Seattle Real Estate Market Watch – 1/24/2023

Hey y’all. Zach McDonald, your real estate agent with Real Property Associates, and this is my Seattle Real Estate Market Watch for January 24th, 2023.

So far in 2023, the Seattle housing market continues to heat up, and I think a big contributing factor is that we just don’t have a lot of houses coming on the market, and there’s a lot of new people coming into the market and people quite frankly, who are used to hearing about interest rates being a little higher. I think last year in 2022, rates were super low and they went up, and people that were searching at that time, maybe they weren’t able to get into a house because it was so competitive. But on the flip side, when prices were starting to come down, the mortgages were even higher with the higher interest rates, and it was quite a bit of a shock. To be really honest, it it, it’s a shock to me to be able to see those reports and the differences in the payments, but I know for buyers that it was especially shocking to see that now they couldn’t even afford what they were hoping to purchase originally as far as the house is concerned.

But those payments were also more for the same house. So again, prices are down, but the affordability factor is the challenge right now for buyers. But the new crop of buyers, and I would say some people who have adjusted didn’t come with that perspective. So as of the beginning of this year, we’ve seen things start heating up. I have experienced multiple offers as a listing agent, also participated in multiple offer scenarios. As a buyer’s agent, it’s very interesting to see how the market’s starting to change and shift even as we head into the end of the month here. And a big part of that is the inventory numbers decreasing. Back in the spring, we were seeing those inventory numbers climbing, especially into the summer, and coupled with rates increasing, we started to see houses sitting on the market. Well, that’s been changing here recently. Houses have been selling.

Buyers are used to the rates. Sellers are pricing their house at an appropriate price. There’s enough data now with houses selling over the past five to six months here at the newer prices with the adjusted prices. And so assuming that a seller isn’t trying to push the price to what the neighbors sold for back in the early spring, as long as they’re realistic, houses are selling fairly quickly again, and in some cases getting multiple offers. But let’s dive into the data because that’s what we’re doing here every single week during these market watches as we’re doing a high level look here at the data and seeing how the market’s adjusting on a weekly basis. So let’s look at new listings. There were 391 new listings in King and Snohomish County here over the past week, residential listings. last week we had 342, so a slight uptick in new listings.

We had 64 houses come back on the market as opposed to 44 last week. So some more. coming back on some of those were those canceled listings as we talk about. There were 74 canceled listings, so a large percentage of those back on the market would’ve been canceled or expired. 42 expired listings. So some of those are coming back on this week, some might come on in a few weeks. Some might ever come back on price reductions, 239 this last week as opposed to 238 the previous week. So we’re staying kind of similar. There we’re, it’s still very common to have price reductions on listings, but again, it’s a lot easier to price right now, assuming you are wanting your house to sell relatively quickly and not be taking a huge haircut off in the offer negotiations. But again, some people want to test the higher prices and see if it happens, it usually doesn’t.

And then bringing the house down to maybe where it should be in the first place. A few list price increases. Again here, the past week contingent sales, there were 18 contingent purchases as opposed to 14 the previous week. Again, there’s still a lot of contingent purchases and some of those new listings that we’re seeing are as a result of buyers getting into the next house that they’re looking for, had some buyers be able to purchase contingent on the sale of their house. But I would say I think that’s going to start going away soon. I’ve seen more competition, as I mentioned, multiple offers, and that’s really the death of the contingent purchases. When there are multiple offers to choose from, sellers tend to pick the offer that’s most favorable to them, and that doesn’t usually include a buyer that’s purchasing contingent on the sale of their house.

So that’s usually the first thing to go as the market starts heating up. So I would say that I would suspect we’re gonna start to see fewer and fewer contingent purchases as the winter progresses and we head into the spring. We’ll see. I think this is a good metric for how competitive the market is, as well as those price reductions. The expired listings, we already talked about that. pending listings, I think this is, this is the big one here. So we had 697 pending listings as opposed to 587 last week, but we only had 391 new listings as we talked about, and we had 697 pendings. That’s a huge gap, and that just means that we’re seeing a lot more coming off the market. Closings 320, again, a little bit more than last week at 278, but most of the sales are happening in retrospect.

So they were homes that were pending in December, closing now in January. But the pendings is showing us what’s happening right now, and we’re seeing that there’s a ton more houses coming off the market than going on the market. We’re gonna do a little crude math here and more the rough versus inappropriate crude. And I, what I did is I looked back at new listings for the market watches so far this year, and this number is not accurate a hundred percent, but it’s close. There’s a few sales and listings most likely from December that are gonna show up on this number, but I calculated about 915 new listings. I can’t pull an exact number from the system until we’re at the end of the month, but we’re getting close. It’s January 24th, and if we had just over 900 new listings, we are way behind. If we look back at 2022 in January, we had 2026 new listings in King in Snohomish County combined in 2021, we had 2,522.

In 2020, we had 2,514, and in 2019, we had 2,748 new listings. All right, we’re at a little over 900. Again, if my rough math is correct, even if we have a ton of new listings over the next week, even if we double this, we’re still gonna be far short of what we normally see in a given January. Probably that 25 to 2,700 is probably a little more normal. Last year we had fewer than normal, but this year, way, way below normal. And that’s what’s putting a lot of strain on the inventory because even though there are fewer buyers in the market right now than there were last year, we have so many fewer listings that we’re starting to see the amount of inventory shrinking. So I’ll be talking about this in the next Seattle real estate market update when we look at the data for the month of January, but we can already see it happening.

We’re just seeing the inventory shrinking and it’s putting a lot of pressure on the listings that are on the market, which is causing in some cases, if the house is priced correctly. We’re seeing multiple offers. We’re seeing competition. I’ve seen contingencies removed. I’ve seen financing contingencies waived. I’ve seen higher earnest money amounts. It’s starting to change out there. Now, how long that’s going to last, we don’t know, but right now what I can see and what I’m experiencing is at the market is heating up. Thanks so much for watching my Seattle Real Estate Market Watch. If you’re enjoying the content of this video and you wanna see others like it, please subscribe. If you know somebody else who could benefit from this content, please share it with them. And if you wanna connect about your real estate goals buying or selling in the Seattle Metro area, please don’t hesitate to reach out.