Seattle Real Estate Market Update | September 2022

 In #Market Updates, #Seattle Real Estate Market, #This Month, #Thoughts

Video Summary

We could be seeing the real estate market here in Seattle starting to pick back up. There are still more pending sales than new listings, which is a sign of strength.

Video Transcript

Hey, y’all Zach McDonald, your real estate agent with real property associates in this is my Seattle real estate market update for September, 2022. Recently, I started recording some videos. We’re calling them Seattle real estate market watches. And what I’ve noticed is a lot of people have been watching those. And I love it. So if you haven’t seen those real estate market watches yet, please make sure you take a watch. And maybe that just means pausing right now and subscribing to the channel so that you can see those videos on a weekly basis. But my hope with those videos is that you’re having a little bit of a weekly kind of gauge on what’s going on in the market. Now, my vision for these videos when I made them and started making these five years or so ago, was that you would have something to look back at every single month, something to count on every single month.

And with those market watches, I’m trying to create that same consistency on a weekly basis, but then supplement that still with these market updates. So that you’re getting a little bit more of the data and a little bit more insight at a higher level. So if you are watching those, keep watching these ones too. I think these bring a lot of value and additional context to what’s going on in the market, but they are by nature looking back, whereas the market watches are kind of as everything’s happening in a given week. So I think there’s value for both. And if you’re enjoying them, I’d love to have you drop in comments and letting me know how they’re interacting and how I could even make the interaction between the two better. Now, as always, we’re gonna start off with a client’s story because I love sharing the good news about some of our clients in the Seattle marketplace and the ASCE family.

We started talking a couple years ago and they reached out after watching some YouTube videos from outta state and they said, Hey, we’re not sure what we’re gonna do or when we’re gonna do it, but we want to talk. So we talked about their situation, made some plans, but really just stayed in touch over the past couple years. And they finally made the move out to Seattle, which is awesome. And they haven’t officially landed here yet, but they did make their purchase. And what’s cool is over the past six months we saw a house that probably would’ve sold in the 1.5, 1.6 range. It was originally listed for 1.4 9 9 9 9, 9. Right? Pretty much 1.5 with a weird sales trick for numbers, but they got it for 1.28. So they got this house over in Woodenville for way below asking price. Um, at least the original asking price. They got this house for 85% of the original asking price. So super pumped for them. I think that’s just a good illustration of what’s been happening in the market. A lot of houses were listing earlier in the year. Maybe in that 1.2, 1.25 range in Woodenville selling for 1.5, at least similar houses. And now nobody wants to pay that price, right? Nobody wants to pay that 15% above asking price. And now we’re back essentially to where prices were earlier in the year.

So if we were to look back at what houses we’re selling for maybe end of December, beginning of January, even into February, that’s more where our prices are. And we saw this massive spike with all of the competition in the early spring, but a lot of that’s died down. So for buyers, I think that’s just an encouragement that there are opportunities. Now, they were able to capitalize and we don’t know what the future holds. We don’t know if prices might go down a little bit more, but they already have gone down quite a bit. Um, and I know when this agent priced the house, what they were doing is looking at what the neighbors had sold for and coming up with a price based on comparable sales and what they didn’t account for. And, and nobody really could account for this. I experienced this too with some listings is how much and how quickly the market was shifting away from.

Yeah, sure. I’ll pay that. I’ll wave all my contingencies to, Hey, I want to have an inspection. I wanna negotiate. I want a lower price. And so that’s kind of where we found ourselves. I think what we’re gonna see as we go through this update is that things have been leveling off a little bit. I think that the buyer and seller, um, expectations are being reset last month. I used the word recalibrating, and I think we’re kind of starting to see that equilibrium. And I’ll show you a few numbers that I think help illustrate that here. As we continue on to continue on with the recalibration conversation, I’m gonna start off with some different stats than I normally do. And I think a lot of people are like, what are the prices? But I think we’ll come to those in a little bit, but I wanna talk about new listings because the new listings have been slowing down here since last month.

So we actually saw fewer new listings in Seattle and Bellevue then we did in the previous month. But if we look back even year over year, we’re also seeing fewer new listings in August. So about a hundred fewer in Seattle, a little more than that. And 20 ish in Bellevue, but still fewer new listings year over year, but also in the month over month comparison. But interestingly, what we’re seeing is more pending sales. So what, what has been happening over the past few months really let’s say four or five months, we’ve been seeing more new listings coming on fewer pending sales. And we’ve been seeing that inventory or supply numbers taking up well over the past month. Plus really we’ve been seeing more pending sales than new listings. And we’re seeing that now reflected in the data. Now granted pending sales in Seattle and Bellevue are both down year, over year.

So pending sales are down 25% in Seattle and 28.6% in Bellevue. So we have to have that as part of our context, but we’re also seeing an uptick over the last month in pending sales in Seattle and Bellevue. So I think we’re seeing signs of the market picking up again. But if we’re looking back here at the current numbers, we’re seeing wow, quite a few less pending sales right year over year, the result of all this is that we’re seeing the amount of homes on the market decreasing. So homes for sale and Seattle and Bellevue are both up considerably year, over year 40.8% in Seattle, 250% in Bellevue. All right, massive. But if we’re looking at month over month, we’re seeing that there are fewer homes for sale in Seattle. And then there were last month. Again, that’s a little bit of a snapshot about how things are transitioning maybe, right?

But again, if we’re looking year over year, pretty big, uh, difference there month over month, we saw supply numbers in Seattle drop by 1.1 percentage point and 0.2 percentage points in Bellevue. So 1.4 months of supply in Seattle, 2.1 months of supply in Bellevue. If we were to look back 20, 21 0.8 months of supply and 0.4 months, respectively for Seattle and Bellevue and in 2020, right when we were having some of the COVID scare, um, 1.8 and 2.1 months in Seattle and Bellevue respectively. So, um, less inventory than we had then during the height of the pandemic of August, 2020, but, um, quite a bit less, um, than there, but quite a bit more also than last year, days on market Woohoo days on market are still ticking up in the Seattle area, nine days on market, which is 50% more, uh, than last year median days on market Bellevue 13 is the median.

But for the average Seattle 16, Bellevue 21 for days on market, both of those are up month over month as well. I do think that we might start to see that shift. I think the fact that prices are coming down is a big reason that we’re starting to or will start to see, uh, more houses selling quicker, pending sales, uh, increasing is because I think we’re starting to see that prices have hit that point where buyers are interested again, especially given what their new payments look like with the higher interest rates. And as, as we’re recording this today, interest rates 6.1, 3% on mortgage news daily. And I think yesterday it was 6.25. So, um, fluctuating a ton still. And there’s a lot of volatility right in the stock market and in the mortgage market. But right now rates are still over six, but houses are still selling.

I think buyers have accepted that. That’s just a reality for now. And prices have started to come down to a point where buyers can buy the house that they wanted to buy before when prices were higher, because they’ve come down, um, a little bit. And that puts us at the average percent of the list price in Seattle is just under, uh, just under 1% 99.7%, 98.2% of the original asking price though. Um, with those price reductions factored in Bellevue was 95.2% of the list price. But again, if we factor in the prior list price, the original price, 92.4% of the original asking price. So

There’s deals to be had, especially in Bellevue. I think we’ll end with the median sales price here is with the data section because that is what everybody wants to talk about. And we’re finally getting into it here in the video. But I think in Seattle last month, $950,000 median sales price this month, $909,000 median sales price. And I’ve mentioned that there’s a trend in the summertime where we see prices decline. So again, I’m not super surprised. I think it’s more noteworthy to point out that houses are selling 5.1% more than they were last year. At the same time, I do prefer the annual comparison year over year versus month over month, because I think it gives a better idea for how the market’s operating in accounts for some of those variables that happen, especially during the different months around here. So year over year is great month over month has its place.

So that’s why I guess I’ll share it in this video. Um, but the previous high for the year 9 96 back in April for Seattle median sales price in Bellevue in March hit its high at 2.25 million. And last month median sales price in Bellevue was 1.5, $8 million. So massive, massive drop off from the previous high. Again, there is a seasonality to pricing and, um, even last month, 1.7 million median sales price. Um, so quite a bit higher, but Bellevue as well as Seattle up 5.1% year over year. So even with all the fluctuations, if you listed your house today in Bellevue or Seattle, you’re probably gonna sell for more than you would’ve last August. So what does all this mean? And I think that’s the value of these videos. I think the numbers in the data, it’s great. You can find this information elsewhere. I think getting down to some of the application might be the most helpful for you.

So I think if you’re a buyer and you’re, you’re thinking about all this information, I would want to, if I was a buyer, know that I am in this position of an opportunity and I like that word because it doesn’t work for everybody. It’s not everybody’s opportunity, right? It’s not, it’s not ideal for everybody right now, but I think there are opportunities to get a better price on a house to have better terms in your offer to maybe purchase contingent on the sale of a house. Right? I think those are opportunities for buyers right now. I think for sellers though, if you do have a motivation to sell, right, maybe you have another house you can buy or you need to move out of the area or you’re selling an estate property, or, you know what, you’re moving to another state, don’t be afraid to sell. You’re still getting quite a bit of money for your house. But I think the acceptance piece is that you are gonna sell for less than your neighbors. Buyers don’t want to pay what you got previously, but that doesn’t mean you shouldn’t sell right now. So I think there’s those tensions, right? For a seller, I would say for buyers, there’s more opportunity for sellers. You gotta weigh the pros and cons of a sale right now. You’re not gonna get the peak price by any means, but you’re still getting a really good price if you compare

Yourself with last year. And with previous years, I think perspective right now is key. And as I was speaking with a client a couple weeks ago, they asked me the question they said, are we in a buyer’s market? And I, I could explain a buyer’s market, but their situation I think, spoke to it really well. We’ve been seeing, as I mentioned earlier in the video, that inventory has been picking up over the past few months, but actually last month, going down a little bit and that we’ve been seeing more pending sales and activities definitely been picking up in the Seattle Bellevue area. And what I noticed is they’re looking at a house and in this specific situation it’s been on the market for less than a day. We rushed out to see it. There was this sense of urgency to make an offer within 24 hours. They didn’t want anybody else to get excited about it. And we made an offer really quickly. The seller waited a little bit, got a couple other offers that were even better for more than asking price.

So I think just that situation answers the question. I think we’re definitely not in a buyer’s market. We are still in a seller’s market for sure. If you can sell your house in a day and you have buyers nervous about missing out, you’re still in a seller’s market. But what we’ve seen is a shift in that, right? So it’s still a seller’s market, but it’s a little bit more balanced, but we haven’t hit the balanced market. And we’re certainly a long way off from a buyer’s market still. So I think perspective wise sellers, it’s still a seller’s market for sure, not the peak of the market, but it’s still a seller’s market and buyers. You have some opportunities right now, but it’s certainly not a buyer’s market. Thanks so much for watching my Seattle real estate market update for September, 2022. Again, I mentioned earlier that we’ve got the market watch videos that we’re adding in here as well. So if you have any feedback on those and how they play with these market updates, I’d love to know those are typically quite a bit shorter than these market updates that many of you have come to love. And speaking of that, if you’re enjoying these videos and you want to connect about how this info impacts your own situation, I’m happy to have conversations with you offline. And if you haven’t subscribed yet, please do so.

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