SEATTLE HOUSING MARKET FORECAST
Home Prices, Interest Rates, Real Estate Statistics, Video and Charts
Seattle Housing Market
Remains RESILIENT IN AUGUST 2022
This article will be about the current and future state of the Seattle area housing market. Refer to the table of contents to skip to your interest.
We start with our 60 second video discussing the 3 key indicators and how they affect the market. Then an infographic and a highlight of what stood out the most this month and some quick stats we think are important.
We deep dive into what story the statistics are telling us. Next we will hear from the 24th most influential person in real estate, Lennox Scott and what he sees happing in the Seattle market. We will do a short breakdown on Sales Activity, Days on Market, Price, Interest Rates, Timing and Job and Population Growth. A complete list of the MLS Infospark stats for Seattle housing market trends.
Lastly, don't forget to check out the newest Seattle homes for sale.
The Seattle Housing Market At a Glance
SEATTLE REAL ESTATE MARKET
- Average Sales Price DECREASED by $10k total to $1.032mil
- New Listings DECREASED to 1,430
- Sold Homes DECREASED to 910
- Pending Sales DECREASED to 890
- Percentage of Sold Price to List Price DECREASED to 100.8%
- Interest Rates DECREASED to a Solid 5.05%
- Home Inventory INCREASED to 1.7 Months of Supply
Every month we gather all the facts, data and statistics about the Seattle Housing Market and share them with you. We will discuss the 3 major factors in determining the strength of the market.
- Monthly Inventory Level
- Percentage of Homes That Go Pending In First 30 Days
- Current Interest Rates
The data tells a story about the current state of our local residential real estate market.
As real estate professionals this is a perfect market. Listings are selling at a swift pace for market price. Buyers are able to pick their home and make offers with little to no competition. We call this Real Life – Real Estate™
Meaning that rather than trying to buy just to take advantage of an artificially low interest rate or to sell because of an artificially high selling price people are buying and selling due to real life events.
This is a good thing. It gives us time to slow down and weigh the pros and cons of each real estate decision.
Sellers that are Market Ready Day One are still seeing their homes sell quickly and for top dollar.
Buyers are still seeing historically solid interest rates and can often tour 5-8 listings that match their search criteria and offer list price with an inspection with little or no competition.
The real winner is the person that needs to sell and buy. It is always OK to buy/sell within same market timing. In this market most sellers are sitting on big equity and can take their time to get their home ready for sale. After we sell we have a much higher chance of buying our move up or move down without having to arrange for temporary housing. We are even seeing contingent sales start to get accepted again.
We are still hearing dooms day stories about the crash and while anything is possible I have found that the best way to really understand how the market is responding is to look at the data and match it up with the eye test.
We tend to look heaviest at the 3 key indicators to determine the health of the market.
The percentage of new listings that go pending, or under contract, in the first 3o days. We call this the "Sales Intensity Scale". During the pandemic we literally had to make up a new adjective to label what was happening as we were seeing over 90% of new listings go pending in the first 30 days. We called that an Ultra and Uber Frenzy Market. We are currently sitting at 54.7% of new listings. We call that a SURGE Market. A median or average type market would be around 30%.
Interest rates have decreased something that we do not seem to hear the news talk about as much as when they increase. We are currently at around 5.05% for a 30 year fixed conventional loan. Pre-Covid we were around 3.75%, then the stimulus packages hit and the Fed lowered the rates to near 0. This gave the banks a rare opportunity to offer rates in the 2's and if you got in on that... Congratulations. Historically speaking interest rates in the low 5's are considered a good rate.
BONUS TIP: With some listings it is possible to negotiate for Seller's concessions. Generally these would go towards your closing costs. Now might be a good time to negotiate seller concessions towards buying down your interest rate a percentage.
Lawrence Yun, the chief economist for the National Association of Realtors, predicted that banks had "Baked-in" the last rate hike this last week by the Fed. He correctly thought that we would see rates stabilize in the 5's.
Inventory level is nearing the 2 month mark. This last year we hit all time record lows for the amount of homes for sale. When there are not many homes to buy and many people looking to buy homes that is simple Supply and Demand. Not enough supply for all that demand.
What we saw happen was 10-20 people bidding on the same house. People buying houses they were allowed to tour for 15 minutes. People waiving all their contingencies and bidding the price of the home up by $50-200K. That was an abnormal market.
With 1.7 months of supply we are again able to tour multiple houses, often times not bidding against anyone or maybe 1 or 2 other offers. We are starting to see home inspections become the norm again.
If you are thinking of buying a home in Seattle right now and are worried that the interest rates have increased it is important to contrast that to what you gain.
"Marry the Home and Date the Interest Rate."
Despite the increased supply we have seen the average sales price remain above the $1mil mark for the past 5 months.
As we continue to see "premium pricing" fade away into the summer it leaves us feeling like prices have dropped. At this time most economists are predicting that prices level off, but will not loose appreciation. Anywhere from a 1-3% appreciation gain for 2022 are what the experts are predicting.
We are on a similar trajectory as we were on in 2018 where after an extended period with extremely low inventory and low interest rates, the interest rates increased and the sales intensity decreased. In 2018 this was most noticeable starting in June and going through the winter.
We should stay in a Strong market meaning that 40-50% of homes sell in the first 30 days through the summer.
Seattle rent remains high and it appears demand has as well as we are hearing stories of applicants calling as soon as the rental hits the market and being 1 of 20 callers. We have even heard stories about people have to win rental bidding wars.
According to ApartmentList.com Seattle's median 3-bedroom rent for an apartment is $4,629 month. Which equates to approximately a $820K home with 20% down on a 30 year fixed 5.05% interest rate loan.
As we find ourselves in recession-like situations the best hedge for inflation is real estate. As we keep seeing public figures like Bill Gates and Jeff Bezos buy real estate at an extraordinary rate.
As we have been talking about for a while now Seattle has the 2nd highest percentage of tech workers in the country. Tech jobs bring people in from all over the world and tend to be come with an above average salary. So what do tons of new people with above average salaries need when they get to Seattle, a place to live.
When you add the large number of high income tech workers with the historically solid interest rates and the desire for people to move into larger homes that accommodate all the at home activities that people have gotten used to along with crazy high rents and a desire to counter inflation with real estate we should steer clear of any kind of bubble bursting.
Despite WA being fully open we will continue to offer a full suite of Virtual Real Estate Services.
THE HOUSING MARKET IS RESILIENT
We have returned back to a strong level of Sales Activity Intensity™ this July for new resale listings going under contract the first 30 days. In Seattle, we are experiencing this for homes priced up to $1.5 million, where 88 percent of sales take place. Sales activity is healthy above $1.5 million.
Buyer opportunities have returned to the market, including increased availability and selection of properties, as well as fewer multiple offer / premium pricing situations. J Lennox Scott
CEO of John L. Scott Real Estate
Seattle Real Estate GRAPHS AND Data
With 1.7 months of supply if no other homes were listed in the next 51 days we would run out of houses to buy.
There were 1,430 new listings in July.
If you are looking for homes 2 million plus you are seeing more inventory than $500k-$1million.
As you can see from the table above anything below 5 months of inventory is considered low. Low inventory means higher demand. Higher demand drives the price up.
910 homes were sold in Seattle last month. That is down 271 from the previous month, down 542 from last year, and down 217 from 5 years ago.
In the Seattle housing market homes in the 500k-1m+ price range typically sell the fastest.
54.7% of homes are selling in less than 30 days in the Seattle housing market. A median market is usually closer to 30%.
Houses in the $750K-1mil price range are selling 57.9% of the time in the first 30 days.
Even as there are more homes for sale, there are still many buyers trying to buy… the homes that do list are still selling very fast.
AVERAGE SALE PRICE: $1,031,606
SINGLE FAMILY RESIDENTIAL: $1,165,666
We have already seen where a low inventory should drive up prices. The average sale price for Seattle homes is $1,031,606. In comparison 5 years ago the average sales price was $757,743 a 36% increase in equity, or a 7.2% increase per year.
Listings are selling at 100.8% of their list price on average.
As you can see from the John L. Scott 6 phases to a yearly house cycle chart we are through the "busy season".
If you’re a buyer you will want to position yourself to create a buyer advantage when competing with other buyers and walk in confidence when making an offer. We can consult with you to be up-to-date with current market intensity and pricing, get pre-approved or fully underwritten through a lender, and receive email/text notification of newly listed properties.
In today’s instant-response market, it’s key to ensure you’re ready to act when the timing is right and make sure you are Buyer Ready Day One.
Sellers should be Market Ready Day One.
WHILE WE ARE NOT SURE HOW THE EMPLOYMENT NUMBERS WILL END UP HERE IS THE CURRENT UNEMPLOYMENT SITUATION
CURRENT UNEMPLOYMENT RATES
"King County lost population last year for the first time in almost 50 years", according to the Seattle Times.
STATS PROVIDED BY: INFOSPARK
- $1,031,606 was the average sold price for listings in Seattle.
- 1,430 new listings went on the market this month.
- 1,910 homes were for sale during the month.
- 890 homes went pending in Seattle.
- 910 homes sold this month
- 1.7 months of inventory available in Seattle
- 12 was the average days on market for a home to sell in Seattle
- 100.8% was the average listing price vs. sales price percentage
- $585 was the average price per square foot in Seattle
- $938,761,222 was the total closed sales volume for Seattle
- 5.5% was the interest rate
- 68.5% of homes sold in the first 30 days in Seattle
The Seattle Housing Market saw 1,430 new listings, 1,910 homes were for sale, while 910 homes sold in July in Seattle.
The average days on market increased to 12 days, the percentage of sale price to listing price decreased to 100.8%, and the average sales price decreased slightly. The percentage of homes that sold in the first 30 days is 54.7% indicating an Strong Market. Inventory is at 1.7 months of supply indicating a Shortage.
Despite interest rates jumping in the last couple months the pool of buyers remains strong.
We should continue to see a strong market through the Fall of 2022.
Now is still a good time to sell your home as we are still seeing low inventory and historically high prices.
If you are considering a move up, a move down, or just want to sell your home… Months of inventory is still at below average. Homes are selling at a rapid pace, the Interest Rates are still at average rates.
The Seattle job market has remained strong powered by the tech sector.
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