What is happening in the Greater Seattle Real Estate Market? In one word, shifting.
Welcome to June’s Market update where we dive into the numbers and the current market conditions. First, we’ll go over the latest market stats, then, just as important, we’ll tell you what this means for both buyers and sellers.
Let’s get into it. First, the inventory. Snohomish County saw an increase in inventory of 26.2%, and King County saw a 12.1% increase year-over-year. On the other hand, the city of Seattle saw a 10.9% decrease in new homes come on the market vs this time 1 year ago. Even though Seattle saw a drop in inventory, when looking at the region as a whole, more homes came on the market. Obviously, when we have an increase in inventory there is more competition for sellers, giving buyers more options.
Now, lets’ mention the speed at which homes have been selling. In the month of May, homes across our region sold faster than the same time last year. In Snohomish County, the average time it took to sell a home in May of 2021 was 8 days. May of 2022, it took 9 days. For King County, the average was 14 days last year AND only 9 days this May. For Seattle, the average days on market was 18 last year, vs only 12 days this May. That being said, these are the numbers of from homes that went under contract in March and April, when the market was hotter. Currently we are seeing increases in the time it takes for homes to sell.
Another revealing statistic is the Sales Price to List price ratio because it tells us how much above or below the list price homes are selling. In Snohomish County, homes went from selling for 9.3% ABOVE the asking price, to selling for 6.3% ABOVE the asking price, year over year, which is a decrease of 3%. For King County, homes went from selling 9.4% ABOVE the list price to 8.7% ABOVE the list price year over year, which is a 0.7% decrease. And in Seattle, homes went from selling for 7.8% ABOVE the list price to 10.2% ABOVE the list price, which is an increase of 2.4%. This makes sense as the City of Seattle did not have as many new homes come on the market as the other areas, so there was more buyer competition driving the prices up.
In Snohomish County, the median sales price went up from $695,000 to $810,000 year-over year. That’s just over 16%. For King County, the median sales price when up from $875,000 to $1,003,000 year-over year, which is in increase of 14.6%. And in Seattle, the median sales price went up from $893,500 to $996,000 year-over year, which is in increase of 11.5%. When looking at the year-over-year comparison values are increasing. HOWEVER, if we compare to last month’s values there is a different story. Snohomish County’s Median Sales Price in April was $841,000, which is $31,000 more than this month. King County saw an increase in value by only $3,000 and the City of Seattle by only $2,000. Here is the important message. We have seen a slowdown in the dramatic home appreciation that we’ve all witnessed the past 2 years. And we expect next month’s market numbers to show even more significant decreases in median home values.
Whether you are a buyer or a seller, everyone is asking, WHERE is the market headed? One thing is for certain, home values are NO LONGER appreciating like they did last year and earlier this year. Do NOT rely on Mainstream media, because they are behind the curve on reporting this. Most of the nation has seen a cool down. Here in greater Seattle, the market HAS also flattened. And we believe this more or less “flat market” (where home prices stay the same) will continue. Home values might even start softening.
Now here are our takeaways for both buyers and sellers. Let’s start with Sellers
1. Temper expectations. Inventory is still low, but it is increasing. The length of time it takes to sell a home is also increasing. Bidding wars are not as common. If you do receive multiple offers, consider yourself fortunate. You may be thinking, “but my neighbor’s home sold 3 months ago and received 20 offers.” True, but that is not today’s market. If you receive multiple offers, even if they don’t increase drastically over the asking price, consider that a win.
2. Do not overshoot your list price by going on the market too high. Your home will sit on the market without enough showings or offers. Currently, 1 out of every 5 home sellers is having to reduce their price. By overpricing, this ends up costing the seller even more money and frustration. The best pricing strategy is to price competitively, according to what market data is showing. Depending on how the market reacts, you may need to make a price adjustment.
3. This is still a fantastic time to sell. Your home’s value is incredibly high. Depending on your neighborhood and the specifics of your home, you could still sell anywhere from 10 – 24% MORE than you could have last year. This is especially true if you have a nice home in a good location. Keep in mind, even though the market has flattened, historically we still have low supply, so buyers are excited to see good homes come on the market.
Now for you buyers:
1. Finally, you are getting some relief. Because much higher prices and interest rates have left many buyers on the sidelines, you don’t have the feeding frenzy environment to compete with. Well priced homes in popular neighborhoods still sell quickly and can garner multiple offers. But as mentioned, it is a far cry from just a couple of months ago. Our advice is to be patient and really find a home you love, especially since you no longer have the overwhelming competition from other buyers. Even better, summer is often a great time to shop for a home in our region because many buyers take a break. While they are distracted with summer plans and travel, you can use this to your advantage.
2. Interest rates have come down a little bit from their recent high of 5.65%. At the time of this recording, you can lock in a 30-year fixed rate mortgage at 5.25%. Now check this out, you can drastically save on your monthly mortgage payment and still get a 3.9% interest rate. What’s the catch? You have to be willing to take on a 5-year adjustable-rate mortgage. Now, we are NOT advocating for everyone to take on an adjustable-rate mortgage just to get a lower rate, because this could get you in to trouble. However, if you know with certainty that you don’t plan on owning the home very long, say you are planning to relocate and sell it within that 5-year timeframe, then an adjustable-rate mortgage could be a good way to go.
3. When you find homes that have sat on the market for more than a week or two, you have the potential for negotiating power. This could mean contingencies that are more in your favor and a lower purchase price. YES, you CAN now negotiate lower prices if the sellers haven’t received offers and they are motivated to sell.
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