Seattle Housing Market Watch 09/19/2024

Hey, i’s Zach McDonald, your real estate agent with Real Property Associates? And this is my Seattle Housing Market Watch for September 19th, 2024. Some big news yesterday in the real estate world and in the news in general, the Fed dropped the rates a half percentage point, a half percent rate drop yesterday, really big news, but mortgage rates did not go down. They actually went up. So a lot of people have, I would say, some confusion about the Fed rate and the relationship with the mortgage rates. The mortgage rates are not directly connected to the Fed rates, although there is a correlation. Over the past couple months, mortgage rates have been coming down in expectation of a Fed rate cut, but the Fed rate cut does not make mortgage rates go down. Now, auto loans, those went down to half point yesterday, a boat loan that went down to half percent yesterday, but not the mortgage rates.

Now, the Fed made a huge drop here, and I was talking with my loan guy and he said that the Fed dropped the rate for the first time since 2020 at the beginning of the pandemic. And also this is the most aggressive rate drop since 2009. So we’re taking some drastic measures here, but at the same time, mortgage rates are still hovering right around six and a quarter today on Mortgage News Daily. They’re saying 6.17 was their average rate for a 30 year fixed rate. So again, something that we’ve been talking about for a while on this channel is that mortgage rates have been coming down, but at the same time in anticipation of this fed rate drop. So hopefully it’s not a surprise for you that rates didn’t keep going down. If you’ve been following along for a little while, rates have been essentially baking in this expected cut.

Now, if we wouldn’t have seen a cut, we would’ve seen rates skyrocket or at least go up considerably. And conversely, maybe if we saw something even more drastic, we would’ve seen a reaction to it. But this was expected a quarter to a half point. And so nothing’s really changing. Now, how does that affect housing, right, because the mortgage rates do affect the buyer pool, the affordability for housing, and in a lot of ways the demand for housing as well, right? More people equals more pressure on the existing homes. And as of late, we have been seeing things picking up a little bit in the housing market coming out of the summer, things did slow down mid-summer to end of summer, which is normal, and we’re seeing more listings coming on the market. Again, a normal phenomenon. I’d say this is that final push before the holidays.

These next probably two to four weeks, mid-October, early November, things start to slow down significantly. So as we’re looking at new listings in King and Snohomish County, we had 904 new listings coming on, and that’s the largest number I’ve set in a little while as far as new listings. And we’ve also seen 523 price reductions over the past week, which is also a large number. So there are some houses that have been sitting over the summer, or at least for a few weeks, and those are now seeing price reductions. We’re also seeing some new listings coming on the market. And again, this is a very normal thing happening in the market, but there are still some houses I saw last week, and I shared this, that we’re selling way over asking price, and I’ve had a few listings recently sell over asking price, but I’ve also had a few that have taken a few weeks to a month to sell, and that’s a normal part of the buying and selling process this time of year as we’re looking at contingent sales, 20 contingent purchases.

So we’re kind of staying in line with buyers, being able to, in some cases, in very small cases, as we look at the number of pending listings 916, and then there were 20 on top of that, that went contingent. So the pending is not counting a contingent sale. That’s a very, very small percentage. 20 out of 936 in the past week were contingent on a home sale. So not an easy way to buy a house, but possible in some cases, usually when a house is sat on the market for a while. But the pending sales number is huge here. So 924 new listings, right? The 916 pending sales is the largest number that I’ve mentioned in a while as well. And the pending sales, just for anybody who’s new, the pending sales are, I would say closer to sold. So some of those are houses that were already pending inspection are now pending, and also the houses that are new to that pending status.

So it’s not just houses that went from active to pending, it does include some of those, but a large majority of them usually are pending directly. Now, listings sold 595, we’re kind of in the middle of the month, so more of the closings tend to happen towards the end of the month, but we’re still seeing that the buyer activity is picking up. That’s a lot of pending sales, and that’s usually a leading indicator that more is to come. So a couple big takeaways from today. Number one, mortgage rates have been declining and are now around 6% or six and a quarter. That’s been the range the past couple of weeks, and that’s significantly lower where we were last year, and even at the peak last year up in the low eights. But rates are not yet into the fives. They might get there, they might not, we’ll see.

But right now, rates are significantly lower and we’re starting to see the buyer activity picking up. So right now, we’re not in a frenzied market yet, but it is possible that we will get there come next spring. So right now is, I would say more opportunity for buyers with more listings coming on the market this next month to month and a half, I would say is a window of opportunity rates are down, but maybe not to where they will, but there’s also enough on the market where you’re seeing price reductions, 523 price reductions. So as a buyer, that just means, Hey, I might not have to compete right now for everything. There are houses that are great, maybe they were just slightly on the higher side of the price. They might sell for asking price or just below. And there are also some houses that you’re going to be competing on if you wanted to.

You could take a look at the most recent Seattle real estate market update. I also have the King and Snohomish County updates. We talk a little bit more about the stats as far as dollar numbers and percentages over asking price, but we are seeing the normal trends, but those are starting to pick back up as we’re looking at these numbers here, the buyer activity, the listing activity, and both of those are good signs heading into the winter, and then again spring of 2025. So my thoughts here as we head into the winter, I’ve been sharing these for a little while now, that this is a great window for buyers to start with the search. And in previous years when the market was more competitive, it was a lot easier to buy in the fall, end of summer and the fall than it is kind of end to winner early spring when there’s the most amount of competition typically for the listings. So buyers, sellers, whatever your situation is, even if you just have questions about the housing market here, I’m happy to be a resource for you. Feel free to reach out in the comments below. You can send me an email or text. Happy to connect.