Seattle Real Estate Market Watch – 10/13/2022

Hey y’all. Zach McDonald, your real estate agent with Real Property Associates, and this is my Seattle Real Estate Market Watch for October 13th, 2022.

We’re gonna continue with these weekly trends here for the foreseeable future. I think as the market’s continuing to change and shift, it’s important that we’re looking at this information on a weekly basis and kind of analyzing what’s going on with the numbers. And again, just a refresher, if you’re new to these videos, we’re looking at King County and Snohomish County Data put together here for, uh, residential listings over the past week. So we’re looking back at the past week and as we’re diving right into the data here, new listings are down slightly from last week. Uh, we had 721 new listings last week, um, in 698 here this last week. Um, we had quite a few price reductions again, um, up from last week. And again, that’s been the theme here over these past few months as we’ve been really diving into these weekly numbers and we’re seeing that reflected in the median sales prices, uh, of King County and Snohomish County, respectively.

We’re still seeing contingent sales, which has been a theme here over the past few months. And what’s encouraging is we’re still seeing pending listings near the new listing numbers, actually more pending listings this last week than we had new listings again. So, um, we’re still in that realm of where we’re not, I’m not expecting to see, again, big jumps in the amount of supply. We saw a tiny little jump last month, so some of those pendings didn’t close in the month, so they may be closing, um, in October or maybe they didn’t close, right? Cause people are negotiating inspections now. We’ve had contingencies, uh, specifically inspection and financing contingencies come back to the table. And so what I’ve noticed is I’ve seen even on my own listings, a few where we’ve had issues with the financing because we didn’t get to choose from 10 different offers.

We had to choose the offer that was there. And so sometimes, you know, the financing isn’t as tight as we’d like it to be, but we needed to move forward with the offer. Um, versus, you know, having the option to choose, uh, your, your buyer essentially. And, and a lot of times it’s easier when you have that many buyers to choose from. You get to, you know, say, Hey, this person’s working with a local lender, they’re fully underwritten, approved versus pre-approved. Um, and again, the market’s changed. So, so have the offers and the terms buyers and sellers. So I think that’s a big change that we’ve seen and I think that’s why we’re seeing some of these pendings not closing, to be really honest. Uh, part, part of it’s financing. A lot of its inspection though. People are negotiating and backing out, which they weren’t doing when they couldn’t do an inspection after being under contract, right?

You’re kinda locked into the purchase again, still seeing a lot of canceled listings here as well. Again, a lot of those cancels become, uh, back on markets, um, whether it’s a week, two weeks, three weeks down the line. But there also are people right now, I’m noticing even more so recently that when their listings expiring or it’s canceled, they’re actually not selling. So I’m starting to see some of that where people have tested the market. They said, you know what? I don’t really need to sell. I’ve got good equity in my house and I want to get a certain price, and people don’t want to pay that price right now. So I’ve seen people start to hold off at least for the short term, and maybe they’re waiting out until the spring, um, or they may just be holding on and sitting tight, which again, I think is a theme here.

And for the past five to six months, we’ve been following along with the market shift on our monthly market updates. Again, if you’re not subscribed and you want to follow along with the market here, make sure you subscribe to the channel. But in our most recent video and in all of ’em here over the past few months, but specifically the most recent one, we looked at how much the market has adjusted and corrected here since the high, earlier in the year. And a big part of that is due to buyer demand. As we think about buyer demand, there’s lots of different factors, right? You’ve got affordability, you have their confidence as part of that, you’ve got interest rates. And again, that has a big part or play in affordability. But as we’re looking at the data, it’s pretty obvious to see that buyer activity has slowed down.

And there’s not a great way to gauge that, aside from the amount of pendings, um, and solds versus new listings. But what we’ve been seeing here is the amount of homes on the market increasing. So over the past year, right year over year in King County, we’ve seen over a hundred percent more homes for sale in September than we did last September. Same thing in Snohomish County. Um, in the month supply, that’s the amount of homes available versus the, the pendings or closed in this case. Uh, closed sales is what I base this off of King County, 1.8 months of supplies, Snohomish County, 1.7 months of supply. And for a little perspective, I wanted to share with you 2018 19 data because for the past five months as the market’s been changing, I’ve been talking about how I think what has happened is mirroring a lot of what happened in 2018 and 19 versus maybe what happened in 2008.

All right? So again, I’ve been pointing to that as more of what I think’s been happening here. And there was a massive adjustment in prices. Seattle had the biggest drop. Um, but King County had a drop of 15.8%, almost 15.9% in Snohomish County, 10% in that drop from in 2018, right from the high to the low before prices started to go up a tiny bit and stabilize a little bit. If you look at the homes for sale and month supply, we actually had larger increases there than we do even right now. If we look back at September, 2018, there are far fewer houses for sale in King County and Snohomish County than there were in September, 2018. And in 2019, again, September, 2019, very similar numbers, but still fewer houses for sale than we had then. If we look at month supply in King County, we had 2.5 month supply versus 1.8 right now, and we had 2.2 months supply in the Hummish County versus 1.7.

If you look at 2019, 2.1 months of supply in King County versus the 1.8 now and 1.8 versus the 1.7 in Snohomish County now. So again, it’s very similar, but still we have less supply than we had back then. And a big, a big thing we’re seeing here is, is the, that we’re seeing fewer listings coming on the market. We’re not seeing a flood of new listings on the market, we’re just seeing less people buying. So if we look at new listings, 7.1% down in King County year over year, and it’s the Hoish County down 15.6% year over year pending sales in King County down 37.6%. Snohomish County, 31.2%, and then close sales down 32.3% in King and 31.6% in Snohomish. So again, new listings are down, but the biggest reason that we’re seeing more inventory right now or supply isn’t because we’re seeing a whole bunch of listings.

It’s just because less homes are selling and ultimately that’s a big contributing factor to what houses are going to eventually sell for, right? If there’s more options and buyers aren’t in a rush, we’ve seen the days on market coming up, we’ve seen the percentage of asking price going down, right? That’s why we’re seeing all those list price reduces that we’re seeing. And percentages in King County and Snohomish County houses are selling below, asking price on average about five to 6% depending on where you’re at. And I think as we’re looking at that, again, it’s not because we have way too many houses available, we just don’t have as many buyers. And so again, there’s lots of different reasons for that. But I think this market is different than the market in 2008 and other recessions that we’ve had. I think that the amount of listings is actually helping us and keeping, as we’ve seen prices have come down.

I think it would be way worse if there was a massive flood of inventory, but we’re not seeing that right now. So typically as we head into the fall in which we already are in the fall, we start to see the amount of listings tapering off. So we’ll be able to compare year over year to see if that’s more or less than we normally would see. But I would suspect that we are gonna continue to see the listings coming down. New listings, I would suspect it as a result, we’ll see the supply numbers coming down, maybe moderately. Um, but in 2018 they did the same thing. In 2019 they did the same thing and in both cases interest rates were at highs for the, for the time. They’re way higher right now than they were back then. But again, even with the increased interest rates now above 7%, all right, mortgage due daily, 7.2% today.

Um, and Freddie Mac’s survey was released today as well. 6.92% for their weekly average. Mortgage rates are much higher than they were in 2018. But again, we’re still seeing less inventory and supply on the market. We’re still seeing buyer activity. And I would suspect that even though the market’s been slowing down, that we will see a similar pattern here this year as we did then and as we normally do, where we historically see less inventory and a lot less activity during the holidays. So again, I don’t think it’s gonna keep getting worse or much worse here for the rest of the year. I do suspect that we’re going to see that home prices might come down a little bit, the median sales prices here as the rest of the year happens. That happened in 2018 as well until, um, until January, 2019. So I would suspect that we might see a similar pattern again, not a massive drop off.

I think we’ve already seen the biggest part of the drop off for the year, but I think we might see a little bit more as we head towards the holidays and in the new year. I think depending on how some of the news interacts, you know, some of the inflation news, again, we got negative news today in inflation, but if some of that inflation news gets better, I think that we might start to see not prices going up but continuing or starting to stabilize a little bit more. Thanks so much for watching this week’s Seattle Real Estate Market Watch. I hope that it was valuable for you. We’ll continue to follow along with the market on a weekly basis here on the channel. And if you’re interested in following along with us, please consider subscribing.