Seattle-area housing market kicks off spring season with a whimper
Warmer weather typically signals the beginning of a bustling housing market. But spring in the Seattle area looks a bit different from usual this year.
Home prices are ticking up, but are down from a year ago, as fewer buyers take the plunge and fewer homes hit the market. Some listings are attracting bidding wars, while others linger for weeks without offers.
“It feels much like our economy: a little unpredictable,” said Ballard Windermere agent Kayse Gundram.
While home sales have picked up in recent months, they remain below 2022 levels. In King County, the number of pending sales in April was up about 2% from March but down 28% from April 2022, according to new data released Thursday by the Northwest Multiple Listing Service. That’s a sign that home shoppers continue to feel the brunt of limited inventory and high mortgage rates.
Median home prices have been increasing since the start of the year, but have fallen compared to last spring.
The median single-family home in King County sold for $875,000 in April, down 12% from a year ago. The median Snohomish County home sold for $767,500, down 9%. The median Pierce County home sold for $525,000, down 9.5%. The median Kitsap County home sold for $520,000, down 8%.
Prices dropped sharply on the Eastside, where the $1.45 million median home price was down 16% from April 2022. Seattle’s $886,000 median was down 13%. Other parts of King County recorded smaller price drops for single-family homes. Meanwhile, Seattle’s median condo price was up 5% from a year ago, while the Eastside’s was down 8%.
A mixed spring season means home shoppers can hold on to contingencies, like getting a home inspected before they buy it, “a huge plus for buyers,” said Sandy Meyer, a RE/MAX agent in Snohomish.
But inventory is still tight despite some improvement from a year ago. It would take about five weeks to sell all the homes for sale in King County at current demand, better than less than three weeks a year ago, but still short of the four to six months the listing service considers a balanced market.
“There are more buyers out there than there are sellers,” Meyer said.
When Marysville renters Thomas and Maegan Brown started looking for a home in Snohomish County earlier this year, they lost out to an all-cash offer, the second time they were beat out by cash in recent years. Higher mortgage rates made it harder to find homes that would fit their growing family and their budget for monthly payments.
The market is “still very difficult and fast moving,” Thomas Brown said.
The family opted instead for a five-bedroom home in Sultan that’s still under construction, priced just below $600,000.
Why new construction? “Because you cannot be outbid,” Brown said.
More new listings are hitting the market than in the slowest winter months, but far fewer than at the same time last year or pre-pandemic. And after a surge of new homes hit the market in March, that growth appeared to moderate in April, according to the NWMLS data.
Homebuyer Kimberlee Cryer saw both sides of the market when she searched for a multigenerational house to suit her, her husband and her parents this spring.
Some homes flew off the market in a few days. But when the family found a home in Smokey Point, the ability to have the home inspected before buying it — rare in recent years — proved key. The seller ended up footing the bill for more than $30,000 in roof and attic work, Cryer said.
Higher mortgage rates cut into the family’s budget by $150,000 to $200,000, Cryer said. “We would have found more turnkey options if interest rates weren’t so high.”
Even with bidding wars in some areas, homes are spending longer on the market than during busy spring seasons in recent memory.
In Seattle, listings spent a median of 12 days on the market, six days longer than a year ago, according to March data from Redfin, the most recent available. Homes are also sitting longer in Everett, Tacoma and Bellevue.
About 42% of homes in the Seattle area sold for more than their list price in March, according to the latest data available from Zillow. That was a big jump from the winter months, but still far below the eye-popping 85.5% a year earlier.
Gundram listed a $2.4 million, four-bedroom Craftsman less than a block away from Capitol Hill’s Volunteer Park in April that has been sitting for sale since, despite a $100,000 price drop. Several buyers visited the home multiple times, even checking to make sure their cars fit in the garage, but did not submit offers, baffling Gundram and other agents she knows, she said.
“There’s kind of no rhyme or reason to what goes quickly and what sits on the market,” Gundram said.
Affordability could be one indicator. Inventory is especially low among the most affordable homes in the Seattle area, while inventory increased among the most expensive homes over the past year, according to Zillow.
Buyers who may have shopped for midpriced homes two or three years ago are now looking for cheaper listings because that’s all they can afford with higher interest rates, said Zillow senior economist Nicole Bachaud. The mortgage payment on a typical Seattle-area home, with 20% down, is about $3,400, up from $2,000 in April 2021. The average rate on a 30-year fixed-rate mortgage was 3% in late April 2021, compared to 6.4% this past April.
“Affordability is one of the main driving factors” fueling competition in some areas of the market and less activity in other areas, Bachaud said. And that could continue: Interest rates are likely to stabilize this year, but “we don’t expect rates to fall meaningfully throughout the rest of the year,” she said.
Bachaud experienced the mixed market firsthand when she recently bought a home in Lake City.
“We definitely got into some bidding wars that I don’t know that I was expecting,” she said, “even though this is my job and I know I’ve been telling people that it’s happening.”