of this update, I want to share a few influencing factors to consider the first one being mortgage rates. If you’ve been following my market updates or the news, you’ve probably heard that mortgage rates have been at all-time lows here over the past few months, bottoming out a couple of months back. A bunch of people refinancing, and what happened is you had an oversaturation of mortgage applications and the mortgage companies were like, “Whoa, what the heck is going on?” And then in the midst of all of this, you had the forbearance starting to be talked about and mortgage companies, in general, started to get a lot of fear up in their heads and rightfully so that people might finish a purchase, and then just say, “You know what? I’m not employed any more.” Or, “I can’t pay my mortgage payment. I want to do a forbearance plan.” So I think mortgage companies right now are making a lot of adjustments. In fact, I know they’re making a lot of adjustments. Some companies are only accepting 20% down. Other companies are not doing jumbo loans anymore. Those are larger home loans. So when you’re talking about buying those $1.5 million houses, even 1.2, 1.3, you start to see people getting into those jumbo categories and they’re having to be creative.
Some people are getting a first mortgage and a second mortgage and blending the two together. It’s interesting times, but mortgage companies are being creative to help people still purchase those higher-end homes, but I think what we’re seeing, and what we will see potentially, is a little bit of a slowdown in the higher end market. Some of those people have just been sitting out. So it remains to be seen really what the impacts going to be, but it is interesting if banks are going to tighten up on what kind of loans they’re going to give, and what kind of programs people are going to qualify for. That will impact those higher-end homes.
So far in the more middle range, there is still a lot of activity. We’re still seeing multiple offers on properties. I’ve had listings over the past few weeks, get multiple offers, sell in a couple of days, I had one where it closed in 12 days, even in the middle of all this there have been delays. A few of them have had delayed closing dates because of appraiser scheduling and things like that, but overall, so far, home prices have remained steady and the market has still continued to move because people still need to buy and people still need to sell.
Jobs are another factor to consider. There are a lot of people filing for unemployment right now. And I mean, I guess my wife would qualify for that as well. She works at the local athletic club four hours a week and has not been able to work the last few months teaching swim lessons at the athletic club. And so for her, she would count as an unemployed person. She hasn’t actually applied for unemployment, but I know there are a lot of people in her position that have applied for unemployment. I know there’s a lot of people that have lost jobs and been impacted.
I know a few of my clients that are in the restaurant industry or in some of the construction fields that were shut down for a while have really felt it. And then I also have a bunch of clients. I’d say the majority of the people that I know and have worked with, at least in this area have not been impacted in the sense of their financial wellbeing. A lot of their lifestyle has changed. Maybe having kids at home and trying to juggle kids, and continue working, but a lot of the people I know that I work with specifically, haven’t been as impacted as far as their lifestyle and their jobs. It’s more been adapting to the stay at home order, but still being able to work from home. But again, these next few months, it’s going to be really interesting to see what happens, how Washington opens up and starts to get people back to work. I know there are some people that don’t even want to go back to work because they’re getting paid more on unemployment, just based on how everything’s kind of working out.
So again, it’ll be really interesting to see what the transition plan looks like and how the economy kind of gets kick-started back up. But again, we don’t really know what that’s going to look like, but I’m hopeful, based on what I’ve seen so far, that the market is going to remain at least moving forward at this point.
A little application for sellers. People have been asking me about selling their home still and I had quite a few listings here this spring in the middle of everything, and people are still out buying. And it’s not a bad time to put your house on the market. Now, if you’re living in it, it is a little bit inconvenient to have people coming in, seeing your house, especially with everything that’s going on. So I completely appreciate if it’s not the right time for you. I think a majority of the people maybe that are sitting on the sidelines right now are people that live in their house and don’t want to have strangers coming in, potentially sick. There are a lot of precautions that we take and notices that are given things like that to protect you as the homeowner, but it’s a completely valid reason to maybe sit on the sidelines just for a little bit. If you’re somebody though that does want to talk about your situation and at least get started on that conversation, I’m happy to explain what’s going on, and how we’re handling the different risk factors, and mitigating those for you as sellers.
For buyers, it’s the time to at least get started talking about buying a house. If you’ve been thinking about it in 2020, one thing that is being talked about a lot right now are the interest rates and how low they are right now. A lot of the mortgage professionals that I respect and look up to are thinking that we’re going to see mortgage rates jump up pretty significantly after the election after all the stimulus kind of stuff runs its course. And we might see mortgage rates start creeping up closer to the 5% range. Now again, who knows. Really, they don’t really know for sure, it’s all speculation, but the idea of thinking like, man, okay, if the market does correct a little bit, if it does again, we don’t know for sure, for sure. But if the market does correct a little bit, but mortgage rates are a whole bunch higher, you’re going to be paying more for your house, which is what we saw in 2018 and the beginning of 2019. People’s mortgage payments were significantly higher when prices were a little bit lower because of the increased mortgage rates.
Okay. So we just talked about a lot. We talked about how the housing prices have continued to go up in King County and Snohomish County, and specifically in Seattle in the midst of the COVID-19 pandemic. The buyers and sellers both equally have declined amount of people that are looking to buy and sell has gone down. I’m expecting that when the restrictions lift, we might see a flood of new houses come on the market, and we might see a flood of new buyers. And if you found some value in this video, I’d really appreciate it. If you’d subscribe to my channel so that you can see other videos like this, and maybe hit that bell, it really does help the algorithm, and help you see more of my content. And if you know somebody who could benefit from this video, please consider sharing it with them. Thanks so much. And we’ll talk soon.
