While the 2022 Puget Sound area real estate market started off with a bang, we’re seeing area-wide cooling since mid-2022 and now into 2023. In this winter 2023 market update I’ll be covering the latest Puget Sound area real estate trends. Before we dig into the latest trends – how hot was 2022 in some of the most expensive neighborhoods in our area? The answer is smoking! The Eastside took the top spots across the board here which isn’t much of a surprise. A home in Medina where you’re sure to be flanked by billionaires and millionaires alike sold for $23 million in August of 2022. That was the most expensive home sold in the Puget Sound area last year. Kirkland also saw its most expensive home sale ever, selling for $15.4 million. As a final noteworthy sale of 2022, Paul Allen’s Estate sold 8 properties on Mercer Island totaling $67.1 million. All data in this post is courtesy of the NWMLS.

Inventory

There were 23,317 fewer sales last year compared to 2021, for a decrease of 21.7%. The number of homes and condos sold in 2022 was the the lowest since 2014. Not surprisingly, there were fewer pending sales reported along with less listings. NWMLS agents reported 21.5% fewer pending sales YoY from 2021 to 2022. The number of pending sales fell every month last year, with the biggest drop in November. There were 40.4% fewer pending sales in November 2022 compared to November 2021. In December, year-over-year pending sales were down 31.3%.

On the supply side there were only about 3 weeks (0.61 months) of supply in January 2022. Last month in December, months of inventory had increased to 2.09 months. We have not seen months of inventory this high since before the pandemic. For each month in 2022 there were an average of 10,075 active listings per month. This can be considered a bidding war rebound year because this average listings per month number greatly exceeds that of 2020 and 2021. It really shows how quickly homes were going into contract in 2020 and 2021 since the overall number of new listings last year was down. An average of 10K active listings/month is only about half of average monthly listings in the early 2010s – furthering the seller’s market narrative. In total, NWMLS agents added 110,294 new listings in 2022.

Pricing

In 2022 the median sales price was $615,000. This represents an increase of 8.85% from 2021 ($565,000). Condo increases which have typically lagged behind single family homes increased substantially – by 11.3% during the same time period. My assessment for the condo price increases is that buyers broadened their search criteria due to so much competition on single family homes.

In December of 2022 the median sales price was $570,000 and down 0.51% from December 2021 at $572,900. The highest median home price last year was in May at $660,000. Looking at these numbers together really shows the mini-bubble in the first half of 2022. Prices remain nearly flat YoY, but surged in early 2022. This pricing surge was created by a perfect storm of buyer demand, record low interest rates, and low inventory.

Conclusion

Even though the market rapidly shifted in 2022, we are still in a seller’s market. As of the beginning of 2023 we currently have about 2 months of inventory across the Puget Sound region. That means it would take about 2 months to sell the current supply of homes on the market. During the pandemic we hit lows of 1-2 weeks of inventory in the metro areas! We really should look at parts of 2021 and 2022 as more of an anomaly driven largely in part by low inventory, buyer demand driven by pandemic factors, and record-low interest rates.

Real estate predictions nation-wide for 2023 have been a bit all over the place for the past few months. I’m currently seeing that most financial institutions and research firms are currently pulling back their predictions to somewhere within a few percentage points on either side of zero. I personally believe prices will remain flat or increase slightly in 2023, but only time can tell.

With the ever-changing market I have also written a dedicated page about home buying in 2023. If you ever want to discuss buying and selling real estate in Woodinville or the greater Seattle area, don’t hesitate to contact me.

-Jennifer