Local Market Update – February 2023
Spring may have come early to the local housing market, with home sales increasing and multiple offers sneaking back into the norm after a downturn over the last few months. While still not at the levels of the peak pandemic market, buyers are actively competing with one another again, as mortgage rates and prices have come down in King and Snohomish counties. General low inventory on the affordable and mid-price end of the spectrum has also fueled competition.
With the average 30-year fixed-rate mortgage coming down to around 6.09% — about a full percentage point lower than last November — mortgage payments are more affordable to today’s buyers than they would have been in the fall, especially since home prices in most areas have come down or at the very least flattened. The question will be if today’s conditions fuel enough competition to set prices rising again in the coming months.
In King County, single-family homes sold for a median of $781,098 in January, up slightly from $775,000 in January 2022. Of these sold units, 11% closed above list price, and over 30% sold in less than two weeks, markers of some competitive demand in the region. Combining King County condo and residential sales, January’s 1,003 sold units were a 32% drop from the 1,437 closings in December.
In Seattle, the median price of a single-family home ticked up to $803,750 last month, compared to $790,000 a year ago. Almost 40% of Seattle residential listings sold in less than two weeks, and 13% sold above list price. With 1.3 months’ inventory, buyers seeking single-family homes have a few more options to choose from than they did a year ago, but the condo market in the city is where they can maximize their buying power even more. The median price for Seattle condos was a relatively affordable $487,500 and, with 2.1 months of inventory on the market, condo buyers may have an easier path to purchase for the time being.
On the Eastside, prices continued to stabilize at a lower level than we saw during the pandemic. The median price of a single-family home in the area was $1,320,000 in January, down 13% from $1,515,500 in January 2022. Like Seattle, the Eastside currently has 1.3 months’ supply of homes. While only 8% of homes sold over list price in January, nearly 30% sold in two weeks or less, indicating that there is healthy buyer demand for correctly priced Eastside homes.
Snohomish County remains a more affordable alternative to Seattle and the Eastside, with the median single-family home price dropping to $699,000 last month. That’s down from $715,000 the same period last year. The county has the smallest amount of inventory, with a single month’s supply of listed homes. Of the closed sales, 34% sold in less than two weeks — reinforcing the fact that many buyers are prepared to move quickly in a hastening market.
According to Windermere’s Chief Economist Matthew Gardner, taking an annual average “is better than comparing this month to this month.” For example, inventory across the Puget Sound region is up almost 200% year-over-year. When compared to the number of active listings during the last pre-pandemic year, the current number falls short by about 30%. This indicates there’s still plenty of room for a competitive market in the months ahead.
If you have questions about these housing market trends or other real estate topics, please reach out to me anytime.
