Seattle Real Estate Market Update | October 2022
Last month in Seattle and Belleuve homes continued to see lower prices. We did see a good amount of home listed, though we will probably see this amount of homes on the market until demand picks back up around Spring next year.
- Last month’s market update – Seattle Real Estate Market Update September 2022
Hey, y’all. Zach McDonald, your real estate agent with Real Property Associates, and this is my Seattle Real Estate Market Update for October 2022.
Well, I think it’s safe to say that 2022 has been an exciting year in the real estate market. It was a wild ride earlier on in the year, and it seems like we’re still on a little bit of a wild ride here as the market has been shifting and cooling here over the past five to six months. Earlier in the year, we were seeing new record highs for a couple years straight, and here we are with prices coming down and recently Seattle was in the news. And again, Seattle Metro area was in the news for being one of the largest drop offs in the whole country as far as the amount houses were selling for and the amount that houses are currently selling for. So we’ve been talking about opportunity here in the past few months and we are certainly seeing prices coming down here all across the region.
And in this video, we’re going to talk about Seattle and Bellevue Stats here from September 2022. So we’re looking back at the previous month and we’re going to look at these stats and do a little bit of a dive into the numbers and talk about some applications for the future. But before we do that, I want to share a client story. And this last month we were privileged to help two different families, one a buyer, one a seller, that we met via the YouTube channel. So I am so grateful for you as a community. I know that there’s a lot of value here and for those that subscribe and follow along, I appreciate your attention here. And I always love it when people reach out and they want to talk about real estate, because that’s what I do. I make these videos and I put them out and I want to first of all bring value, but it’s really fun when I get the chance to meet you and interact with you and even help people walk through the buying and selling process.
But this month I want to highlight another sale, and this is the Wyatt family. They were local and moved away for a job and then moved back very quickly and they were able to get a house in Edmonds that had previously been listed for about 15% more than what they ended up paying. So they ended up getting a pretty nice haircut off of the original asking price. The house was listed earlier in the summer and they just closed and got to move into their new home. So congrats Wyatt family. I’m really excited for you guys to be back in the area. I know you’re close to the rest of the family and so that it’s pretty cool for you guys to be here. But it’s also pretty cool to see some of those opportunities we’ve been talking about and people getting to take advantage of those. So buyers earlier in the year were paying about 15% more, and we’ll look at some of those numbers here in a minute and they were able to get that discount off of the price.
So while we’re talking about that, let’s shift over to the median sales prices for last month. And in Seattle, the median sales price was $890,955, and that’s actually up 7.5% year over year. It is down slightly about $20,000 from last month, and it is down about 10.5% from the high earlier in the year, that was in April. I want to point out, I think this is interesting to note that last year in 2021 when we were in the hottest real estate market in the country, we saw prices come down 7.2% from the high, which was in June that year to September. Okay. So this year down about 10.5% in the city of Seattle, last year 7.2% down. So there’s a small delta there, about 3.2% or 3.3% if my math is correct, between last year’s seasonal drop and then this year’s drop.
Bellevue on the other hand was a little bit more dramatic here, and some of the places on the east side did see bigger drops here, but Bellevue specifically. Bellevue’s median sales price last month, 1,650,000, which is down 8.6% from last year, but up 50,000 from last month. And if we do the same comparison we just did with Seattle, I think these are interesting numbers to consider home values in Bellevue, at least a median sales price for residential homes is down 26.7% from March. So the high was in March, which normally the high is in May or June, but the high was in March this year at $2,250,000. And if we look at the delta here, so we’re going to look back to the beginning of, or actually the end of 2021 here for this one. The median sales price this last month, 1,650,000, is the same median sales price December 2021.
So that was what we essentially were heading into the year at. So what we could say here is Bellevue home prices essentially are about where they were as we headed into the year. So all of the craziness and the drama of the spring, right? We saw people paying way over asking price and prices being driven up. And this last month we saw prices as the median, right in the same exact spot as they were heading into the year. Now, Seattle on the other hand is different. Seattle’s median sales price in December was $823,450, and I just mentioned 890,955. So that’s a pretty nice jump on the median sales price from where we were at the beginning of the year still, and again, up 7.5% year over year. So why is Bellevue declining so much? And I think a big part of that is because Bellevue was going up so much.
Bellevue had way bigger increases over the past few years than Seattle did. Seattle had marginal increases and last year was one of the bigger jumps that Seattle’s had. But really during COVID, Seattle didn’t appreciate as much as a lot of the surrounding areas and there was a lot more demand outside of the city. And so those areas appreciate it a lot faster, and that’s why I think that those areas have also fallen a lot more than Seattle. So again, that’s just my thoughts on the issue and I could back it up with more data. I don’t have it all in front of me, but that would be my thoughts there. Now let’s transition to the average percent of list price. And now I think what we’ve been doing here recently, and I really like this, is looking at the percent of the original list price because there’s been a lot of price reduction.
So if we look at Seattle as a whole, based on the original list price, 97.5%, right? So small haircut off the original price overall on average. In Bellevue, we’re seeing a 93.3% number, so a little bit bigger haircut off those original prices in Bellevue. And I think we’re going to start to see, this is just again my opinion, my prediction would be that we’re going to see less of these haircuts as time goes on because we’re going to have more clarity and data around what the current market is. I think a lot of the houses that are selling right now and are closing, some of these houses have been on the market for 2, 3, 4 months, some of them a month, two months. But I think we’re having a lot better information now to understand how the market has shifted with interest rates being higher, buyer demand being lower, and I think we’re starting to find a sweet spot, again, we’ll see.
I always like to see how my predictions turn out, but that would be my thought, is that these numbers will shrink and become more in line with what the percentage of the current list price is. So in Seattle, that’s 99.3% of the asking price and in Bellevue, 96.8%. A big reason I think that’s the case is because we just went through in September, one of most likely the last large amount of new listings coming on the market. So historically, September, there’s a little spike in new listing activity. Usually August is a little slower, September there’s a spike, and then the rest of the year usually has a pretty big taper off in Seattle, Bellevue, and really all of the surrounding areas. So I don’t suspect that we’re going to see a lot of new inventory coming on. We’ll see more houses for sure, but during the fall and into the early winter, you see a pretty big drop off in listings.
Again, that’s historically normal. What I would assume we would have here is more of a normal fall, then I would say we’re probably not going to see a huge amount of extra homes on the market. And so the people will be competing and what we’ll see is I think those inventory numbers or the supply numbers continuing to come down. Speaking of supply numbers, we in Seattle saw 1.7 months of supply as we wrapped up the month, and that’s slightly up from last month, we saw supply numbers kind of level off around 1.4 over the past few months and now up to 1.7 months of supply. Again, that means there’s enough inventory for almost two months here now in Seattle. And in Bellevue, 2.2 months of supply and that’s actually the same as we’ve seen over the past few months. So Bellevue supply numbers have kind of leveled off with a couple months of inventory, but again, that’s a lot more inventory than we were seeing earlier in the year, and last year at the same time, Seattle had 0.8 months of supply and Bellevue had 0.4 months of supply.
So again, that was a lot of why we were seeing the multiple offers and the large chunks over asking price because people were competing for the same homes. But again, I mentioned here about, I don’t know, a minute ago that I think we’re going to see less new listings coming on the market as we wrap up the year. And as is normal, we start to see a lot of the supply that’s been on the market start to sell because again, there’s not as many new options and so people that need to buy or want to buy, will buy one of the existing houses. So I suspect that these numbers are going to continue to come down here as we wrap up the year. And again, we’ll see what happens in the new year, but I think as we finish out the year, this is probably the most amount of houses on the market that we’re going to see until we get to 2023.
So for buyers, if you’re thinking about, “Hey, when do I have the most options and maybe the best opportunity to negotiate or the best time to buy as a contingent buyer?” Again, I think the opportunities are right now for that. I think if inventory is tightening up and there’s still the similar buyer activity, it’s going to be tough. Again, even with the market being a little slower and interest rates being higher, when there’s less houses on the market, well, you got to compete again. So I think right now is where your kind of golden window of opportunity is probably for the next couple months as these numbers start to dwindle, interest rates are predicted to go down by Fannie Mae. So Fannie Mae is the largest insurer of mortgages, and they’re predicting Q2, Q3 to see more 4 to 5%, kind of in that 4.5% range on their most recent report.
So if interest rates are coming down in that same window and the supply numbers are lower, I think we’re going to see more activity. But again, I don’t know the future, but just predicting and pulling off of these other sources, that would to me spell a little bit more of a competitive spring market. Not anything like we’ve seen over the past few years, but again, I think that would bring back some of that competition. So that’s why I’m predicting right now is going to be that window of opportunity. Rates are higher, buyers are fearful, prices have already come down quite a bit from earlier in the year. I mentioned in Seattle was 10.5%. Bellevue, 26.7% down since the high of the year. So we’re seeing quite a big drop in those prices.
Thanks so much for watching my Seattle Real Estate Market Update for October 2022. If you made it to the end here and you haven’t subscribed to the channel yet, please, please do so. And if you want to talk a little bit more about potentially buying a house here in this window of opportunity that I’ve been talking about and even seeing if it makes sense for you, right? I don’t believe this is the best time for everybody, but I think there are opportunities, and if you want to talk about selling and weighing the pros and cons of selling right now, especially if you maybe want to sell a house and buy another one, please feel free to reach out.