When paying $60,000 above asking price feels like a deal: Here’s what a cooling housing market looks like in the Seattle area

The scorching hot housing market in the Seattle area has started to cool. There were fewer new listings here in the past month and house prices fell compared to the previous month, according to data released Tuesday by the Northwest Multiple Listing Service.

Brokers report the occasional price drop, and a local economist says we could hit a “price cap”. But a year of rapid growth has already done its damage.

Home prices in the Puget Sound area remain double-digit percentages year over year and 2019.

The double realities – a cooling market with high prices – reflect the ongoing effects of the pandemic-induced housing boom. Low interest rates, a flood of interested buyers, and few properties for sale drove prices up here and across the country.

Now, with extra cash, home shoppers can benefit from offers when the market cools, but shoppers with less spending can find a market that is already out of their reach.

“Homes that were 10 months ago at $ 350,000 are now at $ 450,000,” said Darlene Heseltine, a Redfin agent with a focus on Pierce County. First-time buyers in particular, she said, “are not even able to buy them at this point”.

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Last month, the average single-family home price in Pierce County reached $ 515,000, an increase of about 19% over the same point in time last year, according to the NWMLS.

In King County, the average home sold for $ 850,000, 14% more than the previous year. In Snohomish County, the average home sold for $ 694,900, 25% more than the previous year.

In Kitsap County, the median of $ 503,750 is approximately 16% higher than last year. In Thurston County, the median is up 19% from $ 465,000.

King County continues to rise fastest outside of Seattle. Average home prices are up 24% year over year in the East Side and 23% in southeast King County, compared to 6% in Seattle.

However, as a sign of a typical late summer slowdown, average house prices were essentially unchanged from July (about 2% in King County, 1% in Snohomish County, and about 1% in Pierce County). In all three districts, fewer new apartments were offered for sale in August than in July.

Is a “price cap” approaching?

Spouses Jason Owens and Minh Vo began looking for new homes in Snohomish County this spring, but took a break from their search after seeing the hectic conditions in April. In July they started again in the hope of a break.

What they found wasn’t that much easier.

With a budget of $ 800,000, the couple looked at homes for around $ 650,000 on the assumption that they would sell above list price, which has become a new norm for buyers. When a home they loved sold for about $ 230,000 more than list price, they had to adjust their strategy.

After the couple “tried to nurse our hurt egos and feelings and total disgust” because they lost the other house, the couple opened their search for townhouses, said Owens, who works in technology for a healthcare company.

Last month they closed a $ 800,000 four-bedroom townhouse in Lynnwood with space for a home office and rooms for their teenagers, he said.

In the end, the couple paid $ 60,000 above their list price of $ 740,000.

It felt like a deal, “the – $ 60,000 is a huge amount,” said Owens. “When you think we’re excited to get it for ‘just’ $ 60,000 more.”

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Windermere Real Estate chief economist Matthew Gardner predicts the region may “hit a price cap,” he said in a statement Tuesday.

Gardner said he anticipates “the rapid pace of property price increases will continue to slow over the course of the year.”

The inventory remains tight. In August, all of the single-family homes for sale in Counties King, Pierce and Snohomish could have been sold in about two weeks, according to a demand measurement known as month-long inventory.

Blurred image for condominiums

As single-family home prices skyrocketed during the pandemic, the condominium market was more volatile. Last year, local real estate agents described homebuyers foregoing condominiums in search of more space to bypass lockdowns and remote work.

This summer, condominium prices began to rebound.

Lin Shih, an agent for Coldwell Banker Bain, who focuses on condominiums in downtown Seattle, said higher-priced condos had “blown out the door” for buyers drawn to the amenities and views of downtown Seattle. “It’s really hard to copy that on Queen Anne or Capitol Hill,” she said.

August showed a mixed picture. In Seattle and the East Side, average condominium prices are down about 2.5% from July. Compared to last year, prices on the East Side are up 14% and in Seattle they are down 5%.

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Condo owners took notice as interest began to rise again.

This summer, Dan Pierce put a Ballard one-bedroom condominium up for sale for $ 349,950. Shortly afterwards, the condo was sold for $ 367,000 to an out of state buyer looking for a second home, Pierce said.

Pierce said he plans to sell the property and another one in West Seattle, both leases, in response to Seattle City Council’s tenant-friendly legislation and the improving market.

“We got it listed and planned an open house for the following weekend,” he said of the Ballard condo, “but before we even got to that we had two competing offers. ”