Seattle Real Estate Market Update | May 2023

Hey, all Zack McDonald, your real estate agent with Real Property Associates, and this is my Seattle Real Estate market update for May, 2023. Speaker 1 (00:14): I just realized that we have been filming these videos for almost seven years now, starting back in June, 2016, which is crazy. I have had the privilege and I just want to take this moment to say thank you to so many of you who have been following the channel and subscribed, and also for those that have worked with me to buy or sell a property here, meeting over YouTube, which is incredible. Honestly, when I started this, I didn’t imagine that as an outcome. I made these videos at first just for my clients to be able to continue to keep them updated on the market. And turns out other people wanted this information. I didn’t realize it wasn’t out there, uh, but I hope this information is still very valuable for you and you enjoy it. If you do, please give this video a like or a thumbs up. Speaker 1 (00:57): If you haven’t subscribed, please consider doing so. I wanna start off this update with a story, and it’s gonna be a little different than some of the other videos, and this story is going to involve a few different clients when I’m actively working with one that I’ve been talking with and have actually told it’s probably better to hold off on selling their house. And I made a video last week and it’s called The Biggest Mistakes to Avoid When Hiring a Real Estate Agent. And really it’s just one big mistake that I focus on. And the general idea of the video is that you need to make sure that you do your homework and that you do your research when you’re hiring a real estate professional. And this is not a shameless plug for me, although I’m happy to chat with you about your situation if you’re in the Seattle area. Speaker 1 (01:44): The reason I’m sharing this is because I think it’s important to know about the data and understand the market that you’re buying in. But I’ve seen more and more and more as I have more conversations that people get themselves into tough situations sometimes because of the real estate agents that they’ve chosen to work with. So I have two clients, again, one that I’m working with currently, one I’m talking out of working with. And I found that they got into situations that they could have avoided if their real estate agent had helped them better, I think. So the first one, I talk about this in the video, ended up buying a condo with a situation, um, where they, you know, they had a pet, they couldn’t have the pet there, they can’t rent it out either. So now they have to sell it or just have it sit. Speaker 1 (02:30): And in another situation, they bought a condo that had some big repairs coming up and they didn’t really know about it. Now they’re in this situation where they have to pay for these repairs or they can get out, but if they get out right now, they’re gonna lose money. Even though they can sell it for what they bought it for, they’re still gonna lose money because it costs money to buy and sell real estate. So I think the, the point here is that you wanna make sure you’re doing your homework when you’re hiring a real estate agent and you want to not only know about the market and about the houses, but you want to have somebody that can really walk you through that process that has expertise, is good at negotiating. And I made a video about that too. So I guess I’ll link it up. Speaker 1 (03:09): You know how to choose a real estate agent, but I thought that was important to share with you when we’ll tie it into this update as we continue on. But let’s jump to the stats because I know that’s what many of you are here for and we’re gonna start in a little different order. So I wanna start with the percentage of list price, because we usually talk about that at the end. But in Seattle and Bellevue Homes last month in April, sold over asking price on average, Bellevue was just over asking price 0.2% above asking price. Seattle was 2.1% above asking price on the sales price. So things have been picking up and a big driving force right now. We’ve been talking about this, if you follow along with the Seattle market watches that the supply of homes has been shrinking. It ballooned in the spring and the summer last year in 2022. Speaker 1 (04:03): And it’s been slowly declining. It did slightly increase here month over month, but the days on market’s been shrinking. Average days on market, 19 in Seattle, 20 in Bellevue get this median days on market, right? This is the middle number. Six days in Seattle, five days in Bellevue. Homes are selling significantly faster. And a big reason is because the inventory’s been shrinking. And some of that competition’s picking back up. Things are not sitting around waiting for you to buy if you’re a buyer. And as a seller, they’re not just sitting around languishing on the market either. People are coming to take a look at houses. So supply numbers, we talked about this inventory of homes. So there are considerably more houses available right now than there were last year. At the same time. That is not debatable, but what’s changing is the amount of supply that’s available. Speaker 1 (04:58): So we have about 1.4 months of supply in Seattle and the same in Bellevue. So that just means if no houses come on the market over the next one month in a couple weeks, we’re not gonna have any houses available. And back in the summer, we had about two months in Seattle and two and a half, two and a quarter in Bellevue. And the significance there is that there are far fewer houses right now that are available, and that just means there’s more pressure or competition on the houses that are available. And you’re probably thinking and putting this together. But what that’s doing is it’s putting upward pressure on the prices. So in Bellevue, last month, homes sold for 8.4% more than they did last year in April, 2022. Now the high in Bellevue, February and March were the highs above 2 million. So we haven’t reached the all-time highs in Bellevue yet, but last month, $1,990,000 was the median sales price in Bellevue. Speaker 1 (06:02): So we’re just below 2 million. Can you believe that in the midst of all that’s been going on, the home prices have been continuing to climb in Bellevue and we’re getting near the peak of the year, most likely in Bellevue. Seattle is down 12.7% year over year. Eight 70 was the median sales price. And if we look at a a, a graph here, I’m gonna show you this data a little differently today. We’re gonna look at a bar graph and you can see that home prices are about the same as they were back in 2021 in Seattle. Just a little bit higher. And I think a big, big factor right now. So we’ve talked about the inventory, right? There’s two main things happening right now that are causing inventory to go down. We have the new listings shrinking dramatically. So last year, so for April homes, <laugh>, this is crazy. Speaker 1 (06:58): In April there were fewer new listings than there were in March. And normally what we see is a pretty steady gradual increase in the new listings every month into the summer because, well, this is the peak time of year. We saw a drop off in the new listings from March to April. What? And if we look at the data here, I’m gonna show you this, a bar graph again, over the last few years, 2021 in Seattle, we had 1,253 listings. We had fewer last year, 21.5% fewer. We saw another drop off 759. That is a massive delta from the 1253 down to the 7 59 bellevue’s delta isn’t quite as dramatic. It doesn’t seem as dramatic because well, there’s just fewer houses in Bellevue, but 1 52 and 2021 down to 1 0 3 this last year. So there are far fewer new listings than normal. So that’s the first data point. Speaker 1 (07:58): The pending sales are also down significantly. So in Seattle 1042 and 2021 down to 6 31 this year, massive drop off, like I said, Bellevue, 139 pending sales to 93 pending sales. So again, not as dramatic sounding, but still about the same. Close sales are also down in Seattle and Bellevue, Seattle 30.6% down year over year Bellevue, 44.2%. So we have less buyer activity, right? That’s what that means. Fewer pending sales, fewer close sales, less buyer activity. We also have less listing inventory. So although, and this is the thing that I think some expected, they expected that we would see less buyer activity and so therefore we were gonna continue to see inventory climbing and ballooning, which would then put a lot of downward pressure on the housing market, which is what we saw last year. It wasn’t as dramatic as it felt. We didn’t see a ma two, two months of supply. Speaker 1 (08:58): It’s not a lot of supply now it is compared to what we had become accustomed to, but really it’s not that much supply. But I think some expected that we were gonna continue to see inventory balloon and that the buyer activity was going to be so low and the listing activity, new listings was gonna be so high that we were gonna see those numbers jumping up. But what we’ve seen is not that last month, inventory remained about the same. I think we were talking about 1.3 months now we’re talking about 1.4 months. So we’ve had a relatively stagnant amount of supply growth, um, commensurate to the amount of listings and buyers all in the market. At the same time, things are selling quicker. Again, they’re selling over asking price. So what we’re seeing is really the opposite. We’re seeing some upward pressure on prices. So as we head into the rest of the year, I think the big things we’re gonna be looking at paying attention to are what are the new listings looking like? Speaker 1 (09:51): Do we have a lot of new listing inventory? And if what we’ve seen so far is any indication, I would say there’s a lot of people sitting put right now, some of those people might be looking to buy something else, but there isn’t really anything to buy, right? And so then they’re not gonna be selling their houses. And then for first time home buyers, there are a lot of first time home buyers in the market right now, but interest rates are higher. So there’s, they’re, they’re looking, a lot of people are looking in, in a certain price point in the lower, on the lower end, I would say below a million. So as we head into the rest of the year, we’re gonna be paying attention to the amount of listings, and then we’re also going to be paying attention to interest rates. I think the interest rates are still very significant and in a higher price market like Seattle, they do affect things. Speaker 1 (10:40): And again, we’re talking about mortgage interest rates, not the fed, the fed rates. The fed rates have continued to go up here, they keep raising them, but mortgage interest rates are hovering right around six and half percent. They’ve been going between six and 7% for all of this year so far. And I think the biggest thing we’re looking at paying attention to is inflation. So once we get inflation under control, whatever that means, once we have inflation under control, when the government’s confident about it, consumers are confident about it, we’re gonna start to see those interest rates for mortgages drop fairly quickly. And when that happens, I think we’re gonna see a lot more upward pressure on the housing market because inventory’s low and prices are also down. Now I mentioned Bellevue being up, well, it’s a little bit of an outlier across King Snohomish County. Speaker 1 (11:28): Between 10 and 12 and a half percent down is really where we’re seeing, and a lot of the higher priced areas are even down more so for a buyer right now, you can get a better deal as far as the price goes, but your payments higher. So that’s why we’ve talked about interest rates as another one of those factors. So for buyers right now, yes, prices are down, you have opportunities. I think it’s really important as a buyer that you do your homework. When you’re looking at real estate agents, I would love to, if you’re in this area, be part of that conversation and have an opportunity to connect with you about your situation if you’re getting some value out of this. But again, that’s not the heart. The main point is that you just need to make sure you’re looking at reviews, you’re reading May, maybe you’re going on Zillow or you’re, you’re going on Google, Google reviews, right? Speaker 1 (12:14): Does this agent have a track record of success? Do they sell homes where I want to buy or where I want to sell my home? Do they, I I, it’s great to get a recommendation from a friend or a family member, but has that person worked with the agent? Does the agent do a lot of business, right? Most real estate agents don’t do a lot of business. So I guess the caution is make sure you’re doing your homework as you’re looking at people to help you navigate this market right now. And then for sellers right now, I would say that if you felt like you missed a boat last year and you, you missed your opportunity to sell your house and get a good value for it, I think that we’re, you’re still not gonna get what your neighbors got last year. But if you need to sell or you want to sell and move on, you’re going to be able to do that and have the terms of the contract and even the price start to be more in your favor here as we head towards the rest of 2023. Thanks so much for watching my Seattle Real Estate market update for May, 2023. Again, if you got some value out of this video, please gimme some love, whether it’s a comment or a thumbs up on this video. And if you wanna talk more about your situation buying or selling in the Seattle area, please don’t hesitate to reach out.