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 September 2023, Seattle witnessed a 9.07% decrease in active listings for sale compared to the same month in 2022, totaling 1,574.

Closed sales amounted to 616, displaying a year-over-year decrease of -20.31%, while pending sales saw a decline of -5.03% with 718 pending transactions. The median sales price slightly decreased by 2.09%, settling at $795,000 compared to $812,000 in September 2022. Seattle had a Months of Inventory (MOI) of 2.56 in September 2023, indicating a seller’s housing market due to lower supply relative to demand.

ALSO READ: Which Are The Hottest Markets in Seattle?

ALSO READ: Washington State Housing Market Forecast

Is Seattle a Seller's Housing 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 September 2023

The real estate market in Washington state is experiencing a slowdown as we move into the fall season, characterized by a decline in transactions and limited growth in median prices.

The impact of a high-interest rate environment is further reducing the purchasing power of prospective buyers, contributing to the decline in year-over-year transaction volume.

However, experts remain cautiously optimistic, foreseeing a potentially more balanced housing market in the near to mid-term future, driven by a combination of low inventories and pent-up demand.

The Northwest MLS, known for providing the most up-to-date and accurate market listing data in Washington state, recently released its Market Snapshot for the month of September 2023.

Market Recap

As we transition into the fall season, the real estate market in Washington counties is witnessing a slowdown, characterized by a decline in the number of transactions and limited growth in year-over-year median prices.

In comparison to the same month last year, September 2023 saw a -20% change in active property listings in the Washington counties covered by the NWMLS. Most counties (23 of 26) observed a decrease in the number of homes sold, with changes ranging from -2% to -50% year over year, averaging a decline of -24%, and one county remaining unchanged.

The median price of homes sold increased in 15 out of 26 counties, declined in 9 counties, remained unchanged in 2 counties, relative to September 2022.

“The real estate market typically slows down in the fall and winter months,” said Mason Virant, associate director of the Washington Center for Real Estate Research at The University of Washington. “However, the high-interest rate environment has further decreased the purchasing power of prospective buyers leading to a continued decline in year-over-year transaction volume with overall median prices stagnating.”

While continued mortgage rate increases will make additional home price gains more challenging, the demand for listings is giving sellers optimism about their options in the upcoming year. “The combination of low inventories and pent-up demand suggest that home price pressures will continue to mount and drive home prices up by approximately 5% by next September,” said Selma Hepp, executive and chief economist with CoreLogic.

NWMLS President and CEO Tom Hurdelbrink also expressed optimism about further market stability in the near future. He noted that in addition to increased interest rates, experts have observed growth in home values over the last several years. “I see this as a transition period, post-pandemic, after a year of steep inflation and rising interest rates. It suggests there may be a more balanced market coming in the near to mid-term future.”

King County Housing Market Trends – September 2023 vs. 2022

King County, which includes Seattle, remains a highly sought-after area in the housing market. In September 2023, the total active listings in King County, excluding Seattle, were 3,602, indicating a 23.98% decrease compared to the same month in 2022.

Brokers registered 1,823 closed sales for residential and condo properties in All of King County during September 2023, reflecting a year-over-year decrease of -22.36%.

In September 2023, brokers recorded 2,087 pending sales in All of King County, showcasing a year-over-year decrease of -9.81%. The median sales price for homes in King County dropped slightly by 0.25% in September 2023, settling at $797,000. This compares to a median price of $799,000 at the same time last year.

In September 2023, the Months of Inventory (MOI) for King County stood at 1.98, while in Seattle it was 2.56. A balanced real estate market typically has a 6 months of supply. The lower MOI indicates that this region remains a seller’s housing market.

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 September 2023 compared with September 2022.

ACTIVE LISTINGS FOR SALE

• The total active listings in Seattle were 1,574.
• This represents a decrease of 9.07% as compared to September 2022.
• The total active listings in All of King County were 3,602.
• This represents a drop of 23.98% as compared to September 2022.

CLOSED SALES

• 616 closed sales were registered by brokers in Seattle.
• This represents a year-over-year decrease of -20.31%.
• 1,823 closed sales were registered in All of King County.
• This represents a year-over-year decrease of -22.36%.

PENDING SALES

• 718 pending sales were registered by brokers in Seattle.
• This represents a decrease of -5.03% from the same month a year ago.
• 2,087 pending sales were registered in All of King County.
• This represents a decrease of -9.81% from the same month a year ago.

MEDIAN SALES PRICE

• Seattle's median sales price decreased by 2.09% to $795,000.
• Last year, at this time, the median price in Seattle was $812,000.
• King County's median price decreased by 0.25% to $797,000.
• Last year, at this time, the median price in King County was $799,000.

MONTHS OF INVENTORY (MOI)

• 2.56 months represents the number in Seattle.
• Months of supply in All of King County is 1.98.
• 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

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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