Seattle Real Estate Market Watch 9/20/23
Hey, it’s Zach McDonald, your real estate agent with Real Property Associates and this is my Seattle Real Estate Market Watch for September 20th, 2023.
Well, if you haven’t noticed, I got my trusty Mariners hat with me here, and I’ve been wearing lots of Mariners hats lately, even in some of the videos because I’m really excited as we approach the last couple weeks of the Major League baseball season that the Mariners are in the hunt for the playoffs. So in order to cheer on, my Mariners have been wearing a lot of baseball hats in this video and in future videos until the playoffs are over or the Mariners don’t make it, I plan to have a Mariners hat either on or in the video because, well, I got to keep cheering on my Mariners as we jump into this week’s market watch. I wish I had different news to share, but there’s not a lot of new and exciting things to share in the housing market. Everything remains relatively stagnant, I would say, or similar to where we’ve been over the past couple months.
I will say though, that the Fed met today and decided not to raise rates, and it’s only the second time. They haven’t raised them since last March. So I guess that’s some good news. The ideas that inflation’s getting under control, they are talking about doing another raise here towards the end of the year, and they also are projecting maybe end like latter part of 2024 to start maybe reducing the rates. So again, all of this is speculative, but at this time it sounds like that’s the plan. So we’ll see how the markets respond to that. I think the stock market, as of recordings already dropped off a little bit. Mortgage rates before the meeting on Mortgage News daily were at 7.28%, which was a slight increase from the 7.24% last week. And really we’ve been hovering in this seven and a quarter range for a little while now, and again around some of the highs of the past 20 or so years.
Now, how’s the housing market been responding? And we look at this every week. I love doing these videos, so I’m glad that y’all have chimed in and requested that I continue making them. I think the biggest thing we’re going to see here towards the end of the year is just a massive drop off in supply. So if I’m going to predict anything, that’s going to be what it is. I know earlier in the year I started talking about how I think we’ll have year over year increases in the median sales price, and I stand behind that as well. So we’ll see how the rest of the year shapes up, but prices were down quite a bit from even where they’re at now at the end of last year, and I don’t suspect that’s what we’re going to see, especially with the low inventory environment that we are in.
And also with, well, some of the positive sentiment. I would say that we’re starting to get to a point where the fed’s even talking about what it might look like to start dropping the interest rates and at the same time even using some rhetoric to hint that maybe the economy’s doing better than they were projecting it would all at the same time. So listings though, we’re seeing a drop off here week over week. We had 761 new listings at the beginning of September this last week in King Snohomish County we’re seeing 601. So we saw a pretty big drop off there week over week in new listing activity, we saw a little reduction in the price reductions. Get it, we were at 3 96 last week, 3 55. We had a drop off as well in pending sales, not a big drop off, seven 15 versus 7 28 last week.
And again, the pending sales category does encompass houses that were pending inspection and went to pending. So that is again, I would say the closer to sold category is probably the best way to look at those. And then the sold listings, 5 36 versus 5 75. The majority of our closings will probably happen in the next week to two weeks on the data sheet here, especially as we’re hitting the end of the month. The projection I made earlier about the inventory continuing decline, I want to come back to that because it’s not some magical prediction. It’s something that’s based on what we’ve been experiencing all year long, which is reduced housing inventory and it’s piggybacking on the trend that we see almost every year, and that is that inventory tends to decline in the fall and winter months. So there’s nothing magical about it. I’m just affirming what we normally see and projecting that it might be even more dramatic.
And that’s I think, the biggest difference. I think it will be more dramatic than normal. I think that we’ve already seen a big drop off. It’s more than 30% in King County and Snohomish County year over year, so far fewer listings, and I suspect that we’ll see that trend continue. If you have 30% fewer listings than the, I would say lowest point of the year, well that’s going to be very few listings we’ve seen all year that the trend has been, there’s still more buyers than there are listings, which is why we’ve been seeing some competition and some rebound in the prices. So as we head towards the end of the year, buyers that are actively looking and want to purchase are still going to be able to do that, but there’s going to be a lot less selection. And what’ll happen is the selection that’s out there is going to continue to dwindle as we head into the winter months.
And man, I think it wouldn’t be a surprise to see below a month’s supply heading into the holidays and at least the beginning of the year, which I think again, is just going to continue to put pressure on pricing and inventory. And even if we do see more houses coming on the market the beginning of 2024, I suspect that we’ll find ourselves in a similar situation to this year, right where we saw prices start again. I guess I wouldn’t be surprised though to see less listings earlier in the year and then things start to pick up, especially if rates do start to come down and more of the buyer activity starts up again. I do think there will be some kind of connection there, but the golden handcuffs are still there for people that own a house. The first time home buyer market seems to be moving still people buying their first house because while they don’t have one to sell and the move up buyer, that’s the market where it seems to be the slowest right now in our market and across the country where people have such a good mortgage rate, it’s hard to justify that jump.
And the luxury market has also seen similar things, not as active as you would see in a different year. So the prototypical first time home buyer house and price point is moving, but the other price points aren’t moving as fast and there really just aren’t as many options coming on the market. So as we head into 2024, I think we’re going to see a lot of the same with the golden handcuffs remaining in place, less inventory, and I think we’re going to see that start to manifest itself here in the coming weeks. So if you’re a buyer that is currently looking, I would just say be patient. It’s okay, this is part of the process. And if you’re in a hurry, I would say you’re going to want to jump on something sooner rather than later because there is going to be less supply in the winter months, and I would even say later fall, this is probably the last big push of listings for the rest of the year.
I would say if you’re somebody looking to sell in the fall and winter, you’re actually going to be at somewhat of an advantage because there will be less options for buyers to choose from, so you may even find yourself in a somewhat competitive situation. Thanks so much for watching this week’s Seattle Real Estate Market Watch. I hope it was valuable for you. If you got some good nuggets out of this video, I would love it if you give it a thumbs up. And if you’ve got some thoughts to share down below in the comments, I’d love to hear from you as well. Oh, and I almost forgot, go Mariners!