The Seattle housing market has been one of the most dynamic and competitive markets in the United States in recent years. With a booming tech industry and a growing population, the city has experienced significant growth in its real estate sector, making it a hot spot for both homebuyers and investors.
However, like many other real estate markets across the country, Seattle's housing market has been impacted by the rising mortgage rates leading to a cooling-off trend. In this article, we will examine the latest trends and statistics in Seattle's housing market, including median prices, inventory levels, and sales activity. We will also explore what these trends may indicate for the future of Seattle's housing market and provide a forecast for 2023.
The spring housing market in Washington state is off to a positive start, with a steady increase in listings, pending sales, and closed sales from February to March 2023. Although key indicators are declining compared to last year, the year-to-date trends suggest a move towards a healthy market. According to the Northwest Multiple Listing Service, the newly added listings and slower pace of sales resulted in a buildup of inventory, but supplies are still limited in many areas.
Despite the growing number of available homes for sale, sellers in King County are holding firm, with listing prices increasing by over 5% compared to February. In Snohomish County, listing prices were up just shy of 5%, and they were flat in Pierce County. There has been an increase in contingent sales where sellers must sell to buy their next home, and the luxury market is seeing strong buyer activity.
Interest rates dropping and less competition overall are causing buyers who have been sitting on the sidelines to jump back into the market. However, prices overall are down about 7.5% from a year ago, dropping from $638, according to data released by the Northwest Multiple Listing Service.
King County & Seattle
According to the data provided by NWMLS, Seattle's residential and condo market experienced a significant increase in active listings for sale in March 2023 compared to the same month last year. The number of active listings in Seattle rose by 88.68%, while in all of King County, it increased by 78.14%. This suggests that there are more properties available for sale in the region, which could result in a more competitive market for sellers.
However, the number of closed sales and pending sales decreased significantly in March 2023 compared to the same month last year. In Seattle, there were 33.88% fewer closed sales and 33.78% fewer pending sales, while in all of King County, the decreases were 31.68% and 33.54%, respectively. This indicates a slowdown in the market, potentially due to the high prices and low inventory of homes.
The median sales price in Seattle and King County also decreased, with Seattle experiencing a decline of 11.12% and King County experiencing a decline of 9.39%. These numbers suggest that the demand for properties in the region is not as high as it was in the same month last year. The months of inventory (MOI) for Seattle is 1.57 months, while for all of King County, it is 1.27 months.
These numbers are well below the balanced real estate market threshold of six months, indicating that this region continues to be a seller's market. Overall, the data suggest that the Seattle residential and condo market is experiencing a slowdown in sales activity and a decrease in median sales prices, despite a significant increase in active listings. This trend could indicate a shift in the market dynamics, potentially leading to more favorable conditions for buyers in the near future. However, given the low months of inventory, sellers still have a significant advantage in the market.
Kitsap County
According to the NWMLS, prices in Kitsap County are up 4.7% since January. Frank Leach, broker/owner at RE/MAX Platinum Services in Silverdale, noted that “open house activity is up and we continue to see multiple offers on well-priced homes, with seller concessions starting to wane.” The market is hitting an equilibrium, suggested Leach, with an increase in contingent sales where sellers must sell to buy their next home.
Pierce County
Pierce County has less than one month of supply, according to the Northwest Multiple Listing Service. Dick Beeson, managing broker at RE/MAX Northwest in Tacoma/Gig Harbor, reported that “sellers want to sell now before prices fall even further and there’s less competition,” with buyers wanting to buy now because they see modest reductions in prices and rates.
Snohomish County
The number of homes for sale in the tri-county area of King, Snohomish, and Pierce counties was down 40% when compared to March 2019 (pre-pandemic), according to Windermere Chief Economist Matthew Gardner. Despite this, the number of available homes for sale in Snohomish County was up just shy of 5%. Gardner commented that “sellers in King County are holding firm, with listing prices increasing by over 5% compared to February.”
ALSO READ: Washington State Housing Market Forecast
ALSO READ: Which Are The Hottest Markets in Seattle?
In conclusion, the spring housing market in Washington State is moving in a positive direction, with a steady increase in listings, pending sales, and closed sales. Despite declining indicators compared to last year, year-to-date trends suggest a move towards a healthy market. Prices are up in some areas, with sellers holding firm despite the growing number of available homes for sale. Although supplies are still limited in many areas, the market is hitting an equilibrium, and there has been an increase in contingent sales where sellers must sell to buy their next home.
Key Takeaways of King County Housing Market Trends
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 March 2023 compared with March 2022.
ACTIVE LISTINGS FOR SALE
- The total active listings in Seattle were 1,083.
- This represents an increase of 88.68% as compared to March 2022.
- The total active listings in All of King County were 2,485.
- This represents a rise of 78.14% as compared to March 2022.
CLOSED SALES
- 691 closed sales were registered by brokers in Seattle.
- This represents a year-over-year decrease of -33.88%.
- 1,956 closed sales were registered in All of King County.
- This represents a year-over-year decrease of -31.68%.
PENDING SALES
- 831 pending sales were registered by brokers in Seattle.
- This represents a decrease of -33.78% from the same month a year ago.
- 2,364 pending sales were registered in All of King County.
- This represents a decrease of -33.54% from the same month a year ago.
MEDIAN SALES PRICE
- Seattle's median sales price decreased by 11.12% to $768,832.
- Last year, at this time, the median price in Seattle was $865,000.
- King County's median price decreased by 9.39% to $760,000.
- Last year, at this time, the median price in King County was $838,753.
MONTHS OF INVENTORY (MOI)
- 1.57 months represents the number in Seattle.
- Months of supply in All of King County is 1.27.
- 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. It means that the supply and demand of homes are about the same.
The median asking price for a home in King County was $830K in March 2023, trending down 2.1% year over year. The median sale price was 759.5K. In March 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 $540K.
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 1.3% between February 2023 and February 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 $834,356 (Data through February 28, 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 down 2.2% since last February.
- Typical Home Value: $834,356
- 1-year Value Change: -2.2%
- The median sale-to-list ratio is 0.986
- 18.3% Percent of sales over list price
- 60.2% Percent of sales under the list price
- 28 Median days to pending
Here is the housing forecast for Seattle-Tacoma-Bellevue Metro.
- Seattle-Tacoma-Bellevue Metro home values have gone down by 0.2% from last year to $686,844.
- The Seattle metro housing market forecast ending with February 2024 is somewhat negative.
- Zillow predicts that Seattle metro home values may decline by 1.3% between February 2023 to February 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 — 1.57 months in Seattle and 1.27 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
$869,975
$535,000
$840,000
$507,000
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
