Seattle Real Estate Market Update | April 2023

Hey y’all, Zach McDonald, your real estate agent with Real Property Associates, and this is my Seattle Real Estate market update for April, 2023.

What’s up everybody? I’m so excited to be back. Just got back from San Diego, sunny San Diego on vacation with my family. Normally I record these videos the week prior, but last I was on vacation taking a little time away and wanted to get this video to you ASAP here this week. And the numbers are encouraging, they’re encouraging from the housing market standpoint, as we’ve been talking about over the past, oh, I don’t know, eight months, nine months. The market has slowly been, and well, not so slowly in some cases been adjusting and prices have been falling, but the past couple months things have been changing. We’ve seen prices start to climb again, and we knew we were gonna see negative year over year numbers. We’ve been talking about that since, well, probably last summer, but they’re in that 15, 20% category, most of them like we’ve been talking about as well.

So it’s interesting just looking at the data, I was reflecting back on some of the thoughts last year, and I know I shared, and I, I, it looks like August, July, August and that timeframe, we started talking about how what I thought would happen is that we would have, as interest rates were climbing and we were seeing more inventory, we were gonna see more of a 2018, 2019 correction, like, which is what we saw back then. We saw correction, we saw, if I remember correct, it was like eight months backwards, negative pricing. And we started to see prices come back up. 2019 was, I wouldn’t say a, a big year, but things started to stabilize. Prices started to recover a little bit and remain relatively steady heading into 2020. And then we all know what happened in 2020 before things took off. But looking at the data here, what I’m seeing is confirmation of that at least so far that this year has looked a lot like 20 nineteens bounce back from 20 eighteens correction.

So we’ll continue to see and continue to follow this, but I wanted to share that as a little bit of context as we jump into the market update here. So, client story, I always start with one of those. We’re gonna share one. I think this is a good illustration of what’s going on in the market right now. One of our clients, we met him at a home buyer class, and that’s something that I, I’ll, I’ll share a little bit more about at the end. But I teach a monthly home buyer class with one of my favorite lenders. And this is something we offer to people in the Seattle metro area, and we teach him in different locations at different times. So something that we’ll have down below linked as well, if you want to look at that and see when our next class is, we’ll also start to post that in the video.

So you’ll be able to find those if you’re interested in coming to one of our first time home buyer classes. And if you’ve already bought before and it’s a refresher, it’s, there’s a lot of really good stuff to, to dig into about the market, about how to get a mortgage and about the home buying process. So speaking of this client, he came to one of our classes, got pre-approved for a mortgage, started the home buying process, and as we shifted into 2023, we started to see less inventory, a little bit more competition. The first offer he made, there were multiple offers in the household over asking price. Thankfully there was another house that was even better for his situation that came on the next day and we were able to get it, but it was for over asking price with fewer contingencies, no credits.

A lot of the clients we were working with in the summer in the fall and even early winter, we were negotiating the prices down quite a bit. We were getting credits from the seller and even interest rate buy downs, a lot of that leverage has gone, at least from what we’re seeing on the buy and sell side in the market. But he was able to catch it as it was starting to get hotter. And as we look at the data here for Seattle specifically to start with, home prices in Seattle are down 11.5% from last March, and down pretty significantly from the 9 96 price. back in April. That was the high in Seattle, but prices in January 800 was the median sales price. And right now, eight 50 s the median sales price. So we’ve seen a pretty big jump over the past couple months as prices have started to climb again in the new year as inventory shrunken down.

Bellevue has seen a similar thing. Bellevue prices were at an all time high, up over 2.25 million last March, so this was exactly a year ago. Bellevue’s median sales price was down 18.4% from last year at 1.836 million. But that’s up again considerably from the 1.422. So 1,422,500 in the end of December. So Bellevue bottomed out, at least for now. back in December, Seattle was January, but in both cases, prices have started to climb out of their eight, nine month recession or drawback pullback. And we’re seeing what that year over year decline looks like for Seattle. I would suspect it’ll probably be a little bit more next month, but we’re hovering in that around 10% for Seattle and around 20% for Bellevue at this point, which is what we’ve been expecting to see. but we’re seeing that in the data now reflected. If we look back though at 2021, so we just skipped last year, prices are still up.

So anybody that bought in 2021 back in March is sitting positive on their purchase. But unfortunately, if you did buy in March, April, right now, at this point, you are slightly underwater on your home purchase. Hopefully not too much, but again, this is the, the, the market that we’re in. So I, I suspect that we’ll start to see home prices continue to climb into the spring. But we are also going to see more inventory, hopefully at least that’s what we normally do seasonally. Interestingly, we’re not seeing the same amount of listings that we normally would see. And I don’t wanna spend too much time talking about that in this video because over the past few months I’ve shared some thoughts about that. But the, the main idea is that there’s less motivation to sell right now and to buy right now. So we’re seeing fewer listings.

Seattle was about 11% down in new listings, Bellevue, 29 and a half percent down for new listings. But pending sales are also down a lot, 29.1% in Seattle, 36.4% in Bellevue. And if we look at the amount of supply, we’re seeing those numbers remaining low. So home inventory, we are up over two months of supply in Bellevue and we are up close to two in Seattle. And what we’ve seen is those numbers drop down right around one month of supply, 1.2 months in Seattle, 1.3 months in Bellevue. Those are relatively normal numbers for this time of year, at least over the last 10 years or so. But they’re a lot higher than they were last year when we had record low inventory, we had record low number of houses for sale and we also now are having a bounce back, so <laugh> in inventory, so it looks very dramatic.

I wanna share this comparison with you real quick talking about 2018 and 19 as we talk about inventory and the market starting to pick back up in 2018, we saw the record low number of homes available at the time, and we also saw the highest prices available ever in the Seattle area. We saw prices come down, we already talked about that, and then we saw the amount of homes start to pick up. And in March of 2019, we had a lot more homes on the market still than we do now. So we’ve seen that recovery quicker. and when I say recovery, I mean we’ve just seen a lot more of the inventory absorbed than we did in that situation. And we are also coming off this record low. So that parallel is there, but we have even fewer homes for sale back in 2019.

1.6 months of supply in two months of supply. So Seattle and Bellevue respectively, which is actually pretty similar to where we were at the highest at 1.8 and 2.2, which was back in September, 2022 in the, in the last little correction that we’ve been talking about. But 1.2 months of supply right now in Seattle in 1.3 months. In Bellevue we talked about so lower supply numbers than in 2019, and that’s resulting in some more of this competition. This competition means a couple things. Houses are starting to sell quicker and I mentioned that over the past couple months that homes are selling faster than they were and the data is continuing to reflect that and that median number keeps coming down. So in January we were talking about this was the highest number of median days on market, 28 in Seattle, 42 in Bellevue, and last month, seven days on market was the median and 11 in Bellevue.

The averages are still higher, which is normal as things are adjusting. The high was in January at 39 days for average and 54 in Bellevue now down to 28 and 30. So those averages have been coming down. The decline in inventory is also causing prices decline, and we’re seeing houses selling for over asking price in Seattle, 1% above asking price. I, I’m a little surprised to be seeing that right now, but not based on the last few videos. Just thinking back six, seven months ago, it felt felt maybe a little bit more distant than it is right now, but houses are selling over asking price in Seattle, 99.3% in Bellevue is the average. So very close to asking price. Last year, of course at this time houses were selling 10, 15% over asking price. So very different market, but the fact that they’re selling quicker, closer to asking price is a good sign for the housing market’s health.

I think if we look at the original list price houses in Seattle actually selling just below asking price, and I think it’s important to point this out, there are still price reductions in Seattle and Bellevue and the surrounding areas. It’s not like everything is coming on the market and selling. Some things are still priced a little higher, maybe trying to get a price that’s a little bit of a stretch for the current situation, but 99.8% of the original price for Seattle. So almost right at asking price Bellevue is at 97.7. So what it’s appearing to be is one price reduction. If you push the price a little bit is then going to sell at asking price across the board though it, once you’ve got the right price, the homes are selling quickly and sometimes for over asking price, the big question that everybody always has is what’s coming up or how does this all apply to me?

So I guess as we talk about what’s coming up, I would expect that we’re gonna continue to see more inventory coming on the market. That’s normal for this time of year. I think we’re gonna continue to see this trend of fewer houses though coming on the market. So fewer listings, also fewer buyers. I think we’re gonna stay in this level of activity until we start to see the rates come down. Rates have been coming down since the beginning of March. They had come down and then gone back up. They were into the low sixes after being in the low sevens and then back up to seven in early March. And then now they’ve been trending down towards the low sixes again, as of today on April 13th we’re looking at 6.39% for mortgage news dailies, daily mortgage rate survey. Freddie Max report was from a couple days ago.

they were at 6.3 for their weekly rate survey, so right in that 6.3 to 6.4 range for the last week. But they have been trending down since the last fed rate hike. And I think the interest rates stabilizing is helpful, but until we start to see those rates come down even more, I think we’re gonna stay in this realm. But as rates continue to drop or if they continue to drop or when they continue to drop, we’re gonna see things pick up pretty quickly. And so this is as a buyer and I’ve mentioned this personally, I’m still working on a purchase myself and exploring that. And I think my hope is that I can get a house for a little bit less than what they were selling for last year. And we’ve already talked about what some of those numbers look like and then get a better rate in the future because a higher interest rate certainly affects affordability.

And for some people watching this, it puts you out of the ability to buy. And in other cases you’re able to buy, but it feels uncomfortable. And so there’s that tension, right? So for me, I have great confidence that rates for mortgages are going to come down in the near future. Maybe that’s six months, maybe that’s 12 months. The reports and predictions are all over the board at this point. So let’s not pretend we know exactly when that’s going to happen. I like to defer to experts, but they’re all over the board. So let’s just say in the next year, rates come down if I can get a better price, when rates come down, the prices are gonna start picking up, the activity’s gonna pick up even more. There’s gonna be not enough inventory if we continue in this vein and a lot more competition.

And I’d rather buy with less competition and also <laugh> less upward pressure on the prices and then get that better rate in the future. So that’s how I’m looking at it. I think as a seller that the market is the market. If you need to sell, then you’re going to be in a situation where there’s certainly some competition returning to the market. I think you have to price competitively. And when I say competitively, you need to be on that lower side of the value range. If you’re trying to push the price or even above the value range, which is what typically happens when prices are going down. People want to get more than what the market is willing to pay. I think that’s where you’re missing out potentially. I think if you’re pricing it right in line with what some of the more recent sales are, it’s a really good indication of where the market’s at.

And that’s where I would personally price my own house is where the comps are not trying to get more or say, Hey, the market’s picking up. I should, maybe I’ll be able to get this price. I think if that’s the case, that’s where we’re seeing the multiple offers in house starting to sell over asking price. Alright, well this is a little bit longer update here for you all, but I think there’s a lot going on. The housing market in the Seattle area is certainly starting to pick up and heat up over the past few months. And what well, so is the weather. I think if you’re a buyer and you are interested in one of our home buyer classes, I mentioned this, I’m gonna put the link for that class down below. I mentioned it at the beginning of the video and then I also recently added this service for clients and I want to open it up for you.

It’s called Home Bot and it’s an opportunity to, if you are a homeowner, follow along with the value of your house on a monthly basis, let’s call it. It’s, it’s more of an online estimate for the value of your house, but it gives you a monthly report and you get to follow along with it. So if that’s something you’re interested in, I’ll link that up as well and you can sign up for that and get those reports directly from me every single month. And of course, if you have interest in talking about your real estate situation, maybe you’re thinking about buying or selling in the Seattle Bellevue Metro area, I’d love to be a resource for you.