Seattle Housing Market Update – September 2020

HOLY SMOKES!  I did NOT see this coming.

 

Houses hit a new record high price.

For all of 2015, 2016 and 2017, each month I kept saying “it is another record high price for Seattle houses”.  And then in 2018, prices took a steep drop, and we have stayed under peak pricing since.  Until now.  The median sales price for a single family house in the City of Seattle is now $817,000.  That breaks the peak price of $802,000 in May 2018.

What is driving this crazy price increase?  Three things:

  1. People want BIGGER houses and bigger lots.   Until COVID, we had continue to see a buyer preference for smaller homes in more dense and walkable neighborhoods.  But with all this extra time at home, buyer demand has shifted to wanting more rooms and more outdoor space.
  2. Low inventory.   With new construction being put on a 3 month delay due to COVID and the outrageously expensive cost of goods and lack of skilled labor, new homes are not being completed as expected.  And folks don’t really want move in the middle of all this, and they don’t want to have to be buyers in this competitive market, so we have some would-be sellers opting to stay in their home instead of sell.
  3. Crazy low interest rates.  Money has never been this cheap in my lifetime, and it is helping prop up buyers spending power so they can afford these rapidly rising prices.

Let’s look at all the data:

Prices are up across the board.  Condos are still below their peak price, but this is the highest the condo price has been since October 2018.   

Let’s talk about condos:

Condos sold for an average of 103% of list price?!!?!?!   Haven’t I been telling you all year how soft the condo market is, and how hard it is to sell a condo?   Well, that still rings true if you have a small condo, or a condo close to downtown.  What happened this month was REALLY unusual in 2 ways:

  1. One condo sold for $6M, one for $5.25M, one for $2.7M and one for $2.5M.  That really skews pricing when we only had 235 condos sell.
  2. And the condos that did sell were HUGE!  Over the past 3 years, really consistently, the average size of sold condos is 950 square feet. This month it was 1,536 square feet!!!  We also had a disproportionately high number of 3 bedroom condos sell (8% of all condos compared to a typical 5%) and 10% decline in the number of studios and one bedroom condos that sold.

Let’s talk about houses:

Not only did the median sales price jump up $37,000 in one month, we also saw the AVERAGE sales price jump $51,000 compared to last month.  That is a prime indicator that not only are houses getting more expensive, but the bigger and more expensive houses are selling at a high rate than normal.  Seattle had 47 homes priced over $2M sell in August,  and 25 of those were over $3M.   We saw a lot more houses sell this year than last year, but that is likely due to the delay COVID caused in the usual Spring rush.  Faster faster, homes sold in just 16 days and are still selling for 102% of list price.   Although things do seem to be slowing down.  The popularity of the offer review date continues to decline week over week.  Speaking of decline, this was the first week since mid February that we saw a decline in total number of homes for sale.   More signs of us starting to wind down the peak home buying season.

 

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