Seattle Real Estate Market Watch 3/14/23

Hey y’all, Zach McDonald, your real estate agent with Real Property Associates, and this is my Seattle Real Estate Market Watch for March 14th, 2023.

Well, we’ve had some really exciting news here over the past week or so. We had a bank bailout, we had new CPI numbers come out today and well, we’ve seen mortgage rates kind of going like this, and we’ve also seen multiple offers still on houses. It’s crazy. Lots of stuff happening right now in the Seattle housing market. Last week I posted my Seattle real estate market update as well as my king and Snohomish County updates. We skipped the market watch, but as we jump back into the market watches here, just a reminder that we’re looking at King and Snohomish County data together for residential properties over the past week. So as we dive into these numbers, new listings are still super slow. We’re not seeing very many new listings and I, I would say that as we’re coming into the spring, it’s extremely abnormal to see this level of listings for perspective.

Last year, in the past three, four years as well, we’ve seen around 4,000 or more new listings in King Insto, Hammish County. We’re trending for significantly below that. Hard to say exactly where we’ll end up at this point. We could see quite a few over the next few weeks, but at this point we’re trending very, very low. Last month we were 30% below the normal amount of new listings. A little bit more than that in Kingston, Hammish County. And I wouldn’t be surprised to continue to see that trend here as we move forward into the spring, which is gonna keep us in a low inventory environment. If we were to see a normal amount of listings, I would expect to see inventory build a little bit like it normally does in the spring and summer months. But right now, people are sitting on mortgage rates that are extremely low.

I heard somebody recently put it this way, and I, I think it’s, well put that somebody’s mortgage interest rate of two and a half, 3%, three and a half percent, even, even 4%. It almost feels like an asset right now, right? Normally you think of debt as a liability, but in this higher inflationary environment with higher mortgage rates, it almost feels really nice to be able to have an interest rate like that. It, it feels more like an asset and I, I agree with them. So as I’m seeing, we’re we’re seeing people’s behavior different right now than we normally would see in the springtime. So normally we’re seeing a bunch of new listings coming on the market and we’re still seeing fewer buyers in the market right now than normal, but there’s more buyers in the market than there are sellers. So that’s why we’re seeing the inventory declining.

Now, this could change right as we head farther into spring and into the summer, but the fact that we have such low inventory of listings and so few listings hitting the market right now is continuing to trend towards, hey, maybe, maybe this spring and summer is gonna look a lot different than normal and maybe the fall. I would say, you know, people have asked me, you know, when I think the best time to buy is going to be, I think right now we know that home prices are down. That’s something that we just know the future is really hard to predict. Normally the fall is a pretty good time to buy. So if we did see a flood of inventory and we did see the listings pick up fall 2023 might be a really good time to buy. But if we don’t see that, then maybe right now is going to be better than the fall.

We could see if we do see interest rates coming down in the fall, even if we don’t, if we don’t see a large uptick in listings, we’re just gonna stay in this super low inventory environment. And that’s never conducive for a deal. If you’re a buyer or negotiating power, if you’re a buyer, definitely puts things back in the seller’s favor, which is where we find ourselves right now. Even though interest rates are higher, the interest rate buy downs for the most part, right? And the massive price reductions are going away now, right now, as of the last week, we did see 199 list price reductions in King and Snohomish County. So there are houses that have been on the market that aren’t selling super quickly. Maybe they were priced a little bit higher. Maybe they’re unfavorable properties. I, I don’t wanna speculate too much. Those are just a few reasons why things don’t sell quickly, especially right now as people, if they are pricing more competitively, we are seeing things sell fast and over asking price in some cases new listings, 4 23 I mentioned that’s super low compared to normal.

We did see some houses come back on the market 47 again, a lot of those would’ve been canceled or expires maybe that are coming back. Listing price increases, well, we saw a few of those. 32 contingent purchases, 16. So we’re still seeing that, right? We’re not seeing zero, we’re not seeing one, we’re still seeing somewhere in that 10 to 20 range most weeks. So contingent purchases are still happening. Expired listings 20, that’s very few by the way. Most things are selling at this point and it’s also earlier in the month, so you don’t typically see a lot of expireds at the beginning of the month. Pending listings, this is something that we’ve been following, 7 21 pending listings, again, significantly more than the new listings. I mentioned this last week. I’ll mention it again just so we’re super clear. Pending listings in this stat are homes that have progressed towards being sold.

So they were either already under contract, maybe as pending inspection, which could fall out of contract and became closer to being sold, pending, or they were active and went to pending inspection or pending. So some of these have already been off the market, but it is the last seven days a status update towards being sold, right? So we’re super clear here. Listings sold 4 62 more than the new listings, and I suspect we’ll continue to see that trend here in March. I hope, right? For buyer’s sake, that we’re gonna see more supply coming into the market. I know there are a lot of buyers out there that are hoping prices continue to come down, and if I was a buyer, I would feel exactly the same way. In fact, I am looking to buy as well in this market. I don’t know if that’s going to be the case.

I think some people are pretty strongly convinced that we’re going to see prices continue to come down and maybe in the fall we’ll see a good time to buy. And I’ll just say, I don’t know. I don’t know what the future holds. I think the fall could be a great time to buy again, if inventory continues to pick up or if we see a more normal spring and summer market with a lot of new listings. But the higher interest rate environment has a lot of people sitting on the sidelines for multiple reasons. And there are a lot of people that own homes that are just like, you know what? I’m content. I don’t need to upgrade my house right now. And while some others are taking advantage of the lower prices. So I think it goes both ways. If you’re a buyer and you need a place to live, there’s opportunities to get homes for less.

If you’re somebody who wants to upgrade your house, you can buy that upgraded house for a better price than you would’ve bought. in, in a previous market, you’re most likely selling if you do sell for less. But if you are somebody who’s thinking about selling and you don’t need to sell, right? Maybe you don’t need to move, maybe you don’t need a bigger house. I think people are sitting put. So that’s where we find ourselves. We find ourselves in an interesting environment. Last year there were a lot of people that put their houses on the market trying to catch the top of the market in the spring and summer as they were seeing their neighbors selling for so much. Some of them did catch it, some of them caught the starting of it going down. But right now, that’s not where we find ourselves.

We don’t find ourselves at the top of the market right now. We find ourselves king and Stone mish County, year over year, both down a little over 8%. And I would suspect we’ll see those numbers to be even larger as we head towards March and April’s numbers. So a lot of this is interest rate driven. It really is. I think seeing the new CPI numbers coming out, they were as expected, which isn’t really good, but it’s also not worse than people were expecting. So we’ll see how that affects the mortgage rates. Again, mortgage interest rates are not directly tied to the prime rate. They’re not, but they are influenced by it. And with all of these rate hikes, interest rates did hover right around 6% for quite a while, but they have jumped recently. But a lot of that is fear about future inflation and how that’s going to change.

We’ll see those numbers adjust a lot quicker than we will see the Fed funds rate adjust. So just a couple parting notes here. If you want to talk more about your situation buying or selling in the Seattle area and you just wanna bounce ideas off me, I’m happy to chat and connect. I don’t, I certainly don’t think it’s a great time for everybody to buy and I don’t think it’s a great time for everybody to sell, and I certainly don’t think it’s a great time for everybody to upgrade their house, right, or downsize. It’s unique to everybody’s situation. So if you want to chat more about your situation and get my thoughts and how I would approach it, I’m happy to be a resource for you.