House Prices in Seattle Continue to Rise
Is the Seattle Housing Market Cooling Down?
This article will talk about how the housing market in the Seattle area is right now and its forecast for next year. The Seattle real estate market has been hot since the pandemic but things are changing now. Home prices in the Seattle area remain well above where they were a year ago but the market is cooling off.
According to the S&P/Case-Shiller Index, Seattle, WA is at a current level of 387.82, down from 397.61 last month and up from 338.53 one year ago. This is a change of -2.46% from last month and +14.56% from one year ago. The index follows the prices of single-family homes in King, Pierce, and Snohomish counties with a two-month lag.
According to NWMLS's latest report, September showed signs of a more traditional market with a natural slowdown of pending sales during this time of year. There was about the same number of new listings as in pre-pandemic, but with less intensity and a lower percentage of homes going under contract.
The median single-family home in King County sold for $875,000 in September, a 6% increase from the previous year, according to data provided by the Northwest Multiple Listing Service on Thursday. Prices in Pierce County were $538,000, Snohomish County was $735,000, and Kitsap County was $539,997.
Prices in all four counties decreased by 2% to 3% from August and increased by 6% to 9% from the previous year. Last year at this time, prices had increased between 10% and 19% annually. In April of this year, prices in King County rose about 20% from the previous year. At the end of September, there were twice as many properties for sale in the Puget Sound region compared to the same time last year.
Despite this, market conditions do not conform to industry norms. Using a metric known as months of inventory, it would take approximately two months to sell all the single-family houses for sale in King County at the current rate of demand. The balanced market has four to six months, a level not seen in at least six years.
<<<Read: Hottest Areas in Seattle in 2022>>>
King County has 2.02 months of supply, but the other counties in the Puget Sound region have less than that. There are 1.61 months of supply in Kitsap County, 1.63 months in Snohomish County, and 1.84 months in Pierce County. It's worth noting that current inventory levels in King and Snohomish counties are still around 13% lower than they were in September 2019 prior to the pandemic-induced market shift.
NWMLS brokers reported 7,504 closed sales during September, down 27% from a year ago when they notched 10,289 completed transactions. The median price on last month's sales across the 26 counties in the report rose about 5.1% from a year ago, increasing from $570,000 to $599,000. Prices are down slightly from the August median of $600,000 and from the year's peak of $660,000 that was reported in May.
<<<Read: Washington State Housing Market Forecast >>>
Seattle Housing Market Report – September 2022
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 2022 compared with September 2021.
ACTIVE LISTINGS FOR SALE
- Total active listings in Seattle were 1,731.
- This represents an increase of 48.58% as compared to September 2021.
- Total active listings in All King County were 4,738.
- This represents a rise of 98.16% as compared to September 2021.
NEW LISTINGS FOR SALE
- 1,381 new listings were added to the market by brokers in Seattle.
- This represents a decrease of 6.24% as compared to September 2021.
- 3,504 new listings were added to the market in All King County.
- This represents a decrease of 12.3% as compared to September 2021.
CLOSED SALES
- 773 closed sales were registered by brokers in Seattle.
- This represents a year-over-year decrease of -33.93%.
- 2,348 closed sales were registered in All King County.
- This represents a year-over-year decrease of -32.91%.
PENDING SALES
- 756 pending sales were registered by brokers in Seattle.
- This represents a decrease of -41.21% from the same month a year ago.
- 2,314 pending sales were registered in All King County.
- This represents a decrease of -38.54% from the same month a year ago.
MEDIAN SALES PRICE
- Seattle's median sales price increased by 6.14% to $812,000.
- Last year, at this time, the median price in Seattle was $765,000.
- King County's median price increased by 7.25% to $799,000.
- Last year, at this time, the median price in King County was $745,000.
MONTHS OF INVENTORY (MOI)
- 2.24 months represents the number in Seattle.
- Months of supply in All King County is 2.02.
- 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 driven by employees of local tech businesses like Amazon and Microsoft, as well as corporations with big operations in the vicinity like Google and Facebook. Many of them didn't want to work remotely in small apartments during the epidemic, so they sought spacious homes with office areas. Most of them have the financial means to compete with other buyers and raise home selling prices.
The housing market in the four-county Puget Sound region has the tightest inventory. Even with the healthy uptick in inventory, there is still less than 1.8 months of supply. To summarise the last month's statistics we can say that the Puget Sound region remains a seller's real estate market with less than 2 months of inventory — still well below what is required to meet the volume of buyers right now.
It is a Seller's Real Estate Market
According to Realtor.com, King County, WA is still a seller's real estate market. The median asking price is still rising in double digits. The median asking price for a home in King County was $899K in September 2022, which is an increase of 20.6 percent year over year. The median sale price was 810K. 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 September, homes in King County sold for approximately the asking price. The Sale-to-List Price Ratio was 99.43%.
- There are 63 cities in King County, where Realtor.com has active listings.
- Beaux-Arts has a median listing price of $2.3M, and it remains the most expensive city in King County.
- Des Moines is the most affordable city in King County, with a median listing price of $599,000.
- The median listing price of homes in Seattle is $850,000, trending up 13.5% year-over-year.
- The median sale price is $800,000.
- Seattle is also a seller's market, having a total sales-to-total listings ratio above 0.2 tend, which favors sellers.
- North Queen Anne has a median listing price of $1.3M, making it the most expensive neighborhood in Seattle.
- Belltown has become the most affordable neighborhood, with a median listing price of homes being around $567.5K.
Seattle Housing Market Forecast 2022 & 2023
Seattle housing prices are going to rise in 2022 and 2023 albeit at a slower rate. 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.
The current typical home value of homes in Seattle is $944,260. ZHVI represents the whole housing stock and not just the homes that list or sell in a given month. In August 2021, the typical value of homes in Seattle was around $866,585. Home values have gone up 9.0% since then.
- Typical Home Value: $944,260
- 1-year Value Change: +9.0%
- (Data through August 31, 2022)
According to NeighborhoodScout.com. Their data also shows that Seattle's real estate appreciated 124.93% over the last ten years, which is an average annual home appreciation rate of 8.44%, putting Seattle in the top 10% nationally for real estate appreciation. As of now, Seattle prices are up across the board. During the latest twelve months alone, the Seattle appreciation rate has been 11.58%, and in the latest quarter, the appreciation rate has been at 1.69%, which annualizes to a rate of 6.92%.
Here is the housing forecast for Seattle-Tacoma-Bellevue Metro.
- Seattle-Tacoma-Bellevue Metro home values have gone up 9.0% from last year.
- The Seattle metro housing market forecast ending with August 2033 is somewhat positive.
- Zillow predicts that Seattle metrohome values may grow by 0.8% by August 2023.
- If this forecast is correct, Seattle metro home prices will be slightly higher in the 2nd Quarter of 2023 than they were in the 2nd Quarter of 2022.
- King County home values have gone up13.8% from last August.
- Pierce County home values have gone up 12.6% from last August.
- The typical home value of homes in Snohomish County is $754,929, up by almost 14.6% over the past year.
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: The current inventory (months of supply for SFH+condos) in this region remains tight — 2.24 months in Seattle and 2.02 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.
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://www.littlebighomes.com/real-estate-seattle.html
- 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
Source: https://www.noradarealestate.com/blog/seattle-real-estate-market/