Seattle Real Estate Market Update | June 2024

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

Video Summary

Here are my latest thoughts on the Seattle housing market.

Video Transcript: 

Hey y’all. Zach McDonald, your real estate agent with Real Property Associates, and this is my Seattle Real Estate market update for June, 2024.

Welcome everybody to another episode here of the market update, and this is the eight year anniversary of my first Seattle real Estate market update. And looking back, the first update that I recorded was in the backyard of our house with my wife filming. I don’t know, it was like iPhone five or something like that, just filming me while our first child was sleeping, and he’s now approaching his ninth birthday. But looking back, it’s been an interesting journey making these videos, going from filming on an old iPhone with no mics to sitting in here in a recording studio. And I don’t film every update here, but I have recently, and I would love to know if you’ve been watching these for a while, how long you’ve been following along. So drop a comment if you’ve been following along for a while with how long you’ve been following along.

And I’m curious who’s been watching these videos for eight years on the housing market Now. We start off all these updates with a story, and I am really excited about a client of mine getting into his first home. This last week. It was like two days on the market and the house had four offers and he’d already missed out on one. And we were able to get the house for just over asking price. It wasn’t one of those super competitive on price, but there were four offers and a couple of them had waived all the contingency. So he was able to get the house removing contingencies from the contract, which are the protections of your earnest money. And then he was able to go just a little bit over the asking price and get the house. And for him, he was super stoked because this is the best house we’d looked at.

And even though he’d missed out on one, he was actually kind of glad he missed out on it so we could get this one, but kind of in that Snohomish Mill Creek area, technically Snohomish. This house I think was a good just snapshot of what’s been going on in the market. I’ve shared that the market has been picking up and heating up, and certainly there’s still a lot of competition, but the price didn’t go up a ton. And I think that’s a illustration, so to speak, of what I’ve been observing is that we still have the multiple offers in many cases, but people aren’t paying as much over asking now as we’re heading into the summer. And typically the market does pick up in the spring, early spring and then slow down as we head into the summer. Not in any massive way, but usually we start to see enough inventory and houses coming on the market where there’s more options to choose from and a little less pressure on the homes that are available.

So I think that is starting to happen right now. I wasn’t sure if it would, I think biggest factor was, hey, if interest rates drop, maybe we’re going to have a prolonged spring selling season. And I think the answer that we’ve seen so far is no. I do think that interest rates are staying up for a little bit, and we aren’t going to have an abnormal summer this year, maybe next year, but this year I think we’re still going to have the normal summer slowdown. And interestingly, you’d think summer would be the time when everything is hot and everything’s really competitive, but it does tend to be when there’s less inventory on the market when you have some of that hyper competition. So for the buyers out there, the summer’s actually a nice time to buy because people are traveling. You are probably traveling too, and there are usually more options to choose from.

So somebody thinking about buying, this might be the time to do that. You’re still going to be paying a good price for the house. You might have a little competition, but not as much as in the springtime. Now let’s talk about the stats because that’s why, well, if you’ve been following along for eight years, why you’re following along. And as we look at the stats here, Seattle’s continuing to creep up towards a million. We’re not there yet, but the median sales price last month in Seattle was 950,000, which is a 6.1% jump year over year. That’s a really healthy amount. Bellevue, just over 2 million, 2,040,000 other side of Lake Washington, 23.3% up year over year. And if we look back at the data here for Seattle and Bellevue, but Seattle specifically, we see a couple years ago, 2022, we’re pushing a million in Seattle for the median sales price.

Dropped off quite a bit last year, about a hundred thousand less, and this year now jumped back up getting closer, but still about 50,000 below the peak. Bellevue’s peak was a little earlier, so the numbers here won’t show this, but on my bar graph we’re seeing close to 2 million in 2022, dropped off to 1.65 last year, and then a huge jump up to above 2 million here this last year. Let’s look at the closed sales. So one of the things last year we noticed is that there just weren’t very many houses coming on the market, and there also weren’t very many houses selling, but it was pretty similar. And throughout this year so far, we’ve experienced a similar thing where, yeah, there aren’t as many listings, but there were also aren’t as many buyers, but we’ve been seeing more listings coming on than last year, and also more buyers, but pretty much in step.

And we’re seeing more close sales here in Seattle, about 10.7% more closed sales this year than last year. Still not up to the May, 2022 frenzy, but making some progress. And Bellevue is almost the same as 2022. It looks like four sales shy of 2022. So more activity in the market. Let’s look at days on market, days on market, six days on market in Seattle, five days on market in Bellevue, same as last year. The average days on market in Seattle, 18 down 10% from last year. So a little drop off. It was 20 days on market in Seattle last year. Bellevue, 21 days on market, 22 last year. So the average is still quite a bit higher than the median. So there are houses that are pulling that average up. Not everything is selling immediately or for over asking price, but we’re seeing a trend towards home selling quicker and quicker, but not eight days and seven days.

That was the average back in May, 2022, almost the same as the median. So pretty much everything was selling for that price, but now we’re seeing things taking a little bit longer to sell, but still having some selling relatively quickly. What does this mean for prices, right? We’ve already seen how the prices have been climbing, we’ve seen that throughout the year, but as we’re looking at the percentage of list price, what could you expect to pay? So in Seattle, the average house 3.1% above asking price, some are selling for more, some are selling for less, but the average percent of list price, 3.1% above asking. And in Bellevue, we were at 3.8% above asking price on average and four perspective 20, 22, 10% above asking price in Seattle and 10% above, a little bit more in Bellevue. So not anywhere near as competitive, a little bit more than last year, but not up to that level yet.

Now why are things not just like going crazy, right? Why are we not going crazy yet? I think number one, we were talking about interest rates. So interest rates are still hovering as of yesterday on Mortgage News Daily’s website, 7.17%. So kind of in that we’ve been hovering between seven and seven and a quarter on interest rates for the 30 year fix all year. And we’re right in that same ballpark. So we haven’t seen interest rates dropping a lot, but we’ve also seen more listings coming on the market. We normally do this time of year. So in Seattle we saw a 39.9% jump in new listings this month over last year at the same time. So 1083. Now if we look back at 2022, we had 1,049. So we actually had more listings come on the market this month in May, so May 20, 24 than we did in May, 2022.

So we had a lot more listings coming on the market. That was one of the things that we were looking for. Bellevue was very close, not quite as many listings, but from last year, 74.8% more listings in Bellevue. So jump from 103 to 180. So significantly more listings coming on the market this past month than last year. We saw a big jump in pending sales in Bellevue, 68.9%, so pretty much the same amount, 125 pendings. Seattle though had a slight drop off in pending sales. So 3.1%. What we’re seeing then is that the amount of homes for sale is building, right? And we normally see that towards the end of the spring heading into the summer, which is why I mentioned earlier that it’s not usually as competitive in the summer months, even though you’d think it would be. So Seattle is up 40.7% homes for sale this year versus last year and Bellevue’s up 6.6% as the homes for sale number.

So that gives us, as we’re looking at the supply numbers, this is one of the numbers we look at. How competitive is the market going to be, right? 2.1 months of supply in Seattle, which is still a competitive market, but we’re edging towards a market that’s not balanced, but at least not crazy, right? We’ve been in a market this spring in Seattle that has been very competitive and it is still competitive, but not as competitive as it was Bellevue, 1.4 months of supply. It’s still competitive. We are noticing in Bellevue that price is significantly higher, but 1.4 months of inventory is still a really low amount of inventory for this time of year. For perspective, it’s the same as last year. Seattle’s has climbed a little bit year over year, neither is at the same levels as 2022, but we’re still in a pretty low inventory environment.

So what does that mean for us? Heading into the summertime? And I’ve already shared a little bit preemptively that I think that we at least at this point have hit maybe the peak of the market for the year. It has slowed down a tiny bit over the past few weeks. It has slowed down a little bit, not as much of the asking price situations. Some houses are maybe sitting a little bit more. Not everything is selling immediately, but we’re by no means in a seller’s flipping to a buyer’s market, right? We’re not in a market where buyers are negotiating the price down a bunch, but every year we have these cycles and we have lower inventory. Typically coming out of the holidays, the weather starts getting nicer, people are wanting to buy, there’s not as many houses. You have the competition into the summer, and then we have a more agreed upon price, let’s call it that.

So instead of seeing the prices getting bumped up and up and up and up, you have that level. This is where houses are going to sell. Typically in the summer, things are selling around asking price, sometimes a little more, but usually around asking price. And then the fall is hit or miss. Sometimes it picks back up. Sometimes it slows down in a market like 2022. But what we know is that interest rates are still high. And we’ve seen continued demand throughout this year, and I’ve said this over and over and over again on this channel that I think a lot of it is speculative that people are hoping and betting on interest rates coming down, which I think they will when they’re going to come down. We still don’t have a good answer for that. That’s always also speculation, but it’s encouraging to see that the housing market is remaining strong even in this higher rate environment versus dropping off dramatically.

I think there’s still a lot of people that need a house and a place to live. This is an expensive area to buy, but I don’t think it’s going to get cheaper when interest rates come down. And that’s what we’re seeing. Even with interest rates remaining higher, almost three times the amount that they were in 2022 we’re already getting closer and closer to that price where they were with the high interest rates. So then just imagine what’s going to happen when interest rates come down to the prices and money gets cheaper again. Again, when that’s going to happen, we don’t really know. It might still be six months to a year out. So as we wrap up this update, I think sellers, you are still in the driver’s seat as far as negotiations go. You’re likely going to see multiple offers. At least there’s a good chance of that depending on where you are in your house and the prep work that you’ve done.

But I think you can expect to have some competition. I think buyers, you should be prepared for competition, but it might not be as competitive as you think. And so I think this summer, again, while there’s still more inventory and it’s started to build up, is an opportunity for buyers to capitalize. While there is more selection, number one, that’s better for you, and it’s also better to be able to capitalize on maybe a little less competition as it’s spread out during the summer. So if you have questions about the Seattle area housing market, whether you’re thinking about buying or selling or investing in real estate here in the area, I’d love to be a resource for you. And over these past eight years, I’ve had the privilege of helping many people and even some of you watching buy or sell here in the area after watching these videos and meeting this way. So if there’s any way that I can bring value to you and your situation, I would love to have a conversation. And if this channel has brought any value to you over the past eight years, please share it with others.

 

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