Seattle Real Estate Market Watch 5/23/23

Hey y’all. Zach McDonald, your real estate agent with Real Property Associates, and this is my Seattle Real Estate Market Watch for May 23rd, 2023.

The market continues to heat up, as I’ve been talking about over the past few months, and the evidence is just overwhelming right now as far as what I’m experiencing. So last week I had a client lose out multiple offers. I mentioned that, um, it was a condo and this week, um, already we had a, uh, situation with multiple offers up north in Lake Stevens area. And the unfortunate situation is that the buyer, uh, one of the competing buyers with cash, and they did the same price as us, and they were willing to have the same terms in the contract. And unfortunately, my client was putting less down and not able to purchase with cash. They needed financing. And it came down to that ultimately the cash part. And most buyers are not cash. So in, in many situations, you’re not competing with a cash buyer on a home purchase.

But unfortunately, we ran into one of those that was also willing to be aggressive, um, and not just try to get a deal with their cash, which that doesn’t necessarily get you a house, um, but a cash buyer that’s aggressive as well on the terms and the contingencies in the contract. Well, that’s tough to compete with and unfortunately, we lost out. Um, but then today met with a couple clients, um, that we are doing a pre-inspection on a house in Seattle, and that just means that we’re inspecting the house before even making an offer because we want to know what we’re getting ourselves into. But at the same time, we want to be able to make a competitive offer because, well, another buyer’s already doing a pre-inspection, so we know that there’s going to be some competition and we know that, that it’s also going to have, uh, no inspection contingency in the contract.

So things are picking up and it’s, I mean, we’re talking about Seattle, we’re talking about Lake Stevens. That’s a huge, huge range, right? That’s, uh, a different county. That’s a 30-plus minute drive without any traffic. So the whole area, um, is starting to pick up, and I have some actual experiences here to share with you on that. I would say as we look at the data, one thing that I’m noticing is that, yes, we’re starting to see more pending sales and listings, um, than we did over the past few weeks. Um, listings have picked up 7 31 this last week versus, uh, 6 71, uh, last week and back on market. We have 60, 61 last week, 51 this week. And as we’re looking at, um, the listings, I, I noticed that we are still seeing more pendings, um, the 8, 8 19 versus the 7 69 last week. So we’re still seeing the, uh, inventory selling, so that that’s a good sign, right?

I think I would be worried if we were starting to see considerably fewer pendings versus the listings. Now, normally this time of year we’re seeing even more listings, so we’re still low on the listing inventory, but we are seeing listings picking up over the past few weeks, which is a good sign for the market because what we’ve been talking about as well is that if it continues, like it has been where there aren’t enough listings, we’re just gonna continue to suck up the available inventory of houses. And it just continues to put more and more pressure on the pricing. But we’re seeing that right now live experiences where multiple offers are happening. Last month in Snohomish and King County, across the board homes, were selling on average over asking price and quicker, right? Things are selling fast. Now, there’s still some stragglers that were on the market, uh, earlier in the year or even in the winter, and some that still are trying to price on the higher side.

Those are sitting still, but the houses that are competitively priced or priced where the markets at are selling very quickly right now. Listings sold six 18 versus 5 47 last week. Again, that’s been picking up. There were some canceled listings about the same amount, but again, most of those come back on as back on the market. So we had 51 of those come back on the market. Uh, at the same time, price reductions. We had 241 price reductions this past week versus the 2 52 last week. And that number has slowly been dwindling as well. Contingent purchases were down quite a bit, 12 versus 24. Last week was interesting. We had a lot of pending sales that were contingent versus where we had been sitting in that 10 to 12 range. So we saw an abnormally large amount of contingent purchases last year. And this is all happening.

All of this is happening with mortgage rates continuing to climb. Now, mortgage rates today, as of 5 23, have jumped above seven for 30-year fixed rates according to mortgage news. DA’s survey, 7.01% is where we find ourselves. Now, a lot of the other loan programs, the 15-year fixed is around 6.3. You’ve got the jumbo loan, 6.6. Normally jumbo loans are a considerably better deal, but not right now. An arm loan, 6.88 for a five one, the FHA 30-year fixed is, uh, 6.65 in the VA. Same deal, about 6.63%. Those loan programs are typically a little bit better than the conventional products on rate. They have different fees and such, uh, associated with them and different qualifying standards. But as we’re looking at the rates, most of the time people are getting a 30-year fixed conventional loan, the majority of the buyers in America.

So we’re looking at, you know, about 7%. And last week we were at 6.7% on five 17, about a week ago. And when we’re looking at the rates, they’ve been hovering that six to 7% range. And so we’re on the higher side of that range, and they have climbed up, um, previously late last year in 2022, they were into the low, low to mid sevens. Um, we’re still trying to figure out what’s going on with inflation. You’d think we’d have figured it out, but we’re still trying to figure that out right now. Um, but we’re seeing the stock market bouncing, right? We’re seeing the housing market bouncing, even though we’re still trying to figure that all out. Um, and so we have the higher rates for the mortgages, and we, I think have, I would still say there’s risk in the market, right? Um, but it seems like people are betting that it’s going to continue to get better, at least maybe in the long run.

Maybe not in the short run, but in the long run. So maybe some speculation mixed in, but the overwhelming feeling right now as we’re out looking at houses, there’s a lot of cards stacked up. I I haven’t seen this many cards piled up from real estate showings in a long time. Lots and lots of showings. There are multiple offers again, and so for sellers, it’s exciting, right? You’re like, okay, well, I might not be getting as much as my neighbor did last year, but maybe, maybe I could. You never know, right? However, it’s a lot of it comes down to the multiple offers. Um, but I’m still seeing houses where they’re listing 200,000 less than what the neighbors sold for, but they’re listing about what the listing price of those houses were. So it wouldn’t take much for a little bit more competition or a drop in interest rates, I think, to light a fire, uh, on those multiple offer situations and bounce prices back.

So right now they’re still down and suppressed in that 10% or so range. We’ll see the new data here coming up in a week or two, probably two weeks from now, we’ll release the next market update. So we’re gonna look back at some of the most recent data, but I would suspect that we’re seeing housing prices continue to climb across the Seattle region. We’re seeing the amount over asking price, increasing the days on market shrinking, and that overall competition intensifying. And man, we’re, I mean, we’re hitting that point where we normally would see the, the top of the market for the year, but I really wouldn’t be surprised for it to continue for the rest of 2023, unless we get a lot more inventory, we’re getting less than we normally would. So stay tuned. We’ll keep these updates, uh, coming every single week except for the weeks that we do the market updates. If you got some value out of this video, please give it a thumbs up. If you like seeing these on a weekly basis and want me to continue doing them, maybe let me know in the comments. And as always, if there’s any way that I can bring some value to your own personal real estate situation in the King and Snohomish County areas, please don’t hesitate to reach out.