Seattle Real Estate Market Update | February 2020
Here are my latest thoughts on the Seattle Real Estate Market: The Seattle real estate market is heating up! Home prices in Seattle and surrounding areas are increasing due to a lack of housing inventory and a higher amount of qualified buyers in the market. Classic supply and demand principles are at work. For buyers and sellers, competition is heating up too. Pre-inspections, multiple offers, and out-bidding are making a comeback.
Hey guys. Zach McDonald, your real estate agent with Real Property Associates and this is my Seattle real estate market update for February, 2020. We’re going to start this market update off with a story just like we do all the other ones and this month we are going to focus on Jaimin and Riddhi, two clients of mine who bought a house back in the summer. Their story is interesting because it’s a big contrast from how the market was then to how the market is now.
When they purchased their home, it was competitive a little bit, but not extremely, specifically, in the Kirkland area where they bought their house. When we made an offer, they were one of two offers and in their testimonial video they did recently for me, they talked about how I helped them beat multiple offers and we had a strategy, which we did. We had a good strategy, but in their situation we only ended up paying I think $2,000 above the asking price to secure the house and we didn’t include an inspection contingency. There was a pre-inspection done so we didn’t have to do too much and be too creative to beat this other offer. We just had to beat a full price offer with an inspection contingency, so not super complicated, but fast forward to a few weeks ago.
I ended up not even making an offer with clients on this house in Beacon Hill. We talked about it. We decided against it just based on the price point where it was and just knowing there were going to be lots of offers, really competitive. Well, turns out this house sold for over 20% above the asking price. I believe it was like 27% above the asking price, and that equated to over a $100,000 more than what the sellers were asking and quite a bit more than these clients are looking to spend. We’re still looking. These clients, we’re still looking for them, trying to find them a good house, but that competition has heated up significantly. We’re going to talk a little bit more about that here coming up.
Now we’re going to talk about everybody’s favorite part of these videos, the stats. Median sales price in Seattle last month was $720,000. That is up 4.7% from the same time last year. Prices are starting to rise as I suspected last month. King County overall, so the two counties that I serve is King County and Snohomish County. King County, 5.7% up year over year and Snohomish County, 8.1% up year over year. Interestingly in King County there are 46% fewer homes for sale than there were last year. In Snohomish County, 34% fewer homes for sale than the same time last year.
What we’re seeing, the trend we’re seeing is prices are going up not just in Seattle, but in King and Snohomish counties as a whole. A big driver in that is the lack of supply. There are a lot more buyers in the market. I’m hearing things like record numbers of pre-approved buyers and honestly, I don’t know how much of that is hype, but I know personally, I have quite a few buyer clients that I’m working with, but there’s just nothing to show them. There aren’t enough homes on the market to show them that meet their criteria.
A few other stats that you might find interesting. In Seattle last month there were 20% more close sales in 2020 than in 2019. There were also 17% fewer listings coming on the market. We’re seeing that trend, right? Fewer homes coming on the market, more home selling, which means inventory’s going down. In Seattle we ended the month with about 34% fewer homes on the market and that equates to below one month of supply. What that means for those that haven’t watched these videos before, if no new homes are coming on the market over the next month, we would be out of homes to sell. That means supply is extremely low. For perspective in a more balanced market, you would see three to four months of supply and that’s a more equitable market for buyers and sellers.
There’s a little bit more negotiating room and that’s mainly because there are more than enough houses for all the buyers in the market and currently we’re just barely keeping up if not even a little bit behind all the buyers that are in the market. We’ve been seeing over the past few months the number of supply slowly ticking down. Before December we were up over a month and we were up over two months in the summertime, so we’re just slowly seeing that number going down and we’re back into those 2017 numbers where we’re seeing all of the competition in the market.
The big message for the Seattle housing market in 2020 so far is that competition is heating up. There are a lot more buyers in the market, a lot fewer homes on the market and we’ve seen over the past couple of years and really since the beginning of 2018 what this means for you if you are a buyer is that you’re going to be competing again with other people for the same houses, specifically the really good ones. The asking price is going to become more of the starting point versus the ending point for the negotiations on the house. Now in a more balanced market, there’s opportunities to negotiate and negotiate the price downwards. Last year there were opportunities to do that. I had clients where we were able to negotiate not only the price but some of the terms and even get repairs done and closing costs paid, things like that.
Well, fast forward to right now we’re doing pre-inspections again and we are waiving inspections with pre-inspections in place. I always think getting an inspection is a good idea, but we’re starting to make our offers more competitive and more in favor of the seller versus in favor of the buyer. Personally, I don’t like that. Let’s just be real honest. I don’t like it. I’ve been a buyer before too and it’s really uncomfortable to start paying above the asking price and start waiving contingencies and having those conversations. How can I make my offer better for the seller? But to be honest, if you’re trying to buy a house in 2020 or in general in the Seattle market right now, you need to be competitive. Buyers just have that framework, have that expectation when you’re going into the home buying process here this year.
If you’re somebody who’s thinking about selling here or maybe you’re just a homeowner, know that home values are going to be going up, at least in the near future. I don’t have a crystal ball. I don’t know what’s going to happen in the long run, but right now what we’re seeing at least for the next few months is prices are going to start going up. I wouldn’t be surprised to see home prices possibly even eclipsing the 2018 highs by the time the late spring, early summer comes along, but it might not happen, but I wouldn’t be surprised.
Thanks so much for watching my February, 2020, Seattle housing market update. If you made it all the way to the end of this video, you’re a rock star. Please give it a thumbs up. If you want to see more videos like this, I do a market update every single month. It’s a great place to stay up to date on the Seattle housing market, as well as see lots of other valuable real estate content. So, please subscribe on my YouTube channel!