Seattle Real Estate Market Update | August 2023

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

Well, we’re already halfway through the summer and well, we’re starting to see what we do most summers, which is that things slow down a little bit. And we talked about that in last month’s update. And I’m going to reiterate it here in this month’s update that we’re seeing some of those normal summer trends where we see less buyer activity. We do see normally an uptick in listings, but surprisingly, actually, we’re not seeing as many listings at this point in the summer. So we’re having this, um, somewhat normal slash also somewhat weird summer. And a lot of that has to do with interest rates, and we’ll talk about that a little bit later in this video. But before we jump into the stats, I wanna share a little story that maybe highlights the market pretty well right now. I listed two different houses in Edmonds, so we’ll, we’ll think about Edmonds, but think of Seattle in general.

One was completely updated head to toe. This was a client’s house and they on in one day sold for 150,000 over their asking price. So amazing result for them. On the same day, I listed my house and it’s still on the market three plus weeks later, and my house is updated mid two thousands and we haven’t done any modern updates to it, aside from some general maintenance, and it’s not flying off the shelf. And what I’m seeing is a lot of the houses that are completely outdated are, well, they’re a little bit less expensive and selling really fast, right? On the other hand, the houses that are modern updates, really nice new feeling on the inside are also selling really quickly. But there’s a lot of houses in that middle zone like mine that are updated and theoretically worth more than those houses that are outdated from the sixties and fifties.

But at the same time, people wanna update the update so it’s not as valuable in their eyes. So just a trend I’m seeing recently, not updated, lower end, more updated, nicely done. Both of those have been selling a little bit quicker, whereas there’s a lot of houses in that middle area that are, again, not flying off the shelf. So let’s talk about some of the data. Um, let’s talk about Seattle Bellevue as that’s what we focus on in this update specifically. And let’s talk about price first. Bellevue’s median sales price was up from last month, not the high of the year, which was a few months back, but a little bit up from last month. $1,825,000 in Bellevue. That’s a 7.4% increase from last year. You heard it right, increase from last year. Now Seattle, on the other hand, slightly down from the high of last month at nine 15, coming in at eight 80.

Median sales price, 7.4% below last year. So Bellevue was above Seattle below, interestingly, exactly the same percentages. If we’re looking at new listings, we talked about how there aren’t as many listings coming on as there have been. And last year we had 25.3% more listings in Seattle and 12.5% more in Bellevue. So again, less than we would expect to see in a given year. And again, last year was actually fairly similar to what other years have looked like this year, down on the listings across the board every single month here so far. And if we look at the new listings last month, we actually had more new listings in Bellevue and Seattle last month than this month. So we’ve seen even a drop off month over month as well. Pending sales, we have seen a drop-off, but less significantly. So in Bellevue, we saw an uptick in pending sales, right?

Um, less pending sales than new listings. Um, so we still saw an uptick in the housing inventory, which we’ll talk about later. But in Seattle we saw a very, very minor decrease as well point, uh, 5% below last year’s pending sales, which was down, um, as well. So we’re seeing, um, that inventory is building, but very, very slowly and we’ll talk about how it’s actually not even as high as it was last year. So what’s going on? We’ve got the, as we’ve talked about, lower amount of homes coming on the market. We also have less buyer activity and what’s that equating to here? And that’s equating to still less homes on the market this year than there were last year. So homes for sale at the end of the month down 21.5% in Seattle and in Bellevue down 28.1%. So less available than we were seeing last July when things were starting to, well, I would say spiral down.

It felt like prices were starting to drop off and they continued to drop off throughout the rest of 2022. Um, but we find ourselves in a position where we have less inventory and there’s less of the price cuts, less of the negotiation on prices. In fact, homes are selling on average for above asking price in Seattle, 1.4% above asking price, and in Bellevue 0.8% above asking price. And if we look at original sales price, still just above asking price in both cases, so we’re not seeing as much of the negotiation. And I think a big part of that is because we are not seeing houses sitting is long houses are across the board, six days on market median in Seattle, six days in Bellevue median. Now the averages are a little higher, 13 days on market average in Bellevue, 20 days on market average in Seattle.

But what we, where we find ourselves is less two months inventory in Seattle. So 1.7 months and in, in Bellevue, 2.1 months of supply. And those are similar numbers to last year, but they haven’t been growing at the rate that they were growing last year. And so there isn’t as much, I guess there isn’t as much fear in the market. I think that’s a, a good way to put it. I mean, we, we talked about in our market watch video last week, so if you’re not following on the weekly basis, you should be, but we talked about how interest rates are more than 2% up year over year according to mortgage news dailies report. And the most recent data as of yesterday, eight seven was 7.06% across the board on their mortgage survey. That’s a significant amount, 2% more in interest and homes are across the board, selling very closely to where they were at.

King County actually is about the same as it was last year with higher interest rates in Snohomish County is just a couple percent below where it was last year across the board. So just imagine that those payments are a lot larger right now than they would’ve been last year with five, a little over 5% interest rates. And again, we saw a massive drop off continue from this point last year. I would, I would tell you that unless interest rates continue to go up, which maybe they, they could, but if they stay in this low sevens or even drop a little bit or even go up a little bit, I would suspect that by the end of the year we might be seeing home prices above where they were last year, but also seeing interest rates, uh, above where they were last year too. So I think for buyers, it’s a difficult spot.

It’s a difficult spot to be, but at the same time, I think once interest rates do come down, and a lot of experts were thinking, and my, I was agreeing with them that I thought maybe around this time or even by the end of the year, we’d start to see those rates come down. Maybe we will see this higher rate environment for a little bit longer, but I can only imagine that once those rates do come down, there’s going to be a lot more competition in the marketplace, especially given that we’ve had such low inventory, um, maybe compared to what people would’ve thought. So if you’re thinking about selling right now, at least put yourself into a seller’s shoes. Uh, you’re, you’re certainly in a position where your house is not competing with as many houses on the market. You are in a position where home prices have, for the most part recovered to their highs, but we’re not quite at that peak, but they’ve recovered quite a bit and they’re selling relatively quickly.

If you’re priced on, I would say the lower side of the value range, if you’re on the upper side of the value range, uh, people are, are not jumping at those as quickly as well. So if you, if you want to be aggressive on the high side of the price, might take a little bit longer to sell. If you’re willing to be a little bit more aggressive on the lower side of the price, well your house is probably going to sell fairly quickly and again, not for much less than it would have last year. Now for buyers, we just talked about this a little bit, but you are in a position where, yeah, those monthly payments aren’t going to feel amazing. You are not paying the all-time high prices, but you’re still paying a considerable amount for what’s out there. The long-term projection though for you is as interest rates drop, that things will continue in an upward trajectory.

The point of higher interest rates is to cause things to stall out, to pause things. That’s why you see the Fed raising short-term interest rates, trying to control inflation, um, as a whole. And the same thing with real estate when those mortgage rates are coming up, and again, not directly correlated with the fed rates, but interest rates for mortgages are considerably higher right now because of the inflationary environment. And that is putting a lot of stall out on the prices here in the real estate space as well. So if you have questions about how this impacts you as a potential buyer or seller, or you just want to connect, feel free to reach out.