Seattle Real Estate Market Update | April 2021

 In #Seattle Real Estate Market, #Thoughts

Video Summary

Here are my latest thoughts on the Seattle Real Estate Market:

The Seattle real estate market breaks its record-high median sales price! Both Seattle and Bellevue set their median sales price records in March. Prices continue to explosively increase on the Eastside and in the surrounding suburbs and low inventory is a large driving factor. The Seattle housing market is extremely competitive! We’re in a heavy seller’s market and homes are selling significantly above the asking price. In order to be competitive as a buyer, you’ll need to be prepared and willing to be aggressive.

Video Transcript:

Hey all, Zach McDonald your real estate agent with Real Property Associates, and this is my Seattle Real Estate Market Update for April 2021. The Seattle housing market is off to an extremely hot start this year. I know a lot of the markets around the country are experiencing very similar things and Seattle has experienced this in the past, but this year we’re already bumping up against the highest prices that we’ve ever had, and Seattle and Bellevue, both set median sales price records in March, and normally this happens later in the year. For example, Seattle last year set its previous record in August 2020. Typically, we see that in the March and June timeframe, so a couple months early, I’m thinking we’re going to continue to see prices keep climbing. But before we get too far into the stats here, I want to continue with the flow of these videos.

 

Typically, I share a story, I share some stats and I share a little bit of application. Now for this month’s story, we’re going to focus and highlight on the Ross family. They worked with us to buy a house and also sell a house in the last month and a half. They were luckily able to avoid a multiple offer situation. We found them a house in North Edmond’s Meadowdale area. They were able to make an offer before the offer review date. So they were one of those people within 24 hours, got their offer in, zero contingencies, very strong earnest money, and they offered…guys, they offered 175,000 over asking price. So super, super strong offer. And that’s what it’s taking right now to be successful. So if you’re watching this as a buyer, that’s just something to have in the back of your mind. They came out really aggressive. The neighbor ended up selling their house a couple of weeks later and they had a smaller house and they waited for their offer review date and they ended up getting more money for the smaller house than my clients paid for their larger house.

So part of that’s the market, the other part is they got in early and made an enticing enough offer that the seller chose it. I guess if you’re a seller, there’s a lesson in there too. Maybe it makes sense to wait for your offer review date. We were also able to help the Ross family sell their house. They had purchased their second house, so they had to sell their first one and we got them $880,000 on their small rambler in Edmonds, and the list price was 800k, so they got $80,000 over asking price, well actually 85k because we listed just below 800k, but great outcome for them. Ross family, thank you so much for the opportunity and privilege to work with you as your real estate agent. And I hope you guys enjoy your new house.

Let’s jump into the stats now, which is why I know many of you are here. And I mentioned earlier, Seattle and Bellevue, both set median sales price records in March. So what we do here is we look back at stats from the previous month because that’s what we have. So beginning of April here, we’re looking at March’s data and Seattle’s new median sales price record, get this, $818,000, which is only up 4.2% from last year. So Seattle, what we’ve been seeing is the prices have not been climbing as fast as the surrounding areas.

Bellevue on the other hand, their median sales price…you ready for this, $1.54 million is the median sales price in Bellevue. So if you’re looking on the east side, you’re going to be paying a substantially larger amount than you would to live on the west side, and Bellevue’s prices are up 12.4% year over year. Now, if we look a little bit farther north at some of the suburbs in Snohomish County, we had 18.6% increase in Lynnwood. Median sales price in Edmonds, which is where I live right on that Shoreline/Edmonds border, 22.2% growth in Edmonds, which is absolutely crazy! I think the biggest thing as we’ve been talking about in these updates for months, that’s driving the market, we’ve got the low inventory. So there’s just not a lot of houses to sell. Edmonds last month, had 0.2 months of supply, which is less than a week. So pretty much once the house comes on the market, it’s gone. And the other areas, Lynnwood, Shoreline, Seattle, Bellevue, all these other areas, all had low inventory. We’re talking about maybe a half a month, so a couple of weeks of inventory, but Edmonds in particular, had extremely low inventory. A few other stats that I’ll share with you here. I believe they’re a little bit skewed because last year at the same time, we were starting to experience the shutdowns from COVID-19, and we were not seeing as many houses come on the market. So the stats, I think, are a little bit inflated year over year numbers, for some of these that we’re going to share, specifically new listings, we had 27% more new listings this March than we did last year.

And it seems weird to see that many more houses coming on in March and really the numbers aren’t that dramatic, they’re about the same as 2019. But compared to 2020, the numbers are quite a bit larger. And if we look at some of these other places, if we look at let’s say Edmonds, Edmonds had 59 new listings this year, as opposed to 45 last year, but back in 2019, there were 88 listings. So just for reference, there was a dip in the listings that we had come on the market last year. But if we look back a year, we could even look at Lynnwood, Lynnwood had 106 new listings this year, which is 10% more than the year before, but they had 101 in 2019. So again, relatively speaking, these numbers are a little bit bigger than what they should look like, if that makes sense.

A few stats here that I believe tell the story and the real difference that’s happening in the market, are going to be homes for sale. So if we look at homes for sale, we had 511 homes for sale in Seattle, at the end of the month. In 2020, there were 768 homes for sale, at the same time, and in 2019, 989. So that’s a dramatic drop in the amount of homes for sale.

Now, last year we saw a drop partially because of COVID. But this year, we saw an even more drastic drop, and I’ll tell you why I think that, later. I don’t want to share too much at the beginning, right? I want you to stay all the way to the end, but we saw the same thing in closed sales here. So closed sales did the opposite. So in 2019, we had 517 closed sales. In 2020, 652, so we saw more closed sales, even in the middle of a pandemic, because 2019 was a slower year.

And last month in Seattle, we saw 866 closed sales, 32.8% more than we did last year. So we saw fewer homes for sale at the end of the month because we had so many closed sales. And this is despite, this is despite all the new listings, even in spite of all the new listings, we still had less homes for sale. And we talked about the amount of supply still below one month of supply, it’s still a very heavy seller’s market. The seller’s have the advantage in negotiations. That’s what it means to be in a seller’s market, in a buyer’s market, the buyer’s would have the advantage.

And if we look at the days on market numbers, we’re at a week or less. So a house that comes on the market, is not going to be on the market the following week, statistically speaking. And so everything’s selling really quick and that’s what you’re facing as a buyer in the Seattle real estate market, and when I say Seattle, I’m really talking about Seattle/Bellevue metro-area, the whole entire region is extremely, extremely hot, which means houses are selling quickly and they’re selling way over the asking price.

Here’s a couple examples. If we look at the percentage of the asking price, if we look at Seattle, Seattle got 5.7% over asking price. So not super large, but still, you’re having to pay an additional 5.7% to be competitive. In Shoreline, which is just north of Seattle, 6.8% above asking price. If we look at Lynnwood, which is in Snohomish County a little bit farther north, 12.6% above asking price. And if we look at Edmonds, Edmonds got 13.7% above asking price. Now, if we jump over to the other side of the water, Bellevue saw 11.5% above asking price, and some of the other east side locations like Kirkland and Sammamish, Issaquah, all those areas, we’re seeing very similar numbers, 10% or more above asking price. So if you’re wanting to be competitive as a buyer, you’re finding yourself looking at the list price, and you have to add, just add 10% or more, in order to be competitive.

All right, I know that was a lot of data and you could probably find some of this data just by Googling, right? And maybe that’s how you found thi, but what does this data mean? I think that’s where these are really helpful. And for application, I think as a buyer, we’ll start with home buyers here. If you’re a home buyer, this market is extremely competitive and that means there are maybe, maybe there’s 10 houses available and there’s a hundred buyers, and I mentioned Edmonds earlier in this video. Edmonds has 14 houses for sale in the entire city. So if you want to live in Edmonds, you’re competing with all of the buyers that want to live in Edmonds for 14 houses. So that’s just a good picture of how competitive it is. And as a buyer, I think right now, the things that you can do to be successful, the first thing you definitely want to be educated and know what the process looks like.

You also want to have your pre-approval in line, you need to get pre-approved. And as a buyer, you really do need to have somebody walking through this process with you. You need a real estate agent and you need to get pre-approved, and then you need to be aggressive, that’s really what it takes to be successful right now. As a home buyer, if you aren’t motivated, you don’t have a deadline, you don’t know, “Hey, I need to buy a house in the next couple months.” If you can afford to, which is great, if you can afford to wait around and have this process take a while, it’s going to take a while, because the people that are winning these multiple offer situations, need to buy a house.

And so if you’re somebody who is not in that position, relax a little bit, get pre-approved, get your ducks in a row, and then start with the process, but don’t expect for it to happen like that, because everybody else is looking at those same few houses, and there are a few people that are going to be more motivated than you, and they potentially will pay more. And what I’m seeing is that most buyers, at least the ones working with good agents are making very similar offers, and as far as the terms in the contract, there’s a high bar to entry. So most offers that are getting accepted right now, and I work with a lot of sellers too, not just buyers, the offers that are getting accepted have zero contingencies or ways to back out, almost every time, if we’re looking at the higher price points.

On the condos and some of the lower price points, buyers aren’t necessarily able to do all of those things, but the majority of the time, offers are including very few or zero contingencies. They’re also almost always above asking price. And I mentioned earlier, and this data shows, significantly over the asking price, and those really hot houses are selling even more above asking price. I had one last week that I listed, that sold for over 30% above the asking price. And it was listed above a million dollars. So at every price point, we’re seeing competition. There are multiple buyers for every house at every price point right now. And as a buyer, you want to get your ducks in a row and be ready to take action and be aggressive when the right house comes along.

Now I’m speaking to the sellers. If you’re somebody who is a homeowner, you’re probably more excited to hear this data than a buyer. When I share that everybody’s in a frenzy and the prices are shooting up like GameStop stock, sellers are really excited. People that own a house love hearing that their house is appreciating in value, just like anybody likes to know that their stocks going up in value. But a buyer is not as excited about that. Right now, though, as a seller, you have the opportunity to capitalize on a hot, hot housing market.

It means you’re in the driver’s seat. I think it’s still really important to have a real estate agent, and I’m a real estate agent. I’ll admit my bias, but in these situations you get your house exposed to the most amount of buyers and their agents by working with another real estate professional. You get in front of all of these buyers that are chomping at the bit to buy a house. And you also have somebody to help navigate all of this. I’ve seen many, many situations here recently, where the amount over the asking price is more than any of the closing costs and fees that you would pay to work with an agent.

But more importantly, as a seller, if you’re somebody who was thinking about moving out of the area, this is going to be a great time to sell your house and be able to move on. I will say, I’m seeing this middle zone and this middle zone is always there. People that need to buy and sell, so I’m speaking to those people. Maybe you don’t want to move out of the area. Maybe you want to stay here and buy another house because maybe you’re outgrowing your house.

And I think speaking to you is also speaking to everybody here, that one of the reasons that the inventory, or the amount of homes for sale is so low right now in this market, is because people that want to buy another house can’t, or they’re not as motivated. I’ll use myself as an example. I have a house that I like, it’s great for my family. We don’t need to move anywhere, but I would buy another house, I’m definitely keeping an eye out for what’s out there. But I haven’t bought another house yet because there’s nothing that is better to me than what I have in the price range that I want to be.

On the flip side, I could sell my house right now and rent somewhere. So if you found yourself in that situation, that would be option. You could sell your house and rent somewhere. But then I think I have the same concern that other people have, “Well, what if the market keeps going up and I’m renting and I could have just kept my house, right, and continue to build that equity.” So there are people that have a house like me that would go on the market to sell, again, would be an opportunity for somebody to purchase this house, but I don’t know where I’m going to go. And so I don’t want to sell my house and then go rent somewhere and maybe see the market keep going up and then not having anywhere to be and have to pay even more to just buy my own house back.

So I think that’s part of why the market is continuing to stay in this low inventory state, because there are people that have a house, maybe they’re just doing projects to it. And I’m doing projects to my own house right now, or I’m having somebody help. If my wife is reading this, she would tell you, I am not doing projects. And I am not a project guy, but we are doing some house projects right now. So I think that’s a good glimpse into what’s going on, just even from a few personal stories here, there is very little on the market.

There are a lot of buyers in the market, but a lot of people are not selling because they don’t have that next house yet. So I think until it cools down a little bit, and there are more opportunities for somebody to jump back and forth. Couple years ago in 2019, we saw a lot more people buying and selling at the same time, but I’ll say it’s a lot more complicated right now. And I have a client that just did it, I shared that earlier in this video, it is possible, but you have to be aggressive just like they were aggressive.

Thanks so much for reading my Seattle Real Estate Market Update for April, 2021.

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