The Seattle-area housing market is offering homebuyers new leverage and, in some cases, cheaper prices.
More houses are sitting on the market, fewer people are buying homes and home prices in some areas are dropping, according to new data released Wednesday by the Northwest Multiple Listing Service. Townhome developers and swanky condo towers are offering discounts. Some home-shoppers are holding off because of rising mortgage rates or tanking stock portfolios. Others have been priced out.
The trends point to a cool-down that isn’t yet a buyers’ market, but is taking some power back from sellers.
For Constance Winstead, the recent notice of a nearly $400 rent increase for her Tacoma apartment was the “final straw.”
“I have to make a choice here,” she thought, and began looking for a home to buy.
Her search started like so many others in the overheated pandemic housing market, with high prices and bidding wars.
But in recent months, things began to go every way.
After planning to buy one home, she backed out when an inspection revealed the house needed extensive work. She secured a two-bedroom Tacoma condo in June, had it inspected and got $2,000 from the seller to improve the carpet.
With interest rates climbing, Winstead worried about her mortgage payments, but “at least I could build some equity,” she said.
The kind of leverage allowing buyers like Winstead to negotiate with sellers — almost unheard of in the market frenzy of the last two years — is the latest sign that the local housing market is cooling.
“Sellers are more realistic and willing to work with buyers,” said Margo Wheeler-Willis, a John L. Scott agent in Tacoma who worked with Winstead.
In King, Pierce and Kitsap counties, twice as many homes were still for sale at the end of June than at the same time last year. In Snohomish, more than three times as many homes were for sale. Across all 26 counties the NWMLS covers, the number of homes and condos still listed for sale at the end of the month was the highest since October 2019.
The slowdown is beginning to affect single-family home prices. The median home price in King County, which reflect sales that closed in June, is down 6% from May.
Prices typically dip in the summer, but the recent change is especially apparent on the Eastside, where the median sale price dropped 13% in the last two months, compared to 2% in Seattle. The number of pending sales on the Eastside is down 45% from the same time last year, compared to 34% in Seattle.
In the Tacoma area, Wheeler-Willis has seen some recent buyers make their purchase contingent on selling their previous home, another protection that nearly disappeared in recent years. “The market has swung somewhat,” she said.
Still, prices are up from last year.
In King County, the median home price of $938,225 is up 9% from June 2021. In Snohomish County, the $799,950 median is up 12%. In Pierce County, the median of $568,575 is up 10%. And in Kitsap County, the median of $600,000 is up 18%.
It would take more than a month to sell through the current inventory across the Puget Sound region, according to a measure known as months of inventory. That’s still far below the four-to-six months the listing service considers balanced, but the highest level since soon after the pandemic hit.
“For buyers, there’s a lot more breathing room,” said Andrea Keyes, a RE/MAX agent who works with buyers and sellers in Kitsap County. “They don’t feel like they have to make a decision on putting in an offer on a house in a 15- or 30-minute showing. I can show them several homes in a day. And they can think about it overnight.”
Sellers are coming to grips with the shift, too. In May, sellers dropped prices on 27% of listings in Seattle, 48% in Tacoma, 54% in Everett and 36% in Bremerton, according to Redfin. (June data is not yet available.)
Some homeowners “think they’re still in the market that we had as late as February, March and April of this year, which it isn’t,” Keyes said. “It’s evidence of sellers coming back down to Earth.”