State of the Market: Winter Report

Seattle’s real estate market keeps setting records. For sellers, all this record-setting feels like the work of Michael Phelps or the new Star Wars movie. For buyers, though, it’s more like winning a Razzie.

 

Lowest Inventory

Listings feel rare these days. New Record! King County set an all-time low inventory level last November, New Record! only to sink even lower in December. December’s home inventory came in at 1,764. This is the first time it has ever dropped below 2,000. It’s the first time inventory has even dropped below 2,300.

Low inventory resulted in a 9.2 percent drop in King County’s pending sales last December.

 

Highest Prices

The average price of a single-family King County home (excluding condos) jumped almost 15.5 percent this year. What would have sold for $440,000 in December 2014 went for $508,000 last month. New Record! That median $508,000 home price broke the pre-recession July 2007 record of $481,000.

Homes get even more expensive when you confine things to Seattle. The median home price topped $600,000 last month, which is a 20 percent increase over the course of the year.

 

The Best Gold Medals/Razzies

This year, we saw a three-bedroom Ballard home sell for $717,000. New Record! That house went for $640 per square foot.

We also saw a Montlake house listed at $880,000 sell for $1.6 million. New Record! That escalation almost doubled the original price.

 

Recommendations

There’s no one-size-fits-all recommendations for real estate. Every situation is different, influenced by your goals, priorities, security, income—it’s a complicated situation, which is why we always recommend developing a personal relationship with a real estate agent before wading into the market. But as a starting point:

Buyers: It’s a hard road. You’ll face fierce bidding wars over a paltry supply of homes. Expect the search for a home to be long, exhausting, and frustrating. Expect to make compromises.

Sellers who want to leave Seattle: This is a dream market. You can sell almost anything in this market, and you can sell it for more than you paid for it.

Sellers who want to stay in Seattle: It’s tricky. You’ll be able to sell, but you don’t want to find yourself stuck in the same position as a new buyer, facing the slings and arrows of outrageous inventory.

 

On the Horizon

The Seattle real estate market doesn’t look like it will change any time soon. Since the last recession, Seattle has enjoyed strong migration, low unemployment, increasing wages, and heavy tech expansion. New housing isn’t being built fast enough to keep up with demand. Inventory will stay low, and prices will stay high.