Where local homebuyers once found bidding wars, all-cash offers and record-breaking price increases they’re now finding something closer to “normal.”

Buyers and sellers made fewer deals last month than at this time a year ago, according to data released Monday by the Northwest Multiple Listing Service. Sellers are dropping prices, buyers are finding a bit of room for negotiation and prices appear to be leveling off.

After nearly two years of frenzy, “I feel like the market is correcting itself,” said Debbie Barbara, a Redfin agent based on the Eastside.

Here are three takeaways.

Homes aren’t flying off the market as quickly

More new single-family houses and town homes hit the market for sale throughout the month of May, welcome news for buyers who’ve struggled with scarce inventory.

But more houses were still on the market at the end of the month, too. That’s a sign that buyers are moving slowly or shelving their searches altogether.

In King County, 73% more homes were listed at the end of May than at the same time last year. In Pierce County 74% more and in Kitsap 43%. In Snohomish, more than twice as many listings were still active at the end of the month.

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Likewise, a measure comparing the current supply of homes to the demand, known as “months of inventory,” estimates it would take three to four weeks to sell through the available homes across all four counties. At this time last year, it would have taken about two weeks or less.

“Yes, the marketplace is slower than what it’s been,” said Snohomish-based RE/MAX broker Zach Hensrude. “But where we’ve been is really at historical speed where folks are making decisions in 15 minutes to buy a house.”

Fewer buyers are taking the plunge 

The number of pending sales — meaning the buyer and seller have agreed to the deal, but it hasn’t yet closed — dipped across much of the region last month compared with a year ago.

The declines ranged from about 7% in Pierce County to 18% in King County. Kitsap County was an outlier: Pending sales there were up 9%. 

The same is true for condos: About 16% fewer King County condos went pending in May.

Some buyers struggle to afford rising interest rates and higher mortgage payments. Others are holding off because of uncertainty.

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In a region dominated by tech companies that offer their employees stock options, homebuyers who hoped to tap into those stocks to help buy a house might be unsettled by recent dives in the stock market.

“They are not able to get some loans that they wanted to using those stocks,” Barbara said. “People who thought they could buy a million-plus home can’t.”

And with more homes and less buyer interest come price drops.

Hensrude cited a recently remodeled two-story, four-bedroom home in South Everett that hit the market at $900,000. After just one to two showings per week and sparsely attended open houses, the sellers dropped the price to $860,000 last month. They received one offer and accepted it, Hensrude said.

What’s more, the buyer included contingencies such as the ability to get an inspection of the house and sell their own home first. Those types of buyer protections have been rare in the super-hot sellers’ market of 2020 and 2021.

Barbara recently represented sellers who, after some back and forth with buyers, accepted an offer of about $50,000 below the list price for their five-bedroom home in Sammamish.

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“The fact that we negotiated — that’s just something I haven’t had to do in a very long time,” she said.

Prices are leveling off

What does all of this mean for home prices? 

We’re still finding out. Data about home prices reflects closed sales, which typically took place about a month earlier. So, the numbers lag behind the other indicators.

Median home prices were basically flat across the Puget Sound region from April to May. 

In King County, the median home sold for $998,888. Median home prices hit $815,000 in Snohomish, $582,000 in Pierce and $554,550 in Kitsap. 

Median prices are up by double-digit percentages compared to last year, but those increases are getting less dramatic.

Since the start of the year, home prices are up about 29% in King County, 14% in Snohomish, 11% in Pierce and 9% in Kitsap. In all but King County, those are smaller January-May increases than last year.

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Home shoppers will be relieved to say goodbye (for now) to the cutthroat competition of the last two years. But prices in the region will remain out of reach for plenty of people. 

Before the pandemic, Anthony Miller saved aggressively to gather what he expected he would need to buy a house: a 20% down payment for a $400,000 home. He lived with his dad, meal prepped and avoided unnecessary expenses. 

But reality hit when he started shopping and putting offers on houses. As he looked around the Bonney Lake area, the types of houses he once expected to be in the running for “had gone up $100,000,” he said.

Miller, 35, worried about accepting a higher monthly mortgage payment or high homeowners association fees for a condo.

“I went to work and saved my money,” said Miller, who works as a biomedical technician at a hospital. “But even with that, it seems like I don’t have enough money still.”

He plans to wait another year or so before trying again.

“Realistically,” he said, “unless prices start going down, I don’t see myself buying a house anytime soon.”

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