Seattle Real Estate Market Update | March 2020
Here are my latest thoughts on the Seattle Real Estate Market: The Seattle real estate market is seeing interest rates at an all-time low! If you have a higher mortgage rate, it is a good idea to look into refinancing, and I give a few tips for that. In the Seattle housing market, competition is continuing to rise and prices are climbing due to multiple offers, but we still haven’t hit the frenzied market we saw in 2018. There are new listings coming on the market, but many buyers snatching them up, resulting in an extremely low inventory. Whether you’re a buyer or seller in the Seattle real estate market, it is a great time for you with historically low-interest rates and higher competition in the market.
Hey y’all. Zach McDonald, your real estate agent with Real Property Associates and this is my Seattle real estate market update for the month of March 2020. Normally, I start these market updates off with a story from one of my past clients. This month, I want to talk a little bit about the Coronavirus and its impact on mortgage interest rates. If you’ve been following the news, you’ve probably been hearing about the stories of the Coronavirus in Seattle and you’ve probably also seen the fluctuations in the stock market and also in the mortgage interest rate market. Lots of buyers that bought their house over the last few years got interest rates in the upper threes, lower fours and some, if they bought in part of 2018, early 2019, might’ve even had an interest rate over 5%. And if you still haven’t refinanced your house and you’ve got an interest rate back in the seventies, eighties that was like 10, 15 percent, probably be a good time to refinance if you’re still trying to pay that off.
Just public service announcement. Anyways, interest rates as of March 5th, 2020 came in at 3.29% for a 30 year fixed and 2.79% for a 15 year fixed, according to Freddie Mac’s primary mortgage market survey and they study lots of different mortgages and give us a nice idea of what mortgage rates are going for at the time. Now, of course, each rate depends on your own individual situation, how much you’re putting down, what your credit score is, things like that, but each individual situation’s going to be a little different, but mortgage rates are crazy low right now. All-time low. If you’re somebody who has purchased a home and has a little bit higher interest rate than 3.29, again, there are no guarantees you’ll get that rate, but if you know that your rate is higher, it’s definitely worth thinking about. I’m personally looking into refinancing my loan or at least considering it just because I, on my own house, have a 4.25% interest rate and I got that one back in 2017 and it really hasn’t been worth refinancing until maybe now.
A few things to consider though when considering a refinance, first of all, are you planning to stay in the house? Now, it does cost money to refinance. It’s not free, so if you are going to refinance, you’re going to want to live in a house probably for a year or two years. That’s going to be that recapture period and again, it comes down to how much of a rate drop you’re going to take and again, what those closing costs are going to be. But just plan on, if you’re going to do a refinance, you’re going to want to live in that house, or at least keep it, maybe as a rental, for a little bit. Otherwise, it might make more sense to buy versus refinancing and take advantage of those low rates still, and you could either hold on to the house or go ahead and sell it.
It’s hard to say honestly how much of an impact that Coronavirus is going to have longterm on mortgage rates, but at this point, at least we know that it’s causing rates to drop, and so, if you’re somebody listening to this and you are like, you know what? Maybe I should look into refinancing, feel free to reach out. I’d love to chat about it, talk about your situation, and if it makes sense, connect you to one of my favorite mortgage professionals to have that conversation. Now let’s jump into everybody’s favorite part of these videos, housing market stats. Last month, according to the Northwest multiple listing service, home prices came in at a median of $719,950. Up a little bit under 1%. 0.7% above where they were last year and pretty much the same as we saw in January’s numbers. Housing prices have remained about the same as where they did to start the year, but up slightly from last year.
For perspective, I want to do a little something fun here and we’re going to go back to 2019 and 2018 just to kind of highlight what’s changed in the market over the past few years, and we’ll do this with a few of these stats. The first one here with the median sales price this year, we just mentioned the housing price being a 719,950. Last year, 2019, 715,000. 2018, 757,000 in the month of February 2018. Housing prices were up significantly in 2018 from where they’re at now, but only up just a little bit year over year. Competition is certainly returning to the Seattle housing market, causing prices to start to climb. And this is evidenced in that average percent above the list price. And again, that means some houses are selling below, some houses are selling above, but last month in Seattle, the average house sold for 1.5% above the asking price.
We’re starting to see multiple offers. We’re starting to see those home prices go up. In 2019, we saw houses selling actually almost 1% below the asking price. And in 2018, you ready for this, 7.9% above the asking price. Significantly more competitive than what we’re seeing right now, but we’re seeing a lot more competition in the market now than we were at the same time last year. We haven’t returned to the crazy frenzy of 2018 yet, but we’re definitely starting to see more multiple offers, more competition. An interesting stat though, that’s a little different, this is the percent of the original asking price. Last year, we were seeing a lot of price reductions, and we’re still seeing a little bit of that this year. In 2018, the average percent of the original list price, so that’s that original price, 7.5% above it, okay? That’s only 0.4% lower than that percentage of asking price.
Almost the same. Pretty much nothing was getting price reductions. In 2019, we’re seeing 97.1% of that original list price. We’re almost 3% below the original list price. In 2020, we saw only 0.4% above that original list price. We’re seeing houses selling above asking price on average, but it’s not necessarily that much above what the original list price is on average. We’re seeing houses that are still having price reductions, but we’re also seeing houses that are selling really fast. That’s pretty much what that means. A few more stats to compare over the past few years. Median price per square foot. All right. In 2018, the median price per square foot in February, $445 per square foot. In 2019, that number dropped to $424 per square foot. And get this, even though we’re down considerably from where the median sales price was in 2018, we’re actually up on that median price per square foot.
We’re at $451 per square foot versus that $445 per square foot. New listings are up considerably from 2019. In 2020, we had 741 new listings come on the market, almost 25% increase, but we also are seeing all of them get gobbled up. There’s a lot of buyers out in the market right now, and I talked about this on the last couple of market updates, but there are new listings coming on, but not enough to keep up with demand. And this is evidenced by the dramatic increase in pending sales year over year. In Seattle this month, we saw 665 pending sales, and last year, at the same time, we saw 515. 150 more pending sales this month versus last year at the same time. This has resulted in an extremely low amount of inventory in the Seattle market. We’re right now at 0.8 months of supply of homes on the market. For perspective, 2019 we had 1.4 months of supply, which is still really low number, but dramatically more than where we’re at.
And in 2018, get this, we had 0.5 months of supply. We do have more supply than we did back in 2018, but not enough to satisfy the buyers in the market, and that’s why we’re seeing the competition. However, median days on market in Seattle is still 25 days on market for residential homes, and for the average, we’re up at 36 days on market. There are still quite a few homes that are selling really quickly over the asking price, but there also are homes that are taking a little bit more time to sell. What does all this mean? For buyers, this means that you can get historically low-interest rates right now. We talked about the interest rates at the beginning of this video, about how the Coronavirus has been impacting and influencing those mortgage rates and they are at historic lows.
You could either capitalize on that low-interest rate by buying a bigger house or you could just buy the same amount of house you would have bought and get a lower payment. But what this means is there also are a lot of other buyers out in the market right now trying to capitalize on these same interest rates. And there aren’t very many homes on the market, so there is a lot of competition in the market, and you might find yourself in a multiple offer situation. It’s possible, as we head into the spring, that there’ll be more homes coming on the market and it might temper the multiple offer situations. We’ll see. I’m not super confident though that there’s going to be a flood of new inventory here in the spring. I think we’ll definitely see more homes coming on the market, but I’m not sure if it’s going to be enough to satisfy the desire of buyers.
I think we can expect this year, in 2020, just like we normally do, to see prices rise into the spring and early summer. Sellers, what this means for you is that it’s a great time to be getting your house on the market. Not only is this normally the time of year where you’re going to want to put your house on the market these next few months, March, April, May, June, but you also have a lot of buyers out there trying to take advantage of the low-interest rates, and plus you have some buyers that maybe wouldn’t have qualified for your house otherwise that now qualify to buy a bigger, better house because of the mortgage rates. It also is a great opportunity for you if you want to downsize and maybe buy something smaller and capitalize on those low-interest rates, or if you wanted to upgrade your house and buy something bigger and capitalize on those interest rates.
Really, what I’m trying to say is whether you’re a buyer or a seller, or you’re looking to refinance, it’s a great time to do that right now in Seattle. Thanks so much for watching my Seattle real estate market update for the month of March 2020. If you have questions about the content in this video, whether you’re thinking about refinancing or you’re concerned about the Coronavirus, or maybe you’re thinking about making a move, buying or selling, I’d love to be a resource for you and sit down for coffee, lunch, or even just a phone call and add some value to your situation. And if you know somebody else who could benefit from watching this video, please share it with them.