Seattle Real Estate Market Update | September 2021

 In #Market Updates, #Seattle Real Estate Market, #Thoughts

Video Summary

As we compare stats from Seattle and Bellevue, we see that Bellevue has been more competitive, with less days on market and selling higher above list price. Homes in Bellevue are selling faster and higher above the listing price than homes in the Seattle area

Video Transcript

Hey y’all, Zach McDonald, your real estate agent with Real Property Associates, and this is my Seattle real estate market update for September, 2021.

If you’re new to these updates, we start out each update with a story, we talk about the market stats in the Seattle market, and more recently, also adding in Bellevue stats. So we’re looking at east and west side of Lake Washington, and then we’ll talk about applications for you coming up.

Let’s start this update off with a story. We do this in every single update, because I think for you as a prospective home buyer or seller or somebody that’s just following along in the market, these stories help illustrate what’s going on in the market. Yes, it’s one individual situation, but I think it helps make some of this information and this data relatable, and it shows how it all plays out.

Now in the past, I used to record offer negotiation videos where I’d recap the different negotiations, the strategies we used and the way that it turned out. I came at these negotiations from a buyer’s perspective and a seller’s perspective, and it’s been a while since I’ve made a real estate negotiation video. It seems like people really liked them, so maybe someday I’ll bring them back. But in these videos, these stories kind of take that spot.

So, this month’s client story is the Nelson family. They are Lindsey Nelson, my assistant’s parents, which was kind of fun. We got to work a little bit with family, which is always I think exciting. Sometimes it feels like there’s a little bit more pressure to make sure you get it right, but it was a great process. We helped get their house prepped and ready for sale. They did quite a bit of work to the house prior, so they got new siding, because they were having issues with it, they got it painted, new flooring inside, repainted the interior, did a little landscaping. It was quite the process, but a great result for them.

We got $100,000 over asking price and they recently moved over to Atlanta and they just got under contract on their house. So, congratulations Nelson’s on a house that’s even bigger and newer and nicer than the one that they had with a bigger yard for about half the price. So it’s crazy to think that you can get the same house, and I would consider it even a better lot, better house overall for a considerably smaller chunk of change.

So if you are thinking that you’re getting priced out of here, there are other places where you can buy a house for a lot less, but living here, there are certain benefits that come with living here and there are reasons that people are here, but it also does continue to push cost of living, as more people are moving here than are moving away.

Real quick before we talk about the stats, the stats in this video are from the Northwest Multiple Listing Service data, and this data is relevant as of the beginning of September, 2021. So we’re looking at last month’s data, August 2021’s data, and we’re talking about it here in this video.

All right, so we’re looking at the median sales price for Seattle, and we’re going to compare it with the median sales price of Bellevue. If we look at Seattle’s median sales price last month, we saw $861,000 is the median sales price, and that’s a jump of 5.6% year over year. So, not a huge jump. If you’ve been following these videos for a while, you’ve been hearing me talk about how a lot of the general area, the Seattle area has been appreciating a lot faster than the city of Seattle.

Again, I don’t want to talk about my thoughts necessarily about why that is in this particular video. I don’t think that’s the point of these updates, but I do want to point out that Bellevue on the other side of the water, considerably smaller city, by the way, had a median sales price of $1.5 million. $1.5 million, and that’s a jump up 17.1% year over year. More than three times more growth in the median sales price year over year.

If we look at average prices, the average sales price in Seattle is just over a million dollars. If we compare it with Bellevue, the average sales price for a single family house in Bellevue is just over $2 million. So if you’re thinking about living on the east side, you’re going to be paying a considerably larger amount of money to live in Bellevue and any of the direct suburbs of Bellevue, and it will be considerably cheaper to live in Seattle or one of the suburbs on the north end. Although, the north end of Seattle is now catching up to the city itself.

Quick bonus bag for you. If we look at the last two years in Seattle, we’ve seen a 17.7% jump in the median sales price. Conversely if we look over at Bellevue, over the last two years, we’ve seen a jump of 39.5%, almost 40% jump in the median sales price. If we look at the new listings in Seattle, can compare them to Bellevue, it’s not really comparable, we had almost six times more new listings in Seattle. But if we look at the data, we saw a decrease year over year in new listings in Seattle, 27.4% decrease year over year, and we saw a decrease in Bellevue as well of 8.1% in the inventory numbers.

So a lot more houses in Seattle, so it makes sense there could be a bigger drop there, I think. But last September we saw a huge rush of people putting their houses on the market, this year we’ve seen a lot more balance. So if you think back last year, middle of COVID, the spring was a little slower than normal, but then the fall was super hot. We had a ton of new houses coming on the market, but we also saw a huge uptick in buyers.

So this year, it’s looking a little bit more normal. We’re still having more listings coming on the market, it’s still a healthy amount, but we aren’t seeing quite as many people rushing to put their houses on the market at the end of summer and in the fall, but we still have a lot of buyer activity. That’s manifested in the fact that we still are seeing six days on market median in Seattle and five days on market median in Bellevue. So, homes are still flying off the shelves.

What that’s translating to is continued low supply. So, I talked in my last video how we were starting to see supply tick up just a little bit, and whatever ground we made up last month we’ve lost this month. So in Seattle we saw 0.7 months of inventory, which is just a couple of weeks really, and in Bellevue we saw 0.4. So, even less than a half a month of supply.

Again I mentioned earlier, what this means is that houses are just selling super fast, and we’re seeing a lot of competition, which is continuing to push the prices up. So in Seattle we saw houses selling for on average 4.2% above the list price, and in Bellevue we saw houses selling for on average 9.1% above the asking price. So if we look at the data here and we compare Seattle and Bellevue, we’re seeing that the housing market in Bellevue is hotter, we’re seeing prices continue to climb at a faster rate. We’re seeing significantly higher prices, but it’s honestly not the best comparison, because Seattle’s a considerably larger city with older houses. So, a little bit different markets to be quite honest.

In Seattle, there’s a lot more variability in the neighborhoods and it’s a lot larger geographical area as well. So, quite a bit different. They’re not necessarily the best to compare straight across, but I think it’s good to see the picture. If we look over at the east side as a whole, if we look at Bellevue and other suburbs of Bellevue like Redmond or Kirkland or Sammamish or any of those places, Woodenville, just to name some of them, you’re going to see that prices are going to be quite a bit higher even than Seattle as well. I mean, you’re going to get a lot more land, a newer type of house over there.

If you’re looking over at Seattle, you’re going to see older houses typically, most of them built between the early 1900s and the 1960s. There’s some newer houses kind of thrown in there, it’s almost like randomly placed in a lot of situations. There’s a lot more planned neighborhoods as well over on the east side. So, if that’s more of your cup of tea and you enjoy having more of that neighborhood feel where you drive in with an entrance and a lot of the houses look the same and maybe there’s cul-de-sacs and things like that, you’re going to have more of that over on the east side than you’re going to see in Seattle.

Now there are a few neighborhoods like that, but most of the neighborhoods over in the Seattle area and even in the suburbs are going to be a more of like a grid on a map. So, you’ll see just like a box around a certain set of streets and that’s the neighborhood. Whereas the east side, you have more of these signs out front, small HOAs, and there’s a little bit more restrictions on what you can do and not do with the properties.

So if we look at the Seattle Metro area as a whole again, we’re including Seattle, Bellevue and all the suburbs around, we’re seeing a lot of competition in the market. A lot of that’s driven by the low amount of inventory, the low interest rates. I think we’ve had a lot of money coming into the area, and there are a lot of people, believe it or not, that can qualify to purchase these homes.

So, sometimes people ask me who would pay these prices? I was talking with a few different clients this week that gave me more perspective. I shared the Nelson story earlier in this video where they moved from here to Georgia, and they had a completely different perspective. When they went to Georgia, they’re like, “We’ll pay almost unlimited over the asking price,” because for them it was super cheap to buy a house, versus how much it cost to buy a house here.

Seattle, if you’re looking at coming from other places, people like clients that I’m talking with from California, they come here and they can get more house for less money. Same idea. They see the housing prices here and they say, “Ah, these are cheap.” So, it’s really a matter of perspective. Now, Seattle’s continuing to become closer and closer to some of these other markets. When you look at California and New York being more expensive places, we’re starting to catch up. If you look over at the east side specifically, we’re actually not very far off, but it’s still cheaper to buy a house here even in the nicer areas than it is in the nicer areas of California.

So, that’s a big part of the psychology of people moving here. So people moving here from more inexpensive places, it’s a little bit of a culture shock. It’s expensive to live here, cost of living is high, but if you’re coming from other places that have an even higher cost of living, yeah, you think it’s cheap. So, I think that’s how you make that connection between why are people willing to pay some of these prices, and it’s really a matter of perspective for them on what a good value looks like.

A couple applications here. If you’re a buyer, number one, this is typically the time of year where we start to see the best combination of amount of homes on the market and competition. Now, I think this year’s going to look a little different. I don’t want to say here in this video that I think that the market’s going to slow down and that I think there’s going to be a potential for getting a house below the asking price, that’s definitely not what I’m saying. But historically in the fall and even early winter, there are more opportunities as a buyer to purchase a house without as much competition.

This year specifically, I think it’s still going to be competitive, but it’s going to be a little less competitive than it’s going to be in the spring time. So typically you get to the spring and summer, and that’s where it’s going to be the most competitive. So if you can get started now, you’re going to be at an advantage I think, and even be more prepared if it takes a little bit more time in your purchase to go ahead and make that purchase.

So I think started now, starting to have conversations around what you qualify for, what types of houses you like. I call that a buyer consultation. So if you’re watching this video and you want to talk with me about that, I’m happy to schedule a time to talk with you, whether that’s over Zoom or in-person over a cup of coffee.

I think as well as a buyer, interest rates are still super, super low, there is less imminent talk about interest rates going up. I think earlier on in the year, we thought by this time we’d see higher interest rates. It’s all speculation. So as much as we want to pretend like we know what’s coming down the pike, we really don’t. But I do think we’re going to continue to see interest rates in this range for a little bit longer, so it’s still a really good time to get that low interest rate.

If you’re a seller, I think a couple applications for you. Number one, still a ton of competition. As I mentioned earlier in the video, not a lot of inventory. So if you’re a seller and you want to get your house on the market, it’s not bad to be getting 9% over asking price if you’re in Bellevue, or even Seattle this time of year, just over 4% on average. So we’re still seeing a lot of competition, we’re still seeing people bidding for houses, and I’m seeing more of that here over the past few weeks.

Definitely seen a shift from what maybe in the last couple months, if you followed along on this channel, I’ve been talking about how it’s become a little bit easier to be a buyer. Just a little bit, but not a ton, but a little bit, and there’s been a little more opportunity. I’ve had a few clients get houses under asking price, and I’m starting to see these last few weeks that those opportunities are pretty much gone.

There’s still places. If you go a little farther north, you go up north of Everett or even you’re looking in Everett where there’s opportunities, but I think you got to go a lot farther out now to get those opportunities than maybe a few months back. What that means though for you as a seller is that you still have a super competitive market and the opportunity to cash in on some of those more favorable terms in the contract, and also maximize the sale price of your house. So if you need to sell here in the next three to five months, you’re still in a good window.

Historically, I would talk about the spring being the best time to sell. I don’t know what the spring’s going to look like this year, it’s been such a weird last year and a half to be frank in this video, but historically the spring’s that peak time of the year to sell. But this year, we really are seeing a lot of that competition lingering around. So if you need to sell or want to sell sooner rather than later, I don’t think that’s a bad plan.

Thank you so much for watching my Seattle real estate market update, and I hope you’ve enjoyed having some of the Bellevue real estate market commentary here as well. As I mentioned, I’m going to be continuing to talk about Bellevue’s market here a little bit more too, because I want people to be able to benefit from these videos, whether they’re on the west side or the east side of the lake.

So if you have gotten value out of this video, I would super appreciate it if you would subscribe to this channel if you haven’t done so already. Number two, if you want to have a conversation about your situation, I’d love to be a resource for you.

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