Local Market Update – August 2023
The dog days of summer are upon us, and along with stifling heat comes a sluggish market. High interest rates and a dearth of available inventory are driving prices up and slowing sales across the region.
One major contributor to the low supply of homes is the phenomenon of homeowners protecting their sweet pandemic-era mortgage rates of 3-4%. Rather than selling and having to manage interest rates that are currently in 7% range, they are choosing to stay put. This means homes that otherwise might have been on the market this time of year are also staying put, and would-be buyers are competing for very limited inventory.
According to Windermere Chief Economist Matthew Gardner, July’s active listings in the tri-county market were fewer than in any July on record, excepting the pandemic year of July, 2021.
Gardner also noted that “With mortgage rates unlikely to move tangibly lower during the balance of the summer, I don’t expect the market to move much over the coming months, both in terms of sales and prices.” But he did add that “If the economy starts to soften this fall, rates could start to fall and this could revitalize the market.”
The key now seems to be accurately pricing the listings that are available. While there’s limited inventory, mortgage rates are putting a damper on buying power. Buyers may already be forced to compromise on lifestyle and location for mid-tier properties. They won’t want to compromise on price as well.
In King County, the median sold price for a single-family home was $897,500 in July, up from $890,000 in July, 2022. Condos also saw a boost, landing at a median of $510,000 last month—up from $490,000 a year ago. This is likely due to high demand and strong competition from buyers in the area.
In Seattle, the necessity of pricing homes accurately is clear. As an example, 69% of Seattle single family homes sold in under 15 days in July, and these generated sold prices that were 100.1% of their list price. Those that took longer than two weeks to sell, however, closed at 97.5% of list price.
Seattle sold prices softened a bit in July. The median price for a single-family home in the city was $899,950, down from $954,500 a year ago. On the other hand, condo prices rose to $550,000 last month, up from $537,000 a year ago.
Low inventory on the Eastside had the effect of pushing up home prices in July, when the median sold price of a single-family home was $1,500,000. That’s an increase from $1,420,000 in July 2022. It’s also the first month since September of last year that Eastside median prices have increased from the year prior, so the mid-summer market has shown some heat. Eastside condo prices also increased last month, with a median sold price of $600,000, up from $575,000 a year ago.
Snohomish County saw prices soften slightly last month. The median sold price for a single-family home dropped from $770,000 last July to $751,250 this July. Even with less than one month’s inventory, interest rates are slowing sales and causing prices to drop. Condo prices also dipped slightly, from $500,000 in July 2022 to $495,000 last month. The county’s condo market had only .7 months of inventory, but this supply squeeze couldn’t completely counter high interest rates when it came to the impact on sold prices.
Looking ahead, it’s clear that now more than ever, sellers and buyers need to tether their real estate interests to a knowledgeable broker who will help them navigate these fluctuating market dynamics. If you have questions about what current market conditions mean for you, reach out to me anytime.
