Seattle Real Estate Market Update | July 2020
Here are my latest thoughts on the Seattle Real Estate Market: In July, we’ve seen another increase in the median sales price in the Seattle Real Estate Market. A couple of drivers for this are low inventory and record low-interest rates. Despite the COVID-19 pandemic, home prices are continuing to rise, and on average, homes are selling above or at asking price. We’re still seeing fewer listings year over year, but a continued increase in pending sales. This means there’s a lot of competition in the market, especially since inventory remains low.
Buyers, the market is moving forward and remains stable, despite popular beliefs of a housing crash. Sellers, it is a great time to place your home on the market, since home values are strong and competition is high.
Hey, I’m Zach McDonald, your real estate agent with Real Property Associates, and this is my Seattle real estate market update for July 2020.
This month, we’re filming outside a client’s new house. Just gave them the keys! Filmed the welcome home video, so you’ll see some footage from that soon.
Interestingly, here in Seattle, we saw a little dip last month that I talked about in my June market update, and this month we’re talking about increases again in the median sales price. Home prices are up year over year and month over month. So we’re starting to see what I expected to see and that’s that the housing market is continuing to remain strong here in Seattle, despite the COVID-19 pandemic. I think if your major drivers are, first of all, the inventory level is still a lot less homes on the market than there were in previous years and also really, really, really good interest rates; record low. So I think those two things are continuing to drive us forward.
Before we jump into the stats though, I want to share a client’s story just like I do every month. This month I want to feature Katie and Shane. They are clients who recently purchased their very first house in Lynnwood, Washington. They were referred to me by one of my favorite mortgage lenders to work with. They had a previous experience with another real estate agent and it really wasn’t working out for them. They’d lost out on a couple of offers and were just unhappy.
They were connected to me. We met up. We talked about the home buying process and kind of fine-tuned some of the things that they needed answers to. Came up with a plan. After looking at two houses together, we made an offer. Beat out six other offers. They moved into their first house together here a couple of weeks back. Really excited for them. Shane and Katie, thank you so much for the opportunity to be your real estate agent, and I’m really excited about what you’ve got to come.
All right, so now it’s time for everybody’s favorite thing to talk about here in these updates and that’s the stats. Last month in the city of Seattle, the median sales price was 785, a 4.7% increase year over year. Last year we were looking at 750,000 for the median sales price. For reference back in 2018, we were at 785 in June as well.
These stats as a reminder are June stats and they’re from the multiple listing service, and we’re focusing on residential sales as we move forward one these next stats.
King County as a whole, the median sales price was $729,000 and that’s up 4.2% year over year. Last month in Snohomish County, the median sales price was 539,975 and that’s up 5.9% year over year.
What we’re seeing interestingly is that despite the COVID-19 pandemic, despite the media and what’s been going on, despite having to wear masks almost everywhere we go, home prices are continuing to go up in the Seattle area. We’ll talk a little bit more about why I think that is, but the fact is they are, and the market is continuing to remain strong.
A few other stats that people like to hear on a monthly basis, the average percentage of list price. So if somebody makes an offer on a house, typically they are spending 1.4% above the asking price in June and that was up 0.6% year over year. Essentially the average house is selling above the asking price. In Shoreline, we were seeing 1.2% of the list price. In Lynnwood, we were seeing 1.1.7% of the list price. And an Edmonds, we saw 1.5% above list price.
So overall, whether you’re in Seattle or one of the suburbs around, we’re seeing multiple offers on most houses, not every house, but on average, we’re seeing multiple offers. Homes are usually selling at the list price or a little bit above. Occasionally for maybe a not as good of location, maybe a busier road or a house that needs more fixing up, we’re seeing the asking price reduced just a little bit. But on average, again, we’re seeing home selling for at or above the asking price.
So if you’re looking to jump into the market, I would have that as your expectation going in. And if you’re a seller again, there are no guarantees, but if we price right you’re probably going to be getting at or around your list price.
New listings in the city of Seattle; we saw 1,125 new listings in the city of Seattle, which is just 0.1% below where we were last year. In the past few months, I’ve been talking about how we’ve seen fewer and fewer homes coming on the market than normal. We’re talking about like 30, 40, 50% fewer houses coming on the market. But what we saw this last month is it’s starting to open up again. More people putting their houses on the market.
Now going forward, are we going to see more or less going into the summer and fall? It’s really hard to say. I suspect we’ll probably see similar numbers to what we normally see in the summer and into the fall. I don’t think we’re going to see some massive spike in new people deciding to list in September, October than they normally would. I think a lot of the people that did decide to hold off in the spring and early summer, some of them are going to put their houses on the market now, but there are going to be a large portion as well, that will just keep holding onto their house, ride out the uncertainty and see where things go.
King County as a whole was down 5.4% in new listing, so a lot closer to what we normally see. In Snohomish County as well was down 9.2% in new listings. Both Snohomish and King County down a little bit year over year, not nearly as substantially as we were seeing earlier in the spring and summer.
Pending sales were also up in Seattle. We saw 971 pending sales, which is a 14.2% increase year over year. So we’re talking about a little bit fewer listings, just barely, and 14% more pending sales, which means we have a lot more competition in the market now than we were seeing even last year. And just as a reminder, in 2018, we saw a pretty massive drop off in home prices, and that lasted until the beginning of 2019. 2019 was almost like a rest year in the Seattle real estate market. Home prices had leveled off a little bit, remained pretty stagnant throughout the year. And coming into 2020, we were thinking, “Man, home prices are going to be shooting up,” and they’ve continued to rise, maybe not quite as quickly as they were at the beginning of the year because of the COVID-19 pandemic.
Heading into July there were 38.9% fewer homes on the market this year than there were at the same time last year. Again, just super low supply.
Median days on market; seven in the city of Seattle, seven in Shoreline, seven in Lynnwood, six in Edmonds. So the average house is selling pretty quickly. That’s the median days.
Another way to look at averages is the actual average where you put all the numbers together and divide it by the number of sales. And in that case, we’re looking at 20 days on market in Seattle. So whichever way you look at it, the median number is seven in Seattle, and the average is 20.
The last stat we’ll wrap up with is the amount of inventory in Seattle. We were looking at 1.5 months of supply in the city of Seattle, which is 37.5% below where we were in 2019 and just above where we were in 2018.
All right, let’s wrap this all up with a couple of applications.
Buyers, the market is still moving forward. Home prices have not dropped. In fact, they’ve actually gone up year over year, despite the COVID-19 pandemics. So as a buyer, I wouldn’t jump into the market expecting to get any kind of a discount right now. Home prices have remained stable and I suspect they will continue to remain stable. There are lots of different news outlets and noise talking about different things, but the truth of the matter is people are still paying their mortgages. Especially in the Seattle area, I wouldn’t be too concerned about seeing any kind of massive corrections in the housing market.
Now I don’t have a crystal ball, but what we’re seeing is that people are still moving forward with purchases. There’s a lot more consumer confidence again. The stock market’s going up again and we’re heading into an election. So if anything, I’d say that’s the wild card in the stock market. I don’t necessarily think that has any implications for the housing market itself, maybe certainly for the stock market. The housing market and the stock market are two separate animals, so I wouldn’t, as a home buyer be necessarily concerned about the election. It would be more if I was putting money into the stock market, but that’s just my thoughts.
For sellers, it’s a great time to put your house on the market. I’ve been telling clients that are planning to sell, you didn’t miss the boat in the springtime. Home values are still strong. There’s still a lot of competition and if the price is right, you can still expect to see potentially multiple offers and sell your house really quickly.
Interest rates are down, which is fueling a lot of this. Record low interest rates. I’m seeing clients get quoted in the upper twos, which is crazy. I refinanced back in the spring and got 3.25% and I thought that was amazing. Now I’m like, “Oh man, if I would have just waited a couple more months,” which again, I don’t have a crystal ball. I didn’t know that was going to happen. But if I did, I would have loved to wait another couple of months and cash in on those even lower rates. So for buyers, your money is going a lot farther, which is helping fuel the demand in the market.
If you want to chat about your individual situation, whether you’re thinking about buying or thinking about selling, I’d love to be a resource for you and go over the details of your situation. Everybody’s in a different place in life, and it does, and doesn’t make sense to buy or sell depending on your situation. Please feel free to reach out to me. My contact info is down below in the comments.