Seattle Real Estate Market Update | September 2023

Hey all, it’s Zach McDonald, your real estate agent with Real Property Associates, and this is my Seattle Real Estate market update for September, 2023.

I can’t believe it’s September already. And really for me, a lot’s changing right now. We got the kids getting back into school. First day of school was yesterday, adjusting back to some of those normal rhythms of life, which I think are really good. And I guess if you’re in that same position, I wish you all the best. It’s been a little bit of an adjustment as you can imagine for us right now, we’ve got four kids, three of them in school, and as I’m looking at the market, it’s interesting to think about what that does for the housing market. And this month, instead of doing a client story or something like that, I just want to share some thoughts around what happens in the summertime here and how that changes in the fall. Typically, housing market here in Seattle, typically in the summertime, you would think it would be hot, but it really does slow down in interesting ways.

There’s usually fewer buyers out looking for houses, and a lot of that is because people are on vacation. They might not completely stop searching, but if you’re on vacation and then you come back and you look at houses and then you go on vacation again and then you’re gone for the weekend, it’s not a continuous search. And that’s what you see in a normal rhythm. When you’re in your normal job, you’re not taking your vacations. A lot of people save that for the summertime here. So what I see every single year is kind of this little bit of a bump in the summer and things tend to pick up a little bit in the fall. We’ve already seen over the last week more houses coming on the market since we got back from the holiday. Not a large amount of houses, but things are starting to pick back up again after a little bit of a lull last week.

And really we’re behind as far as housing supply goes for the summertime as opposed to last year and previous years. And I suspect that we’ll still be in a place where we have less than normal, but we should see more houses coming on the market here this month and into October. But what’s going to happen inevitably in November, December, things are going to slow down a lot. There’s going to be a lot less houses coming on the market, a lot less people buying, and we’re going to see the supply of houses dwindle again as we head into 2024. That’s what normally happens. That’s what I expect to happen this year. But I do think that here the next month, month and a half, we’re going to see a lot more activity in the market and really the final push I would say, for the rest of 2023.

So if you have questions about all that, or maybe you’re somebody that’s thinking about selling or buying and you don’t want to miss the last window here of year, feel free to reach out today. I want to do something a little bit different. And if you follow along with the channel, you’ll see that normally we look at a three year window. There’s no particular reason that I choose to look at a three year snapshot and we look at the stats, but I think sometimes too much data or too much of a look back isn’t necessarily helpful for where we’re at. Just because we were somewhere 10, 15 years ago doesn’t really mean it affects us right now. So although it’s cool to see the trend, and if we look at median sales price, we’re going to see that there’s been a massive uptick in values for homes in Seattle, Bellevue, and really across King and Snohomish counties, the two counties that I service.

I do however think it is important to look back sometimes. So today we’re going to look back and I think it’ll be helpful to really see where we’re at in the housing market right now to look back. So today I want to do that. It’s a little bit different, but bear with me. I think you’ll get some value out of this conversation. So let’s start off with media and sales price. Now, there’s nothing too fancy to share here, but if we look at where we’re at right now, it’s pretty clear if we look back that we’ve come a long way. And really since 2014 or so, home prices have taken off in the Seattle area. And last month in Seattle, median sales price was 883003% down from last year. And again, I think we’re going to see it be up at the end of the year, but 3% down Bellevue is 2.8% up year over year.

1,644,500 was a median sales price in Bellevue. I did add on King and Snohomish County here just for some perspective. I do King and Snohomish County updates as well. So if you want to pay a little bit more attention to them specifically, I do those updates separately. I don’t want to spend too much time on ’em. But you’ll notice if you’re curious, you can see the county averages there as well. That’s the orange and the purple. Now let’s look at some of these other data points, specifically close sales, new listings and the pending sales. I think that’s going to tell a lot of the story about what’s going on here. So if we look back at the data from 2008 to 12, you’ll notice that we had quite a drop off there in the closed sales activity. And it looks a lot like what we’ve experienced in 2023 if we’re really honest.

The data is similar as far as closed sales activity in Seattle, Bellevue, really across King and Snohomish County. King County jumps out at us because, well, it’s the orange one at the top. But the difference here and why we’re not seeing prices dropping dramatically at this point, why I think prices have stabilized is because new listing activity looks a lot different. If we look at the data in 2008 to 12 in that window, you’ll see it start to dwindle. And specifically in 2011 and 12, we saw the largest dropoff there, but it doesn’t look anything like right now. Right now we’ve seen a substantial drop off from where the normal numbers have been in Seattle, Bellevue, king County, Snohomish County, we’ll see a similar pattern. Again, it’s more pronounced if we’re looking at King County because we have a larger sample size. But you’ll see the new listings have dropped off dramatically.

Now, pending sales have dropped off considerably in 2023, especially if we’re looking back at the previous few years. And again, it doesn’t look that different from 2000 nine’s data. But again, the big difference is how many houses are coming on the market. So we’ve certainly seen fewer sales, less buyer activity, less close sales, but the big difference this year, something we’ve been talking about is that we’ve seen a massive drop off in the new listings. We’ve talked about why in some of the other videos, I’ll spare the long-winded answer, but the truth is interest rates are so much higher right now. People are not wanting to trade the interest rate they have for a new one. That’s a huge driving factor right now for people not selling their houses and buying a new one. Nobody wants to have their payment jump that much, and unless they can really get a much better house, the trade-off might not be there.

And if we’re looking at the homes for sale number, we’re going to see what I just shared. Show up on the graph. The homes for sale numbers ballooned in 2007, 8, 9, 10. You’ll see it 11, 12, massive amounts of inventory or houses available for sale, which puts a lot of downward pressure on prices. You’ll see that those numbers have slowly dwindled down. And last year we saw an increase in inventory for sure, but if we look back at some of the previous years, it doesn’t look like much in comparison. The same is true when we look at the supply numbers, which we’re going to look at the amount of houses versus the amount of buyers or houses coming off the market. And you’ll see, again, we saw that those numbers rose last year in 2022, and in a lot of places we’re seeing that number now, this year actually down year over year, but getting close to 12 months in Bellevue, back in 2009, massive amounts of supply.

Again, that just means that buyers have a lot of choices. And that hasn’t happened here recently. I think some people feared that, and maybe that’s what the future holds. I really doubt it because we just don’t have enough houses out there. There’s not enough and hasn’t been enough construction over the past decade to keep up with all the people that have come to the area. And again, the markets are different everywhere, but we’re talking about the Seattle Metro area right now. There is a video that I made a while back, and I’ll link it up where I talk about some of the issues that we’ve had with creating enough supply. And I think there are some local geographical issues with that as well. With Lakes and the Puget Sound, it really pushes people farther north and south. It makes it a lot more challenging logistically to build than it does in other places.

And when you do, you’re building a lot farther away from where people want to be. So it makes the areas closer in more expensive, hence South Snohomish County and North King County being a lot more expensive than some of the neighboring areas. But we’re seeing that even with higher interest rates, 7.29% as of today on Mortgage News Daily’s website, that housing prices have stabilized, relatively speaking in King and Snohomish County. And again, Seattle and Bellevue specifically. I think a lot of that is because there hasn’t been as much inventory or supply coming on the market. And so as much as interest rates have increased and as much as the affordability has decreased for homes, you’ve seen things remain relatively stable since the same time last year. And we’re seeing that even right now houses. And if we look at the original list price, I think this is the better metric in a market like now.

But if we look at original list price in Seattle, 0.1% above asking price, what Bellevue? 1.4% above original list price, king County as a whole, 99.8% of the original list price since Snohomish County, 99.7% of the original list price. So although things are not selling for 10, 15, 20% over asking price like they were, it actually was pushing that direction earlier in the spring, by the way, when inventory was lower. As a whole, houses are still selling relatively quickly as well. And if we zoom out and we look at the Seattle metro area, we’re seeing number one that interest rates are a lot higher. And that’s the same thing all across the country. We’re seeing that the amount of homes coming on the market is significantly less than last year, but really normal over the past, let’s say 10 years or so. And even historically speaking back 15 to 20 years as well.

We’re also seeing that home prices are about where they were at the same time last year and maybe even going to be higher than they were when we get to the end of the year. And we’re also still seeing that houses are selling, yes, fewer houses, but they’re keeping up with the amount of houses coming on the market. So in summary, I really do think the Seattle market has stabilized. I also think that fear has decreased. If you compare it with last year, yes, interest rates are still higher. Yes, it is still more difficult to purchase a home right now. I think it is easier now than it will be when interest rates start to come down, but for now, housing prices are where they’re at. The affordability is what it is, yet people are still needing to buy and sell homes. So thanks so much for watching this month’s Seattle Real Estate market update. I hope the different cadence and a little different look at the data is helpful for you to get a little perspective on where we’re at. If you have questions about your situation, you’re thinking about buying or selling real estate, or heck you just want to talk about the housing market, feel free to reach out. I’m happy to be a resource.