Each quarter I write about how the market as a whole is trending throughout the Greater Seattle Area. The fall update continues from my Summer 2018 Real Estate Trends post so feel free to give that one a read if you’d like to track how this market has been progressing over the year. The NWMLS is currently reporting market data through October 2018 so my focus here will be what happened in late summer and early fall. I’m planning on writing my next market update (winter) in December, and then provide a full 2018 . This year has been a busy and exciting real estate year for me, constantly adapting to shifting trends from bidding wars when the inventory was low to now seeing increased time on the market and price corrections.
As a quick recap from my summer post: in August we were seeing homes taking longer to sell than they had earlier in the year. Average months of inventory (how long it would take to sell the current market supply of homes) for counties in our region was around 1.5, up from around 1 month or less earlier in the year. While a 50% increase in the amount of time it would take to sell all homes in our market may seem like a massive increase in such a short period of time, it is important to note that industry experts say a balanced housing market is 4-6 months of inventory.
Now how are we looking as we’ve settled into fall of 2018? At a macro level, the trend for the counties in our region (King, Pierce, Snohomish) is that inventory is up from last year, months of inventory supply is up from earlier this year, and both the number and dollar figures for closed sales is down compared to this time last year. Let’s break that down in a little more detail:
The months of inventory has increased from approximately 1.5 months in the summer to to now 2.4 months, 2.14 months, and 1.73 months for the counties of King, Snohomish, and Pierce respectively. Brokers across Western Washington added 399 more listings last month compared to October 2017, however there were 984 fewer closed compared to last year. This is in line with the trend of increased inventory and increased time on the market. While we will continue to monitor the market closely, I am not alarmed by these changes. Interest rates are rising which can be a concern for buyers, but on the other hand with The State Employment Security Department reporting that Washington gained 4,500 jobs in September, we are still looking at a very strong economy that is bolstering the local housing market.
Last month the total dollar value of closed sales was $3.9 billion in Western Washington. This was approximately 239 million dollars less than the closed sales this time last year. That said, prices are still up 5% from a year ago with King County having the most expensive average home price at $725,357. The increased inventory and fewer sales may make it seem like the market is cooling, but it’s really just getting back to normal.
My focus for my sellers is setting an appropriate list price that is right in the “sweet spot” so that the homeowner can receive the best possible price for their home. Pricing a home too high in this market means risking sitting on the market for a long time which more often than not leads to (sometimes multiple) price reductions. Listings that have been active for awhile generally don’t receive as much attention as a new listing will either. For buyer’s that are looking for a good deal right now what I’d recommend doing is looking for homes that have been on the market for awhile/have had a price reduction, and submitting a competitive offer under the current asking price. On the flip side, sellers looking to sell their home quickly and for the best price should price it aggressively to avoid the price reduction scenario which benefits the buyer. I’m still seeing bidding wars and multiple offer scenarios when a home is priced to sell; but a house priced even a little too high with an “offer review date” runs the real risk of buyers standing by the sidelines waiting to see that price drop.