August 2023 Greater Seattle Real Estate Report
NWMLS Report (Including Seattle Real Estate)
Is the real estate market, including the greater Seattle real estate market, slowing down? There is a saying: figures lie, and liars figure. Despite what you might read elsewhere, you have to look at the entire picture. Except for some blips along the way (2008 for example), prices in Seattle have increased throughout the years.
For instance, looking back to the start of 2013 (not a magical year, just looking back 10 full years), prices have increased every year. The exception is this year: 2023. The reason is interest rates were at the lowest rate, if not in history, then in a generation, in January 2022. Thus, median price peaked in May 2022 at $660,000, but as interest rates continued to increase, the median price declined steadily until it reached $570,000 in December 2022. Then, the median price increased every month in 2023, until July when the median price declined from $625,000 in June to $615,000 in July.
This August the median price was again $615,000. Thus prices stayed steady, BUT at the same time August was the first month there was a year over year gain. That is because July 2022 median prices were $625,000 (vs $615,000 this July), but declined to $600,000 in August 2022. Thus, without increasing over the previous month, August 2023 became the first month to beat last year.
Interest Rates = Doubled Edge Sword
High interest rates are a double edged sword. They have decreased the purchase power of homebuyers; therefore, demand is down. At the same time they have discouraged homeowners from selling their homes; thus, supply is down. The result is prices have stayed historically strong this year.
To clarify, in August 8,152 new properties were added, down from 9,914 in August 2022. Likewise, pending sales in August was 7,189 compared to 9,552 in August 2022. Thus new inventory was down almost 18%, while demand was down nearly 25%.
The result is there is only 1.71 months of real estate inventory compared to 1.84 last August. A balanced market is generally considered between 4 to 6 months of inventory.
The Reluctance to Sell
People move for various reasons, but it is a lot harder choice to sell when rates have increased drastically. For example, a homeowner that is locked in at a sub-3% rate will stayed longer in their current home if they know a replacement home will cost them over 7% interest rate. Homeowners will still sell, it just causes many to pause/delay selling if they do not have to move.
The Condo Market
The condo market also remains strong. Median prices in August ($465,000) did dip from July ($480,000), but for the second month in a row they did exceed the previous year’s median price ($450,000 in August 2022). Condos have been a great alternative to new homebuyers, especially, with employers pushing for people back in the office at least partially.
The Luxury Market
The luxury real estate, which generally includes waterfront homes, also has continued to perform well. This August 239 properties sold for $2 million or more, including 71 that sold for $3 million or more. Last August, there was 211 and 73 respectively. This is even more impressive when you consider the overall closed sales across the entire NWMLS real estate market were down 16% from the previous August.
While King County was 80% of the closed sales of $2 million or more in both August 2022 and 2023, the real concentration of luxury sales is more specifically on the Eastside of Seattle. In August 2023, the highest sale was a Mercer Island waterfront home that sold for $24,375,000. The top 10 sales included 3 in Medina, 2 each on Mercer Island and Clyde Hill, and 1 each in Bellevue, Seattle and Redmond. In August 2022, the results were similar. The highest sale was a Medina waterfront home for $23,000,000. The top 10 included 4 from Medina, 3 from Mercer Island, and 1 each from Seattle, Kirkland, and Bellevue.
Is Greater Seattle Real Estate Slowing Down?
As seen throughout blog, the Greater Seattle real estate market has slowed generally in transactions, but prices have remained strong. Furthermore, the luxury real estate transactions have increased despite the overall market having less transaction.
Every real estate market is different. To navigate the current issues, contact one of Ewing and Clark’s real estate brokers. Ewing and Clark has provided exceptional real estate service to Greater Seattle since 1900. Whether you are looking for a waterfront property on Bainbridge, a luxury home in Windermere, or your first Seattle home, please contact us