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Q3 Western WA 2022 Gardner Report
The following analysis of the Western Washington real estate market is provided by Windermere Real Estate Chief Economist Matthew Gardner. We hope that this information may assist you with making better-informed real estate decisions. For further information about the housing market in your area, please don’t hesitate to contact Kari.
REGIONAL ECONOMIC OVERVIEW
The Western Washington labor market continues to expand. The addition of 110,000 jobs over the past 12 months represents an impressive increase of 4.9%. All but seven counties have recovered completely from their pandemic job losses. In total, the region has recovered all the jobs lost and has added an additional 30,000 new positions. The regional unemployment rate in August was 3.8%. This is .2% higher than at the end of the second quarter. That said, county data is not seasonally adjusted, which is likely the reason for the modest increase. The labor force has not expanded at its normal pace, which is starting to impact job growth. Although the likelihood of a recession starting this winter has risen, Matthew Gardner is not overly concerned; however, he anticipates businesses may start to taper hiring if they feel the demand for their goods and services is softening.
WESTERN WASHINGTON HOME SALES
❱ In the third quarter, 19,455 homes traded hands, representing a drop of 29.2% from the same period a year ago. Sales were 15.4% lower than in the second quarter of this year.
❱ Listing activity continues to increase, with the average number of homes for sale up 103% from a year ago and 61% higher than in the second quarter of 2022.
❱ Year over year, sales fell across the board, but when compared to the second quarter they were higher in Mason, Cowlitz, Jefferson, and Clallam counties.
❱ Pending sales (demand) outpaced listings (supply) by a factor of 1:6. This ratio has been dropping for the past three quarters and indicates a market moving back toward balance. The only question is whether it will overshoot and turn into a buyer’s market.
WESTERN WASHINGTON HOME PRICES
❱ Higher financing costs and more choices in the market continue to impact home prices. Although prices rose an average of 3.6% compared to a year ago, they were down 9.9% from the prior quarter. The current average sale price of a home in Western Washington is $748,569.
❱ The change in list prices is a good leading indicator and we have seen a change in the market. All but two counties (Island and Jefferson) saw median list prices either static or lower than in the second quarter of 2022.
❱ Prices rose in all but two counties, and several counties saw price growth well above their long-term averages.
❱ With the number of homes for sale rising and list prices starting to pull back, it’s not surprising to see price growth falter. We are going through a reversion following the overstimulated market of 2020 and 2021. There will be some ugly numbers in terms of sales and prices as we move through this period of adjustment, but the pain will be temporary.
MORTGAGE RATES
❱ This remains an uncertain period for mortgage rates. When the Federal Reserve slowed bond purchases in 2013, investors were accused of having a “taper tantrum,” and we are seeing a similar reaction today. The Fed appears to be content to watch the housing market endure a period of pain as they throw all their tools at reducing inflation.
❱ As a result, mortgage rates are out of sync with treasury yields, which not only continues to push rates much higher but also creates violent swings in both directions. My current forecast calls for rates to peak in the fourth quarter of this year before starting to pull back slowly. That said, they will remain in the 6% range until the end of 2023.
DAYS ON MARKET
❱ It took an average of 24 days for a home to sell in the third quarter of the year. This was seven more days than in the same quarter of 2021, and eight days more than in the second quarter.
❱ King and Kitsap counties were the tightest markets in Western Washington, with homes taking an average of 19 days to sell.
❱ Only one county (San Juan) saw the average time on the market drop from the same period a year ago. San Juan was also the only county to see market time drop between the second and third quarters of this year.
❱ The greatest increase in market time compared to a year ago was in Grays Harbor, where it took an average of 13 more days for homes to sell. Compared to the second quarter of 2022, Thurston County saw the average market time rise the most (from 9 to 20 days).
CONCLUSIONS
This speedometer reflects the state of the region’s real estate market using housing inventory, price gains, home sales, interest rates, and larger economic factors.
Listings are up, sales are down, and a shift toward buyers has started. After a decade of sellers dominating the market, it is far too early to say that the shift is enough to turn the market in favor of buyers, but the pendulum has started to swing in their direction.
A belief that the housing market is on its way to collapsing will keep some buyers sidelined, while others may be waiting for mortgage rates to settle down. Whatever their reasons, Matthew Gardner maintains that we will see a brief period where annual price growth will turn negative in several markets, but it is only because the market is normalizing. He certainly doesn’t see any systemic risk of home values falling as they did in the mid-to-late 2000s.
ABOUT MATTHEW GARDNER
As Chief Economist for Windermere Real Estate, Matthew Gardner is responsible for analyzing and interpreting economic data and its impact on the real estate market on both a local and national level. Matthew has over 30 years of professional experience both in the U.S. and U.K.
In addition to his day-to-day responsibilities, Matthew sits on the Washington State Governors Council of Economic Advisors; chairs the Board of Trustees at the Washington Center for Real Estate Research at the University of Washington; and is an Advisory Board Member at the Runstad Center for Real Estate Studies at the University of Washington where he also lectures in real estate economics.
This post originally appeared on the Windermere.com Blog.
October 2022 Real Estate Market Update
Increasing listings inventory, lengthening time on the market and a slowdown in home price increases across the Puget Sound region herald a return to normalcy and better opportunities for buyers. According to September data from the NWMLS, active listings nearly doubled from a year ago, with pending sales declining by about 31%.
“The ‘Great Reversion’ continues, with the number of homes in the tri-county market of King, Pierce, and Snohomish counties up 106% from a year ago,” says Windermere’s Chief Economist Matthew Gardner. “It’s worth noting that current inventory levels in King and Snohomish counties are still around 13% lower than they were in September 2019 prior to the pandemic-induced market shift.”
While the recent sales data may be pointing to a market shift of a different sort, they may reflect some normal seasonal trends as well. October is typically an average selling month, with November typically performing about 76% as well as an average month, and December and January slowing even further as the holidays and end of year pull some buyers from their home searches.
That being said, last month still saw year-over-year price increases in Puget Sound’s busiest metros, despite some month-over-month price dips. King County single-family homes saw a price decrease from $899,999 in August to $875,000 last month. That’s still up from last September’s median price of $825,600, and condos also saw year-over-year price increases, from $466,501 last September to $483,000 this September. With about two months’ inventory for both housing types, King County buyers are better able to take their time and consider the details of their purchase.
Seattle also saw a slight month-over-month decrease in single-family home prices, from a median price of $927,000 in August to $900,000 last month. That’s still up six percent from $850,000 in September 2021. Conversely, year-over-year condo prices slumped a bit, falling to $499,000 last month from $505,000 in September 2021. Condo inventory has also increased, with buyers benefitting from over two months’ supply. Sellers are encouraged to price wisely and accurately to beat the competition in these conditions.
The Eastside was the only area to see prices stay the same month-over-month, with the median price for a single-family home remaining constant at $1,350,000. That’s an increase from the median price of $1,310,000 in 2021. Active inventory also increased, up to 1.9 months’ supply. The last time the Eastside had this many listings (approximately 1,200) was before the pandemic in 2019.
Snohomish County followed Seattle and King County, with prices dropping slightly to a median of $735,000 for single-family homes last month — down from $749,000 in August. Inventory was slightly tighter in the area, with about 1.75 months’ supply, though it’s still an improvement over the tight inventory at the height of the pandemic.
Many buyers are feeling a bit of a “pandemic hangover” when it comes to interest rates, which may be contributing to the increase in inventory across the region. The conditions that led to the historic low-interest rates were unprecedented, and buyers now need to be willing to consider buying at a higher rate with the goal of refinancing later on if they’re able.
The future of the local market will be dictated by fluctuations in interest rates. If rates increase from the September average of 6.11%, real estate experts expect new pending sales to continue to be 25% – 30% below the prior year in units. Median closed sale prices will roughly decline 10% for each 1% increase in interest rates. However, if interest rates decline from the September average, we can expect pending sales to increase, prices to remain flat, and active inventory to decline more than normal.
Matthew Gardner also points out that home prices “remain positive compared to a year ago.” He doesn’t expect this to change by the end of 2022. By spring, however, Gardner believes “it’s likely that year-over-year prices will start to trend negative. That said, I firmly believe that this will only be a short period of correction, so homeowners in the Puget Sound area shouldn’t be too concerned, especially given that 64% of them are sitting on over 50% of home equity.”
If you have questions about how home inventory or inflation could impact your position in the real estate market, please call the Kari Haas Real Estate Team.
EASTSIDE
KING COUNTY
SEATTLE
SNOHOMISH COUNTY
VIEW FULL SNOHOMISH COUNTY REPORT
This post originally appeared on GetTheWReport.com.
How to Successfully Move and Start a Business at the Same Time
If you’re moving house and starting a business at the same time, proper planning is key to easing stress and making smart decisions. Bellevue, WA has a lot to offer new business owners and homeowners, so it’s a great place to start your search. If you take the time to consider your needs, this venture can be an opportunity for the best start possible rather than an additional challenge.
Buying Your New Home
If you’re starting a home-based business, there are additional concerns to take into account. To help the process go smoothly, here are some steps you should take:
- Secure a mortgage. It can be difficult for self-employed people to get home loans. If you don’t have a partner helping with expenses, you may want to keep your day job until after settlement.
- Define your needs. List any special requirements of your business, whether that’s inventory storage or a separate entrance and waiting area for clients.
- Hire a real estate agent. The right agent listens to your needs and budget and presents properties that meet those requirements.
- Consider laws and regulations. Zoning laws and HOA regulations can restrict your ability to run a business from your home. Bellevue’s zoning regulations can be found online.
By following these steps, you’ll minimize the challenges that can come up during the buying process.
Moving In
Getting professional assistance for your move can be useful. Movers can pack and transport the majority of your belongings while you concentrate on your most important possessions. These important possessions include paperwork, your computer, any inventory you have, and other tools or equipment that let you do your work. It can be best to put this all in one box or bag that you move yourself so that it remains easy to access. If your new property doesn’t have space for everything, you can look at alternative storage. This can be a temporary or more permanent solution for storing inventory. In the Bellevue, WA area, 5×5 storage units start at $45.
Launching Your Business
The next step is to launch your business. The Small Business Administration has a good guide that can help you through the process, from market research to opening a business bank account. You can also look into getting a business degree to cover all the ins and outs of being a successful entrepreneur. You can choose to study online to better balance your studies with your other responsibilities.
Spend some time deciding on the structure of your business. Your options include sole proprietorship, partnership, corporation, or limited liability company. An LLC limits your personal liability, which can protect your assets, such as your new home. In Washington, you can register your LLC online. This helps you avoid legal fees.
Also, keep track of your finances. No matter what your business structure is, it’s important to keep personal and business expenses separate. Consider using business accounting software that can keep track of income, business receipts, and expenditures. Accurate records can help you at tax time, especially when it comes to the deductions you’re allowed for a home office.
The Right Help
No matter how well you plan, having the right assistance can be essential to your success. The right real estate agent can also help you make your home and business ownership dreams come true. While we might not be able to help you start a business, we are prepared to take the weight of home buying off your shoulders. Contact Kari Haas to start your journey.
We pride ourselves in having the best track to success in real estate and while we aren’t business advisors, we do have a long list of referrals for those seeking help. i.e., a financial advisor, property manager, and more.
Image via Pexels
This post was originally written by a guest blogger, Lisa Walker.
July 2022 Real Estate Market Update
Cooler temperatures and a cooler regional real estate market have been this summer’s hallmark thus far. After months of blazing hot sales and a breakneck pace, buyers are finally seeing inventory levels accelerate and price gains slow. With inspection and financing contingencies once again becoming the norm, the region may, at last, be shifting toward a more balanced market.
Area home prices were down across the board last month. The median sold price for King County single-family homes dropped to $938,225, slightly lower than May’s near million-dollar price ($998,888). Year-over-year, however, King County prices were still up by 9%, despite the higher 1.5 months of available inventory.
Seattle mirrored the county’s trend, with the median price dropping from $1,025,500 in May to an even $1,000,000 in June. This price was still up 12% year-over-year, indicating continued demand for housing in the city.
Real estate experts have pointed out that areas that saw the greatest appreciation earlier this year will likely see a more significant dip in prices as the market rebalances. The Eastside market bore out this theory in June as the median sold price for single-family homes was $1,500,000 — down almost $100k from May’s median price of $1,590,000. That said, last month’s Eastside median sold prices were still up over June 2021, increasing 10% year-over-year in the residential market and 12% in the condo market. And with two months’ supply of homes currently listed, Eastside buyers have significantly more options to choose from than they would have had earlier in the year.
Snohomish County — long a refuge for buyers seeking more bang for their buck — followed a similar trend. The median sold price for single-family homes dropped to a more attainable $799,950, down from May but still up 11% year-over-year. Snohomish County condo prices dipped in June as well, with the median sold price of $500,000 down 9% from May and up a meager 1.6% from June of last year.
While these recent price dips may cause concern for some sellers, local real estate experts reiterate that this is a necessary step toward a more balanced market. “The increase in listings has started to slow the rapid pace of price gains that we’ve experienced,” said Matthew Gardner, Windermere’s Chief Economist. “This is a good thing, not a cause for concern.”
Other factors influencing the summer real estate market are higher mortgage rates, higher post-pandemic rates of travel, and typical seasonal buyer patterns. With graduations occurring and school years finishing up, many potential buyers are scratching their itch for travel and family time, putting off their home search until a little later in the year.
For sellers looking to make the most of the current market, flexibility is key. Pricing their home correctly from the get-go and being willing to negotiate with buyers on terms can still result in a top-of-market sale, albeit one in which multiple offers are less expected.
If you have questions about real estate opportunities in the current market, please reach out for additional insights and analysis. The Kari Haas Real Estate Team is here for you! “Let’s Sell Your House & Find Your Home!”
Eastside
King County
Seattle
Snohomish County
VIEW FULL SNOHOMISH COUNTY REPORT
This post originally appeared on GetTheWReport.com
February 2022 Real Estate Market Update
What’s Happening in the Market
In this February 2022 real estate market update, we see that the local market in January looked a bit like the calm before the storm. Home prices took a pause from the frantic surges of last year, but if the sales we’ve seen in the last few weeks are any indication, the market looks like it’s heating up again. Inventory inched up in January but remains far short of buyer demand. Homes are selling fast, and for well over the asking price. Expect this spring, traditionally the busiest season of the year for home sales, to be hotter than ever.
Reason for Concern?
Concerns about future mortgage interest hikes appear to have added fuel to an already overheated market, further depleting already meager inventory. The number of homes for sale was lower than any January on record, according to Matthew Gardner, Windermere’s chief economist. There were 59% fewer homes on the market in King County than at the same time last year. Snohomish County’s inventory was down 35%. Based on current demand, it would take less than two weeks to sell all the properties on the market in both counties. Buyers competing for scant inventory snapped up available homes quickly. In King County, 72% of the homes sold in January were on the market less than two weeks. On the Eastside, 81% of homes sold in less than two weeks, as did 61% of homes in Seattle, and 76% of homes in Snohomish County.
Home Price Trends
Homes prices continued to trend upward compared to the same time last year. In January, the median price of a single-family home in King County rose 7% year-over-year to $775,000. Home prices on the Eastside jumped 32% over a year ago to $1,515,000, virtually unchanged from the all-time high of $1,529,500 set in December. With 71% of homes on the Eastside selling for over asking price, the market is expected to stay very competitive. Prices in Seattle have been fairly level for the past few months. The January median home price of $790,000 is flat compared to a year ago. In Snohomish County, the $715,000 median home price was up 19% over the prior year.
While January’s statistics (which reflect sales that closed in December) hinted that the market may be easing off, the housing activity we’re seeing today indicates that buyers are stepping on the gas. Expect even more competition for homes in the coming months.
Expectations for the Future
Despite the pandemic and remote work, large companies continue to hire new workers and invest in large office projects in the area. Matthew Gardner weighed in on how he sees that affecting the housing market for this February 2022 real estate update. “One of the biggest questions for 2022 is how the market will be further impacted by the work-from-home paradigm given that many companies have postponed their long-term WFH plans. This is likely holding back sellers during a time when we desperately need additional inventory, as well as buyers who are concerned about rising mortgage rates.” Gardner expects more sellers will list their homes and more buyers will start their searches once they know how often they need to commute to work, which may result in a busier spring market than expected.
If your plans for 2022 include buying or selling a house, we’re here to help. Get in touch and we can get started.
EASTSIDE
KING COUNTY
SEATTLE
SNOHOMISH COUNTY
VIEW FULL SNOHOMISH COUNTY REPORT
Check back next month for a new local market update.
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This post originally appeared on GetTheWReport.com.
January 2021 Real Estate Market Update
What’s Happening in the Market
In this January 2021 real estate update we see record-low temperatures combined with record-low inventory put a chill on housing activity in December. With very few homes available to buy, sales were down. Lack of supply and high demand continued to push prices up. Since the winter months historically bring the smallest number of new listings, buyers should not expect relief anytime soon.
December Results
While up from a year ago, home prices in general were relatively flat from November to December. In King County, the median single-family home price rose 9% from last December to $810,000. Despite high demand and low inventory, prices in Seattle continue to level off. While down slightly from November, the median price increased a modest 5% over a year ago to $839,000. The Eastside was again the outlier. After breaking price records in October and November, home prices soared 37% year-over-year to set yet another all-time high of $1,529,500 in December. That represents a 7% increase from November. In further evidence of just how hot the Eastside market is, 75% of the properties there sold for over list price. Prices in Snohomish County continued to inch closer to King County. The median home price there jumped 22% to $700,000.
The driving force affecting affordability is lack of inventory. In both Snohomish and King counties it would take less than a week to sell the homes that are currently on the market. At the end of December, Snohomish County has just 210 single-family homes for sale in the entire county. Seattle had only 167 homes for sale; the Eastside just 55. That represented 70% less inventory for both Seattle and the Eastside as compared to a year ago. To give some historical perspective, the ten-year average inventory for the end of December is 545 homes in Seattle and 743 homes on the Eastside.
Matthew Gardner, Chief Economist at Windermere, registered his concern. “The Puget Sound region is in dire need of more housing units which would function to slow price growth of the area’s existing housing,” he said. “However, costs continue to limit building activity, and that is unlikely to change significantly this year.”
The demand side of the equation isn’t expected to wane any time soon either. With millions of square feet of new office space and new light rail developments in the works, the area continues to be a draw for employers – and more potential homebuyers.
2022 Predictions
What’s ahead for 2022? Matthew Gardner expects the market to continue to be strong, but believes the pace of appreciation will slow significantly from this year. “I predict single family prices will increase by around 8% in King and Snohomish counties. Affordability issues and modestly rising interest rates will take some of the steam out of the market in 2022.”
From working remotely to finally retiring, life events often trigger housing decisions. If you find yourself looking to buy or sell a property, we’re here to help.
EASTSIDE
KING COUNTY
SEATTLE
SNOHOMISH COUNTY
VIEW FULL SNOHOMISH COUNTY REPORT
Check back next month for a new local market update.
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This post originally appeared on GetTheWReport.com.
December 2021 Real Estate Market Update
What’s Happening in the Market
While the housing market typically slows down in the winter, fewer buyers are taking a break this year. High demand and scant inventory still favor sellers, who continue to see multiple offers. In one bright spot for buyers, home prices – while up from over a year ago – appear to be evening out in most of the region. Potential home sellers who’ve been sitting on the fence may want to consider taking a leap into the market now.
November Results
With the exception of the Eastside, Puget Sound median home prices were essentially flat in November compared to the previous month. However, prices increased by double-digits in most areas from last year. In King County, the median single-family home price rose 12% from last November to $820,000. Home prices in Seattle continue to level off, with the median price of $850,000 up just 4% from a year earlier. The Eastside maintained its strong appreciation, with prices soaring 35% from a year ago to a new record. The median home price there of $1,428,000 topped the previous all-time high price of $1,365,000 set in October. Prices in Snohomish County jumped as well, rising 23% to $695,000.
Despite the traditional winter slowdown, the supply of homes for sale just isn’t budging. Snohomish County has just three weeks of inventory. In King County it would take just over a week to sell through all the homes for sale. Inventory is at an all-time low on the Eastside, where there are only 100 single-family homes for sale in the entire area, which stretches from Issaquah to Woodinville. Homes there are snapped up quickly, with 85% of properties selling within two weeks. With demand at a peak, the inventory crunch is expected to continue. Developers are particularly bullish on the Eastside, where plans are in the works for numerous projects, including a new condo tower in Bellevue, a $500 million transit-oriented development, and over 7,500 new apartment units that are being built in Redmond.
2022 Predictions
What’s ahead for 2022? Matthew Gardner, Chief Economist at Windermere, expects the market to continue to be strong, but believes the pace of appreciation will slow significantly from this year. “I predict single family prices will increase by around 8% in King and Snohomish counties. Affordability issues and modestly rising interest rates will take some of the steam out of the market in 2022.”
Do your New Year’s plans include buying or selling a home? Your broker can keep you up to date on the latest trends and help you create a plan to meet your goals. Let us know how we can help.
EASTSIDE
KING COUNTY
SEATTLE
SNOHOMISH COUNTY
VIEW FULL SNOHOMISH COUNTY REPORT
Check back next month for a new local market update.
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This post originally appeared on GetTheWReport.com.
November 2021 Real Estate Market Update
What’s Happening in the Market
As we head towards the end of the year, the housing market traditionally slows down. As a matter of fact, this year’s activity was even slower than normal, with record-low inventory and correspondingly fewer sales. What’s happening in the market now? At this point, prices aren’t appreciating at the pace they were in the spring, but they continue up as compared to a year ago. While potential home sellers usually wait until after the holiday season to list their homes, those who opt to put their home on the market now can count on strong buyer interest.
With the number of buyers far outstripping supply, inventory is at historic lows. King County as a whole has less than two weeks of inventory. The supply of homes is especially strained on the Eastside where there was just one week of inventory at the end of October – 61% fewer homes were on the market than the same time last year. Snohomish County is starved for supply as well, with just over one week of inventory. The entire county had just 492 single-family homes for sale at the end of October.
Strong buyer demand has kept prices steady, and most areas saw home prices increase from a year ago but remain fairly flat over the past few months. The median price of a single-family home in King County rose 11% from twelve months ago, increasing from $745,000 to $824,270. Within the county, the Eastside experienced the greatest gain. Home prices soared 30% to $1,365,000, inching above the previous all-time high of $1,364,000 set in June of this year. Prices in Seattle registered the smallest gain at 6%, up from $800,000 a year ago to $850,000.
Homes that sold in the North, Southeast, and Southwest parts of the county saw price gains ranging from 16% to 20%. Buyers may find some relief with condominiums. The median price of a condo in King County was $459,970, an increase of 3% from the prior year. Tight inventory kept prices strong in Snohomish County. The median price of a single-family home jumped 20% in October to $695,000. Like most of King County, home prices in Snohomish County have been fairly flat over the past few months.
Have home prices plateaued? Will strong buyer demand continue? After all, the real estate market can change quickly, so whether you’re looking to buy or sell, your broker can provide you with the most current data so you can make the best decision for your situation. Let us know how we can help.
EASTSIDE
Local Market Update
KING COUNTY
Local Market Update
SEATTLE
Local Market Update
SNOHOMISH COUNTY
Local Market Update
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This post originally appeared on GetTheWReport.com.
The Gardner Report – Quarter 3
The following analysis of the Western Washington real estate market is provided by Windermere Real Estate Chief Economist Matthew Gardner. We hope that this information may assist you with making better-informed real estate decisions. For further information about the housing market in your area, please don’t hesitate to contact your Windermere Real Estate agent.
REGIONAL ECONOMIC OVERVIEW
The emergence of the of COVID-19 Delta variant had a palpable impact on the region’s economy, which, naturally, impacted job recovery. Employment levels in Western Washington had been picking up steam in the spring but started to slow quite dramatically over the summer. To date, the region has recovered more than 201,000 of the jobs that were lost due to the pandemic, but we appear to be in a bit of a holding pattern. That said, the ending of enhanced unemployment benefits has led many business owners to see more applicants for open positions, so I am hopeful the numbers will pick back up as we move into the winter months. The most recent data (August) shows the region’s unemployment rate at a respectable 5%, but we still have a way to go before we reach the pre-pandemic low of 3.7%. On a county level, the lowest unemployment rate was in Kitsap County (4.4%) and the highest was in Grays Harbor County (6.6%). There are still many hurdles in front of us, but I believe we will continue to add jobs and reach full employment recovery by mid-2022.
WESTERN WASHINGTON HOME SALES
❱ Sales in the third quarter rose 6.4% year over year, with a total of 27,280 homes sold. The increase matched what we saw in the second quarter of this year.
❱ I was pleased to see sales growth continue. This rise was supported by a 28.4% increase in the number of homes for sale. Listings rose the most in Grays Harbor (+62.6%), Lewis (+53.6%), and Skagit (+52.0%) counties.
❱ Sales activity was mixed. Nine counties saw year-over-year growth, but sales slowed in six counties. That said, sales were up in every county other than King and San Juan compared to the second quarter of 2021.
❱ The ratio of pending sales (demand) to active listings (supply) showed pending sales outpacing listings by a factor of 4.6. Even with the increase in the number of new listings, the market is far from balanced.
WESTERN WASHINGTON HOME PRICES
❱ Home prices rose 18.9% compared to a year ago, with an average sale price of $726,168—another all-time record.
❱ When compared to the same period a year ago, price growth was strongest in Clallam, San Juan, and Jefferson counties, but all markets saw prices rise more than 12% from a year ago.
❱ Average sale prices pulled back 1.1% compared to the second quarter of this year. Given the massive increase in value over the past few years, it is not at all surprising. The key indicator has been a softening in list prices and that naturally translates to slower price growth. This is nothing to be worried about. It simply suggests that the market may finally be heading back to some sort of balance.
❱ Relative to the second quarter of this year, all counties except San Juan (-0.1%), Island (-0.5%), and Whatcom (-0.5%) saw higher sale prices.
DAYS ON MARKET
❱ It took an average of 17 days for a home to sell in the third quarter. This was 19 fewer days than in the same quarter of 2020, and 1 fewer day than in the second quarter of this year.
❱ Mirroring the second quarter, Snohomish, Kitsap, Thurston, and Pierce counties were the tightest markets in Western Washington, with homes taking an average of 9 days to sell in Snohomish County and 11 days in the other three counties. The greatest reduction in market time compared to a year ago was in San Juan County where it took 102 fewer days for homes to sell.
❱ All counties contained in this report saw the average time on market drop from the same period a year ago, but eight counties saw market time rise from the second quarter; however, the increases were minimal.
❱ Even with inventory levels increasing in most markets, the region’s housing market remains remarkably tight. That said, I do see some of the heat dissipating and I am hopeful that if inventory levels continue rising, we will start a slow move back toward a balanced market.
CONCLUSIONS
This speedometer reflects the state of the region’s real estate market using housing inventory, price gains, home sales, interest rates, and larger economic factors.
Even given the speedbump that hit the region’s economy with the emergence of the Delta variant, the housing market remains remarkably resilient. Demand from buyers continues to be very strong, and modestly increasing inventory levels appear to have—at least for the time being—reduced some of the fever from the market. Mortgage rates remain very favorable, and my current forecast is for them to stay in the low- to mid-3% range until next summer. Rising inventory levels have led price growth to slow and days on market to start increasing, which may be a sign that the market is retreating from a prolonged period of exuberance.
As we move through the balance of the year, I believe demand will remain solid, but we will continue to see price growth soften as more listings compete for the buyers that are out there. That is not to say price growth will turn negative; rather it suggests that we are slowly moving back toward a more balanced market. That said, the market certainly still favors home sellers. As such, I am leaving the needle in the same position as the second quarter. I may move it a little in the direction of buyers next quarter if the current trend continues through the winter months.
ABOUT MATTHEW GARDNER
As Chief Economist for Windermere Real Estate, Matthew Gardner is responsible for analyzing and interpreting economic data and its impact on the real estate market on both a local and national level. Matthew has over 30 years of professional experience both in the U.S. and U.K.
In addition to his day-to-day responsibilities, Matthew sits on the Washington State Governors Council of Economic Advisors; chairs the Board of Trustees at the Washington Center for Real Estate Research at the University of Washington; and is an Advisory Board Member at the Runstad Center for Real Estate Studies at the University of Washington where he also lectures in real estate economics.
This post originally appeared on the Windermere.com Blog.
September 2021 Local Real Estate Market Update
September Local Market Update
As the seasons get chiller, according to Windermere Chief Economist, Matthew Gardner, so are the prices in this market with the median listing prices and sales prices in August even the slightest bit lower than in the month prior. In the most recent local market update, Gardner has even said that he believes “that this is because we are hitting a price ceiling and that the rapid pace of home price appreciation will continue to cool as we move through the rest of the year.”
Home Prices, Trends, & More…
While up by double digits year-over-year, home prices in August did cool off slightly throughout the region as compared to July. The median single-family home in King County last month sold for $850,000, up 14% from a year ago. This is a drop from the record-high $871,000 set in July. Seattle saw the median price rise 6% from the same time last year to $875,000, down from $896,500 the prior month. Home prices on the Eastside were up 24% year-over-year to $1,300,000, a dip from the $1,330,563 median price in July. Snohomish County’s median price jumped 25% from a year ago to $694,900, just shy of July’s median of $700,000.
While a slight softening of home prices may be welcome news for buyers, inventory is still a big problem. King County has under three weeks of available homes for sale. The lack of inventory is especially severe on the Eastside. At the end of August there were just 278 homes for sale in the entire area, 62% fewer than the same time a year ago. And 85% of homes sold in less than two weeks. As companies continue to invest in large office projects on the Eastside, demand for homes is expected to continue to rise. Snohomish County reported the smallest supply of homes of any county in Western Washington, about two weeks. The Puget Sound area as a whole remains well below the four-to-six weeks of inventory that is considered a balanced market, favoring neither buyer nor seller.
City-Living
An uptick in condo sales indicates that in-city living is on the rise again. In King County, the number of closed sales were up 20% in August compared to a year ago. The median condo price on the Eastside rose 14% to $544,000. The supply there remains tight, with just two weeks of inventory. Seattle offers much more choice, with six weeks of inventory available. Condo prices there dropped slightly year-over-year to $480,000. With Amazon looking to hire 12,500 corporate and tech employees in Seattle, demand for in-city living there is predicted to remain strong. As single-family home prices have soared, condo living remains an affordable option for those wanting to live close to urban centers. The King County median condo price is 46% less than that of a single-family home at &460,000.
What’s happening in your neighborhood?
Whether you are thinking of buying or selling — or just curious — the Kari Haas team or your broker can provide you with the latest data about specific neighborhoods and answer any questions you might have about home prices, financing, and strategies to help you meet your goals.
Charts
The charts below provide a brief overview of market activity. Every Monday, Windermere Chief Economist Matthew Gardner provides an update on the US economy and housing market. You can get Matthew’s latest update here.
EASTSIDE
KING COUNTY
SEATTLE
SNOHOMISH COUNTY
Check back next month for a new local market update.
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This post originally appeared on GetTheWReport.com.
