Seattle-area housing market sluggish ahead of the holidays

After a burst of activity in October, the Seattle-area housing market slowed to a more typical fall pace in November. 

Fewer homes hit the market for sale and pending home sales dipped from month to month, according to data from the Northwest Multiple Listing Service released Wednesday. In the midst of limited inventory, Seattle-area home prices increased from a year ago.

The more sluggish pace of listings and home sales, partially seasonal, reflects the pressures facing Seattle-area homebuyers: For more than two years, the combination of high mortgage rates and high prices has throttled many people’s ability to buy a home in the region.

Jen Cameron, an agent with The Agency in Kirkland, has heard from a number of sellers asking to take their home off the market until the new year.

The sellers “sticking it out over the holidays,” Cameron said, are those who “really need to sell right now.”

On the other side of the table, home shoppers continue to face high costs.

The median single-family home in King County sold for $925,000 in November, down 4% from October but up 4.5% from a year earlier.

Prices are climbing faster on the Eastside than in Seattle year over year. While the median Eastside home price increased 10% to $1.5 million, the median Seattle home price was up just 2.5% to $968,000.

Single-family homes sold for a median price of nearly $785,000 in Snohomish County, up 8% from a year earlier; $565,000 in Pierce County, up 5%; and $557,000 in Kitsap County, up 1%. 

The median King County condo sold for $565,500 last month, up 17% from a year earlier. The increase appeared to be driven by North King County, where the median sale price increased 82% but a small number of sales can skew the numbers. The median Seattle condo sold for $575,000, down 1%, and the median Eastside condo sold for $685,000, up 10.5%.

First-time homebuyers struggle

The market is particularly tough for first-time homebuyers with smaller budgets and less money for a down payment. Nationwide, fewer than a quarter of homebuyers are buying for the first time, according to a recent National Association of Realtors survey, the lowest share in the more than four decades the organization has tracked that figure. 

With higher mortgage rates, buyers “just can’t afford as much, but prices keep going up,” Cameron said.

Mortgage rates held steady through November at just under 7%, slightly below the average rate a year earlier but still far higher than the 2%-3% rates many buyers secured during the height of the pandemic market in 2020 and 2021.

High mortgage rates have cooled demand, but home prices continued to rise in the Seattle area. Blame the region’s shortage of homes — both a dearth of newly constructed homes and a limited supply of resale homes as many owners stay put.

While Zillow considers Seattle a “neutral market,” favoring neither buyers nor sellers, the multiple listing service still considers the Puget Sound region a seller’s market because of a narrow selection of homes for sale. 

Based on current demand in King County last month, buyers would have snapped up all of the available single-family homes in about six weeks, according to a measure known as months of inventory. Although that’s a slower market than the breakneck pace of 2020 and 2021, it remains well below the four to six months the listing service considers a balanced market. 

Even as more buyers and sellers made deals in November than during the same month a year earlier, that increase was more modest than the jump recorded in October. In King County, for example, the number of sales in November was 15% higher than in November 2023, compared with a 33% jump in October.

As homes sit on the market, some sellers are eager to cut a deal. Others are holding firm. 

“There’s a number of sellers who are just kind of fixated” on factors like the price their neighbor’s home fetched six months ago, regardless of more recent comparable sales, said Zach Entwistle, an agent with Keller Williams in Tacoma. Entwistle recently represented a buyer offering 3% below the list price on a Puyallup home that lingered on the market for more than a month. The seller, offended by the offer, refused to even make a counter offer, Entwistle said.

When talking with sellers, “there’s just that come-to-Jesus conversation about what the market is really doing,” he said.

The Seattle-area housing market will likely remain sluggish through the end of the year and the early part of 2025, with little mortgage rate relief on the horizon.

But a bit more supply might come online. Although homeowners often wait until the busiest spring market to re-list their homes, some are planning to wait only until the new year, Cameron said, hoping to take advantage of the market’s limited inventory.