Seattle Real Estate Market Update | October 2023
Hey, I’m Zach McDonald, your real estate agent with Real Property Associates, and this is my Seattle Real Estate Market update for October, 2023.
Welcome to this month’s recap of the Seattle Housing Market, and if you’re new to these videos, welcome. We’ve seen quite a bit of change here in interest rates. Over the past month, interest rates have been hovering in the low sevens, upper sixes, and now we’re looking at really close to 8%, 7.84% on Mortgage News daily survey as of today. And when we look back at rates last year, they were hovering right around 7%. So rates have climbed. They’ve really done a nice little dance all year long and found their way trending upwards since the spring. But the mortgage rates have played a significant factor in the housing market across the country, but I would say more specifically in the higher price markets like Seattle where the affordability is even more affected when you have the higher mortgage amounts, it’s going to impact those payments a little bit more dramatically.
So as we dive into this month’s data, keep that in mind that the mortgage rates are playing a big factor in what’s going on. A little update on my own personal situation. I always share a story in one of these updates and figured I’d give you all an update if you’ve been following along that my house is now under contract, yay, but it’s under contract contingent on the sale of somebody else’s house. So I’m going to put that house up here. If you’re like, yes, that looks like a house I’d be interested in. Well, if you buy that house, it helps me sell my house, get it. But I think contingent purchases are happening a little bit more right now, and we’ve seen an uptick in them over the past few weeks. I even made a few videos here talking about contingent purchases recently, so you’ll get another update at some point, hopefully in the next month or so that my house is closed and not just under contract, but for now, we are under contract in a contingent status.
So if somebody still really liked my house, they would have the chance to make an offer on it if it was not contingent on a home sale, but that doesn’t happen as often as it would if it was actively marketed. So just a little bit of an update there on our situation. Now let’s talk about the market because, well, that’s why you’re following along with this channel, not necessarily to hear what’s going on in my personal life. And over the past year, home prices in Seattle and Bellevue really have remained relatively flat, and they came with the so far seasonal undulations in prices where we had a decline in inventory and we saw inventory pick up again here this summer, not dramatically, but more so than in the spring. And what we’ve seen is that in Seattle, the median sales price last was $899,950, which is 1.1% above the same time last year. And that’s something that I was sharing earlier, that we would start to see this trend of home prices stabilizing and maybe even being a little higher than last year. Bellevue was at negative 0.3%, so pretty much the same $1,645,000 as the median sales price in Bellevue. Now as I share that the prices have remained relatively stable over the last year, or at least are in the same place heading into the fall. When we look at the drop off in prices, we’ve still seen a solid drop off in Seattle home prices from the peak in the spring last year down 9.64% in Bellevue. Home prices from the high in the spring of 2022 are down 26.89%, 26.89%, and a lot of the east side is seeing very similar drop off in prices. Seattle just did not see as much of the growth in the C years in the 20 20, 20 21, early 2022 timeframe because people were getting out of Seattle because they were moving farther out to the east side or the suburbs on the north end or the south end where there was more space, bigger houses, less money, maybe a space for a desk or two to work from home.
And now we’re seeing that people need to come back to the city. Some people are selling those houses and moving south, but either way, there’s just less demand to move away and more demand to stay. And so there was just less of a dropoff in the city as things started to shift again. Now as we look at the new listings coming on the market, something that we always pay attention to, we saw 15.6% fewer listings in Seattle and 22% fewer in Bellevue. Again, we’ve been talking about interest rates, and if you’ve been following these updates regularly, you would’ve heard me tell you that a big piece of that is people wanting to hold onto their houses, so significantly fewer listings coming on the market. And as far as homes for sale, we’re also seeing a pretty large drop off. So last September in Seattle, we had 1,236 houses available on the market, and at the same time here as we wrapped up September 987 or a 20% drop off, Bellevue was at 191 and at one 50 or 21.5% drop off on their end.
So again, very similar as far as the changes in the Seattle and Bellevue markets with inventory. Now, even more importantly than how many houses are coming on the market and how many houses are available, you’ve got the pending sales, and that’s something that we want to pay close attention to as well, because that gives us a good indicator of how fast things are coming off the market and maybe what’s coming up in the future. And pending sales in Seattle and Bellevue are both down around 5%, not a big drop off in the pending sales year over year, but if we look at previous years, both of those years were down from where they would normally be. So seeing fewer houses coming off the market does increase our inventory, and that’s something that we’ll see. We had a drop off in our supply. So when we look at this graph here, this is the amount of homes available versus the amount of pending sales happening simultaneously.
You’ll see that there was a spike during COVID in 2020 up over two months of supply in Bellevue, and nearing that in Seattle, we also saw that the supply ballooned last September as well, which is normal. It’s where you start to see the most listings on the market. Late summer, early fall last year, we were at 1.8 months in Seattle, 2.3 months of supply in Bellevue. And we’re looking at this year, two months in Seattle, 2.1 months in Bellevue. Not a massive number for a normal fall, but certainly not the super low inventory that we saw in the fall of 2021, but 11% up in Seattle, 8.7% down in Bellevue. Overall, I think interest rates have played a key factor in why people aren’t listing their house, but they’re also playing a key factor in why people aren’t buying a house either. And at this point, again, throughout the year, we’ve remained in this balanced state where there are fewer houses coming on the market, but also fewer sales, but we’re not seeing a massive influx of one or the other buyers or sellers. And those have remained, again, relatively stable. Now, during the spring when interest rates had dipped down, we saw some of the price recovery that we saw this year in the spring and early summer because well, there wasn’t enough inventory and people were jumping on the purchases, especially with those lower rates. Now, things have trickled down since then as rates have ticked up and so have the days on market.
The days on market have also increased from the spring, but not dramatically back in January, 2023, so the beginning of the year, 28 days on market in Seattle and 42 days on market in Bellevue, and those were the median days on market. Now, if we look at the current median days on market, 10 days in Seattle versus the 28 and eight days versus 42 in Bellevue, you’d see that’s a massive drop off from January, but even from September last year, we have a 23% drop off in Seattle, 61.9% drop off at Bellevue. So things are selling faster, houses are not sitting as long as they were, and they’re also selling for more than they were last year. When it comes to comparing asking price versus the sales price, let’s look at a couple stats here that talk about the sales prices. And when we look at last year, 2022, the average percent of list price or the current price in September, 2022, Seattle, 99.3% of the asking price.
And in Bellevue, 96.8% of the asking price. Now, if we look at the same stat here, a hundred 0.4% were over asking price in Seattle and 101.2% in Bellevue, which tells us a couple things. It tells us that, well, there’s people paying, asking price, there’s not as much negotiating room, but it also tells us that people are likely listing their house or have better intel on where they should be priced. Now, another stat here that’s similar to this is the average percentage of the original list price. And if we look at that number, we will also see a differentiation as well. So Seattle was 97.4% and Bellevue was 93.3% of the original asking price, meaning if you compare those two that they were selling, at least Seattle was almost at asking price, but that would’ve been after a price reduction. The percentage of the original asking price was lower than the price of current asking price.
So again, factoring in price reductions, but if we look at the percentage of original price in Seattle, 98.8% and Bellevue, 99.5%. So on average, houses are selling relatively close to not just that current asking price, but their original asking prices and substantially better than they were at the same time last year. Now, where does that leave us? We still find ourselves in an environment in the Seattle area where there are not a lot of houses available, but at the same time, we find ourselves where there are not as many buyers in the market. So we talked about how prices are down and they’re down in Seattle and Bellevue and all across King and Snohomish County. We just highlight the big cities in this particular update. But that means for buyers that even with the higher rates, you still have an opportunity for a better price. So if you’re a cash buyer particularly, you’re like, yeah, this is great. Now, could things, and this is the question people have, could things get worse or will they get worse? I don’t know. I think we’ve seen over the last year that even with rates increasing, that prices have stayed about the same. And I think there are still some people that would say, yeah, I think the worst is yet to come. We’re going to see a bigger drop off. I’m waiting for that moment. I think that moment would come maybe if rates kept climbing into the mid eights and that would change things, but it’s still not going to make more people want to sell. So we’ll still have the shortage of supply.
Now, what could happen on the flip side is that rates start to come down in mid next year, and we see a lot more buyers jumping in and we don’t have enough houses, and we’re going to see prices go up just like they did this spring because prices went up this spring. We might see that happen and it would be fairly dramatic. So I think it’s hard to tell you exactly what’s going to happen. I don’t think personally we’re going to see a massive jump or massive drop off. I think prices will remain relatively similar to where they’re at. It might go up again in the spring a little bit, which is normal. And we saw last year as some of the new inventory comes on, and as we see more buyers considering a purchase, but I think there’s still opportunity for buyers and for sellers. I think there’s just not going to be a lot of listings here for the rest of the year, and that will be an interesting thing for us to watch, but we might see a relatively stale or slow fall in the Seattle real estate market. Thanks so much for watching this month’s Seattle Real Estate Market update. I hope that this was valuable for you, and if you want to connect and talk a little bit about your situation or just even ask some questions, feel free to reach out.