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Local Market Update – August 2022

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LOCAL MARKET UPDATE·2 min read The summer continues to heat up, and patient buyers are being rewarded as market shifts create a new dynamic between buyers and sellers. After years of intense competition between buyers for the most desirable listings, increasing inventory and slower price appreciation across the region has caused a pivot, with sellers competing more strongly against each other than they have in previous years. While this may cause uncertainty in some sellers, the rise in active inventory is an indication that we are returning to a more balanced housing market as a whole. Sellers can still be very successful with their home sales, as long as they price their homes accurately and understand that they may not see the exorbitant offers that were typical a few months ago. This is a pragmatic approach, and we should see some relief in the “buyer gridlock” that had kept homeowners in place who wanted to sell and move, but simply had no place to go. Even with the increased inventory across the Puget Sound region, we may start 2023 with low supply, high demand, and multiple offer situations. Prices are coming down largely as a result of the previous rapid price appreciation and rising interest rates. However, the Puget Sound’s underlying lack of supply and huge demand has not changed, although rates have improved. Seattle’s median price for single-family homes rose 6.4% year-over-year, from $896,500 to $954,500. That’s down slightly from the million-dollar median the city hit in April, and should help create a more inviting market for prospective buyers. The median price for condos is currently a more affordable $537,000, with 2.5 months’ of inventory. King County as a whole is experiencing much the same phenomenon, with the median sale price for single-family homes decreasing from $938,225 in June to $890,000 last month. However, that’s still  up 2.1% from $871,000 in July 2021. Single-family homes on the Eastside currently have the most inventory of the tri-county area, with 2.5 month’s supply. The median price for single family homes has dropped to $1,420,000, down from $1,500,000 in June, but up 6.7% year-over-year. It’s important to note that this decrease in the median price is likely not due entirely to price depreciation, but from the fact that lower-priced homes made up a larger percentage of the overall sales in the area, thus lowering the median sold price. Real estate experts believe […]

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Local Market Update – July 2022

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LOCAL MARKET UPDATE·2 min read 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 rabid 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 […]

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Local Market Update – June 2022

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LOCAL MARKET UPDATE·3 min read The tides of our local real estate market may at last be shifting, as buyers find relief in increasing inventory and the frenetic pace of sales slows noticeably. At the end of May, inventory across the 26 counties served by the Northwest MLS had increased by 59%, with 8,798 active listings in the database, compared to 5,533 active listings just a year ago. While this shift may cause concern from some who anticipate a drop in the market due to rising mortgage rates, Windermere’s Chief Economist Matthew Gardner had this to say: “What’s more likely to occur is that the additional supply will lead us toward a more balanced market, which after years of such lopsided conditions, is much needed.” While inventory has increased, the meteoric price hikes seen in this first part of 2022 is expected to slow dramatically in the next half of the year. Seattle saw a historic first in April, with the median sold price for a single-family home topping $1 million for the first time. May home sales continued that trend, with the median sold price inching up to $1,025,500, which is a 12% increase from $919,000 in May 2021. King County as a whole mirrored this trend, with the median price of single-family homes reaching $998,888 in May, up from $995,000 in April and up 14.8% from last May’s median price of $869,975. May closings reveal that the Eastside and Snohomish County didn’t follow this same pattern, instead experiencing a much-needed cooling of prices. On the Eastside, the median sold price for single-family homes fell from $1,722,500 in April to $1,590,000 in May. While last month’s median price is the lowest since January of this year, it was still up 22% year-over-year. The Eastside saw an increase in the percentage of homes that had a price change before selling, hitting 10% in May — double that of April. This is likely a signal that Eastside sellers will need to adjust their lofty price expectations. While a majority of listings in the area — about 66% — still sold over list price last month, a full month of inventory and a 403% increase in active inventory on the Eastside from February to May means that buyers have more choice and agency than they’ve had in some time. Homes are still selling, but multiple offers are far fewer and sellers are […]

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Local Market Update – May 2022

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LOCAL MARKET UPDATE·2 min read After a long stint of suppressed housing inventory across our region, buyers may at last have more options as the supply of available homes ticks up ahead of the summer market. The month-over-month increase in inventory has been as much as 50% in some areas, offering renewed opportunities for those buyers who are not dissuaded by high home prices and rising mortgage rates. The Eastside appears to have experienced the most dramatic inventory growth, with .79 months of available single-family homes last month compared to .46 in March. Seattle increased slightly to .59 months of inventory, while Snohomish also had a notable increase up to .67 months of inventory compared to .46 in March. The increase in supply is likely occurring because rising home prices and mortgage rates have put a slight damper on sales in the area. Last month, the median sold price for a single-family home in Seattle surpassed $1 million for the first time—landing at a historic $1,019,950. This is up 16.6% year-over-year from $875,000 in April 2021. The median price for single-family homes on the Eastside last month was an eye-watering $1,722,500, with 80% of homes selling over list price. Although inventory has increased in the area, Eastside homes are still selling quickly, with 96% of listings selling in under two weeks. King County as a whole also saw prices increase, with the median sold price for single-family homes reaching $995,000, up from $830,000 a year ago. Snohomish County home prices have kept pace with the market, with the median sold price for a single-family home reaching $839,298. That’s an increase of 24.3% year-over-year from $675,000 in April 2021. This is likely due to increased demand from buyers who can’t compete in the intense Seattle and Eastside market, seeking more bang for their buck in the relatively more affordable Snohomish County market. Affordability issues have also trickled into the condominium market, as some prospective homebuyers divert from the single-family market to condos. Eastside condo prices have increased 29.7% year-over-year to $674,444 last month from $520,000 in April 2021. In Snohomish County, the median sold price for condos rose to $550,000 year-over-year from $432,250 last year. That’s an increase of 27.2%. Despite rising home prices and heftier mortgage rates, many buyers are still eager to take advantage of the financial benefits of homeownership. According to Windermere’s Chief Economist, Matthew Gardner, “Owning real […]

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Local Market Update – April 2022

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LOCAL MARKET UPDATE·2 min read The spring market continues its frenzied pace, with soaring prices and stiff competition testing the resolve of buyers. Despite these obstacles and rising mortgage rates, inventory remains low across King County, as pending sales keep pace with new listings, demonstrating a strong demand from buyers. This demand has factored into the way sellers are approaching the market. Windermere’s Chief Economist Matthew Gardner notes that median listing prices continue to rise, saying “this suggests that sellers remain quite bullish when it comes to pricing their homes.” This was certainly true in March on the Eastside, where the median closed sale price for single-family homes was $1,700,000, an all-time high. This was up 26% year-over-year, and slightly up from February, when the median was $1,697,500. In Seattle, the median price for single-family homes achieved an all-time high of $970,000, up 18% year-over-year. Snohomish County continues to feel the impact of this voracious demand, with a median closed sale price of $1,298,000 for single-family homes — that’s an increase of 38.1% year-over-year. Not only are asking prices increasing across the region, but many homes are selling for well over list price. On the Eastside, a staggering 85% of closed sales in March 2022 sold for more than the list price. Overall, that’s down from an all-time record last month of 87%, but tied for the second-highest month ever with April 2021. Of the Eastside homes that sold over asking last month, the median difference was 21% over asking, and they spent an average of just 4 days on the market. Seattle is experiencing a similar pattern, with 71% of the closed sales in March going over the list price. This is a high for Seattle; in March and April of 2018, 63% and 68% of listings closed over asking, respectively. Last month, the Seattle listings that sold over list price sold for a median of 15% over the list price, and were on the market for 5 days. In Snohomish County, homes that sold over list price went for a median of 21% over the asking price. With these conditions, many buyers are looking to condos as a more affordable way to break into the market. Consequently, condo prices have also seen a year-over-year increase. In King County, condos remain relatively more affordable, with a median price of $540,000 in March 2022. That’s up from $470,000 in March […]

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Local Market Update – March 2022

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LOCAL MARKET UPDATE·3 min read As we head into the traditionally busy spring season for homebuying, the market seems to be keeping up its intense pace, with low inventory across the board and multiple offers the norm. A marginal increase in listings across King and Snohomish counties has done little to counter fierce buyer demand, with certain areas on the Eastside virtually unable to sustain new inventory. With these trends likely to continue, buyers will need to be aggressive and ready to compete. Prices continue to rise across Seattle and the Eastside, with the median sold price for single-family homes on the Eastside increasing to an eye-watering $1,697,500 in February — a 34% year-over-year increase. Seattle saw a 16% year-over-year increase last month, with a median sold price of $925,000 for single-family homes. These median home prices for the Eastside and Seattle were all-time record highs. Fierce competition on the Eastside last month drove price increases, with 87% of  homes in the area closing above list price and the median sold price coming in at a whopping 23% over list. At the start of this month the Eastside had just under two weeks of inventory, and 94% of last month’s listings sold in under two weeks. The pace of home sales in Seattle was almost as hot, with 86% of homes selling in two weeks or less.  Snohomish County saw a year-over-year price increase of 19% in February, with a median sold price of $745,725 for single-family homes, a record-high for the area as well. The continuation of remote and flexible work options continues to encourage buyers to purchase in the area, and by month’s end Snohomish County inventory had dropped to less than two weeks’ supply. The competition and rising prices have some buyers torn between jumping into the market while they still can, or waiting to see if a price correction will occur within the foreseeable future. The last correction occurred in 2018; in the three years from May 2015 to May 2018 King County home prices rose 51% from $480,942 to $726,275. During the same time, interest rates increased from 3.84% to 4.59%. Prices then dropped 16% from $726,275 to $610,000 and took 18 months to rise above $726,275 again. While this context is helpful, it’s also extremely difficult to predict when and if a price correction will occur in the near future. Amid rising concerns over […]

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Local Market Update – February 2022

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LOCAL MARKET UPDATE·2 min read If the home 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 asking price. Expect this spring, traditionally the busiest season of the year for home sales, to be hotter than ever. 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 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. 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. 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. “One of the biggest questions for 2022 is how the […]

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The Gardner Report – Q4 2021

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WINDERMERE INSIGHTS·4 min read 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 agent. REGIONAL ECONOMIC OVERVIEW Just when we thought COVID was starting to pull back, the Omicron variant made its presence known. It is still too early to suggest that this has affected the region’s economic recovery—we won’t likely know for certain until we get more job data. I remain hopeful that this latest spike in infections will not have too much of an impact, but only time will tell. To date, the region has recovered all but 51,000 of the 297,000 jobs that were lost due to the pandemic. Some of the region’s smaller counties, including Grays Harbor, Cowlitz, Thurston, San Juan, and Clallam, have seen a full job recovery. The most recent data (November) shows the regional unemployment rate at a very respectable 3.3%, which is below the pre-pandemic low of 3.7%. The lowest unemployment rates were in King and San Juan Counties, where 2.9% of the labor force was out of work. The highest rate was in Grays Harbor County, which registered 5.1%. I still expect to see a full job recovery by this summer. However, there is a growing labor shortage holding the area back. Hopefully, this will change, but some industry sectors—especially hospitality—continue to find it hard to attract workers. HOME SALES In the final quarter of the year, 22,161 homes sold, representing a drop of 5.2% compared to the same period in 2020 and down 18.8% from the third quarter. The reason there were lower year-over-year sales is simply because the number of homes for sale was down more than 30%. The drop between third and fourth quarters is likely due to seasonality changes in the market. Although home sales were lower in most markets, there was a significant uptick in Grays Harbor and Thurston counties. The number of homes sold dropped across the board compared to the third quarter. The ratio of pending sales (demand) to active listings (supply) showed sales outpacing listings by a factor of 5.2. The market is supply starved and unfortunately, it’s unlikely enough homes will be listed this spring to satisfy demand. HOME PRICES […]

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Local Market Update – January 2022

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LOCAL MARKET UPDATE·2 min read 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. 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.      What’s ahead for 2022? […]

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2022 Housing Market Forecast

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[THE STATE OF] REAL ESTATE·4 min read Each year, Windermere’s Chief Economist, Matthew Gardner, helps us plan for the year to come with his annual forecast about the state of the economy and upcoming housing market trends. According to Gardner, the U.S. housing market has been a beacon of hope during the pandemic period. Given the massive spike in demand that started last June, he’s expecting more than 6 million existing homes will have changed hands in 2021. However, he doesn’t see this level increasing in 2022 – mainly due to ongoing supply limitations as well as rising affordability issues. Therefore, Gardner is forecasting sales to modestly pull back in 2022. That said, the country has never seen more than 6 million homes sold in a single year since records were first kept, so the number is still very impressive. With the market as tight as it has been so far in 2021, it shouldn’t be any surprise to see median sale prices skyrocketing. Even though there are 3 more months of sales data yet to be released for this year, Gardner anticipates prices will have risen by almost 16.5 % in 2021 — a remarkable number. This pace of appreciation has never been seen before. The closest was in 2005, when the housing bubble was inflating rapidly, but even then prices only rose by 12.2%. However, as Gardner mentioned in his sales forecast, this pace of growth is unsustainable. He is expecting to see some of the heat to come off the market next year, but a growth rate of 7.3% should still be noted. There are three major reasons why the market will see the pace of growth slow. Gardner has concerns regarding housing affordability, but mortgage rates and new supply will also influence the slowdown in sales and price growth for resale homes. Although Gardner does not prepare a forecast for housing affordability, this is where he expects to see mortgage rates through the end of next year; he is predicting they will continue “stair-stepping” higher, but still ending 2022 below 4%. This is very low by historic standards given that the long-term average for a conventional 30-year mortgage is somewhere around 7.5%. As rates notch higher, this will start to compress price growth as it puts a lower ceiling on how much a buyer can afford to pay for a home. Slowing growth in existing home […]

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