More new homes for sale around Puget Sound, but buyers have to be ready to pay

After several slow winter months, Seattle-area home sellers appeared ready to make a move in January, listing more new homes on the market than they did in November and December. 

But the new options offered little respite for buyers, with many new listings snapped up in less than a month.

New buyers just starting their searches are joining the race with others who have been shopping for months, said Nicole Bascomb, who is owner and broker at Bascomb Real Estate Group and focuses on South King County. Last January, Bascomb said she had three clients actively looking. This week, she has 12.

“The inventory just can’t keep up,” Bascomb said.

Prices in January stayed roughly stagnant.

For sales that closed in January, which likely took place in the prior month, median prices dipped 2% in King County and were up 4.6% in Snohomish County compared to December, according to data released Thursday by the Northwest Multiple Listing Service. Prices held roughly steady month-to-month in Pierce and Kitsap.

In Seattle, the median home sale closed at $791,471, the lowest since May 2020.

Prices remain well above those a year earlier. The median King County home closed for $725,000 in January, 15% higher than a year earlier. In Snohomish County, the median price of $599,990 was up 17.7%, and in Pierce County, the $440,000 median was up 15.8%. Price growth was slightly slower in Kitsap County, where the $425,000 median is 11.8% higher than last January.

In Seattle, the $791,471 median is up 9.9%. On the Eastside, the median price of about $1.15 million is 28.8% higher than in 2020. Growth on the Eastside was nearly the biggest year-over-year in King County, exceeded only by the small Vashon Island submarket, where the median price rose 29.5% to $735,000.

Prices continue to climb in Southwest King County, including Federal Way and Burien. The median home in Federal Way sold for $500,600, up 20% from last year.

The new year, and news of the coronavirus vaccine, have injected new energy into the market, said RE/MAX Northwest agent Isaac Rivelle, who works mostly with first-time buyers throughout the Puget Sound region. Buyers feel like “there’s an end in sight” to the pandemic, he said.

In recent weeks, Rivelle has worked with clients who offered $90,000 over list price and $100,000 over list price. Both lost out to even higher offers, Rivelle said.

Coldwell Banker Bain agent Phillip Belenky said sales in the last month have commonly gone for roughly 10% to 15% over asking price.

Escalations over list price are a common trend in January and February coming off a low number of sales around the holidays, Belenky said. Still, “for buyers, it’s frustrating when they’re shooting in the dark with price,” he said. 

Brokers say a steady stream of hungry buyers is preventing any real break from frenzied competition. 

“It has gone from being up against 22 other buyers to nine or 10,” Rivelle said. 

But new listings are having an effect.

In December, months of inventory, a measure of how long it would take to sell all of the homes on the market at current demand, was at its lowest point in at least four years. Last month, it began to tick back up.

In King County, it would have taken close to three weeks, compared to less than two weeks in December. That’s still a tighter market than last year, though, when it would have taken more than a month.

When Birkan Bayrak and his wife bought a home in Lynnwood in 2009, they had time to negotiate a price with the seller.

“This time, we felt like first-time homebuyers again,” Bayrak said. “You don’t have any time when you see the house because there are so many potential buyers out there. Everyone is waiting, they have notifications from Zillow and Redfin.”

The couple closed in January on a house in Mukilteo with views from the deck of the Olympics and the Puget Sound. They paid $1.31 million, more than $100,000 over the list price of $1.15 million, and waived contingencies like a pre-inspection. They narrowly beat another offer for roughly the same amount, Bayrak said. 

For Erik Connell and Charlotte Boutz-Connell, the competition has meant adjusting their expectations. The couple is now considering buying a home that requires some remodeling. 

“We would prefer to be able to move into some place that’s ready,” Boutz-Connell said. “But so would everyone,” Connell added. “That’s the problem.”

The pandemic has drawn some buyers outside the city in search of more space. But not everyone is seeking out the suburbs.

Pioneer Square renters Neil Soika and Marcia Wright-Soika are shopping for a downtown condo, hoping for an older building with character and easy transit access.

“Things will eventually reopen again. For us, being accessible to all of those things weighs out more than having more space,” Wright-Soika said. 

In a “reality check,” the couple offered the listing price for a $575,000 condo in Belltown but lost to an offer for about $30,000 more, they said.

“We learned pretty quickly that you have to be fast … it’ll go off the market before you see it,” Soika said. 

Now, they’re trying to strike a deal with their current landlord to buy their Pioneer Square loft. “A month in, we still feel upbeat,” Wright-Soika said. “Maybe ask us in six months.”

The downtown condo market saw a “significant” dropoff in demand early in the pandemic, said Windermere agent Olga Dyckman, who specializes in downtown condos. 

January offered mixed signals.

Closed condo sales and median condo sale price in King County were both down about 6% from December. But pending condo sales, which took place more recently, were up 26%.

Some buyers are looking to upgrade from one-bedroom to two-bedroom units in the same pricey buildings, Dyckman said. Others “finally got outbid on trying to do houses and started revisiting opportunities downtown,” she said. “If it’s efficiently priced, people are coming back.”