It’s fall, and that means home sales are slowing down — except where Seattle-area buyers can get more house for less money.
In King County, home prices in September remained nearly flat at $660,000, a 1.2% decrease from this time last year and down 6% from the seasonal peak in May.
And in Seattle, prices dipped 3.2% over last year, to land at $750,000. Home-sales activity was concentrated in Ballard, Green Lake and Greenwood, which saw a 30% rise in the number of closed sales over this time last year, but overall, fewer homes were sold in Seattle than in the summer months.
After the flood
A largely stable market isn’t necessarily what you’d expect to see when the number of homes on the market plummets, like it did last month.
The number of homes on the market in King County fell by almost 20% in September, compared to last year. Overall, 18 counties across Western Washington reported double-digit drops in inventory last month.
In King County, there were almost 1,000 fewer homes on the market than this time last year, accounting for one-third of the region’s total drop in inventory. South of Seattle, Thurston County felt the shrinkage particularly keenly, with a 35% reduction in inventory compared to this time last year.
But what looks on paper like a major contraction is actually just a return to normal, said Windermere chief economist Matthew Gardner. This time last year, sellers flooded the market before an anticipated rise in mortgage rates and a fall in home prices.
Last year’s numbers showed a 20% increase in inventory in September, generally a time when fewer homes go on the market. While mortgage rates did rise in October last year, they fell steeply after that, and home prices have remained mostly flat.
The jump in listings a year ago means that now, “the traditional slowdown in September appears to be exaggerated,” he said.
Tech families flock to Sammamish
Directly north and south of Seattle, the more modestly priced cities of Everett and Burien, where prices hover around $500,000, saw year-over-year price growth of roughly 8% and 13%, respectively.
Sammamish, where median home prices rose 2.5% over last year to $902,380, saw the second-strongest home sales in King County last month. Many of those sales were of massive new properties — 4,000-square-foot homes with five bedrooms and three bathrooms — purchased by families who work for Microsoft, said Sotheby’s agent Ericka Nash, who estimated 60% of her buyers work for the Redmond tech giant.
“If you were to buy that same home in Bellevue, you’re probably adding a 30% premium,” said John L. Scott broker Peng Tea, who works primarily on the Eastside.
The flood of buyers interested in new Sammamish homes is quickly eating up available land on the plateau, said builder Kevin Rech, a principal at Terrene Homes. He estimated the number of available lots for new construction is going to start trending downward within five years.
“We’re adding 200 new houses in Sammamish a year that are all going to these high earners,” he said.
Prices rising south of Seattle
In Pierce and Thurston Counties, prices continued to buck seasonal trends, creeping upwards last month compared to early-summer levels, when prices in less overheated markets usually peak. In Pierce County, the median home sold for $384,500 last month, a 9% year-over-year increase and a 2% bump up since June.
But down south, where Seattle-area buyers have fled to escape high prices, the major action is in homes going for less than about $420,000, according to data from the S&P CoreLogic Case Shiller Home Price Index.
As less expensive homes fly off the market, Tacoma’s ritzier properties can be left sitting on the market for more than a month — a dynamic more akin to what’s happening in Seattle and the Eastside.
That’s what happened this summer to Peter Minich, who was prepared to wait for two months to sell his 2,000-square-foot historic renovation in Tacoma’s Proctor District, which he priced at $915,000.
After lowering the price to $885,000, the home sold in 40 days — a far cry from the supercharged process of buying the more modestly priced house he lives in now, which received multiple offers in the span of 48 hours.
In the five years since he moved to Tacoma, he said, his neighborhood has changed — largely, he said, due to “people with more money and more sophistication moving into the city.”
Whereas five years ago, his neighborhood didn’t have many small eateries, now, he said, “there’s a really excellent coffee shop. There’s a yoga studio that we can walk to. We’re all seeing that shift.”
Single-family outperforms condos
Condo sales were flat, the NWMLS data shows, compared to an 11% bump in pending sales in single-family homes. In King County, far and away the largest market for condos, prices fell by nearly 6% over last year to $399,950.
Brokers indicated the coming months could spell opportunity for committed buyers, who could encounter less competition on a still-presentable range of homes.
“At this time of year, although there are fewer resale listings and unsold inventory than what buyers will find during the peak summer months, there is also less competition for new listings currently on the market,” said J. Lennox Scott, CEO of John L. Scott Real Estate, in a release.