Seattle Real Estate Market Update | January 2022

In December, Seattle is still lagging behind King & Snohomish County as a whole when it comes to competitiveness. We are still seeing a low number of homes available and this is because homes are selling very fast! Going into 2022, we are continuing a very hot Seller’s market and it looks to continue that way for now.

Video Transcript

Hey all, Zach McDonald, your real estate agent with Real Property Associates. And this is my first Seattle real estate market update for 2022. What a crazy year we had last year in 2021. One for the record books, at least as far as prices are concerned and activity is concerned. And what I want to do in this video is recap 2021, as we’re talking about where we’re headed in 202. all right, before we get into the stats, which I know you’re all really excited about, specifically the recap and some of the predictions for 2022. I want to start this update off with a client story, which we do in every single update. And this month we are going to feature Shahi and Anja. So Shahi and Anja are past clients of ours. We helped them buy their first house in north Seattle, and recently they decided they wanted to purchase over on the east side.

And we looked at different places in Bellevue and Kirkland and Redmond and Sammamish and Issaquah. And we ended up getting them a great house here a few weeks back in Issaquah, got a lot of property for their growing family and a huge house, really giant house that only had one owner previously, but also needs a lot of updating. So it’s going to be a fun project for them. It’s also a really cool canvas, if you want to call it that, for their growing family. So Shahi and Anja, really, really excited for you guys and your home purchase. I’m also excited, and this is for all of you that we were able to actually get the house below asking price. So this is a house that had sat on the market, was overpriced, obviously. Price was high, sat on the market for a while, and we were able to negotiate the price down versus going up, which is the theme here for 2021 and will be in this update.

So if you’re somebody who is like, I really just don’t want to have to compete. There are properties out there. We just have to be looking at properties maybe that are sitting on the market and being patient. So it is a possibility. We got this one significantly under asking price, and it is possible even in this competitive market to do so. Let’s jump into the stats now, which is everybody’s favorite part of these updates. But before we do, I want to put a quick plug in. If you’ve been following this channel for a while, or maybe you even just stumbled upon it and you want to hear more of these updates on a regular basis, you want to hear more about the Seattle area real estate market, or heck you just like hearing me talk, I’d really appreciate it if you’d hit that subscribe button right now, please do it.

I also love it when people engage. So if you can drop a comment down, if you have some thoughts about the video or feedback on the video, I’d love that down in the comment section. And of course, go ahead and give it a thumbs up. So median sales price in Seattle, Washington last month, as we wrapped up the year, so these stats are from December, 2021. So last month of the year, we had a median sales price of $824,950, which was up 6.2% from last December. So as we go through this update, we’re going to do a little bit of a recap because the year over year numbers are right here as we’re looking at it. So when we say up 6.2%, we’re talking about over last year. So at the end of last year, we saw home prices in Seattle at $776,750. So they did jump, but I’ve been talking about in these updates over the last year that Seattle really isn’t keeping pace with everywhere else.

Zach McDonald:
So King County and Snohomish County, the two neighboring counties, or at least King County is the county Seattle’s in and Pierce County kicked Seattle’s butt too. So really all the counties in the area have gone up more than the city of Seattle, which is a little bit of an inverse relationship to previous years, where Seattle was the one leading the charge. If we look over at Bellevue though, Bellevue, Washington right across the lake from Seattle, 34.7% up year over year. Considerably larger jump. And we’re looking at a median sales price last month of 1.65 million, which is pretty much double what the median sales price was in Seattle. Actually, as I’m looking at it, it’s more than double what the median sales price in Seattle was last month. So if you’re thinking, man, where can I buy more affordable housing in King County? Seattle’s actually one of the more affordable places compared to the east side.

And a lot of the neighboring cities around Bellevue have very similar prices. We can also look up north in the suburbs in Snohomish County. So I will be posting, and I do this every month as well, a video on the Snohomish County market. And I’ll highlight some places there and also the King County market so you can see how much your money buys you in these different places. And in this video, we’re talking about Seattle and Bellevue, because they’re kind of the two big cities in the region. But there also are other places that you can purchase around that are going to have a little bit better prices. Last month, we also saw a pretty significant drop in closed sales in Seattle and in Bellevue, but most pronounced in Bellevue. About 10% down in Seattle, and about 40% down in Bellevue, which is pretty significant, a lot more significant than the 10%.

But something to note is that we also had a lot less houses come on the market. And that’s a big reason why we’re seeing this drop off. So the new listings in Seattle, we saw a 32% drop. And in Bellevue we saw a 39.3% drop in new listings. So considerably smaller amount of new listings on the market, which is a big reason why we saw such a dramatic drop in the closed sales. If we look at the numbers though, we didn’t really have that few listings come on for December. So typically at the end of the year, we see a really small number of houses coming on the market. It’s just the way it is. It’s seasonal. It’s the type of market that we find ourselves in December. Same thing in Bellevue. It’s fairly normal for us to have lower numbers of homes coming on the market.

But if we look back at last year, we saw an anomaly. We saw a considerably larger amount of houses come on the market than we saw in normal years. So for example, this year we saw 337 houses in Seattle come on the market, which is actually the most amount of houses we’ve seen come on the market outside of 2011 in a while. So it’s been more than 10 years, outside of last year. And last year we saw more than a hundred more houses than we typically see come on the market, which is why we saw so many more sales. We have a lot of buyers still in the market wanting to buy, but they’re just waiting around for something to buy right now. So COVID was a big influence last year, as far as the amount of houses, because the vaccine had come out, people were excited.

They were a little bit more comfortable. They were ready to sell their house and make their move. So we saw that last year. This year, we saw a little bit more of a normal December with a lot less listings on the market. As I mentioned previously, we still had a very similar number of houses come on the market in Seattle and Bellevue that we normally do. But when we look at the pending sales, we actually had more houses go pending in Seattle and in Bellevue than came on the market. So we’ve been talking about the amount of homes on the market, the supply, the inventory, so to speak, of houses. And the past few months we’ve seen that number getting tighter and tighter. There’s just fewer and fewer and fewer houses for all the buyers out there. So last month I mentioned, we had record low inventory and this month wrapping up the year, heading into 2022, we’re seeing more of the same.

So Seattle’s now at a record low of 0.2 months of supply, which is like a week. And Bellevue is still right around 0.1 months, which is like half a week. So pretty much every house that comes on the market is selling like that. And that does not bode well for buyers as far as competition and prices. Sellers are really excited about this because that means that there’s all these buyers that are still trying to buy houses, interest rates are still low, and they’re looking at very few selections. So the buyers that are out there competing over few homes. So for sellers, that’s amazing because that means you’ve got a lot of competition for the house. But for buyers, that means a little bit more of the same of what we saw in 2021. As we wrap up this video, I want to add a little bit of my thoughts here to what’s going to happen here as we start 2022.

And if you really want to see more of these thoughts in greater detail, I recorded a 2022 Seattle real estate market predictions video. And I’ll link that one up down below. You could also just search for it on Google or YouTube, I’m sure you would find it that way too. But in that video, I go into a lot greater depth of my thoughts and my predictions for the new year. But in this video, I’ll just give you a couple thoughts. And I think for buyers, you can expect a lot more of the same in 2022 from what we saw in 2021, especially here at the beginning of the year. It looks a lot like the end of 2017 heading into 2018, but even more tight. So in 2018 we saw home prices skyrocket after the really, really low inventory. And right now we’ve even less houses on the market.

We have lower interest rates and we have even more competition in the winter months already than we did then. So I’m just anticipating a really, really hot start to the market. I think we’re going to see a lot more listings coming on, but again, we saw more listings than average coming on the market in December. It still wasn’t keeping up with demand. We saw more houses going pending, more houses leaving than more houses coming. So I think we’re going to see more houses, more houses coming on the market, which is a good thing for buyers, but I think it’s also going to be super, super competitive. So anticipate multiple offer situations. In Seattle, we were seeing 3.1% over asking price in December, which normally that’s a time of the year where you might be able to get it for less than asking price. In Bellevue, we saw houses selling more than 16% over asking price on average and the media number wasn’t very far off.

So that just means that most houses are actually selling that far above asking price. And a lot of the really good ones are selling 20 plus percent over, 25, 30%. So I think we’re going to continue to see more of that here as we head into 2022. If you’re a buyer though, I wouldn’t be disheartened. I just, I want you to know the real facts. I want you to kind of know what to expect as you’re heading into the 2022 housing market. And if you really want to talk a little bit more about what it looks like to purchase, maybe it’s your first home purchase, or you just want to have a conversation about the market, please feel free to reach out to me. All my contact info's down below this video. And you could find it fairly easily by just doing a Google search as well, but I’d be happy to have a conversation with you a little bit more about what to expect and how to get yourself set up for success.

Sellers, as we’re looking at 2022, I think we’re going to continue to see a lot of buyer activity. I think we’re going to see continued competition for your home. There’s just not a lot of houses on the market. And I don’t anticipate there being so many houses coming on the market that it’s going to tip the scales. I also don’t anticipate seeing interest rates climb so much that it puts buyers out of the possibility of purchasing. So I think there was a concern for that and I think it’s a valid concern. I just don’t think we’re going to see interest rates jump up as high as some are predicting, which is going to continue to keep that competition there and buyers excited. I also think buyers are scared of interest rates going up, which makes them want to purchase now versus waiting until later, because it will severely impact their ability to purchase.

It’ll also make borrowing the same amount of money a lot more expensive. So I think for sellers, if you’ve been holding off, if you waited last year, didn’t sell, good for you at this point, right? You probably look back and you’re like, whew, I’m so glad I waited. But if it’s time, it’s time to move. If it’s time to downsize, relocate, this might be the time to get your house on the market. Thanks so much for watching my Seattle real estate market update for January, 2022, first one of the year. I super appreciate your attention. And if you made it all the way to the end of this video, I know you got a lot of value out of it. So if there’s any way I can bring more value to your situation, please feel free to reach out.