The fall months brought a cold snap to Seattle’s housing market.
Prices in King County are essentially flat. Fewer new homes are listed for sale, and fewer home shoppers are taking the plunge. That’s welcome news for some buyers still on the hunt, who are finding occasional price drops and fewer bidding wars.
But it’s not all so rosy.
The number of new listings in King County plunged from September to October and those listings were quickly snapped up before the month was out, putting the squeeze on buyers who are still shopping.
For would-be homebuyers, the selection of homes is more limited than this time of year before the pandemic. King County saw 65% fewer active listings at the end of October than the same time in 2019. And at this time two years ago, it would have taken just over a month and a half to sell all the homes available, compared to less than two weeks now. Pierce and Snohomish counties saw similar trends.
“The inventory that was already low, I’m definitely feeling it dropping even more. And the buyer demand does not feel like it’s dropping,” said Heather Maddox, a Windermere agent based in Renton.
Median single-family home prices are still up by double-digit percentages compared to the same time in 2020 or 2019. In King County, the median home sold in October for $824,270, up 10.6% from October 2020.
In Snohomish County, the median home sold for $695,000, up 19.8%. In Pierce County, the median home sold for $520,000, up 20.9%. Kitsap, Thurston and Whatcom counties all saw year-over-year increases between 16% and 20%.
Prices were roughly level from September to October, dipping less than two-tenths of a percent in King County. In Pierce and Snohomish counties, prices ticked up about 3% after dropping roughly the same amount the month before.
In Seattle, the median home sold for $850,000, up about 6.2% from a year earlier. On the Eastside, the median home sold for about $1.4 million, up 30% from a year earlier. In Tacoma, the $615,000 median price in North Tacoma was up 24.7% compared to last year and the $440,000 median price in Central Tacoma was up 23.9%.
This week, Maddox wrote an offer for a client on a two-bedroom house in Rainier Beach listed at $615,000. The home drew five competing offers and went pending in eight days. Maddox said her client lost out to buyers willing to pay more and waive more protections.
Competition, even among two or three buyers, can drive prices up and push buyers to waive protections like their inspection contingency.
“I’m just telling buyers to get in now. It’s not going to hurt you to start your search early,” Maddox said. “But jumping in in February is like throwing yourself in front of a truck or running with the bulls or something. You might want to warm up.”
Still, some buyers are finding deals.
Redfin agent Malia Vassar recently worked with a couple who had been searching for a home in the Green Lake area for 11 months. This week, they closed on a $996,000 three-bedroom house they secured at the list price without competing against other offers.
“Now is the chance to get lucky,” Vassar said.
The seasonal cooling off of prices in the Seattle area matches national trends, but the market is still drawing people looking to turn a profit.
Nationwide, all-cash buys are up, and the share of institutional investors buying homes, about 7%, is the highest level since early 2014, according to ATTOM Data Solutions. Meanwhile, the share using Federal Housing Administration loans, which offer low down payments for middle-class buyers, is the lowest since late 2007 at about 8%.
For those who already own homes in Western Washington, the potential financial gains have skyrocketed since the years following the Great Recession.
In a measure of profit margins — the difference between the price a home sells for and the price it last sold for — Bellingham ranked second in the nation. The margin there increased from 69.5% at this time last year to nearly 106% this year, according to ATTOM.
The Bellingham area has seen an influx of buyers from Seattle as the pandemic allowed white-collar workers to abandon their office commutes and work from home.
Even owners who stand to make large gains selling their homes can worry about finding another house to buy, leading them to hold off on selling.
“No one wants to become a buyer right now,” Vassar said.
In the market for condos, prices were roughly stagnant, ticking up 1.8% in King County from September to October. Fewer condos were listed in October than in September and fewer new sales took place in King County.
The median condo in Seattle sold for $525,000 last month, up 5.6% from last October. On the Eastside, the median condo sold for $550,500, down 11.2%.
Condo sales are down compared to last year, but up from the same time in 2018 and 2019, likely due in part to new construction in recent years. In Seattle, 11 new condo developments have sold about 59% of their units, according to an analysis from Dean Jones, owner of a local Realogics Sotheby’s International Realty affiliate. Two projects under construction are set to open in 2023 and 2024.
The condo market floundered earlier in the pandemic, as buyers looked for more space and worried less about being close to their offices. Earlier this year, the market stabilized. While some condo shoppers are seeking out luxury towers, others are looking for a more affordable door into homeownership.
With the constant climb of single-family home prices, “it makes sense that affordable housing options for purchase are increasingly being limited to condominium flats,” Jones said in an email. “Town homes and single-family homes especially are asset classes that are simply out of reach for many.”