Seattle Real Estate Market Update | November 2022
We experienced some strength in the real estate market in October as we start to see fewer homes come onto the market. Last month we saw home prices in Seattle slightly tick up while also on the market for fewer days.
- Last month’s market update – Seattle Real Estate Market Update October 2022
Hey, y’all. Zach McDonald, your real estate agent with Real Property Associates, and this is my Seattle Real Estate Market Update for November 2022.
Well, if you’re new to these updates, it’s been quite the roller coaster here in 2022, in the housing market, in the Seattle area, specifically, but really across the country. The Seattle area was one of the hottest housing markets in the country over the past few years and, well, it was also, and has been, one of the quickest to drop off, specifically in the suburbs outside of the city of Seattle itself. But we’ve seen quite the up and down here this year. We typically see what I would call seasonality in the market. And this year it’s way more pronounced than normal, so we’re not going to be able to chalk this all up to seasonality. I think as we’ve been looking at the market and as we consider some of the data here, I think the biggest influences so far this year have been rise in interest rates, interest rates have more than doubled, and we’ve also seen an uptick in uncertainty around what’s going on in the market, specifically around Fed policy and also around the inflation that we’ve been experiencing here most heavily over the past year plus since all the stimulus and things like that.
So the housing market, as we’re kind of coming to a close here in 2022, has had, like I said, this kind of big up and now we’re coming down a little bit. But surprisingly, or maybe not surprisingly, we’re still up year over year as we’re looking at some of these numbers. So I suspect that we’re going to see positive year over year numbers here for the rest of the year. And I think as we head into the new year, 2023 is when we might see some of the negatives, if you want to call it that, some of the negative year over year numbers. But I think the rest of this year, we’re going to finish out strong. I think we’re going to continue to see the amount of housing inventory tightening up here as we head towards the rest of the year. And I don’t suspect any kind of a mad rush for people to try to list their houses before the holidays.
So without further ado, let’s jump into some of the stats. And if you haven’t subscribed yet to the channel, and this is your first time watching one of these videos, please pause for a moment if you want to hear these updates on a regular basis and go ahead and hit that subscribe button. And each update, we talk about the market, I share a story from some clients, and then we talk about the stats. And we always start off with the story. And we had a good client of ours, repeat client of ours who has bought and sold a few different places with us, and she just sold her final condo that she had in the area, and she’s moving all of her investments to Alaska where she has a few properties there and also has her residence. So Laura, it’s been great to work with you. I’m sure we’ll cross paths here and stay in touch, but super honored to be able to walk with you through a couple different sales here this year. And we wish you the best on your new projects and properties there in Alaska.
Now it’s time for some of the fun stuff, and that is the prices, and everybody wants to know where are housing prices right now? And we’ll look at Seattle. Seattle’s median sales price, $910,000 last month, actually up from last month and about the same as August. And if we look at year over year numbers, 9% up from last October. And Bellevue is a little different story. Bellevue median sales price last month, $1,480,000 and down 7.5% year over year. So Bellevue’s prices took off a little bit faster last year. And what I mentioned earlier in the video is that I think we’re going to start to see some of these negative year over year numbers, possibly in Seattle and some of these other suburbs here, as well as we head into 2023, but Bellevue’s given us a little sneak preview of what we might expect to be talking about at the same time next year.
We’re sustaining a few trends here in the housing market, namely the decrease in amount of sales, decrease in the amount of closed transactions, pending sales. I think we’ve seen somewhat of a normal reaction to the time of year, so we’re seeing a decrease in the amount of new listings coming on the market which is common, but we also are seeing a decline in some of the other sales activity, and that’s been sustained from the summertime all the way until now. And I suspect as we continue to head throughout the year, that we’re going to see a continued down trend in the amount of new listings. And what that’s resulting in is we’re still seeing houses selling below asking price. The average percent of the original list price in Bellevue, 94.2% last month. In Seattle, 97.7% of the original asking price. So houses are selling below asking price.
But I think what we’re seeing is that the supply is starting to tighten up. So houses aren’t sitting on the market as long. Last month, the median days on market actually dipped. So last month in October, eight days on market in Seattle and 10 days on market was the median. In September, 13 days on market in Seattle, and 21 days in Bellevue was the median. So considerable drop off there. And the average is also down from 21 to 19 days in Seattle and from 27 to 23 in Bellevue. So houses are not sitting on the market as long as they were earlier in the year. And I think a big part of that is because we’re seeing the inventory starting to tighten up. So fewer houses for sale in Seattle. We’re up 73%, so we have a lot more houses for sale right now than we did last year, but about the same as 2020, actually a little bit less in Seattle, a little bit more in Bellevue. And over 300, almost 400% more houses available right now in Bellevue than there were last year.
But the thing that’s changing here that I mentioned is that that supply number is going down. So last month, 1.9 months of supply of housing in Seattle, 1.7 this month. What I’m seeing is what I would expect to see for this time of year. I’m not seeing anything out of the ordinary right now. I think the thing that’s out of the ordinary is just the amount of houses available compared to last year. But as I’m looking at the data, I’m looking at a very normal curve for the year, and I would expect that as we wrap up the year that I’m going to see, and we’ll be able to look back and see if this is true, but what I would expect is to continue to see fewer listings coming on the market and I would expect to see fewer closings and fewer pending sales.
But what I do expect is we’re going to see the amount of homes available continuing to tighten up here over the last few months. And what’ll happen is we’re going to have pressure on some of those houses that have been sitting. Some of those houses are going to sell during the holidays. And I think as we head into the new year, that’s where we’re going to start to see, “Okay, what’s changed?” Because as we hit January and really hit February, March, that’s when we’re going to start to see a lot more of the normal housing inventory. So that’s where we’re going to get to see are a lot of people going to be trying to sell their houses this spring? Are we going to have people that are sitting on the sidelines and not making a transaction because maybe they don’t want to trade the interest rates? Are we seeing a ton of new inventory and not enough people buying? Are we going to see a different spring season than we normally do?
What I think we’re going to see is one of two options as we head towards that spring market. Number one, more listings coming on the market, nobody wanting to buy, and so that supply continuing to balloon. And again, that would be more downward pressure on pricing or at least keeping things the same. I think the other option would be is that we don’t have as many listings as we normally do come on the market in the spring, and maybe we kind of stay in the same vein that we’re in right now where there’s not a ton of listings on the market. Right now we’re even less than normal, about 15% down year over year listings. So maybe we’re going to be fewer houses on the market than we’re used to seeing, we have fewer buyers, but they kind of balance themselves out. That’s what’s happening right now.
So I’m excited to see, and I hope you are as well, kind of how we finish out the year. And I’ve shared my thoughts. I think we’ll end up about where we’re at as far as median sales prices and things like that. I think that we’re going to have a lot less supply, and I suspect that we’ll kind of head into the new year with, let’s call it a fresh start, but quite a bit higher interest rates. So right now, interest rates are, as of today, 7.25% on Mortgage News Daily’s website. I like Mortgage News Daily as far as kind of the daily rates. I think the Freddie Mac Primary Market Survey is also a great resource, and as of today, 6.95 was their most recent published rate, which would’ve been last week, last Thursday.
So I think right now we’re hovering right around 7% on rates. Kind of been off and on that number here over the past few months. I think when rates dipped a little bit about a month and a half ago, two months ago, we saw prices, or at least home sell a little bit there. And I think right now we’re just seeing how rate sensitive this market is, and pretty much any market is right now. But rates are the big factor right now and why things have slowed down here in the housing market. And I think as we head towards the new year, some are predicting that we’ll get closer to 8% on the rates. We’ll see. I’m not going to put my mouth there yet, but we might see rates getting closer to eight, and they certainly are a lot closer now than they were. And some are predicting that rates are going to be back down into the fives and even upper fours by the spring or summer, and that would be Fannie Mae.
So, again, we’ll see what happens here as we wrap up the year, but I think we’re going to still see rates in this higher elevated state for the next at least rest of this quarter, and maybe even first quarter, second quarter, next year. But right now we find ourselves in this spot where buyers have opportunities, but higher payments for those opportunities. And we’re seeing a lot of rate buy downs in the market. So sellers are buying or paying credits to the buyer to help buy down their rates. And so instead of having a 7% rate, maybe it’s a 5% rate at least to start with. So there’s some different programs out there and ways that sellers are trying to help buyers with their purchases, and that in some instances gets the seller a higher price. And in other instances, I think it gets the buyer a discount on the price and on the rate. So if a seller’s really having a tough time selling, there are certain ways as a buyer that you can not only get a better price, but also still get a little bit better rate than what’s being advertised right now.
So those are things that we’re talking about, ideas that are circulating, and those are things that I’m happy to engage with you guys as well if you want to talk about rate buy downs and some of the creative strategies right now that we’re using to help people get into a house, if that’s what they want to do. Thanks so much for watching this month’s Seattle Real Estate Market Update. We just wrapped up our November update. That means we got one more update before the new year. If you want to talk about buying a house here as we head into 2023, and that’s something that’s on your list of items to take care of, I’m happy to be a resource for you. Of course, I’m making these videos every single month, and I hope that they’re bringing some value to you. And if you’re getting a lot of value out of them and you want to have a conversation about your real estate goals, I’d love to chat.