The Seattle housing market, often referred to as the Emerald City's real estate landscape, continues to face challenges due to limited inventory and high demand. In August 2023, Seattle's real estate market underwent significant changes compared to the same period in the previous year. The total number of active listings in Seattle was 1,333, reflecting a notable decrease of 8.7% from August 2022. This decline in active listings suggests a tightening of the housing supply within the city.
Seattle registered 729 closed sales in August 2023, representing a year-over-year decrease of -15.72%. This decrease in closed sales reflects a shift in market activity, although Seattle still saw a considerable number of completed transactions. Additionally, there were 791 pending sales in Seattle, marking a decrease of -15.22% from the same month a year ago. These figures indicate a decrease in both completed and anticipated transactions within the city.
Furthermore, Seattle's median sales price decreased by 4.15% to $809,950 in August 2023. In contrast, the median price in Seattle during the same period last year was $845,000. Despite this decrease, Seattle remains a dynamic real estate market with a median sales price that reflects the city's diverse housing options.
Seattle's months of inventory (MOI) stands at 1.83 months, well below the balanced market threshold of 6 months. This low MOI reaffirms that Seattle continues to be a seller's housing market, characterized by high demand and limited housing supply.
ALSO READ: Which Are The Hottest Markets in Seattle?
ALSO READ: Washington State Housing Market Forecast
Is Seattle a Seller's Real Estate Market?
The following Seattle 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. The median listing home price in Seattle, WA was $799.5K in August 2023, trending down -5.2% year-over-year. The median listing home price per square foot was $592. The median home sold price was $820K.
Median listing home price vs. median home sold price
Sale-to-list price ratio: 100%
Homes in Seattle, WA sold for approximately the asking price on average in August 2023.
Seattle, WA is a seller's market in August 2023, which means that there are more people looking to buy than there are homes available.
Median days on market: 40 Days
On average, homes in Seattle, WA sell after 40 days on the market. The trend for median days on market in Seattle, WA has gone up since last month, and slightly up since last year.
There are 94 neighborhoods in Seattle. North Admiral has a median listing home price of $1.2M, making it the most expensive neighborhood. Broadway is the most affordable neighborhood, with a median listing home price of $550K.
Are housing prices dropping in Seattle?
As of August 2023, the median listing home price in Seattle has declined by -5.2% year-over-year. However, this overall trend doesn't indicate uniform drops in all neighborhoods or property types. Homes are still selling at a median price of $820K, with a 100% sale-to-list price ratio, suggesting strong demand. Specific neighborhoods like North Admiral and Broadway show varying price levels. While prices have dipped, Seattle remains a seller's market with homes selling close to asking prices.
Key Stats from NWMLS Market Report for Aug 2023
The Seattle housing market is undergoing significant changes as of August 2023. The Seattle housing market in August 2023 is characterized by mixed trends, with rising prices but declining sales activity. The impact of rising mortgage rates and limited supply are significant factors influencing the market.
While challenges persist, there is hope for increased listings in the fall and opportunities for both buyers and sellers in various segments of the market. According to a recent report from Northwest Multiple Listing Service, there are both positive and negative trends affecting the market.
Positive Price Growth
In August, the median price of homes that were sold rose by a noteworthy 2.5% compared to the previous year. This marks the first year-over-year increase since January. The median price stood at $615,000 for 6,734 closed sales across 26 counties, matching July's figure.
Challenges in Key Metrics
While prices have shown growth, other key metrics in August have experienced declines in year-over-year comparisons. Brokers added 8,152 new listings, a drop of nearly 17.8% from August 2022. Pending sales also decreased by nearly 25% compared to the previous year.
Rising Mortgage Rates
One of the primary reasons for the decline in sales activity is the uptick in mortgage rates. The average interest rate on a 30-year home loan reached a high of 7.23% in August, according to Freddie Mac. Although it subsequently dropped to 7.12% in early September, these higher rates are discouraging both buyers and sellers.
Supply Constraints
Despite slower activity, the supply of homes in the market remains limited, with only 1.71 months of inventory in the MLS database. This is down from both a year ago and the previous month, indicating a continued constraint on supply.
Market Predictions
J. Lennox Scott, executive officer at John L. Scott Real Estate, predicts that over the next two months, homebuyers will experience the best selection and availability of homes for sale until March 2024. This is due to the reduced number of homes coming on the market over the winter months.
Matthew Gardner, Windermere Chief Economist, believes that the housing market is currently in a state of uncertainty and may not find its direction until mortgage rates start to decline, assuming the U.S. economy continues to moderate.
Long-Term Outlook
Dick Beeson, managing broker at RE/MAX Northwest, Tacoma | Gig Harbor, expects that the market will continue to face low inventory and high rates for the next one or two years. While some high-priced homes have been affected, the median priced buyer still seeks to purchase homes despite higher interest rates.
Attracting Multiple Offers
Despite low inventory in several counties, new listings are attracting multiple offers, often selling for more than the asking price. Smart sellers are furnishing home inspections and correcting issues, while smart purchasers are presenting offers with a minimum of contingencies and short closing dates.
Optimism for the Future
Although there are challenges in the Seattle housing market, some remain optimistic. John Deely, executive vice president of operations at Coldwell Banker Bain, believes that a fall season increase in listings should provide more options for determined buyers.
Kitsap County's Unique Situation
Kitsap County faces its own set of challenges with extremely low inventory. Buyers in this county need to be prepared to offer full price or better and expect multiple offer situations for correctly priced new listings.
New Construction and Condo Options
Some hopeful homebuyers are turning to new construction where builders are offering discounts or other incentives. Additionally, the condo segment provides options, with prices considerably lower than single-family homes.
King County Housing Market Trends – August 2023 vs. August 2022
King County, which includes Seattle, remains a highly sought-after area in the housing market. In August 2023, King County, excluding Seattle, experienced notable changes in its real estate market compared to the same period in the previous year. The total number of active listings in King County was 3,222, marking a substantial drop of 25.19% from August 2022. This decrease in active listings indicates a tightening of supply in the region.
Closed sales in King County amounted to 2,160, representing a year-over-year decrease of -16.96%. While there was a decline in closed sales, the region still saw a substantial number of completed transactions. Additionally, pending sales in King County numbered 2,340, showing a decrease of -19.84% from the previous year. Despite these declines, King County continues to be an active real estate market.
Furthermore, King County's median sales price saw a modest increase of 0.74%, reaching $821,000 in August 2023. This indicates a relatively stable pricing environment in the county. With months of inventory (MOI) of 1.49, well below the balanced market threshold of 6 months, King County remains a seller's housing market, characterized by strong demand and limited supply.
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 August 2023 compared with August 2022.
ACTIVE LISTINGS FOR SALE
- The total active listings in Seattle were 1,333.
- This represents a decrease of 8.7% as compared to August 2022.
- The total active listings in All of King County were 3,222.
- This represents a drop of 25.19% as compared to August 2022.
CLOSED SALES
- 729 closed sales were registered by brokers in Seattle.
- This represents a year-over-year decrease of -15.72%.
- 2,160 closed sales were registered in All of King County.
- This represents a year-over-year decrease of -16.96%.
PENDING SALES
- 791 pending sales were registered by brokers in Seattle.
- This represents a decrease of -15.22% from the same month a year ago.
- 2,340 pending sales were registered in All of King County.
- This represents a decrease of -19.84% from the same month a year ago.
MEDIAN SALES PRICE
- Seattle's median sales price decreased by 4.15% to $809,950.
- Last year, at this time, the median price in Seattle was $845,000.
- King County's median price increased by 0.74% to $821,000 .
- Last year, at this time, the median price in King County was $815,000.
MONTHS OF INVENTORY (MOI)
- 1.83 months represents the number in Seattle.
- Months of supply in All of King County is 1.49.
- 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.
Seattle Housing Market Forecast 2023-2024
The Seattle housing market has long been a subject of interest due to its dynamic nature and its influence on the broader Pacific Northwest economy. In recent times, the market has shown some intriguing trends that prompt us to examine the factors driving the current state and future trajectory of the Seattle-Tacoma-Bellevue housing market.
Current State of the Market:
According to Zillow, as of July 31, 2023, the average home value in the Seattle-Tacoma-Bellevue area stands at $701,530. This represents a decrease of 4.9% over the past year, indicating a shifting landscape for both buyers and sellers. The median time a property takes to go pending is approximately 7 days, underlining the competitive nature of the market. The market's current dynamics have led to a median sale-to-list ratio of 1.002 as of June 30, 2023, implying that homes are selling, on average, at or slightly above their listed prices.
Market Predictions:
Looking ahead, the Seattle housing market is projected to experience a 5.0% increase in home values over the next year, according to forecasts as of July 31, 2023. This prediction suggests a potential rebound from the recent decline in home values, indicating a positive sentiment in the market and renewed interest from both buyers and investors.
Market Trends and Influencing Factors:
Several factors contribute to the housing market trends in the Seattle-Tacoma-Bellevue area. One notable aspect is the ongoing interplay between supply and demand. The persistent demand for housing, driven by a strong job market and a desirable quality of life in the region, continues to exert upward pressure on home prices. Simultaneously, the supply of available homes might play a role in influencing pricing dynamics. Limited housing inventory could lead to increased competition among buyers, potentially pushing sale prices above listing prices.
The sale-to-list ratio, which measures the relationship between the final sale price and the initial listing price, indicates the negotiation power of buyers and sellers. A ratio of 1.002 suggests that, on average, homes are selling very close to their listed prices. This might indicate that while buyers are competitive, sellers are also pricing their homes reasonably, aligning with the current market conditions.
The percentages of sales occurring over and under the list price offer insights into the level of competition in the market. With 51.7% of sales over the list price and 27.4% of sales under the list price as of June 30, 2023, it's evident that multiple buyers are willing to pay premiums for homes they desire, while a significant portion of transactions still occurs at or under the listed price.
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 — 1.86 months in Seattle and 1.50 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
$899,000
$575,000
$906,250
$525,000
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
