Seattle’s housing frenzy cools a bit, but it’s still ‘incredible.’ See what’s happening near you

As Craig Anderson started shopping for a new home early this year, what he saw was “just incredible,” he said. 

Homes sold for $100,000 to $150,000 over the list price. He lost out on two houses offering a mere $50,000 to $60,000 over the list price, he said. 

“I just wasn’t willing to play that game,” Anderson said.

So he took a break. Anderson, who works in IT security, moved into a rental apartment and waited. 

The pause paid off. When Anderson tried again in July, he said he quickly secured a mid-century modern home in South Everett for just $50 over its $599,950 list price. 

“I feel like in this market I got a good deal,” Anderson said. 

The Seattle-area housing market has officially entered a summer slowdown marked by more houses for sale and a drop in the number of home sales compared to the previous month.

“Buyers feel like they can be a little more choosy at this point,” said Ian Gordon, a broker at Coldwell Banker Bain’s Seattle-based Get Happy at Home Team. The shift is typical of this time of year, though the pandemic upended the market’s usual timelines last summer.

Even with some seasonal relief, homeownership continues to soar out of reach for plenty of people.

Median home prices are up about 22% in Southeast King County, 24% in North King County and 32% on the Eastside compared to last year, according to new data released Thursday by the Northwest Multiple Listing Service.

In Seattle, the median single-family home price of $896,500 is up about 11% from last July but down from a $919,000 peak in May.

Countywide, the median single-family home in King County last month sold for $871,000, up about 20% from last July. In Snohomish County, the median home sold for $700,000, a 22% jump. In Pierce County, the median home sold for $510,000, up 20%. 

All of the houses for sale in King, Pierce and Snohomish counties could sell in less than three weeks at the current level of demand, according to a metric known as months of inventory published by the listing service.

Generally, real estate brokers consider about six months of inventory a balanced market favoring neither buyers nor sellers. 

“We would need to have at least a 300% or 500% increase in inventory before anybody would feel any relief,” said John Manning, who owns RE/MAX on Market in Ballard.

In one 24-hour period this week, almost 200 new homes hit the market in King, Pierce and Snohomish counties and twice as many went pending in the same time period, Manning said.

For much of the coronavirus pandemic, telecommuting white-collar workers have driven bidding wars and price hikes in areas farther out from Seattle. Anecdotally, Manning said he has seen that demand start to slow, particularly among tech workers.

Amazon and some other employers have indicated they still want employees working in the office at least part-time. (Because of the latest coronavirus surge, Amazon said Thursday it will push back an office return to 2022. Microsoft is delaying a return to its offices until Oct. 4.)

The housing market appears to be cooling nationwide. Applications for new mortgages are down. So are online home searches and in-person tours, according to Redfin. While prices continue to shoot up, Zillow economists expect a “slightly more sedate pace of growth” in prices next year.

After a record-setting year in housing markets across the country, some buyers are surprised to encounter anything less than an all-out bidding war. 

Lindzee McCain and her husband were bracing for the worst when they sold their West Seattle home and began searching for a new house, she said. 

Shopping for homes between $700,000 and $900,000, the couple expected to have to spend up to $1.2 million to beat out other bidders. McCain said the first house that caught their eye in Lake Forest Park sold the same day it was listed.

That “set our expectations that we were going to be dealing with a competitive market,” said McCain, who works in marketing.

So the pair was surprised to find an 1870s farmhouse in Bothell that hadn’t received any offers.

“We really like old houses. Finding a house older than the state of Washington really appealed to us,” McCain said.

They paid the list price: $899,950. 

Elsewhere, the pandemic pull to suburbs and exurbs last year hammered Seattle’s condo market. This spring and summer, buyers have again looked to in-city life. 

Pending condo sales were up about 9% on the Eastside and 18% in Seattle compared to a year earlier. Even so, Seattle has nearly two months of condo inventory, compared to less than three weeks for single-family homes.

The median condo price in Seattle is essentially flat, down 1% from last year. Prices on the Eastside are up nearly 12%.

The median condo in Seattle sold for $492,500 last month. On the Eastside: $558,000.

Condo prices are also climbing in South King County. In Southwest King County, the median condo sold for $287,500, up nearly 13%. In Southeast King County, the median of $348,000 is up 16%. 

As prices for detached single-family houses continue to rise, buyers are likely to seek out alternatives, Gordon said. He expects town homes to entice more buyers in the coming year.

Prices for single-family houses “are just so out of whack,” he said, “people are going to say, OK a town house makes complete sense.”