Seattle Housing Market Watch 11/07/2024

Hey, I’ll Zach McDonald, your real estate agent with Real Property Associates, and this is my Seattle Housing Market Watch for November 7th, 2024. Well, we just wrapped up the presidential election. There’s a lot of feelings right now about what just happened. Some people are really excited, others not so much. And as we’re looking at the housing market, because that’s what we do here, I think it’s important and we’ll talk a little bit about the impact of the election potentially on the housing market towards the end of the video. But for now, I want to kind of zero in on the stats that we talk about every week. I want to share a little bit about a couple recent negotiations as well, just to give you a little pulse on the market in different parts of Seattle. And then we’ll talk a little bit about what I think is going to be happening here as we head into the remainder of the year, especially in light of the presidential election.

So let’s first talk about the week over week changes here, and keep in mind that I added a few bonus days in here after the election, just kind of see how things are playing out. So if we look at last week’s new listings, we saw 455 new listings in King and Snohomish County. We saw 390 this week, which is not surprising to see fewer listings coming on the market, especially during the election week. At the same time, it’s normal to see fewer and fewer listings coming on the market as we wind down the year. And this is just the beginning of that trend. We’ve been seeing it for the last few weeks, and we’re going to continue to see fewer and fewer new listings coming on the market as we head towards the end of the year. And we are most likely also going to see fewer of the other things as well.

So we talk about price reductions. Last week we had 383 price reductions this week, 278. It stands to reason that even if you have the same percentages of price reductions, you’re going to see fewer and fewer as you have fewer listings on the market. And coming on the market for the contingent purchases, we typically talk about this stat just to give an idea for the ability of a buyer to purchase a house that’s contingent on selling their current house. That’s a contingency that doesn’t get anybody excited about selling to a potential buyer, especially when the housing market is hotter. At the same time, there’s still possibilities and opportunities for this, and there has been for the past few years. So the housing market has not reached a point where we’re seeing zero contingent purchases or one or two in a week. We’re still seeing the same kind of 20 or so contingent purchases that we’ve been seeing for the last couple of years.

Let’s also look at what’s coming off the market. So we looked at what’s coming on the market, new listings. Now we need to also look at the houses that are coming off the market, right? Listings that are pending, listings that are sold, and listings even that are expired. So a lot of the expired listings end up coming back on the market. So we had 108 expireds, we had also 105 canceleds, and in those two we saw 67 come back on the market. So some people taking their houses off the market this time of year. It’s typical to see people maybe take their house off for the holidays. I’ve even had clients that were talking about this very thing in both cases their houses ended up selling in the last week or so before making that decision. And so as the amount of houses on the market starts to dwindle, that’s when you start to see some of those houses that were taking a little bit more time to sell come off the market.

Now let’s look at the pending sales here. 666 pending sales last week, 775. But again, we’re kind of at the end of the month, so we had a little bit of the end of October in there. A little bit of those that bled into the new month that we’re supposed to close at month end. 667 is a good amount. And look at the difference here. New listings, three 90 versus 666 pending sales. The solds 584 down from last week at six 40, but significantly more than the new listings. And again, that’s just the beginning of the trend where we’re going to see more houses selling than we are coming on the market, which is going to shrink the supply of housing that’s available for purchase. And this is just a normal cycle here in Seattle. We’re going to see by the time January comes around, not very many houses available, and we’re going to start to see quite a bit of competition.

And I want to talk about the competition just a little bit because every neighborhood’s different. Every price point’s different. Every city’s different, right? So King in Snohomish County is the general Seattle area and Seattle itself. I made a couple offers with clients in the past few days in Seattle, one in, we’re going to call it Ballard, but just a little bit north of Ballard in Whittier Heights in this house. This house had a lot of work that was needed and it had the potential to build one of the backyard cottages or ddus. I made a video about that a while back with one of my friends who builds these ddu, and in this case, we were one of 44 offers on this property, and it was listed well below, I believe what it should have been as far as its value. But it ended up we were close to a couple hundred thousand dollars over asking price, and we did not get it.

Somebody else got it. It pretty much needs to be completely redone, plus has the potential to build A-D-A-D-U. Maybe they could tear down the house, build a few houses on the lot, but kind of an interesting situation. It’s fun to participate in them. It’s better to win. But it is interesting to get that intel a little bit earlier maybe than everybody else would’ve gotten it. I think the other situation was a house in Queen Ann. Great House, super nice, well done. It was pretty much rebuilt about 20 years ago, and my clients were in a position where they were able to pay cash and offer cash. They were considerably over asking price, quick, close. There’s no contingencies or ways to back out. I mean, they wrote a great offer in this situation. They ended up getting beat out by a couple other offers on this one, and they were probably in a seven to 8% over the asking price range.

It seems like it went closer to 10% over asking price. I don’t have an exact number to share here, but at the same time, it was interesting to see two different pockets having that competition and different price ranges, having that competition. But again, a lot of times in Seattle comes down to the location. Also the house itself, because sometimes the lot, especially in Seattle, you might be in an area where there’s some more hills like Queen Anne. So sometimes the neighbors got a flat lot, but the house next door is pretty steep. Maybe you’ve got some stairs getting up and down, maybe it’s a little less desirable. Maybe the yard’s completely unusable. Maybe there’s not much yard to speak of aside from the house. So it’s always interesting seeing how it all plays out. But in this case, a couple different competitive situations. So there’s certainly people that are out there looking to buy houses and especially houses with the DADU potential 44 offers on one property.

I think it’s starting to catch on this idea of buying and not just rehabbing or fixing a house and flipping a house, but if you can add that with some type of construction project, it increases the number one profits for the developer, but it also increases the value of the properties for the homeowners because having this potential to build A-D-A-D-U in your backyard does bring additional value to the table. And we saw that on this house. That’s really, it needed a lot of work, right? And if it didn’t have that potential, I think we would’ve had a few offers to maybe rehab it, fix it up. It certainly wouldn’t have sold for what it did, but having that potential added a lot of extra value to the property. So I think for a lot of Seattle homeowners, especially if you live in some of the areas that have alleys or if you’re on a corner lot, those are some prime DAU development sites, and you don’t need to have a huge yard to be able to build one of these DADU units.

Okay, let’s talk about mortgage rates because man, where are we headed, right? We’ve been talking about mortgage rates for a while. We just had a presidential election. What’s going to happen to mortgage rates? And on one hand, the elected president, Donald Trump’s been talking about how he wants to bring mortgage rates down, but it would stand to reason that as we see the economy jumping, I mean the s and p 500 over the past few days has been jumping, assuming that the economy’s going to get better, if the economy’s going to get better from here, I don’t know how much rates are going to be really coming down. And the bond markets actually responded, and we’re seeing that mortgage rates have, they’re down 0.05% from last week, but they’re pretty much stayed the same as where they were. And yeah, there’s probably going to be, there might be a fed rate cut next week, but at the same time we’ve been talking about how those rate cuts are already baked in to where the mortgage rates are.

So at this point, we may actually see rates hovering in a higher place than maybe with a different outcome in the election. But now we’re going to have to recalibrate and figure out, okay, are we going to see what’s going to happen? Right? What is going to happen? I think that’s the big question. I personally think that for at least the short term, we’re not going to see rates dropping as much, but we could see at some measures that could be taken to start to bring these rates down. We’ve had quantitative easing in the past. I wonder if that might come back to help stimulate the housing market in particular. I think another thing that people have been talking about a lot is affordable housing. What’s going to be done here? That was a conversation for both presidential candidates and in the Seattle area. There’s been, I think personally in the city of Seattle and Washington’s been adopting some new rules to help bring more affordable housing, such as being able to build backyard cottages and renting out basement apartments and increasing the development potential of a lot of these properties and some of the larger metro areas.

Some of these areas are being mandated to allow some of the same rules. Seattle’s adopted and Seattle’s rules are actually going to be changing here too. So the fact that in Seattle you have so many different housing options inside of each neighborhood is really interesting and could potentially help a lot of other places in the country. It’s not as pretty, it’s not a planned development. You don’t have a HOA, but in the city of Seattle itself, there are neighborhoods where you drive down and it looks like it did a hundred years ago. You have these beautiful old houses, but in the back you’ve got another house, a brand new house that somebody can buy that’s smaller. Maybe it’s in the six to $700,000 range. And that may not be affordable for some, and it certainly isn’t in some parts of the country, but in Seattle, that would be considered more affordable housing than some of the other options available.

In some of these neighborhoods, you could spend 2 million for a house and you could also get a townhouse or A-D-A-D-U that is much more affordable and more less than half the cost. So I think for Seattle, they’ve already been taking a lot of proactive measures to help with affordable housing. It’ll be interesting to see on a national level what that looks like. And as our state starts to play out some of these new rules, how that affects some of the suburbs around the Seattle area as well. I think some of the older areas like Edmonds or Shoreline have some of the bigger potentials for these ddus, especially with the way that they were planned without having the HOAs not having the communities. They have these grided streets and there are alleys in some cases. So places where the development happened before the uprising of the planned neighborhoods and the HOAs.

I think there are greater possibilities for some of this increased density around the city and also in other parts of Washington. So again, it’s going to be interesting to see, I think that overall that the housing market has been trending in a positive direction, it’s been improving and stabilizing. I think we’ve already seen that. I think the mortgage rates are still a big hindrance to the affordability of buying a house here in the Seattle area, especially with the prices nearing the record highs, even with the inflated interest rates. So again, a lot hinges on the mortgage rates coming down and how some of these results of the election start to play out. But I’m optimistic as a homeowner here in the Seattle area that I will be able to refinance my house at some point. I’m one of those that traded in my mortgage rate and I have a higher rate.

I’m at 7% right now, and I would certainly love to have my rate coming down so I can refinance. So I’m in the same boat as many. If you have questions that are more specific to your situation about the housing market here in Seattle, I’d love to be a resource for you. If you have questions about the Ddus and what that looks like, or maybe you own a property that might be a property where you could build one of those, I’ve got a good buddy who does those projects, and I’d be happy to talk with you a little bit more about that as well. I.