The fall months have caused a cold snap in the Seattle housing market.
Prices in King County are virtually unchanged. There are fewer new homes for sale and fewer buyers are taking the plunge. This is good news for some buyers who are still on the lookout, who are faced with falling prices from time to time and fewer wars between trades.
But not everything is so rosy.
New listings in King County fell sharply from September to October, and those listings were quickly sold out before the end of the month, putting pressure on shoppers who are still shopping.
For potential home buyers, home choices are more limited than at this time of year before the pandemic. King County had 65% fewer active listings at the end of October than at the same time in 2019. And at this time, two years ago, it would have taken a little over a month and a half to sell all the existing homes, compared to less than two weeks now. Similar trends were observed in Pierce and Snohomish counties.
“Stocks, which were already low, I definitely feel like they have dropped even more. And customer demand doesn’t seem to be dropping, ”said Heather Maddox, Windermere’s agent in Renton.
Median single-family home prices continued to rise by double-digit percentages compared to the same period in 2020 or 2019. In King County, the average home sold in October for $ 824,270, up 10.6% from October 2020.
In Snohomish County, the average home sold for $ 695,000, a 19.8% increase. In Pierce County, the average home sold for $ 520,000, up 20.9%. In the counties of Kitsap, Thurston and Whatcom, compared with the same period last year, growth was from 16% to 20%.
From September to October, prices were about the same, falling less than two tenths of a percent in King County. In Pierce and Snohomish counties, prices rose by about 3% after falling by about the same amount a month earlier.
In Seattle, the average home sold for $ 850,000, up about 6.2% from a year earlier. On the Eastside, the average home sold for about $ 1.4 million, up 30% from a year earlier. In Tacoma, the average price of $ 615,000 in North Tacoma is up 24.7% from a year ago, and the average price of $ 440,000 in Central Tacoma is up 23.9%.
This week, Maddox wrote a proposal for a client for a two-bedroom home in Rainier Beach, which is valued at $ 615,000. The house received five competing bids and was reviewed eight days later. Maddox said her client was losing out to buyers who were willing to pay more and forgo extra protection.
Competition, even between two or three buyers, can drive up prices and push buyers to abandon protective measures such as contingency checks.
“I’m just telling buyers to come in now. “It won’t hurt you if you start looking early,” Maddox said. “But jumping in February is like throwing yourself under a truck or running with bulls or something like that. You may want to keep warm. ”
However, some buyers are finding deals.
Redfin agent Malia Vassar recently worked with a couple who had been looking for a home in the Green Lake area for 11 months. This week they closed a $ 996,000 three-bedroom home that they purchased at list price without competing with other proposals.
“Now there is a chance to get lucky,” Vassar said.
Seasonal price declines in the Seattle area are in line with national trends, but the market still attracts people looking to make a profit.
Across the country, cash purchases are on the rise, according to ATTOM Data Solutions, with about 7% of institutional investors buying homes, the highest since early 2014. Meanwhile, the percentage of FHA loans that offer low down payments to middle-class buyers is the lowest since late 2007 at around 8%.
For those who already own homes in Western Washington, the potential financial gain has skyrocketed since the Great Recession.
In terms of profit margin – the difference between the price at which a house was sold and the price at which it was last sold – Bellingham was ranked second in the country. According to ATTOM, the margin there has increased from 69.5% this time last year to almost 106% this year.
The Bellingham area is seeing an influx of buyers from Seattle as the pandemic has allowed white-collar workers to stop traveling to the office and work from home.
Even owners who want to make a big profit from selling their homes may worry about finding another home to buy, which forces them to refrain from selling.
“Nobody wants to be a buyer now,” Vassar said.
In the condominium market, prices remained largely unchanged, rising 1.8% in King County from September to October. Fewer apartments were listed in October than in September, and fewer new sales occurred in King County.
The average Seattle apartment sold for $ 525,000 last month, up 5.6% from last October. On the Eastside, the average apartment sold for $ 550,500, down 11.2%.
Condominium sales are down year-over-year but are up over the same period in 2018 and 2019, likely due in part to new construction in recent years. According to an analysis by Dean Jones, owner of the local branch of Realogics Sotheby’s International Realty, about 59% of apartments in 11 new condos have been sold in Seattle. Two projects under construction are scheduled to open in 2023 and 2024.
At the start of the pandemic, the condominium market hesitated as buyers looked for more space and less worried about proximity to their offices. At the beginning of this year, the market stabilized. While some condominium buyers are looking for luxury towers, others are looking for a more affordable door to home ownership.
With the prices of single-family homes rising steadily, “it makes sense that affordable housing options are increasingly being limited to condominium units,” Jones said in an email. “Townhouses and single-family homes are especially asset classes that are simply out of reach for many.”