Seattle Real Estate Market Update | May 2022
The April housing market stats for Seattle and Bellevue are showing housing inventory increasing which is good news for buyers! However, homes are generally still selling quickly and for over asking price across King and Snohomish County.
- Last month’s market update – Seattle Real Estate Market Update April 2022
Hey, all. Zach McDonald, your real estate agent with Real Property Associates, and this is my Seattle Real Estate Market for May, 2022.
What a crazy start to the year we’ve had in the Seattle housing market. We started off just raging hot. We’ve had record high prices already multiple times this year in Seattle and Bellevue and all the surrounding areas, specifically King County and Snohomish County. We’ve also seen interest rates continue to climb.
So lots of people are asking me on a regular basis, what’s going on with the market? How are interest rates going to impact things? Is inventory picking up? What’s coming down the pike? I just want to say right now, I don’t have a crystal ball, but everybody’s got an opinion and I’ve got an opinion, and I’m looking forward to sharing that with you right now.
As we get started with this update, I’m going to share a client’s story, as I do in every single one of these market updates, bring honor to one of my past clients.
In this month, we’re going to talk about the McLaughlin family. They purchased a townhouse in Bothell with me just about three years ago. They were super kind to share their experience working with me a few years back on camera. And recently we just had the opportunity to delist and sell their home. They’re planning to relocate to be near family. Looking back at the numbers, I’m blown away by the return for them.
So 2½ years ago, almost three years ago, they purchased this townhouse that they sold for $428,000. Okay? They put 5% down. So let’s just call it 30,000 total for closing costs, down payment, things like that. I couldn’t find the exact number when I was looking. They recently sold for $750,000. Which, if you just look at the appreciation in the value, 75%. Crazy. But if you think about the cash-on-cash return, $30,000 investment, they ended up selling their house and walking away with almost $250,000.
That’s crazy. That’s over 800% return over three years. And if we were to annualize that, it’s going to be somewhere in that 275% a year range. So not a lot of investments paying that type of return. Obviously, we were in a crazy market here recently. But that just shows how hot the market’s been here over the past few years in the Seattle/Bellevue area.
Let’s jump in now to the stats, which is why I know many of you continue to follow the channel. If you haven’t subscribed yet, this is your chance to go ahead and subscribe, so that you can see more of this Seattle and Bellevue Real Estate Market updates. But as we look at the stats here, median sales price, Seattle set a new median sales price record just under a million dollars, $995,000. Up 15.4% year-over-year. Bellevue, as we’re looking at the stats, actually took quite a step back in the median sales price. We could come up with lots of reasons for that, but Bellevue came in at 1.805 million, 11.4% jump year-over-year.
If we look back at the last few years in the Seattle and Bellevue real estate market, back in 2020, Seattle’s median sales price was 800,000. We just talked about how it jumped up to $995,000 median sales price. Big jump. Bellevue’s was 1.095, so almost 1.1. And now we’re talking about 1.805. So huge, massive jump over the past few years. Specifically in Bellevue, but any real estate market would say that this is a good return here over the past few years for anybody that has bought or sold here in the Seattle area.
Let’s consider a few more stats as we wrap up this portion of the market update. And the first one I want to focus on is the percentage above asking price.
So last month in April, we still saw a pretty large amount over asking price for single-family homes. 12.1% above asking price across Seattle, and 15.8% across Bellevue. Closed sales in Seattle was down 18.3%, and same thing in Bellevue, 14.2% down. But if we look back over historical averages, we’re seeing very normal amounts of closings. We just saw a little bit less than we did last year. Last year was almost record numbers. In a lot of months was record numbers of sales and closings and new listings. And we’re seeing a little bit of a pullback from that compared to last year. But historically, pretty normal numbers of new listings and also closings.
Speaking of new listings, we had just over 1,000 new listings in Seattle and 162 new listings in Bellevue. Again, down a little bit year-over-year in Seattle, and up just slightly in Bellevue. Pending sales were down also 20.6% in Seattle, 21.6% in Bellevue.
This brings us to the inventory conversation. In Seattle, we had 480 listings on the market at the end of the month, which is down 27.7% year-over-year. And even more, if we look back at the COVID year. Bellevue homes for sale, up quite a bit. 89 homes on the market in Bellevue. I’m going to venture to say that this has something to do with how extremely expensive Bellevue is and the rising interest rates. But again, that’s pure speculation.
But in Seattle, things have seemed to continue on and keep picking up. In Bellevue, we’re seeing things slowing down a little bit. Maybe it has something to do with the higher price point over on the Eastside and over on the Westside. We’ll continue to watch this trend, but I think that’s something significant.
In Seattle, inventory rose a little bit. Still 0.6 months of supply, which is low for this time of year. We’re talking about record lows, right now, for inventory levels. Historically speaking, heading into the spring and summer months, we start to see those numbers pick up and they are picking up a little bit, but not a lot.
Last year in Bellevue, we had 0.5 months of supply at this time. In this month, 0.8 months of supply. So again, nothing radical, but that is a 60% jump in supply. So Bellevue’s seeing a little bit more of that. But again, still historically low supply numbers, which is causing houses to still sell extremely fast. We’re still in that seven days or less for Seattle and Bellevue. This is keeping the market moving extremely fast. So we’re still seeing a median days-on-market of five in both Seattle/Bellevue. Then an average of five days in Seattle and an average of five days in Bellevue.
So what the heck does all this mean? Right? It’s one thing to just share the numbers, but another to bring a little bit of value to the situation, explain the numbers a little bit and tell a story, but also give a little bit of insight.
So the first thing I’m going to say is, interest rates have been going up over the last year, specifically. But most specifically since the beginning of the year. As of today, filming this video on May 10th, we’re looking at average rates, according to bank rate, 5.57% is the averaged 30-year fixed rate that they’re posting on their website. Freddie Mac’s data is a little outdated at this point. So they were still seeing similar numbers last week at the end of the week.
But rates are definitely going up. A lot of people are speculating that we might see rates jump into the 6s. I’ve said previously in my videos, I think the market can bear these 5% to 5½% rates right now because of how much money got pumped into the economy last year. But if we see rates climb up into the 6s, I think we’re going to see things slowing down a little bit. Definitely seeing just anecdotally less action on some of my listings, especially the higher priced ones. I think fewer showings definitely changing up some of the pricing strategy. I think some of the, “price it low and hope to get the crazy offers,” might not be the best strategy right now for sellers, but the market’s still moving.
There’s still buyers that are really excited to purchase homes and can afford to purchase homes. But I think these interest rates going up are causing people, potentially, to think twice about if they own a house selling that house and buying another one. Because while you’re going from maybe a 3% rate, which is a super, super record all time low, to maybe a 6% rate, and that’s a pretty big jump, monthly payment wise. And if you’re buying the next house and not just buying, jumping across the river so to speak, and buying the same house again, what’s the point? Right? So I think for some people, the affordability’s gone down a little bit.
So my prediction here as interest rates have climbed, is we’re going to see a little bit of a slowdown as far as interest goes and purchasing. But also you’re going to see a little bit less, I think, as far as people wanting to sell.
So there will be some that’ll want to sell and try to say, “Hey, maybe this is the top of the market.” Other people are going to be sitting on the sidelines because, well, where are they going to go? It’s that same conversation. Do they really want to get another house with a higher interest rate?
So if we have rates staying in the same area, I don’t think we’re going to see any kind of massive fallout with higher rates. I do think we’re going to see a normal seasonal slow down this year. We did see that a little bit last year, but 2020 was a little weird. We never even saw that seasonal slow down. It came earlier in the year, and then we just saw a super hot market the rest of the year. Which is abnormal. And last year we also saw super hot end of the year in the fall and into the winter, which is also abnormal.
So if we want to say that was the hot spring/summer market, I could say, fairly confidently, I think we’ve seen the hottest part of the market for the year already. But if you’re somebody thinking about selling, it’s still a good market to be selling in. When we look at some of these numbers, less than a month’s of inventory, way over asking price, record high prices, I mean, we’re still in a seller’s market. Don’t get me wrong.
But as a buyer, I think, if you’re looking for an opportunity to maybe start getting started with the process, yes, interest rates are a little bit higher. But if you have the ability, you might be able to get into the market and save yourself some of the competition here in the coming months.
So that’s my thoughts here, as we wrap up the month. Are interest rates going to get over 6? Are we going to see prices go backwards? Every year we start to see a little bit of a ebb and flow. Right? So typically in the end of the summer and into the fall and early winter, we see prices level off and even go down a little bit. Then we see this natural rising as inventory gets lower and competition heats up until we start to see more inventory.
So I think this year’s going to be a little bit more of a normal year, as far as the normal historical cycles here in Seattle. It’s possible we might see a little bit more of a drop than we normally do if interest rates get higher, but that remains to be seen.
So thank you so much for watching this video. I hope you got some value out of it. If you want to see videos like this on a regular basis, please consider subscribing to the channel. If you know somebody, as well, who could benefit from it, please consider sharing it with them. And of course, if you want to talk more about your situation buying or selling, I’d love to connect with you.