With prices flat, Seattle-area housing market settles into new normal
King County home prices ticked up for the fifth straight month in June, but were basically flat from a year ago as the local housing market settles into a new normal with higher mortgage rates, less buyer frenzy and a continuing shortage of homes for sale with little relief in sight.
The median King County home sold for $935,000 in June, down less than half a percent from a year ago, according to new data released Thursday by the Northwest Multiple Listing Service. Prices elsewhere in the region remain down from the same time last year, when interest rate hikes had just begun cooling the market.
Economists and real estate brokers say higher mortgage rates continue to discourage sellers from listing their homes and keep some home shoppers out of the search. But with less competition, some buyers are finding the chance to haggle.
“For people who can afford the payment, there is a lot of opportunity,” Seattle Windermere agent Sharon O’Mahony said.
Affording that payment is harder today than it was at the height of the red-hot market a couple of years ago. Zillow estimates the monthly payment on a typical Seattle-area home reached $3,653 in May, up 11.5% from a year earlier. (June data was not yet available.)
Those costs drive demand in more affordable suburbs, even as employers try to pull workers back to in-city office campuses like Amazon.
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“Homes are still more likely to be affordable farther away from the urban center [in Seattle],” Zillow senior economist Nicole Bachaud said in a statement. “So that’s where we are seeing more demand.”
Among more affordable and “midprice” homes, “we are observing a virtually sold-out market,” J. Lennox Scott, executive officer at John L. Scott Real Estate, said in a news release from the listing service.
Across the Seattle area, home shoppers bought fewer homes in June than at the same time last year, with the number of pending sales dropping most in Pierce County, according to the NWMLS.
In June, the median single-family Pierce County home sold for $545,000, down 4% from 2022. The median Snohomish County home sold for $774,975, down 3%. The median Kitsap home sold for $550,000, down 8%. Median means half of homes sold for more and half for less.
After a year of rising mortgage rates, some buyers are adjusting.
Coldwell Banker Bain agent Ken Graff said his business picked up in the last month or two. “People have come to accept that interest rates aren’t going to make a dramatic drop any time soon,” Graff said.
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“My phone is ringing again,” he added.
Higher rates have spooked plenty of sellers, though, with few homeowners willing to give up ultralow rates on their current homes to buy something new. A third fewer King County homes were newly listed for sale in June than at the same time in 2022.
That lack of homes for sale as people continue to move to Seattle has so far kept home prices from dropping further, according to economists and real estate brokers.
The number of people who believe it’s a good time to sell ticked up last month, according to one national survey. But it would take a significant drop in rates or “big surge” in new listings to jump-start the market, Redfin deputy chief economist Taylor Marr said in a recent report. For now, neither of those things are happening.
Higher rates made selling a “tough decision” for Seattle homeowner Stefan Hajek. But Hajek’s family was outgrowing their two-bedroom Craftsman in Rainier Beach and looking for more open space.
So, the family listed their home for just below $600,000 in May and accepted an offer just above list price less than a week later.
Meanwhile, they took their turn as homebuyers, searching a slim inventory for houses on Whidbey Island or Vashon Island.
But unlike the last time they were home shopping, when “we had to waive all kinds of things,” this market felt a bit more flexible, Hajek said. After some negotiation with the sellers, Hajek and his wife bought a two-bedroom Vashon Island home on 2 acres of land for less than the asking price.
With room for that kind of negotiation, the Seattle-area market “feels a little more balanced,” said Windermere agent O’Mahony, “but it’s still definitely a sellers’ market.”
Source: The Seattle Times
