Seattle Housing Market: Prices, Trends, Forecast 2023

Seattle Housing Market Trends

This article will talk about how the housing market in the Seattle area is right now and its forecast. The Seattle housing market in February 2023 shows an increase in active listings for sale, with 894 listings in Seattle and 2,064 listings in all of King County. However, closed and pending sales decreased compared to February 2022, with Seattle seeing a -26.22% decrease in closed sales and a -28.63% decrease in pending sales.

King County also experienced a decrease in closed and pending sales. Median sales prices decreased in both Seattle and King County. Despite the increase in active listings, the low MOI of 1.69 in Seattle and 1.43 in King County suggests that the market continues to favor sellers NWMLS, the primary resource for the residential real estate industry in the western region of Washington, has released its monthly market update.

Brokers suggest that the housing activity is following a normal seasonal pattern, with increasing open house traffic signaling the start of the spring market. The report indicates that softening prices are enticing some would-be buyers while others are waiting for mortgage rates to stabilize or decline.

Although there has been an uptick in new listings, pending and closed sales, and median prices compared to January, when compared to the same month last year, these figures have declined. This article analyses NWMLS’s monthly market update, with a focus on the Seattle housing market.

While NWMLS’s monthly report is not exclusively about Seattle, it includes information about the Seattle housing market. The tri-county area of King, Pierce, and Snohomish counties, where around half of the inventory is located, offers insight into the Seattle housing market. The report shows that the number of homes for sale in the tri-county area has more than doubled from a year ago, yet there were still fewer homes available to buy in February than in January.

ALSO READ: Washington State Housing Market Forecast

Furthermore, listings were more than 40% lower than pre-pandemic levels, suggesting that homeowners may be holding off on selling until the market stabilizes. Although fewer homes are coming on the market than in previous years, NWMLS expects that spring will bring a seasonal increase.

J. Lennox Scott, Chairman, and CEO at John L. Scott Real Estate, also commented on the limited selection. Scott expects that new listings will sell quickly, bringing back the multiple-offer scenario for some properties. Unsold inventory virtually sells out in the more affordable, mid-price, and upper end price points. Scott recommends that buyers become “buyer ready” to ensure they get the home of their choice.

NWMLS data for the tri-county area shows that the median price system-wide on February's closed sales was $575,000, down 1.7% from the same month a year ago, but up 3.1% from January. Year-over-year sales prices slipped in all but six counties. YOY asking prices were unchanged areawide, at $650,000, but vary widely by area.

Low Inventory and High-Interest Rates

Both inventory and interest rates are worrisome for some buyers, according to spokespersons with the multiple listing service. At the end of February, the MLS report shows only 1.7 months of supply across the 26 counties in the report. While that’s an improvement from a year ago when there were only about 0.7 months of supply (about three weeks), it is down from January’s total of about 2.5 months.

A supply of four-to-six months is considered a balanced market, according to the National Association of Realtors and other industry watchers. Dean Rebhuhn, the owner at Village Homes and Properties in Woodinville, reported that the February market got off to a quick start, with an increased number of homes coming on the market daily as prepared buyers made their offers. Open house activity has been very active.

“Although the number of homes for sale in the tri-county area of King, Pierce, and Snohomish counties is more than double from a year ago, there were still fewer homes available to buy in February than in January,” observed Matthew Gardner, Chief Economist at Windermere Real Estate. “Furthermore,” he continued, “listings were more than 40% lower than pre-pandemic levels, suggesting that homeowners may be holding off on selling until the market stabilizes.”

Listings are not coming to the market as quickly as in recent years, reported John Deely, Executive Vice President of Operations at Coldwell Banker Bain. This is due to a combination of factors, including low inventory, high demand, and the ongoing pandemic, which has made some sellers hesitant to list their homes.

Deely noted that despite these challenges, the Seattle real estate market remains strong and resilient. Home prices continue to rise, and competition among buyers remains fierce, particularly in desirable neighborhoods.

If you're a buyer in this market, it's important to be prepared for a potentially long and challenging search for your dream home. You may need to act quickly and make strong offers to compete with other buyers. Working with an experienced real estate agent can also be a big advantage, as they can help you navigate complex and rapidly changing market conditions.

If you're a seller, now could be a great time to list your home, as many eager buyers are looking for properties in the Seattle area. However, it's important to work with a real estate agent who has a strong understanding of the market and can help you price your home appropriately and effectively market it to potential buyers.

Overall, while the Seattle real estate market is facing some challenges, it remains a strong and desirable place to buy or sell a home. With the right approach and guidance, you can achieve your real estate goals in this dynamic and exciting market.

ALSO READ: Which Are The Hottest Markets in Seattle?

King County Housing Market Trends for February 2023

Below is the most recent Seattle Housing Market Report released by “Northwest MLS.” The report compares the key housing metrics of the City of Seattle (which is part of King County).

Here are the numbers (RESIDENTIAL+CONDO) for February 2023 compared with February 2022.

ACTIVE LISTINGS FOR SALE

• The total active listings in Seattle were 894.
• This represents an increase of 83.95% as compared to February 2022.
• The total active listings in All of King County were 2,064.
• This represents a rise of 111.04% as compared to February 2022.

CLOSED SALES

• 529 closed sales were registered by brokers in Seattle.
• This represents a year-over-year decrease of -26.22%.
• 1,448 closed sales were registered in All of King County.
• This represents a year-over-year decrease of -18.92%.

PENDING SALES

• 708 pending sales were registered by brokers in Seattle.
• This represents a decrease of -28.63%% from the same month a year ago.
• 1,986 pending sales were registered in All of King County.
• This represents a decrease of -24.52%% from the same month a year ago.

MEDIAN SALES PRICE

• Seattle's median sales price decreased by 1.32% to $750,000.
• Last year, at this time, the median price in Seattle was $760,000.
• King County's median price decreased by 4.35% to $726,700.
• Last year, at this time, the median price in King County was $759,735.

MONTHS OF INVENTORY (MOI)

• 1.69 months represents the number in Seattle.
• Months of supply in All of King County is 1.43.
• 6 months of supply is when you have a balanced real estate market. 
• This shows that this region continues to be a seller’s housing market.

Why is the Seattle Housing Market So Hot?

Seattle's housing market is red hot, and it's due to the influx of high-paid tech employees from companies like Amazon, Microsoft, Google, and Facebook. These employees have been seeking more spacious homes with office areas to work remotely during the pandemic, and they have the financial resources to outcompete other buyers and drive up home prices.

Despite an increase in inventory, the Puget Sound region's housing market remains tight, with less than two months of supply. This means the region continues to be a seller's market, with a limited number of homes available to meet the high demand from buyers. As a result, home prices are likely to remain high for the foreseeable future.

The city's vibrant cultural scene, scenic beauty, and excellent quality of life also make it an attractive place to live. Despite the rising prices, Seattle's housing market continues to attract buyers from all over the country. The city's strong job market, diverse economy, and progressive values make it a desirable destination for people from different backgrounds and professions. This has resulted in a highly competitive real estate market, where homes are selling quickly and above asking prices.

However, the shortage of housing inventory has become a major concern for the city's policymakers, as it has led to affordability issues and exclusionary zoning practices. To address these challenges, Seattle has launched several initiatives, such as increasing the supply of affordable housing, promoting sustainable development, and reforming zoning laws. These efforts aim to ensure that Seattle remains an inclusive and livable city for all its residents, regardless of their income or background.

It is a Seller's Real Estate Market in 2023?

The following housing market trends are based on single-family, condo, and townhome properties listed for sale on realtor.com. Land, multi-unit, and other property types are excluded. This data is provided as an informational resource only. King County, WA is now a balanced real estate market. The median asking price is rising in single digits.

The median asking price for a home in King County was $800K in February 2023, which is flat year over year. The median sale price was 731K. If the Median Listing Price is increasing, the market is likely “hot,” and homes will sell more quickly. When prices increase, sellers will benefit. In February 2023, homes in King County sold for approximately the asking price. The Sale-to-List Price Ratio was 100%.

• There are 63 cities in King County, where Realtor.com has active listings.
• Mercer Island has a median listing price of $2.5M, and it remains the most expensive city in King County.
• Federal Way is the most affordable city in King County, with a median listing price of $549.5K.

Seattle Housing Market Forecast 2023

Seattle housing prices are estimated to go down in 2023. Despite the robust growth in the Seattle housing market, it is predicted that home prices in the Seattle-Tacoma-Bellevue metro area may decrease by 1.1% between January 2023 and January 2024. This forecast is based on the assumption that the local real estate market will continue to cool off as more inventory becomes available amidst higher mortgage rates.

Let us look at the price trends recorded by Zillow over the past few years. For the past 6 to 7 years an extreme drop in inventory led to an astronomical rise in Seattle home prices, as buyers competed over a dwindling number of properties on the market. Seattle has a track record of being one of the best long-term real estate investments in the U.S.

• According to NeighborhoodScout.com, Seattle's real estate appreciated 137.11% over the last ten years.
• It is an average annual home appreciation rate of 9.02%,
• It puts Seattle in the top 10% nationally for real estate appreciation.
• As of now, Seattle prices are up across the board.
• During the twelve months, from 2021 Q2 – 2022 Q2, the Seattle appreciation rate has been 12.16%.
• In the quarter, from 2022 Q1 – 2022 Q2, the appreciation rate has been at 4.35%, which annualizes to a rate of 18.58%.
• However, the housing market in Seattle is cooling quickly since the third quarter of 2022.

The current typical home value of homes in Seattle is $831,102 (Data through January 31, 2023). ZHVI represents the whole housing stock and not just the homes that list or sell in a given month. Seattle home values have gone up 0.2% since last January.

• Typical Home Value: $831,102
• 1-year Value Change: +0.2%
• The median sale-to-list ratio is 0.992
• 22.3% Percent of sales over list price.
• 53.1% Percent of sales under list price.
• 35 Median days to pending.

Here is the housing forecast for Seattle-Tacoma-Bellevue Metro.

• Seattle-Tacoma-Bellevue Metro home values have gone up by 2.9% from last year to $689,866.
• The Seattle metro housing market forecast ending with December 2033 is somewhat negative.
• Zillow predicts that Seattle metro home values may decline by 1.1% between Jan 2023 to Jan 2024.

These numbers can be positive or negative depending on which side of the fence you are — Buyer or Seller? People continue to buy and sell their homes, whether they're growing their family and need a bigger place, relocating for a job, or retiring. Opportunities abound for both buyers and sellers if they’re willing to act quickly.

Seattle and the entire metro area market is so hot that it cannot shift to a complete buyer’s real estate market, for the long term. In a balanced real estate market, it would take about five to six months for the supply to dwindle to zero. In terms of months of supply, Seattle can become a buyer’s real estate market if the supply increases to more than five months of inventory. And that’s unlikely to happen at least over the next twelve months.

The bottom line: This region's current inventory (months of supply for SFH+condos) remains tight — 1.69 months in Seattle and 1.43 months in All of King County. Therefore, in the long term, the Seattle real estate market remains as strong as always. This housing market is skewed to sellers due to a persistent imbalance in supply and demand.

FAQs – Seattle Housing Market

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Some of the information in this article was obtained from referenced websites. Norada Real Estate Investments provides no explicit or implied claims, warranties, or guarantees that the material is accurate, trustworthy, or current. All information should be validated using the below references. As a general policy, Norada Real Estate Investments makes no claims or assertions about the future housing market conditions across the US.

REFERENCES

• https://www.nwmls.com/
• https://www.zillow.com/seattle-wa/home-values
• https://www.redfin.com/news/seattle-homes-sold-above-list-price/
• https://www.realtor.com/realestateandhomes-search/Seattle_WA/overview
• https://www.rentcafe.com/average-rent-market-trends/us/wa/seattle
• https://www.neighborhoodscout.com/wa/seattle/real-estate
• https://seattlerealestatenews.com/category/info/seattle-monthly-housing-news
• https://www.seattlepi.com/coronavirus/article/best-time-to-buy-or-sell-a-house-during-pandemic-15287608.php