Seattle Real Estate Market Update | February 2023

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

2023 is getting off to a hot start in the Seattle area. Mentioned in some of my recent market watches. If you haven’t been following along with those Seattle market watches, I recommend that you do as we take a week by week look at the market. And what we’ve been seeing here over the past three, four weeks is that multiple offers are returning to the market, competition is returning to the market. And a big part of that is because the inventory or the amount of homes is dwindling here, which is normal for the time of year every year. If you look back, um, historically, you’re gonna see that inventory tends to lag into the early winter, and we’re seeing that phenomenon here this year. And it’s also being accompanied by more buyers coming into the market. So you have less inventory, more buyers coming back, people returning maybe from taking a break, new buyers jumping in.

And what we’re seeing is we’re starting to see the competition over the listings again. So contingencies removed, home selling above asking price. I know it sounds crazy, but we’re already starting to see some of that here as we head into 2023. All right, let’s talk about a client story here real briefly as we always do that in these monthly updates. And I wanna highlight, um, a, a friend, uh, Vicky, and she sold a house in both and also bought a new house in Bothel here over the past few months. And in this situation, we were able to buy a new construction house with a contingency on a home sale. And I’ve mentioned that in videos here over the past six months, where there’s this possibility and opportunity for a contingent purchase as a buyer. And when I say contingent purchase, I mean able to buy the next house contingent on selling the other one.

So not a normal contingency of maybe financing or inspection, but the actual, Hey, I need to sell my house first, and once this house sells, then I’m going to close on the next purchase. Super rare in a hot market, almost impossible, but the last six, seven months in the Seattle area and really across the region, there’s been this opportunity and we’re seeing 10 to 15 a week in King in Snohomish County. And my client was able to be one of those. So, uh, if you’re in a situation like that, maybe you have a house that you own and you’re thinking about upgrading, but you’re not sure if you have to sell or buy, I’m happy to be a resource for you and connect on that. Good news for buyers, it is possible to buy your next house contingent on selling your current one. Let’s jump into the stats here, and as we do jump into the Seattle and Bellevue stats from last month, I wanna just pause real quick because many of you are following this channel because of the stats and the data.

And if you haven’t taken a second to subscribe, please do that now and we’ll head into talking about the market here a little bit more. So, Seattle’s median sales price last month was 8 0 2, which is down up from last month slightly, but up year over year, 3.5%. So I mentioned that I thought Seattle would be one of those places that would be a little more insulated as we’re talking about year over year changes. And it’s proving true here as we continue into 2023, Seattle did not see as big of gains and consequently, well, it’s not seeing as big of a drop. In fact, Seattle’s up over 2022 and also 2021. If we look at Bellevue, Bellevue’s, median sales price was 1,498,000, which is 12.5% down year over year. If we look back at 2021 though, Bellevue’s median sales price is still up. So we lost some of those gains from last year, but are still up if we look back at 2021.

So if you bought in 2022 in the beginning part of the year in Bellevue or even into the spring, you’re most likely slightly underwater as far as your sales price. And I would say if you just hold on a little bit, it’s gonna be just fine. Uh, we’re already starting to see the market picking up here. Um, but if we look at the average percent of list price, Seattle was 98.4% of list price. Bellevue was 92.5% of list price, all right, which is a 23.4% delta. So last year, houses in Bellevue in January sold 20.8% above asking price. And this last January, the one we just had, 92.5% asking price, that is a massive delta. So right now, if you’re buying in Bellevue, you’re getting a massive discount over the prices. We’ve already talked about that 12 and a half percent or so approximately from the previous year.

But you’re also not competing with people and essentially making a silent bid like you were last year. If we look at close sales in Seattle, close sales last month, were downed 31.2% in Seattle and down 29.5% in Bellevue. I want to add a little context to this. When we look at January’s numbers, we’re actually having sales that happened in December, closing in January. So it’s pretty typical to see dips in home values heading into January. So when we look at January, data, usually February’s that first jump in home sale prices, um, the median sales price, and it’s also fairly normal to see dips in the close sales and such, because again, those are sales that would’ve been listed in December, which is usually one of the slowest months of the year, if not the slowest month, and they’re closing in January. So usually the, the month after is reflecting those listings in sales.

I’ll talk about how those things have already been picking up. We’ve seen more listings, we’ve seen more sales activity, but again, we’re looking at data that is closings from December listings, median days on market in Seattle last month, 28 days in Bellevue, 45 days. And again, these are sales that would’ve been listed most likely in September, October. Houses have been sitting on the market for a little bit. We’re starting to see that trend change. And I mentioned, we’ll talk about that here in a sec. But 15 days on market in 2021 in Seattle, nine in Bellevue in 2022, last year’s, seven days on market in Seattle, five days on market in Bellevue. So huge jump in the time on the market. If we look at new listings though, we’re starting to see fewer new listings than 2021. In 2021, we had 717 new listings last year, massive drop off in January, 4 89 in Seattle, and also five 10 last month in Seattle.

So small jump, uh, increase in new listings actually year over year of 4.5%. Bellevue had a increase in new listings of 31%, 31.1. We saw 80 new listings in Bellevue versus 61 last year. So again, not a massive number as far as the amount of houses, but percentage wise, pretty substantial pending sales in Seattle, down 1.8% year over year and in Bellevue, up 11.5%, um, month over month down. Uh, but again, we’re gonna start to see that picking up here. Homes for sale, this is where we talk about the inventory numbers. Inventory is up considerably in Seattle and Bellevue, 162.7% in Seattle, 370% in Bellevue. Um, we’re talking about in Seattle, a very minor jump from 2021. If we go back, Bellevue’s still a pretty substantial, uh, increase if we look back over the past couple years. There’s actually more homes available in Bellevue right now than there were totaled over the past couple years.

Uh, at the end of January now supply, and this is where we start to see the competition is when we get the supply numbers closer to one month on the market. And I think that’s why we’re starting to see it returning. Usually when we’re over a month of supply, there’s competition over a few listings, very, very few and hardly any competition over the rest. And in this case, we’re starting to see those numbers shrink down closer to one month of supply. And so I think that’s why we’re starting to see a little bit more competition in the market in Seattle. One month of supply Bellevue, 1.2 months now, significantly more than last year. Last year was a record low for supply and I would say 2021 was also pretty close to that, but 0.8 months in Seattle and 2021 and 0.4 Bellevue last year. Again, 0.3 and 0.2, which were our record lows.

And I’ll say this for buyers as we’re wrapping up this update, I think the housing market is starting to pick up. I’ve seen multiple clients on the buyer’s side having to compete with other buyers. I’m also seeing the same thing with listings where there’s more competition, a lot more showings. And I, I know I can speak for other agents too that I’ve been speaking with, they’re seeing the same types of things. Interest rates have stabilized relatively, but this last week they’ve jumped. So they were hovering in the six and a quarter range and now getting close to six and a half as of the recording of this video. Mortgage News Daily and the Freddie Mac websites are both great resources if you want to see what the average rates are across the board, across many different companies. But I would say as a buyer, competition starting to pick up, prices are still down.

And I think that’s why people are jumping back into the market because maybe their confidence has increased. Um, I know that we’re seeing that in the stock market as well. There’s been a bit of a rally confidence is increasing there, so it makes sense to see that starting to translate over to the housing market as well. The confidence returning, yeah, acceptance maybe of interest rates being higher with the hope that they’ll be able to refinance. So as a buyer, I do suspect that this spring is going to be competitive. It’s starting to trend that way already, and I wouldn’t be surprised for the next few months to be that way. The end of the year will be very interesting. I, I still haven’t made a decision in my mind whether the end of the year is going to be up year over year or not, but I think as we’re heading into the spring, we’re still gonna be seeing the lower prices.

So if I was a buyer and I am actually, I would consider it buying sooner rather than later, if you can. And as far as the sellers go, I think you’re gonna see the best competition here probably in the next couple months. When you think about selling in the spring, it’s historically the best time to sell. And I would say this year is going to be no different. But I would say earlier in the spring versus later in the spring, early summer, there’ll likely be some more listings in the summer to compete with as far as for the buyers that are out there. So if I was a seller, I’d be starting to think about what can I be doing to get my house ready to sell. It usually takes 30, 45 days, I would say, to get your house ready, assuming that maybe you don’t live in a perfectly pristine house.

I know for me it would take some time to do some of those lingering projects maybe and get it into the shape that I’d want to have it for presenting to the market. So I think there’s some actionable steps for buyers and sellers if you’re just watching this as somebody who owns a house and you’re curious. I’m so glad that you’re following along as well. I hope these videos are valuable to keep you informed on what’s going on in the market. Thanks so much for your attention. I appreciate you following along with these Seattle real estate market updates. If you have questions about buying or selling real estate in the Seattle Bellevue Metro area, please feel free to reach out.