Seattle Real Estate Market Update | November 2018
Home prices in Seattle have remained relatively stable over the past three months after a volatile summer.
Here is what I had to say last month
[Video transcript of November 2018 Seattle Real Estate Market Update]
Hey, I’m Zach McDonald, your real estate agent with Real Property Associates, and this is my Seattle real estate market update for the month of November 2018. I’ll do these updates just like I do all the other ones. Just in case you’re new, I start off with a story and talk about some stats, and then I bring it home with a little bit of application to you as home buyer or home owner in the Seattle area.
I’ll start off with a story. I’ve worked with Monica and Dan before. They sold a house with me back in the springtime in the Lynnwood area, and they had told me that they wanted to buy a house in Edmonds in the near future, but they were kind of putting their home search on hold so to speak. I got a quick text message, it was like two weeks ago now, on a Sunday afternoon saying, “Hey, we found a great house. We stumbled into it at an open house, and we actually do wanna buy.” So, we scrambled to get the approval done. We were able to, and this is where I think the fun part is, we were able to negotiate the price down, because there weren’t a bunch of offers on the house, and it had been on the market for 30 days or so. Then, what’s even better is that once we got the price down, we were also able to do an inspection after we were under contract, which in the Seattle area, that’s amazing. We were able to continue negotiations during the inspection period.
Ultimately, the deal didn’t come together because the seller wasn’t willing to concede what we needed to keep the deal going. They weren’t willing to do all of the repairs. Good for them, they’re back under contract, actually, a few days later with a different buyer. So, we were negotiating it down, and then they decided, “You know what? We’re gonna take our risk and say no. We’re not gonna go any farther down.” My clients said, “You know what? It’s not worth it for us with all this work.” So, they back out and the seller’s back under contract. I think just in a microcosm, that’s a really good picture of what the Seattle market is starting to change to.
Now, it’s still too early, I think, to say this is a permanent change, but right now, you have sellers that are open to negotiating the price a little bit, and even paying some closing costs or fixing some things with the house during the inspection period. You have buyers that are thinking, “You know what? I can negotiate the price down. I can ask for some electrical work to be done on the house, or I can ask for a attic to be cleaned out, or crawl space to be insulated.” There’s things now here the buyer starts to have a little bit more negotiating power, and the seller is not standing on a stronger ground. But the market still favors sellers, because, well, the seller’s able to say, “You know what? I’m not willing to do that much,” and then go ahead and get the house under contract knowing all that they know now.
I think that’s a good segue into the stats. Today I don’t wanna talk about too much of the statistics, because we do that every month, and well, they haven’t changed that much. So, home prices stayed relatively the same as they were last month. The Seattle median price, median sale’s price last year … When I talk about these stats, these are from as of November 1st for up through the month of October, and then the stats are focused on the residential purchases, not condominiums. They don’t factor those into these updates, so those numbers are a little different, but the media sale’s price for residential homes in Seattle was up about 3% over last year, which is significantly lower than some of the numbers we’ve heard in the past, when I’m saying 10%, 12%. Up a little bit but not a bunch.
What we see in the suburbs, Shoreline, Edmonds, in Shoreline we’re up almost 8.5% and Edmonds, which is another city just north of Seattle if you’re not familiar, 13% up over last year. So, the suburbs still are considerably more above where they were the previous year, but Seattle, we’ve seen prices kind of come down a little bit, and they were considerably higher as well, than in the suburbs. What’s interesting, though, is we’ve seen a whole bunch of new listings coming on in the last few months, and we still saw more listings come on last month than the previous year. But what we also saw is more homes start to sell again. So, those inventory numbers we’ve been talking about how that’s kind of the number to watch. Okay, well, how many homes are for sale and how many buyers are out there? I mean, that’s usually one of the big metrics, supply and demand. What we saw is more homes start to come on the market, but not as many new ones, and we started to see more sales.
The last few weeks even, and this won’t necessarily reflect now in this update, but we’ll see it in the next update, is that there have been considerably more pending sales and sold than there have been new listings. I know it stinks to wait a few weeks, but we don’t have all those numbers. The way the numbers work, we get them once a month. We do have some weekly numbers, but the main numbers are once a month. So, we have to wait, but stay tuned because I think we’ll start to see, and we’ll continue to see that these inventory numbers are climbing back down, which continues to keep us in the direction we’ve been going, which is in a positive upwards direction on the market.
As far as application goes, the Seattle real estate market, and one of my lending partners mentioned this in a video, and I think he put it really well that what we’re seeing is a transition from a sellers market to a more normalized market. Simple as that. I really resonate with that, and then what I’ve seen and what I’ve experienced is, it’s not like we’re falling off a cliff right now in Seattle. We’re seeing a transition, though, where sellers are starting to lose some of their negotiating power and buyers are starting to get some back, but we’re not in a free fall right now. We’re definitely leveled out over the last few months. We’re not continuing to see a flood of new listings and a continual drop in prices. I think what we’re seeing is now, okay, people are able to take a break. We’re starting to see prices level out a little bit.
What’s interesting is in 2016, around this same time, people were starting to talk, and I was hearing the chatter in the office, this is it. I mean, this is the end of what we’ve been seeing. They were talking about it a couple years ago. This is the end of the crazy price growth, the multiple offers, things like that. There’s no way this is gonna keep going. There was a lot of conversation that this was the end of that boom and that we were gonna level out, flatten out there. We saw quite a significant drop off, about 7% in home prices from the top of the market in that year is, I think, June down to October. We’ll let the sirens go by. And this year, I was looking at the same numbers. May, we had our top price in … just for residential homes specifically were a little, 800,000, 801,000. Then, we saw prices, and we’re talking about median sales price, price go all the way down to, now we’re at 740 for this month, which was about 8% if my math is correct. So, down definitely, but not that much more than they were in 2016.
The jury’s still out. I mentioned in the last video, I think we’ll see inventory levels continue to shrink as the rest of the year goes on, as it normally does. I think we’ll continue to see that, and it will be interesting to see in the new year, but I do think we’re gonna start to see prices climb back up again as we have in the past. Not as dramatically but I do think that’s where we will head. For sellers, I would say if you’re not in a hurry, hold off, wait a little bit before selling your home. You’re gonna have better competition, most likely, and potentially a better price if you wait until late winter early spring to kind of get the house ready and get it on the market.
If you’re a buyer, you might have seen the other day, i posted a video that says don’t buy a house. I was pretty emphatic. The thumbnail even says that. I explain more about it, and I’ll link it up in this video. I think for the buyer, right now is a good time to be buying. Prices are down quite a bit from where they were. If you’re thinking that you wanna be buying a house now, and then maybe selling it in a year or two and just moving on really quick, it probably doesn’t make sense financially to buy a house. In the video, I explain that that’s actually what I mean by don’t by a house right now. Don’t buy a house to just live in it, and then sell it really quick, because I don’t think we’re gonna see the kind of growth we have over the last few years, and I don’t think you’re gonna actually walk away with more money. You’ll probably actually lose money on that deal.
Now, if you’re planning to live in a house for the long haul, more that 7 to 10 years mark, it would still make great sense to buy right now, because time is really your friend in the real estate market. Timing the market’s always awesome. If you bought a house in 2012 in Seattle, congrats to you. I’m super happy for you. It’s tough to do, though. It’s tough to know, okay, where is the bottom, where is the top, where is the middle, where are we. As much as I talk about it or other people talk about it, we’re all speculating and doing our best job to guess. The reality is time is your friend in the market, and that’s in the stock market and also in the real estate market, and that’s what we’re talking about here. So, if you’re planning to be in the house for the longer haul, that’s when it would make sense to be a home buyer.
So, sellers hold off, just unless you need to, right? If it’s an estate or there’s a divorce or something like that, and you really do need to sell, do it, but if you can wait. If you’re a buyer, this might be the right time to start thinking about buying, but again, you need to consider your specific situation.
Thank you for watching. If this content is valuable to you and you find it to be helpful, I’d love for you to hit that subscribe button. There’s actually a little bell you can ring, as well, that will alert you to other videos that I do. You’ll find on my channel that I post almost daily videos, at least during the week, that are real estate education and also Seattle real estate market updates. These updates, I do once a month, but you’ll see a lot of other valuable content on my page. So, thanks so much for watching. Again, Zach McDonald, and we’ll see you here soon. Bye for now.