Seattle Real Estate Market is Cooling
The housing market in Seattle and King County has undergone recent changes that have provided buyers with an increased number of options. The people who live in Seattle have never had as many options for places to live as they do right now, which means that now might be a good time to buy a house. There were fewer pending home sales which means that houses are staying on the market for much longer periods of time.
According to a new analysis from Redfin, a technology-powered real estate brokerage, the Seattle real estate market is slowing faster than any other market in the country due to rising mortgage rates, inflation, a weakening stock market, and widespread economic anxiety. This is according to a Redfin analysis that ranks the 100 most populous metropolitan regions in the United States by the rate at which they are cooling, based on the change in multiple housing indices between February 2022 and August 2022.
These data include of pricing, price declines, supply, pending sales, sale-to-list ratio, and home sales velocity. The ten areas that are cooling the quickest are virtually exclusively West Coast cities that have always been pricey or locations that were much less affordable during the pandemic due to the influx of migrating homeowners. Las Vegas came in second, followed by San Jose, California, San Diego, Sacramento, California, Denver, Arizona, Oakland, California, North Port, Florida, and Tacoma, Washington.
Rising mortgage rates make wealthy locations like Seattle more costly, discouraging purchasers. Seattle has seen the biggest reduction in homebuyer interest and competition this year. In August, 34% fewer properties sold in two weeks than a year earlier, compared to February's 7% gain. In August, the average property sold for 5% more per square foot than in February. The average property sold for 2% less in August than a month earlier, sliding from its peak.
In terms of dollars, higher mortgage rates have a greater impact on more expensive residences. At current mortgage rates of 6%, the monthly mortgage payment on the median-priced Seattle home, which costs $775,000, exceeds $4,400. This is up from approximately $3,300 at the beginning of the year when the average interest rate was 3%.
The Hottest Housing Markets in Seattle Area
Here are some of the most competitive housing markets within Seattle, according to data provided by Redfin, a national real estate brokerage.
North Seattle Housing Market
According to Redfin, the North Seattle housing market is very competitive. Homes in North Seattle receive 3 offers on average and sell in around 8 days. The average sale price of a home in North Seattle was $823K last month, up 3.0% since last year. The average sale price per square foot in North Seattle is $484, up 1.1% since last year. Many homes in North Seattle receive multiple offers, some of which include waived contingencies. The average home sells for around the asking price and goes pending in 8 days. Hot homes in North Seattle can sell for 2% above the list price and go pending in 5 days.
West Seattle Housing Market
According to Redfin, the housing market in West Seattle is extremely competitive. Homes in West Seattle receive 4 offers on average and sell in around 9 days. The average sale price of a home in West Seattle was $805K last month, up 4.3% since last year. The average sale price per square foot in West Seattle is $491, up 2.5% since last year.
Many homes in the West Seattle housing market receive multiple offers, some of which include waived contingencies. The average home sells for around the asking price and goes pending in 9 days. Hot homes in West Seattle can sell for 2% above the list price and go pending in 5 days or less.
In August 2022, West Seattle home prices were up 9.5% compared to last year, selling for a median price of $805K. On average, homes in West Seattle sell after 7 days on the market compared to 7 days last year. There were 463 homes sold in August this year, down from 683 last year.
Northwest Seattle Housing Market
The Northwest Seattle housing market is also very competitive. Homes in Northwest Seattle receive 4 offers on average and sell in around 7 days. The average sale price of a home in Northwest Seattle was $849K last month, up 6.1% since last year. The average sale price per square foot in Northwest Seattle is $563, up 4.6% since last year.
Many homes in Northwest Seattle receive multiple offers, some of which include waived contingencies. The average home sells for 1% above the asking price and goes pending in 7 days. Hot homes in Northwest Seattle can sell for 3% above the list price and go pending in 5 days or less.
In August 2022, Northwest Seattle home prices were up 4.8% compared to last year, selling for a median price of $870K. On average, homes in Northwest Seattle sell after 6 days on the market compared to 6 days last year. There were 251 homes sold in August this year, down from 347 last year.
Northeast Seattle Housing Market
The housing market in Northeast Seattle is extremely competitive. Homes in Northeast Seattle receive 4 offers on average and sell in around 9.5 days. The average sale price of a home in Northeast Seattle was $1.12M last month, up 8.7% since last year. The average sale price per square foot in Northeast Seattle is $611, up 4.1% since last year.
Many homes in Northeast Seattle receive multiple offers, some of which include waived contingencies. The average home sells for 1% below the asking price and goes pending in 10 days. Hot homes in Northeast Seattle can sell for 1% above the list price and go pending in 5 days or less.
In August 2022, Northeast Seattle home prices were up 14.3% compared to last year, selling for a median price of $1.1M. On average, homes in Northeast Seattle sell after 7 days on the market compared to 6 days last year. There were 254 homes sold in August this year, down from 325 last year.
Central Seattle Housing Market
The housing market in Central Seattle is extremely competitive. Homes in Central Seattle receive 3 offers on average and sell in around 10 days. The average sale price of a home in Central Seattle was $875K last month, up 9.4% since last year. The average sale price per square foot in Central Seattle is $626, up 2.3% since last year.
Many homes in Central Seattle receive multiple offers, some of which include waived contingencies. The average home sells for 1% below the asking price and goes pending in 10 days. Hot homes in Central Seattle can sell for around the list price and go pending in 5 days or less.
In August 2022, Central Seattle home prices were up 3.4% compared to last year, selling for a median price of $879K. On average, homes in Central Seattle sell after 7 days on the market compared to 10 days last year. There were 378 homes sold in August this year, down from 583 last year.
Downtown Seattle Housing Market
The Downtown Seattle housing market is somewhat competitive. Homes in Downtown Seattle receive 1 offer on average and sell in around 16 days. The average sale price of a home in Downtown Seattle was $619K last month, down 8.8% since last year. The average sale price per square foot in Downtown Seattle is $737, down 10.9% since last year.
Some homes in Downtown Seattle receive multiple offers from buyers. The average home sells for 1% below the asking price and goes pending in 16 days. Hot homes in North Seattle can sell for around the list price and go pending in around 5 days. In August 2022, Downtown Seattle home prices were down 0.16% compared to last year, selling for a median price of $614K. On average, homes in Downtown Seattle sell after 16 days on the market compared to 28 days last year. There were 177 homes sold in August this year, down from 279 last year.
Will housing Prices Drop in Seattle ?
As the market cools, it would take nearly two months to sell all the available single-family homes in the region at the current rate of demand. The last time inventory was at this level was in late 2018 and early 2019, when the housing market in the region was experiencing another downturn. In the last year, we had record-breaking sales in the Seattle housing market despite record-low inventory levels. No month had a supply greater than a month.
By and large, industry analysts define a balanced market as having an inventory of four to six months. The Seattle area home prices continue to rise beyond the reach of many buyers. The median home sold for $828,111 in King County, up 14.2 percent from 2020. Prices increased even faster in Snohomish County, where the median price of $680,000 increased by 23.6 percent, and in Pierce County, where the median price of $502,500 increased by 19.6 percent.
Redfin’s economists predict Seattle’s housing market is less vulnerable to a dramatic slide in a recession than many other cities, such as Boise, Idaho, and Phoenix. That ranking relies on 10 measures of price volatility, debt-to-income ratio, flipping, second homes, and other factors. Marr predicts Seattle-area prices will continue to decline this year, though how dramatically depends in part on the rest of the economy.
More homes are available for sale, so the inventory is improving. It is approaching the two-month mark. Last year Seattle area hit all-time record lows for the number of homes for sale. Seattle has the second highest percentage of tech workers in the country. Tech jobs attract people from all over the world and typically pay well above the national average. When there aren't many houses to buy and a lot of people looking to buy houses, it's a case of supply and demand. There isn't enough supply to meet all of the demand.
There are several reasons why now is a good time to purchase a home, even though housing prices are expected to keep climbing through 2022. Additionally, interest rates have been trending downward since reaching their all-time high in 2022. Real estate agents are reporting that the Seattle housing market is showing signs of returning to normal in the second half of 2022.
Sources:
- https://www.nwmls.com/
- https://www.noradarealestate.com/blog/seattle-real-estate-market/
- https://www.redfin.com/neighborhood/36496/WA/Seattle/North-Seattle/housing-market
- https://www.redfin.com/neighborhood/741/WA/Seattle/Downtown-Seattle/housing-market
- https://www.redfin.com/neighborhood/3040/WA/Seattle/West-Seattle/housing-market
- https://www.redfin.com/neighborhood/37603/WA/Seattle/Northwest-Seattle/housing-market
- https://www.redfin.com/neighborhood/36541/WA/Seattle/Northeast-Seattle/housing-market
- https://www.redfin.com/neighborhood/760187/WA/Seattle/Central-Seattle/housing-market
- https://www.redfin.com/news/metros-recession-risk-housing-downturn-2022/
- https://investors.redfin.com/news-events/press-releases/detail/796/redfin-reports-seattles-housing-market-is-cooling-faster
