In the year since the coronavirus pandemic first took hold, the Seattle-area housing market has not just rebounded. The market is “on steroids,” said Seattle-area broker Raché Boston.
Prices are up. Inventory is flying off the market. Home showings draw lines of potential buyers down the driveway, and multiple all-cash offers. List prices can feel like a mere suggestion.
“I knew it was going to be hard,” said buyer Lis Manning, who with her husband recently bought a four-bedroom house in North Edmonds after putting in seven other offers. “But I didn’t think it was going to be a monthslong process.”
Single-family home prices climbed all over the Puget Sound region last month compared to February, according to monthly data released Wednesday by the Northwest Multiple Listing Service.
King County zoomed past other counties, with a 10% jump over February, the largest month-to-month spike since last June, when shrinking inventory started to supercharge the market. In March, the median King County home sold for $824,997.
In Snohomish, Pierce and Kitsap counties, median prices increased by single-digit percentages month-over-month to $640,000, $480,000 and $450,000, respectively.
The month brought good and bad news for buyers. Across the region, more new homes hit the market last month than in any single month since spring peaks in 2018 and 2019. But homes were snapped up almost as quickly as they arrived.
By the end of the month, fewer than 1,000 homes were listed for sale in King County, compared to about 2,100 last year in March, and 3,300 in 2019.
Prices in all four counties have surged in the year since the start of the coronavirus pandemic, ranging from a 14.5% jump in King County to 17% in Pierce County and 21.9% in Snohomish. In King County’s Eastside, the median home price is up 30.4% from last year. (While the start of the pandemic may skew last year’s numbers some, the effects of the virus on the housing market took hold mostly in later months. Prices dipped in April and May, but then started climbing again through the summer as buyers went looking for more space and would-be sellers stayed put.)
Even in typically less expensive areas, the cost of entry for first-time homebuyers is on the rise. Pierce County broker Jenny Wetzel predicts that in coming months, “it is going to be very difficult to find any home in Pierce County for $350,000 or less.”
Within King County, prices are surging especially outside Seattle.
The median price in North King County leapt 15% from February to March, an increase of more than $100,000 to a new level of $805,250. The median is up about 19% from last year.
Compared to last year, some areas of South King County have seen dramatic price hikes. The median home sold last month in Skyway was $656,500, an 8% jump from February and a 44% increase from last year.
In Seattle, the median home last month sold for $825,000, a 3.4% uptick from the previous month. On the Eastside, the median home price has been more than $1 million for nine months in a row.
Across the region, cash is fueling more competition as tech companies profit despite the pandemic downturn.
“When do you know a 28-year-old who’s able to buy a property for $700,000 and have $300,000 or $400,000 in cash?” said Boston, a broker with John L. Scott. “That comes from their stock options.”
Luxury sales are up. Across the 26 counties included in the Northwest MLS, brokers reported 400 sales at $2 million or more in the first three months of this year, more than double last year, according to the MLS.
Developers and flippers see opportunity, too: Even extreme fixer-uppers attract multiple offers, Boston said. A Beacon Hill house in “awful condition” drew seven all-cash offers. She expects to close the sale at “close to $470,000,” well over the asking price.
Trevor Walker and Brooke Moody started their search for a home under $600,000 near Lynnwood and Bothell, but within a few months were “priced out of everything between Renton and Everett.”
Prices seemed to keep climbing. Home tours were crowded. On one recent weekend, the newly married couple toured 14 homes.
“It hits you in your gut every time you show up at a house and there are already 15 people standing there,” Walker said.
For months on end, a cocktail of low inventory, high demand and rock-bottom interest rates has squeezed buyers.
In King, Snohomish, Pierce and Kitsap counties, all of the homes currently listed could sell in less than two weeks at current demand, according to the MLS. At this time in 2019, selling out would have taken more than a month in all four counties.
Similar trends are playing out nationally, with nearly half of homes selling within a week and 41% selling for more than the list price, according to Redfin. The Seattle area is a top destination for buyers moving from San Francisco, according to a recent analysis by Zillow.
Condos offer some respite
Buyers who aren’t attached to a single-family home may look to the condo market.
A stream of new condo listings arrived in March and demand ticked up, though it’s still more tepid than the single-family market. At current demand, it would take a little over a month to sell through the condos available in King County.
In Seattle, condos are lingering on the market longer than elsewhere in King County. At the same time, the number of pending condo sales in the city last month was higher than March 2019 or 2020.
In all the frenzy for single-family homes, home shoppers are increasingly expected to waive protections, known as contingencies, meant to guard against financial loss.
At one home, Manning said she offered a higher price than a competing buyer but the sellers weren’t interested.
“They’re like, ‘It’s not about the money. We just don’t want any contingencies,’” she said.
On their winning offer, the couple was pre-underwritten, did not complete an inspection on the house and waived their appraisal and financing contingencies. They paid $715,000 for the home, originally listed at $629,000, Manning said.
Walker and Moody said they became comfortable waiving most contingencies. Like Manning, they skipped an inspection on the house they finally secured in Kent.
“On some of these houses we were the highest bidder and we were losing because people were waiving the appraisal or bringing cash,” Moody said. “How is a first-time buyer ever supposed to get a home?”
Buyers who waive appraisal and financing protections can risk higher costs or losing part of their down payment. Skipping inspections can result in costly repairs down the road.
“Knowing what a house sold for is very important, but it doesn’t tell the story of what buyers are having to do, the risk they’re having to take to get their offer accepted,” said Wetzel, with the Tacoma brokerage Windermere Abode.
Waiving contingencies and speeding up the closing process are ways for buyers to compete against cash, said Boston, who frequently represents sellers.
“You have to waive everything in the market we’re in right now … You have to be able to give your grandmother to the seller in the offer to be able to win,” she said.