Blog - Seattle Real Estate Agents - Seattle Homes for sale in WA

The Seattle Real Estate market has been pretty much unaffected by the housing slow down nationally until…maybe now! Since 1995 we have seen almost double digit appreciation every year for most of the greater Seattle area. Last year when we all saw a substantial downturn in housing prices across the country, Seattle Real Estate continued to go up. The interesting thing however is that while prices continued to go up, home sales actually have started to decrease.
Being a Buyer in the Seattle market over the past several years has meant that you had to be ready to act quickly to make an offer on a home or be prepared to get in a bidding war with several other Buyers. Here’s what happens: A new Listing comes on the market for $600,000. The Listing agent is holding offers for a week. Maybe you can justify a price of $649,000 so the Listing Agent maybe under priced it. But they got 7 offers, all waiving the Inspection and most waiving Financing as well. Three of those offers are over $750,000 because these 3 Buyers had already lost out of 3 other homes they bid on. Inventory in Seattle is tight and for every 15 new Listings there are usually only 2 or 3 good houses. Now we were putting a home on the market the day after this other Listing reviewed its 7 offers. The home we were putting on was worth $595,000 tops…but there are at least 6 frustrated Buyers for the neighborhood so we priced the home at $650,000 but didn’t hold offers. We sold it the first day for full price to one of the Buyers that bid on the other house. OK, so we are smart and we are representing the Seller and we are obligated to get the highest price possible for our client. We are doing our job and doing it well and…Caveat Emptor.
Does this situation create an interesting philosophical situation for us, our industry, and Real Estate Agents as a whole? Does it actually help to over inflate the market setting it up for a big fall in the near future? You know, I don’t know, and looking back over the last 12 years I think that it’s ridiculous what you can buy now for half a million dollars, but prices are still going up or are at least stable in our current market. Home prices in Seattle are also about 70% of what they are in the Bay Area and we have seen that ratio remain consistent for years now. Do we as professionals have a greater responsibility than to just get our clients the highest price? I think not, but it does keep me thinking, which I guess is good. We have heard that there are Real Estate Companies that tell their agents not to give advice about price, the condition of the house, but to be facilitators only, that way they don't assume any liabilities. We believe that we should have that liability and we tell our Buyers emphatically not to pay over an amount we think they could sell the house for if they had to sell it in a “normal” not a “hot” market. We also look at the building quality of the home and the location and advise them if they should even buy it at any price. What we can say is that Buyers need to be well educated and aware of what is happening in the market and to keep at least one foot planted firmly in reality.
It’s going to be interesting to see what impact the current lending problems will have on our market here in Seattle. Already in the past month Listing that have been holding offers to a specific date, many now are not getting any offers. Seattle however has a very strong economy and it’s predicted that 100,000 new employees will be moving here by the end of the decade. Traffic is a huge problem however in Seattle and living close-in is highly desirable and they are not making any more land close in to the city. The next two months should be petty telling as to where our market is heading.

While the Seattle Real Estate market is slowing down from the feeding frenzy this of this past spring, good homes are still selling. Our Listing on 38th Ave West on Magnolia had an offer accepted this week and very close to asking price after being on the market for just 37 days. When we put this home on the market on May 20, there were only 4 other properties that would be considered competing properties. However, in the past month, there have been about 20 additional properties listed for sale in the $1,000,000 to $2,000,000 price range with only 4 properties including ours selling. Right now the average days on market for this price range on Magnolia is 84 days. In March it would have been 30 days. Inventories have increased dramatically over the past month and sales have not kept up with the new inventory, a sure sign of a slowing real estate market. But the really good houses that are priced correctly are selling even in the over 1 million price ranges. We are also starting to see an increase in inventories in all price ranges in the city neighborhoods with the occasional multiple offer happening. It looks like the Seattle Real Estate Market is getting a bit more Buyer friendly but don't expect any major price drops.

The National Market

The 2006 housing market in the US had it's peaks and valleys. Here in Seattle the market slowed down somewhat but overall remained strong. According to leading industry analysts the housing market nationally in 2007 should be more consistent and positive. Alan Greenspan who retired as chairman of the Federal Reserve last year concurred that housing sales should pick up steam in 2007.

"Most of the negatives in housing are probably behind us," Greenspan said. "The fourth quarter should be reasonably good, certainly better than the third period." Others, including Steve Murry, publisher of Real Trends, a real estate research and information company, are saying that the desire for a home as a residence, or a recreation or retirement investment will remain strong for the next ten years. "We believe that housing consumers will purchase more homes in the next 10 years than they did in the last 10 years," Murry said.

David Lereah, chief economist for the National Association of Realtors, said 2006 was a different market because past declines were associated with the traditional factors of employment losses and rapidly increasing interest rates. However the 2006 slump occurred while jobs were being created, sound economic fundamentals were in place, and mortgage interest rates were at near historic lows.

"The 2006 declines came from affordability problems because prices were too high, forcing consumers to borrow too much," Lereah said. " We also experienced investors leaving the market, the perception that real estate was no longer a favorable investment, and the scare provided by some members of the media that the national bubble was bursting."

"Overall home-price gains will be modest, Lereah said of 2007's national outlook. "Home sellers are becoming realistic about current market conditions and are now offering more competitive pricing, in addition to some incentives or concessions."

"We now have the most favorable market for home buyers in several years, and most sellers who've been in their homes for a normal period of home ownership are still seeing very healthy returns on their investment, Lereah goes on to say. "Conditions for buyers have improved because sellers are flexible now and mortgage interest rates are near historic lows. The market promises to be more balanced between buyers and sellers by early spring, supporting future price growth."

The Seattle Market in 2007

Seattle was just 1 of about 5 market areas in the country that didn't experience a real turndown in homes sales and prices in 2006. This positive trend appears to be continuing now in early 2007. Lack of inventories has remained the same now for the past 3 years and home prices are continuing to increase but at varying rates depending on prices range and locations.

While the total number of homes and condos sold decreased from 2005 to 2006; prices were up. In 2005, there were 31,939 homes sold and in 2006 there were 27,834 homes sold for a decline of 12.9%. Condos went from 9,984 in 2005 to 9,694 in 2006 for a decrease of 2.9%.

The under $500,000 prices range continues to be the biggest market in the Seattle area where we are seeing the fastest appreciation, but that depends on location. The closer you are to the "major job hubs" of Seattle and Bellevue the higher the appreciation will be. Closer-in neighborhoods may see another 10% increase in prices by the end of the year and neighborhoods farther out will be less, about 3% to 7% depending on location.

In 2006 there were 4,181 homes sold between $300,000 and $500,000 as compared to 3,103 homes that sold between $500,000 and $6,000,000. The average price for a home in Seattle in 2006 was $536,701 with the median price being $449,950. The lowest price was $140,000 and the highest price was $6,000,000. Homes between $600,000 and $800,000 are seeing the next fastest appreciation and so on. The average price of a Seattle home in 2000 was slightly over $300,000, in 2003 it was about $350,000 and then on 2004 it went up to $400,000, in 2005 it was $450,000 and now it's $536,000.

The local economy continues to be robust and we are experiencing a shortage of local people to fill those jobs. It has been estimated that Seattle will see an additional 100,000 workers being moved to Seattle by the end of the decade. That along with historically low inventories will continue to push prices upwards but at a more modest rate than in the past 3 years.

2007 has started out with very low inventories and a reasonable demand. Properties are selling if they are priced correctly in less than 30 days in most prices ranges under 1.5 million. Investors and builders have been backing off paying premium prices however for projects now for about 6 months as we have seen a surge in new townhomes on the market. There is some concern that the condo market will be effected in the short term by how many new buildings are being built at this time and slated to open by the end of the year. Seattle is a great real estate market and the long term outlook is very positive indeed.

Everyone is talking about what is or isn't happening in the Seattle Real Estate Market these days. Is the market slowing down, is the market still "hot" or is it somewhere in-between? The real estate market nationally has slowed down and the figures for August showed the first monthly decrease in several years. This is nationally however, and doesn't actually apply to the Seattle market. In a recent real estate industry article Seattle is listed as one of the 10 Best Cities for Real Estate in 2006. The article sites a good economy and low inventories that will keep the Seattle Market strong throughout the year. The nine other cities listed in this article are: Atlanta, Austin, Boise, Dallas, Houston, Las Vegas, Phoenix, San Antonio and Milwaukee.

In a recent Seattle Times article a Princeton economist writing for the New York Times, said: "The long-feared housing bust has arrived." "Nationally speaking, anyway." But again if you look at the housing history of Seattle over the past 20 years we have seen homes prices go up then leveling off, then going up again and then leveling off through recessions, interest-rate hikes, wars, and employment downturns. Seattle has been fairly immune to a downturn in home prices. This article goes on to talk about a "market-risk index" compiled by PMI Mortgage Insurance that calculates that San Diego faces nearly a 60% chance that homes prices will fall in the next two years, the highest of any city in the country. "Boston, Sacramento, Los Angeles and San Jose all have a 50% or greater chance of price dips" PMI says. Then there is Seattle with about a 11% chance of home prices falling.

As we have said in our other blogs, Seattle's job growth is among the strongest in the country and our unemployment rate is below our long-term average. But our housing prices are high here in Seattle but are still more affordable than prices in other west coast cities. The median price of a home in San Diego is $613,000 according the National Association of Realtors. That is more than $200,000 above King County's median price. However when prices get seriously out of range, prices will stall or fall until wages catch up. We are approaching or have reached that level in the Seattle area now according a recent story on a local TV news broadcast. They said that "home prices have now outpaced wages in the greater Seattle area." So are Seattle homes prices on the verge of falling now?

Here's our answer...some will fall, some will level off, and some will keep going up. We are in a very interesting time for Seattle real estate we believe. We are just coming out of a period now that for the past 24 months where we have had very low inventory of homes in Seattle. Inventories started increasing in July and August of this year and now at the end of September we are seeing more homes on the market in all price ranges than we have seen in a long time. Price reductions have also increased substantially and so have the average days on market. But there are still homes selling with "Multiple Offers" and some bidding wars still happening on some homes. Here is what we are seeing at this time: good homes in good locations that are priced correctly are selling quickly. Good homes in lesser locations are not selling quickly and may require a price reduction. Then just OK homes in just OK locations aren't selling quickly at all and may require several price reductions to finally sell.

When we look at the price of a home or what we think it will sell for we usually come up with a price range. For example; this house should sell for between $500,000 and $525,000 in our opinion. If it a normal average house in good condition in a good location, six months ago we would have priced it at $524,950. Today, six months later we would most likely price the house at $500,000. So it's not so much a price reduction as it is "we just can't push the price today." Now, lets say the house is a very special house in a great location and we think it will sell between $800,000 and $835,000 we would most likely price it at $835,000 and it might well above asking price with several offers.

For the most part we think we have reached the top of the market except for very special properties or great locations with huge view potential or waterfront property. We should still see an increase in the under $450,000 price range as that is about the bottom price now for a home in Seattle. We should see marketing times go up and inventories continue to build. But we agree with most people that we shouldn't see any significant downturn in home prices either.

2005 and the first 6 months of 2006 has seen the Seattle Real Estate market continue to be very strong. As the Real Estate Market nationally has seen substantial corrections, Seattle has seen an over 11% increase in average selling price from the fist half of 2005 to the same period in 2006 in most close-in Seattle neighborhoods.

We thoroughly analyze the sales figures every month for the Magnolia neighborhood of Seattle and those numbers are pretty typical for most of the other in-city neighborhood that we work. It would be far too time consuming to analyze all the neighborhoods because of the depth we get into with our analysis. When the MLS shows the sales figures for a home that is sold it only accounts for the last List Price the home had before it sold. By only using this figure we may not get an accurate representation of that particular sale. We go back and search the "history" of each property sold to find out the exact sales history so we can compute the exact % of asking price vs. sales price. For example: If a home is Listed on March 1 for $800,000 but then has a price reduction on March 25 to $750,000 and then another price reduction on April 15 to $699,000 and sells on April 30 for $675,000 the MLS will show that the property was listed for $699,000 and sold for $675,000 or 96.5% of asking. The home actually sold however for 84.3% of the original list price. Then if a listing "expires" or is "canceled" and then re-listed the Days on Market (DOM) may not reflect the actual total time the home was on the market, thus giving us inaccurate statistic's. Some might say that these things don't occur enough times to really impact the average numbers, but they do happen enough to actually impact the averages.

We just completed doing a 18 month running average for single family homes on Magnolia from January 1, 2005 to June 30, 2006 and the numbers are quite interesting. The average List Price on Magnolia for the first half of 2005 was $699, 723 and the average List Price for the same period in 2006 was $746,953, an increase of about $70,000. The average Sold Price for homes for the first half of 2005 was $639,825 and the average Sold Price was $711,211 for the same period in 2006, for a $71,386 increase in Sold Prices or a 11% increase from 2005. There has been an interesting trend however with average days on market (DOM) during this strong sellers market. From January 2005 through June 2005 the average DOM was 36 days. Then it went to 27 DOM from July 05 to the end of 2005. Now for the first 6 months of 2006 the average DOM has increased to 54 days. And the total number of "Price Reductions" has increased over the same time period as well. Could all this be indicating the start of a market correction here in Seattle? We don't think so and here is why. A majority of price reduction have been in the over 1 million market and we are seeing a substantial increase in inventories in that market segment as well. In May 2006 there were only 6 properties for sale on Magnolia in the over 1 million range. As of mid July 2006 there are 17 Active Listing over 1 million, a substantial increase in inventory, but there are also 9 properties over 1 million that are Pending. 3 months ago the sales ratio between Active Listings and Pending/Sold Listings was 85% and now it's about 53%.

So where is this all going...? We believe that the market will slow in the over 1 million price range, flatten out for the next few months in the $750,000 to $1,000,000 range and continue to be strong in the lower ranges. If we see inventories building in the lower price ranges then we could see a little slower market in the fall. July and August historically are slow months for sales in Seattle and if a lot of people put their homes on the market now or at the beginning of September then we could see a slight slowdown, but we don't see prices dropping and much as simply stabilizing. This could be one of the better times we have had for the move up buyers. As the price of higher end homes are not increasing at the same rate as lower priced homes.

While the Seattle Real Estate market is slowing down from the feeding frenzy this of this past spring, good homes are still selling. Our Listing on 38th Ave West on Magnolia had an offer accepted this week and very close to asking price after being on the market for just 37 days. When we put this home on the market on May 20, there were only 4 other properties that would be considered competing properties. However, in the past month, there have been about 20 additional properties listed for sale in the $1,000,000 to $2,000,000 price range with only 4 properties including ours selling. Right now the average days on market for this price range on Magnolia is 84 days. In March it would have been 30 days. Inventories have increased dramatically over the past month and sales have not kept up with the new inventory, a sure sign of a slowing real estate market. But the really good houses that are priced correctly are selling even in the over 1 million price ranges. We are also starting to see an increase in inventories in all price ranges in the city neighborhoods with the occasional multiple offer happening. It looks like the Seattle Real Estate Market is getting a bit more Buyer friendly but don't expect any major price drops.

We have just listed a wonderful view (on main and second floors) home on Magnolia. It's 4300 square feet with 3+ bedrooms and 3.25 baths. It was originally built in 1948 and has been completely remodeled from the studs out in 2006. It has sweeping views of downtown Seattle, Elliott Bay, Mt Rainier, and the Cascades. It's in an excellent Carlton Park location with underground wiring. Walk to Magnolia Village and Discovery Park. It's about 10 minutes by car to downtown Seattle. It has gas fired radiant heat, a true gourmet kitchen with a 48 inch DSC gas range with 6 burners a griddle top and double ovens. The Master Suite has a fabulous view from the sitting room, deck and bedroom. The Master Bath with extensive use of Travertine Marble is absolutely wonderful, with large walk in shower, huge soaking tub, washer and dryer, and huge walk in closet in the. The Family Room off the kitchen has a wonderful view and is open and light filled. This is a very special home and a rare find for Magnolia. If you want more information or arrange a private showing just let us know.

The Seattle Real Estate Market has been trying to slow down now for about a year. 2005 was a very strong year for real estate across the country and Seattle was no exception. Most of the country has seen anywhere from a moderate to strong correction in the market sine January 2006. Not Seattle however. While the number of home sales is slightly down so far in 2006 as compared to 2005, demand is still strong and supply is well...very, very low in most of Seattle's close in neighborhoods. I think that buyers and agents alike would like to see things get back to just a normal "feeding frenzy" and we all think that a correction is just around the corner, but the corner just keeps getting longer and longer. January and February of 2006 were slower than the same period in 2005 but prices of single family homes just kept increasing. House that would have sold for $500,000 in October 2005 (which is almost the bottom price now for neighborhoods like Magnolia, Queen Anne, Wallingford, Green Lake, Ballard, Ravenna and Bryant) would now sell for about $550,000 and maybe $575,000. We are looking at homes that should sell for under $500,000 being Listed for $699,000 and some people are buying them. They have lost their minds because they have lost out on 3 or 4 homes because of bidding wars. This brings up a whole different subject but I'll get into that at a different time.

We have a friend and client who is an educator at the university level and we were talking a few weeks ago and did you know that the State of Washington ranks 43rd in the country in producing BA degrees? Yikes. But we are one of the highest educated states in the country. So, all of these people are being brought here for jobs that the locals can't fill. Microsoft has said recently that they are adding 10,000 new jobs in the next 4 to 5 years. Amgen at the base of Magnolia has said that they are adding about 500 new jobs in the next few years, and so on and so on and so on. Lots of high paying jobs, lots of out of state recruitment and very low housing inventory. Economics 101...prices are going up! And another interesting fact and what we tell our buyer clients is that about 1 out every 15 to 20 new homes that come on the market in Seattle is a really good house, the rest are well, the rest.