Seattle Real Estate Market Update | September 2018
Housing inventory in Seattle continues to climb and home prices are down. What is happening in the Seattle real estate market?
[Transcript of September 2018 Seattle Real Estate Market Update]
Hey, I’m Zach McDonald, your real estate agent with Real Property Associates. This is my September Seattle real estate market update. For those of you that are new, I start off every update with a story, and then I progress to the stats. This month’s story is fun for me, and more of an encouragement almost just to continue making these videos and providing value to you as either a viewer on YouTube or Facebook.
Kit and Taryn just closed on their first home purchase a couple days ago, so congrats to you guys. I know you’re watching these videos. At least, you better be watching this one. I met Kit and Taryn three, four months ago, I think now. They contacted me through Zillow. When I met up with them the first time, it was the funniest thing. I show up and they’re like, “Hey Zach, how’s it going,” like we were buddies and that we knew each other. I was a little taken aback. I’m a pretty outgoing guy, but I was a little taken aback. I was like, “Hey, yeah, yeah,” rolling with it. “Hey yeah, it’s good to see ya.” It was almost like I was supposed to know them, but I didn’t. Really quickly, one of the first questions I ask is, how did you hear about me? They started watching my videos. So, Kit was watching my videos and that’s how he got to know me a little bit and that’s actually why they decided to work with me.
So, quick flash through the story. We met up the first time. They were already excited to work together. We got them pre-approved. We found some homes. Actually, I think we got the fourth house that they offered on. Looking back, I think they would even say that’s their favorite one of the houses that they got, but super fun process going from watching videos on YouTube, so consuming content, getting to know me, but also just learning about the Seattle real estate market, to grabbing coffee and then all the way to a closed sale and then even a beer here at the end. So, super excited for them.
If you’re watching this, just a quick plug, if you’re watching this, and this is valuable content for you, please consider first of all subscribing, and then also you’re somebody who’s thinking about buying a house or selling a house in the Seattle-Bellevue area. I’d love to be a resource for you and meet up with you for coffee as well and talk about your individual situation. It might at first seem weird, but it actually is, I’ve had multiple clients this year that have worked with me and bought a house after watching these videos and reaching out. So, if you’re one of those people, please feel free to reach out.
Now, let’s talk about the stats, the market, as that’s probably why you’re watching this video. The Seattle real estate market really has changed over the last few months. Last month’s video, I was emphatic and I said multiple times, “This isn’t the top. This isn’t the top.” Some of my clients were even poking me a little bit with that. I had some comments on the last video about being in denial, and things like that. So, I want to just start off with that I do stand by that I don’t think that the Seattle real estate market’s gonna have an epic crash. That’s what I keep hearing and that’s what the news talks about. The headline I read the other day in The Seattle Times was, “Home prices are down $70000 over the last three months in Seattle.” That’s a pretty shocking hyperbolic headline, but honestly, that’s the total median number. So, you’re looking at homes at the highest price points and homes at the lowest price points, and you’re coming up with an average number there. The majority of houses in the median, that more middle range price point, are not dropping that much.
So, if you bought a house for $500000, your house is not now worth $430000. It’s just not how it’s been. A lot of this price change has been on the higher end. There are homes that are being reduced in price. There’s more inventory. Now, I was reading through the northwest MLS summary for the last … That’s where I get all the status. If you hear me quoting stats, it’s from the Northwest MLS. They were talking about just the market. There are a few agencies interviewed. One of them was talking about, “We should have coached people about how to bring their homes on the market, not to put them all on at the same time.”
We’ve had such low inventory of houses for sale that we’ve had an extremely depressed amount of homes, and a lot of interest, so you have this frenzy that’s been cooking up. Then over the last few months, it has been, it seems sudden, but it has been gradually increasing. Now we have, I’m looking at the stats here, we’ve got a couple months now, just under two months of inventory in Seattle and in the suburbs you’ve got a little bit more, like two months, around there in Edmonds, Lynnwood, Shoreline actually getting closer to three months. But the truth of the matter is, even with all this new inventory, first of all, it’s been somewhat gradual, and then second of all, it’s still a seller’s market. The world has not ended for sellers. It’s still a market where sellers have leverage.
Now, what we’ve seen is buyers aren’t necessarily having to do their inspections ahead of time and compete with 10 to 20 offers, but we’re still seeing multiple offers on a lot of houses, and sellers still have a lot of negotiation power and leverage. This is by no means even close to shifting to a seller’s market. So yes, the market has shifted a little bit, and I’m gonna keep doing these updates. So, please stay tuned. I’ll continue to keep you informed, but I’m not ready to say, “The world’s coming to an end. There’s a big huge crash coming in the Seattle real estate market,” because it still remains that the Seattle economy is really strong and there are still a lot of buyers. Yes, there’s new inventory on the market and homes are still selling quick. I mean, the median days on market, I’m looking at these, we’re still between 10 and 13 days from Seattle all the way to Lynnwood. So, it’s not like homes are taking forever to sell and they’re languishing on the market.
Now I’ve said in the past, the homes that are overpriced … See, that’s the big thing. Pricing is more important. When you don’t have seven buyers for every house, the price matters a lot more. Buyers are smart. People are smart. They analyze. They compare. So, if you’re overzealous on your price, your house is gonna sit on the market. That’s always the case, but in a hot market like Seattle’s been, sometimes those houses are selling even though they’re overpriced. So right now what we’re seeing is those homes that are priced way too high … There’s one in a complex I just listed a condo in. It was, even the seller was like, “Seriously?” My seller was like, “What the heck? This is way overpriced.” And it is, it’s still sitting. They’ve already dropped the price 30000 and they’re gonna have to drop it again before it sells. So, pricing is really important if you’re a seller. It always is, but it’s extra important right now.
Another stat I want to point out is just the list price. Your home, if you’re a seller and your expectation is, my house is gonna sell and get seven offers, and it’s gonna go crazy over the asking price, it’s just not the case. So, really what we’ve seen I think in the last few months, we’ve seen more inventory come on. What’s been driving this upward pressure in the market, and this is always the case, is the supply and demand. If you don’t have four offers and the prices aren’t escalating over the asking price, you’re seeing people buying for the asking price, instead of getting that extra pop. So, you don’t have the acceleration in the market as we’ve seen. And, if you’re dropping the price, of course, you’re selling below. So, we’re seeing homes selling at or around a lot closer to the asking price, rather than escalating above the asking price.
So, stay tuned. I’ll continue to provide these updates for you, but I really think what we’ve seen is, and I’ve said this before, a more cautious buyer. There are some buyers that are sitting on the sidelines, but there’s still a whole bunch that are really excited to buy a house, and there are still a whole bunch that are looking to buy a house, but they’re not in a rush. I’m working with some people like that right now. They’re trying to find the right home and they’re not gonna overpay or bid up for a house that they’re just kind of interested in. So, I’m not sounding the alarm. I do think the market’s shifted a little bit. I think it’s for the good. It would be a good thing for Seattle to see a more normal 5% to 6% appreciation every year, more like a historical average than 12%, 13% because it’s honestly not a sustainable pace, and I’ve talked about that. I think that’s gonna come to an end here soon, but we could see a more gradual growth, which I think is a lot more healthy for the Seattle real estate market.
Again, Zach McDonald, Real Property Associates here. If you are thinking about buying a house, or you want to talk about the market, whatever your situation is, please feel free to comment down below. I’d love to engage with you on these videos. It’s one of my favorite parts of it all, just hearing your thoughts and engaging. Then also if you want to meet up for coffee and actually get to know each other and talk about your individual situation because each one’s a little different, I’d love to do that. Again, thanks so much for watching, and bye for now.
