Seattle Real Estate Market Update | July 2022

 In #Seattle Real Estate Market, #This Month, #Thoughts, Seattle Real Estate Market Updates

Video Summary

We are certainly seeing the market start to level out to normal levels. Inventory is starting to climb to numbers we have seen historically, though median sales price is still up a good amount year over year.

Video Transcript

 

Hey all Zach McDonald your real estate agent with real property associates. And this is my Seattle real estate market update for July, 2022. Just getting back from beautiful lake Chelan, got to go there for the 4th of July week with my family. Beautiful place. If you haven’t visited Chelan before I highly recommended about three hours or so from Seattle Bellevue area. Um, great vacation spot. A lot of people have second homes there we don’t, but we’re able to rent one, so super, super fun. But I think coming back in thinking about the market, I think the big question everybody’s been having is where is the market heading what’s going on? And we’ve definitely already seen prices start to come down. So I think that April was the high median sales price in Seattle for the year. And Bellevue’s was in March so far. I would say we’re probably not gonna touch that again.

This year, February, March, we’re both over well over $2 million in Bellevue. So I think Seattle’s kind of leveled off. Bellevue had a pretty steep drop and, and median sales price is a fuzzy thing sometimes because sometimes you have a bunch of really high priced listings that sell and kinda skew that. Um, but we’re seeing that number trending up here over the past few months in Bellevue again. So Bellevue’s kind of in this 1.87 million range, Seattle 9 65 last month. So I think we’re gonna see this slow trickle, um, in my opinion, as we head towards the end of the year, as far as median sales price go, but before we get too far into the data here, I wanna just share a story just like we do as we start off all these other updates. And this one, uh, features a beautiful house in Kenmore, and this was a listing.

The client reached out to us after following, along with the channel and some of the videos here, they saw the market updates on a regular basis. And then we sold another house that was on the Sammamish river, really close to theirs. And after seeing, and they actually got the just listed postcard and just sold postcard, I think after seeing that and following along with the channel, they decided to reach out and have us sell their house and pleased to announce right as the market was shifting, we did get them a great price for their house, full price offer at the asking price on the review date. So they were pretty pumped about that. And the market was clearly already starting to shift in may and especially now as we’re into July. So really, really excited for them in that result. I think, um, right now what we’re seeing is houses sitting a little bit on the market. If we’re looking at the last week, right after 4th of July, we saw about 1,118 listings in Snohomish and king county. If you sandwich ’em together, total, if we look at the number of price reductions, 887,

All right. So a significant amount of price reduction. So I think we’re still trying to find that balance where sellers are realistic about where the market is and that the market has shifted a little bit and finding where buyers are willing to buy. Um, I think the one thing I want to point out as we’re gonna now talk about median sales price is this. If we look at the numbers, we’re still up significantly in Seattle and county, king county and Snohomish county wide, we’re still up significantly as far as year over year numbers. But what we’ve, what we saw was a big spike again, and things have leveled off a little bit. So if we look at Seattle, I already mentioned 9 65 median sales price last month up 9% year over year, that’s significant 9%. That was almost leading the world when Seattle was seeing those types of jumps year over year back in 2016, 17, that was a big deal.

And seeing 9% is a lot. So even with the fluctuations and the prices still up 9% year over year Bellevue, uh, $1,870,230 median sales price, all right, up 13.3% year over year, big jump. Now last year, some of the numbers we were reading were like 26, 30, 40% up year over year, which is crazy. And I didn’t expect that to continue, or at least I hoped it wouldn’t because that’s not very realistic or attainable for people. Um, but seeing that number, I think, I think it’s important just to think about that, um, and consider that we are still up considerably, even though we have seen things slowing down, for sure, as I mentioned, April was the high in Seattle and March in Bellevue. A lot of times we see that more this time of year, may, June. So we’ve started that seasonal correction that we have every year, a little bit sooner.

And I mentioned, I think what we’re going to experience is more like that than any kind of a catastrophic crash time will tell as I’m not a, a profit, I wish I could see the future and tell you that whip out my crystal ball. But I do think that we’re just seeing that starting a little bit earlier. And I think the biggest thing I’m watching right now, aside from interest rates, I think everybody’s thinking about that is the amount of inventory. So homes for sale in Seattle, we had quite a bit more houses for sale, 27.6% more houses for sale at the end of the month, Bellevue 237% more for sale at the end of the month. Now, not very much different than 2020, right? Very similar amounts of homes for sale, but compared to last year, which was super, super tight inventory, that’s where those numbers are coming from.

So if we look back two years, it looks pretty much the same, slightly more houses for sale in Bellevue, slightly fewer houses for sale in Seattle, but not as big of a difference, but comparing year over year, it’s pretty dramatic. Speaking of homes for sale. If we look at new listings, we saw just a little bit more than last year in Seattle, 1.2%, about 16.3% more new listings in Bellevue. I mentioned earlier that we saw more houses on the market or more homes for sale. And that’s because that pending sales are going down. So we’ve had more new listings and we’ve had fewer pending sales. So those are the two things that I’m looking at when I’m thinking about where is inventory going to be, right? And then I’m looking at pending sales as well to project closings for the next month. So right now I’m seeing more new listings on the market.

I’m seeing about 30.7% fewer pending sales in Seattle last month and 44% fewer in Bellevue. So more new listings, a lot fewer pending sales. Now I mentioned closed sales. I think next month will be down. They were also down this month. So last month we saw the same trend this month, I’m going to project, we’re gonna see the same thing we’re seeing here. And that is 27% fewer closed sales year over year in Seattle. Now very similar numbers to 20 2810 closings, 845 in Seattle, twenty twenty one hundred and eight closings, 104 in Bellevue, right? So I think the 27% down in Bellevue and the 27% down in Seattle, it’s significant when we compare it to last year. And it’s clearly, we’re seeing more inventory coming on the market. But I think when we look at 2020, we’re thinking that’s about the same time that we saw some of the COVID drama happening.

So we’re starting to see people buying houses again in June of 2020. And this year we’ve had the interest rates spiking up, right. And some fear there. So we saw fear in 2020, we saw fear again this year. Um, so I think we’re seeing inventory climbing. Um, and we’ll talk about that. I think we’re gonna see inventory continue to climb in 2022. And I don’t think that’s a bad thing, a normal, market’s gonna be four to six months of inventory or homes available. And right now we’re still in that one and a half months of supply range for the entire Kings Hummish county. If you put ’em together. So we still have a shortage of inventory, which is why houses are selling relatively quickly in less than 10 days, less than 10 days. So it’s not like houses are in general sitting on the market for a long time.

There are houses that are sitting on the market for longer, for sure. And there are houses that are selling quicker. I think people are able to be a little bit more picky right now is really what it is before we talk about application here. As we wrap up the video, I just wanna share this on interest rates. And that is the Freddie Mac survey that came out last week, showed interest rates 5.3%. Now that was for the week prior, we did see a pretty big drop in rates, uh, in comparison to where we’ve been. But if we think about where rates have come this year, rates are up considerably, which I think is having a big impact

On where we’re at right now. But if we look at rates as of today, so I’m looking at these as of seven 12. So when we’re filming this video here this month, 30 year fixed rates on mortgage news, daily’s website 5.71% for a 30 year fixed rate. So I think we’re still seeing rates down, but up from where they were last week. Um, but it does seem like they’ve kind of leveled off in this upper fives range, at least for the time being. Um, but we did even three, four weeks ago, see a pretty big spike up into the low to mid sixes. So I think rates are still pretty volatile, but it seems like over these past few weeks, they’ve leveled off a little bit. One more observation I wanna make, as we transition to talking about application is this. And as I was looking at the supply numbers, I was looking back at the past, right?

And, uh, if you go back and watch some of my old market update videos, you’d see these same things and be able to hear me talk about them in the moment. But as I’m looking back at 2017, when Seattle was one of the hottest real estate markets in the country, and in fact, I believe it was the hottest market in the country at the time, the inventory numbers or amount of houses on the market, very similar to what we’re seeing right now. So as far as percentages go, so Seattle 0.9 months of supply at the end of June this year, 1.2, Bellevue was 1.5 months of supply. Now 1.8 king county in 2017 in June 1.3 months. And this month, 1.5 months in Snohomish county, 1.5 months in Snohomish county this month, 1.6 months. So I think as we’re looking at inventory, it’s normal to see more houses coming on the market this time of year, and to see, uh, buyer activity, in fact, slow down a little bit, which is weird, but it is normal to see the inventory and supply numbers picking up as people are going on summer vacations like myself, right?

I was in Chelan for a week. And I think as we’re looking at this, it’s important to note that although inventory is going up, it’s not necessarily a panic button moment as I’m looking at the past. Now, again, we don’t know what the future holds looking at the past does very little to tell us about the future. I think it’s good to learn from the past, but it doesn’t predict what’s going to happen. So as we talk about application here, I think going into the rest of the year, the mindset is there’s going to be opportunity. There’s going to be opportunity. Now, does this mean everybody should take advantage of this opportunity? Probably not. I think I’ve done a good job in some of these other videos talking about maybe who should take advantage of these opportunities and you can watch some other videos on the channel.

One in specific, I think is talking about the monthly payments and what the difference in monthly payment actually is for a buyer right now. And rates are even lower than what I was talking about in that video. Its more of a worst case scenario, its like a, I believe it was a three and a half to a six and a half, which a lot of people would be able to get a lower rate right now. But just talking about how much the payments have gone up because we see the rates and we think, man, the rates are up almost double. That means payments must be double. And that’s just not true now for somebody buying a million dollar house, um, you’re gonna have a, a bigger jump in your payment. But for, in a lot of cases it’s still an affordable payment. It might not be as comfortable.

But what I’m seeing with a lot of my clients is if they’re adjusting their budget, it’s more because it’s what they want their monthly numbers to look like versus I can’t even afford to make that payment anymore, if that makes sense. So I think that might be a good video to watch, but as I’m thinking about what’s coming up, there’s going to be opportunities for buyers. And as we’ve talked about, the market’s already shifted a little bit. We’ve seen prices come down. I think the biggest difference we’re seeing right now, if you’re a buyer, is that you’re not paying that multiple offer jump much, right? We’ve had some clients recently in multiple offer situations even over the last few weeks, right? Cuz there’s still, if houses are selling over asking price, you still have competition or else that wouldn’t be happening, right. Houses would sell for less than the asking price or asking price.

Now we’ve seen some get houses at asking price with better terms maybe than other offers. So there’s not as many offers one to at offer review date or in some cases, if you’re priced too high houses sit on the market. So I think some of those opportunities for a buyer would be a house that has been on the market 2, 3, 4 weeks. And maybe you really like it. Maybe they push the price a little bit and there’s an opportunity to get that house for less. I think if you’re a buyer who is serious and you are planning to buy a house, you can do that right now with a lot less of that competition. Right? So prices part of it was you had this just pressure pushing prices up and that pressure is gone right now. So in a lot of cases, you’re getting a house at asking price.

And if that asking price is too high, able to negotiate it down. And if it’s not too high, right, if it’s a fair price for where the market’s at, maybe you’re able to get it at asking price or even a little bit less still. So you’re, we’re seeing in the data that prices have come down a little bit from the peak of the year. And I think what we’re gonna see over the rest of the year is that same opportunity for buyers. We might even see a little bit less on the prices, but I wouldn’t be surprised to see prices remain similar to where they’re at with very modest correction. I think if we look back at 2018, which I’ve compared this time to over the past three, four months of what I thought and what we were experiencing and what we might experience, I think we saw prices go backwards for eight months. I think we saw about a 15% pullback in Seattle and we’re already starting to see that right now. So if you’re a buyer, this would be that time to start looking. If you can afford that higher mortgage payment, right? With the, the higher interest rate. Again, it’s not as big as you would think. So you gotta see those real numbers. I think there are gonna be chances to get a house maybe for less and then refinance and get a better rate and better payment

In the future. So that’s that opportunity for a buyer? I think that’s here sellers. I don’t think the world is falling for you. I don’t think you wanna rush to sell your house, but if you are planning to move and relocate downsize, you’re, you’re still gonna be able to sell your house. I think just as a seller, you have to have in your mind that the market has shifted that the price your neighbors got, isn’t the price you’re probably going to get right now. You might not get the price that three buyers were bidding. The price up to you might be getting the price that sellers were listing their house for, if that makes sense. So I think without that competition, there’s less people wanting to pay that higher price. And there’s typically a pool. And if we were to get 10, 15, 20 offers on a house, even four or five months ago, there were only a few people that were willing to pay that top price, which is what it ended up at.

But the majority of the people were actually at a, a far lower dollar amount. So I think what we’re seeing is reality check. So if you’re a seller and you wanna sell your house or you’re thinking about, you know, what that might be, um, I think it’s just important to have in your mind that the market has changed. You’re still gonna be able to sell your house. And we were just talking about earlier in this video, that prices are up in Seattle, 9% Bellevue. We saw prices up over 13% in countywide king counties. The hoish county all are up. So it’s not like you’re selling for less than you would’ve last year, but you might be selling for a little bit less than what your neighbor sold for a couple months ago. Thanks so much for watching this month’s Seattle real estate market update. If you made it all the way to the end, I hope this video was valuable for you. And if you wanna continue to pay attention to the Seattle Bellevue real estate market here as the market is shifting and hear the latest information on the market, please subscribe to this channel. And of course, if you want to talk about buying or selling real estate in Kingston hoish county, please feel free to reach out.

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