The Seattle Real Estate Market Starts 2020 Hot!

As a real estate broker I’m constantly asked by clients and friends “how’s the market?”.  Well we’re a month and a half into 2020 and based on how things have started we are headed for an intense market this spring.  The Northwest Multiple Listing Service just released statistics for January and their data showed pending sales outgained new listings, record-low inventory that is down 33% from a year ago and many counties with double-digit price increases.

We now have a three month trend of pending transactions exceeding new listings in all the major counties around Puget Sound.  Inventory has slowly but steadily declined and we are back to having right around a month in many areas.  The average for all of the NWMLS is at 1.54, which is a 36% drop in comparison to January 2019. Inventory around Puget Sound comes in at 1.1 months in Pierce County, 1.2 months in Snohomish County and 1.3 months in King County.  A balanced market between buyers and sellers is considered to be 4 months of inventory, so that gives you a sense of how much of a seller’s market we currently have.

At the end of January, the entire MLS database had only 7,791 active listings of single family homes and condos, a drop of 33% from a year ago. Going back through data since 2005 shows that amount is a new low, below the previous one of 7,921 in February 2018.  In fact, for the 15 years from 2005-2019, inventory has dipped below 10,000 listings only eight months. 

This low inventory coupled with high demand is the trigger for large increases in sales price and values. King County had only a fairly modest value increase of 4.4% over January 2019. However the other counties around Puget Sound reported double-digit  increases with Pierce County at 14.7% and Snohomish County at 12.8%.

Double digit price appreciation in those counties is being pushed by buyers searching and purchasing outside of King County as they look for price points that line up as more affordable and accessible particularly for first time buyers. We started seeing this trend start in 2018 and it exploded during 2019 as the intensity and pricing of the market in King County propelled buyers to look at properties farther away from Seattle.   

The luxury home market is also  feeling the pressure in Seattle and on the Eastside of King County, with very few properties available in the $1 to $1.5  million range.  Evidence of the heat of that market can be exemplified by one central Seattle property, priced around $1.2 million which had more than 300 visitors to its weekend of open houses recently. WOW! 

This high of demand early in the year coupled with strong consumer confidence is certain to push us back from the trend we had towards an improving market for buyers throughout most of 2019.  Inventory is back to being very tight and I do not expect that to change much even as we move into the spring months when we typically see a larger number of homes come on the market.  Unless something unexpected happens to affect our local job market, there’s no reason to think that our trend of shrinking inventory and robust price gains over 10% per year will be altered. 

It’s starting to feel like the market is trending towards the intensity we had in 2017 and the start of 2018.  That would be a market with multiple offers, escalation clauses, waiving of contingencies and sales well above list price.  We’re already seeing that on some listings in particular areas/prices because of the interest level they receive in a market with very little inventory for those buyers to choose from.  If you’re a seller and you’re considering selling this year it could be a great opportunity to do so.   Buyers will face some challenges and in order to succeed in a market like this you need the input and expertise of a professional who is experienced with it and how to win when you have to compete with other buyers for a property. 

If you're thinking of buying or selling please contact me for details about your needs or questions. If you want to know what your home value currently is check our site for your automated value range or request a full evaluation from me anytime. We all can look forward to what is likely to be an exciting year in Seattle area real estate in 2020!