Seattle Real Estate Market Watch – 9/27/2022
In this video, I give a snapshot of the Seattle real estate market in the week of 9/27/2022.
Hey y’all, Zach McDonald, your real estate agent with Real Property Associates, and this is our market watch for September 27th, 2022.
Well, we’re keeping with the theme here of these weekly market watches as we continue to follow the Seattle housing market, as the market shifts and changes for the better part of a couple years, we were on this really, really steep trajectory upwards during the Covid pandemic interest rates were at all time lows, and now we find ourselves announcement with the highest interest rates we’ve seen in 20 years. So again, it sounds like a really scary headline. and interest rates have been at all time lows here over the past few years specifically, but over the past 10, really hovering in that territory and now we’re back up into the low seven. So as of today, mortgage news daily reported 7.08% rates in the morning. Crazy. So we haven’t seen 7% rates since early 2000. And really up until 2000, most of the rates were 7% or more.
So again, we’re talking about the highest rates we’ve seen in a while because rates have been low or and have really trended down historically. But if we look at historical rates since 1971, we’ve seen rates over 7% historically and quite a bit over 7%. So we’re kind of nearing more historical averages territory, but the fact of the matter is houses cost a lot more money right now. So a rate in the sevens means that you have a lot bigger payment on a house of this dollar amount. So prices are way, way up from the early two thousands. So the impact of that rate is a lot more dramatic. People are making more money, but again, those payments are pretty hefty right now. So what’s happened here recently, as we’ve seen prices going down in the Seattle area and a lot of the other higher priced markets, there’s a recent Redfin study, and I’m going to talk about it in a different video, where they’ve looked at some of the housing markets across the country and Seattle currently is number one on their major list of metro areas as far as decline since February when prices were nearing their peak.
So again, crazy, but I, I wanted to make sure that I made this announcement today. Do I think that the housing market is gonna fall apart, that the sky is falling? And I didn’t make this video today to tell you that because I don’t think that’s the case, but mortgage rates do have a big effect on affordability for people and we can’t brush over that. So historically speaking, as we head into recessions, and I would argue we’re already in one mortgage rates are tending to go up and once we hit recessions, that’s when we see mortgage rates go down. We’re still, the government hasn’t officially announced it. Again, I would argue we’re already in a recession, but until it’s announced, I think we’re gonna continue to see rates going up. We’re trying to get a handle on inflation. People are afraid about what the future holds, right?
Fear is a big part of the economy, whether we like it or not, right? Or do people want to spend money or do they want to hold on to money? But once we get to that point where we feel like we’re on top of it, that’s when I think we’re gonna start to see rates going down. And I think we’re gonna see the real estate market picking back up. We did have a blip though in rates about a month and a half ago, and that did help stimulate things a little bit. And I think we’re still living out that a little bit, and we’ll talk about that in the weekly market watch here as we go down. And if we look at some of these stats, we had new listings on the market, 753, which is fairly light for a September. So I think again, as we’re looking at these market updates, as we talk about the October market update and look back at September, I think we’re gonna see some of the same trends we did in August.
And that was that the inventory and the supply is continuing to tighten up. we had 767 price reductions. I feel like this is the story here over the summer, the contingent purchases we had 30, again, we’re still seeing contingent purchases in the market, which again is great for buyers that want to move up. Now, what’s not great is that payment, right? That jump and interest rate. So a lot of people, and I think that’s why we’re not seeing as many new listings and why I also think we’re not gonna be flooded with them is because people have really great mortgage rates right now. And I think if people were having a difficult time making those payments, you’re gonna wanna hold onto it because you’ve got really good equity in your house still and you’ve got a really great mortgage payment. So I think people are gonna fight to keep their houses, even if it does get even more difficult here in the future.
But I also think that people are gonna be less likely to sell and buy unless again, they’re in a very good position because it’s going to be a lot more expensive in the short term. So for those that can’t afford it and are able to, I think there might be opportunities at the higher price points to get a pretty good deal on a house coming up again in the next six months to a year. It’s something to be watching. I know I’m personally gonna be watching but to be able to maybe purchase that next house, you might not want to sell the one that you have. You might keep it as a rental property because now everybody needs a rental. So there’s a lot of scarcity in the rental market. Again, it’s all connected. I think I saw a notification to my email that somebody, I think it was Zillow, was saying that my house would rent for $4,000 a month.
I’m like, what? That would be pretty sweet, right? I could make some money on my house and make, make another purchase. But again, time will tell if that even happens. Love my house. By the way, I think if we’re looking at here and wrapping this up, pending listings 848. So again, every single one of these I have done, we have seen more pendings than new listings. So we’re continuing to trend towards supply. So that’s why I’m saying I think September coming up, we’re gonna see less inventory. It’s not like right now as all this is happening, rates are at an all-time high. At least over the past 20 years, we’re not seeing the sky falling. And that’s why we do these market watches because I think the data doesn’t lie. And we have people continuing to make purchases, even with the rates going up.
People need a place to live. It’s really expensive to rent a place right now too. It’s not like rental costs have gone down. They’ve actually gone up because there’s competition in the rental market when there’s not as much competition in the housing market because people are wanting to rent versus buy. So again, I think opportunity, right? I don’t know exactly when that opportune moment’s gonna be. That’s a, that’s gonna be a gut decision for people. The market is down, the stock market’s, down the housing market’s down, everything’s down right now. And that’s when you want to be buying, right? You, you’re always buying when you, when you can, which is my general recommendation. But if there are opportunities where you can buy and time the market a little bit and you’re in that situation and you can take advantage of it, do it. So I wish I had a crystal ball and could tell you, Hey, this is the bottom, or it might get a little, it’s going to get worse or it’s going to get better from here.
I don’t, and if I, if I did, I would make a lot more money than I do. But what I can tell you is you’re already purchasing at a steep discount from what people were paying earlier in the spring. So you’re already in a good spot here to move forward with a purchase. So selling a house, again, I’ve mentioned this in market updates and if you want more of the data, you gotta check out the monthly market updates, Seattle real estate market updates. But in those updates, I’ve been sharing that even though the market has corrected quite a bit here in the Seattle area, we’re still selling houses for more now than we were last year. So maybe you missed the boat for the highest prices ever in the area. And we probably won’t see those prices for a little bit, maybe a year or so, maybe two years or more.
But we’re still selling for more than we were at the same time last year. So sellers, you didn’t completely miss the boat. but again, buyers opportunity. We’ve got the contingent purchases again, we’ve got the higher rates, so that’s something you have to be able to stomach. But I think the biggest opportunity is probably gonna be on those higher end homes. Homes that are more expensive. You’re gonna see steeper price cuts and those houses will recover really quickly when rates get better. Thanks so much for watching this week’s Seattle Real Estate Market Watch. If you got a lot of value out of this video and you want to follow along with these and other videos, including the Seattle Real Estate Market updates on the monthly basis, please consider subscribing to the channel. And if you want to talk about your situation or have questions about buying or selling real estate in the Seattle Metro area, please don’t hesitate to reach out.