I’m Roy Powell with Team Diva Real Estate at Coldwell Banker Bain, and thank you for joining me for Coffee with Roy! In this fun new series, I will be making an awesome cup of coffee and chatting about what’s going on in Seattle’s real estate market. In this first episode, I am breaking down one of my favorite ways to watch an ever-changing real estate market. Demand rate is one way to look at the real estate market. Thanks for joining as I share exactly what the demand rate is and how it can benefit you big time!
But before we get too deep into real estate talk, let’s brew some beans!
Roy, What Kind of Coffee Are You Drinking Today?
Today, I’m drinking coffee from Counter Culture Coffee roasters in Emeryville, California. I stop by there whenever I’m in the Bay Area visiting family. I’m brewing today’s beans through a Fellow Pour Over. The roast is called Fast Forward and I love it because it’s rich and warm, which is needed on a foggy day like today. It’s super satisfying and I highly recommend it!
Coffee with Roy: February 2022 Seattle Real Estate Market Update
Thank you for joining me as I talk about all things real estate while enjoying one of my favorite coffee roasts! Hopefully, you have a fresh cup of coffee at your side, too. In this first episode of Coffee with Roy, I am breaking down one of the best ways to watch an ever-changing real estate market, which is to analyze the demand rate.
What Is Demand Rate & How Can We Use It To Understand the February 2022 Seattle Real Estate Market?
We like to use a method to evaluate real-time market data called the demand rate. The demand rate looks at how many buyers are in a market compared to how many homes are available. Most Seattle brokers are looking at the average closed sale price from the previous month. Well, this information is useless if the market is changing every single week.
To understand a market’s patterns, you have to gauge how many interested buyers are out there. This helps us understand if a house is likely to have no offers or 10+ offers. Having a sense of this information can be important for both buyers and sellers. For instance, you have a red hot month of multiple offers because there are so few homes available. Then the next week, three or four neighbors suddenly put their house up for sale.
Sure, last month, the list-to-sale price average was 10% over asking. But this month there are more homes and fewer buyers. Instead of multiple offers, those neighbors can now expect their home prices to level off or even take a dip. Only looking at last month’s list to sell price is not going to work if you want a supercurrent read on the market.
What’s Happening in the February 2022 Seattle Real Estate Market?
So what’s actually happening in Seattle’s real estate market right now at the beginning of 2022, you might ask? Well, January and February are notoriously slow listing months. Most sellers think listing their homes in April and May will help their homes shine because the flowers are in bloom.
But the reality is that there are always more buyers in the earlier part of the year, and there’s not enough supply to meet the demand. Calculating the demand rate is rather simple. You pick your desired area and then divide the number of active homes by the number of pending homes. This is the demand rate.
Right now, all of the Seattle real estate markets are screaming “multiple offer market!!!”
Below we break down the stats for you.
Here is How the Market Breaks Down
The Team and I went through and did a ton of work to figure out exactly what is going on in the market. Below are some numbers for those of us who are housing nerds.
Seattle Real Estate Market Update January/February 2022
Condos: For every condo buyer in the market, you have 0.80 of a condo available to buy. Put that another way? There are four condos for every five buyers, which is not far off from one to one.
Townhouses/Townhomes. Wow, townhouses are even more intense. Many projects were stalled because of supply chain issues, the price of wood, and the lack of available home builders. Right now, there is 0.25 of a townhouse available for every buyer. Or put another way, there is one townhome for every four buyers.
Single Family Detached Homes: The part that I find fascinating is that many detached single-family homes are running at the same demand rate as condos. This means there’s a smidge less than one home for every buyer and a demand rate of 0.8. What’s interesting about this, too, is that we have a luxury market mixed in with these single-family homes that is likely making this number larger. This is because the luxury market moves a lot slower than the rest of the market does.
It is also important to keep in mind that these numbers will change neighborhood by neighborhood within Seattle. That being said, if you want localized information for your neighborhood, just hit me up. I’m happy to run the demand rate for you.
What Is Your Advice for Buyers Right Now?
My advice for buyers in Seattle’s real estate market right now is this: You have to just hang in there and be honest with yourself about what you can buy and where. Use the demand rate to help you better understand if the market. Will the market you’re looking in continue to shoot up? Or is it time to capitalize on the abundance of inventory? Interest rates will go up this year, and that means your buying power will be greatly reduced later in the year.
This means that as a buyer, you should focus your energy on where you will have the best chance of success. This also means being realistic about the fact that you are going to find yourself in a multiple offer scenario! In Team Diva’s blog post “Advice From the Team to Win a Multiple Offer in 2021 in Seattle,” we share our very best advice for how to win in a multiple offer situation in Seattle.
What Is Your Advice for Sellers Right Now?
My advice for sellers in Seattle’s real estate market right now is this: If you can bring your home on the market in the next two to three months, you will be in the winning seat. Using the demand rate will help us select the list price that is both attractive and competitive with the comps in your neighborhood. The same interest rates rising will also impact your ability to sell your house later in the year.
In our blog post “How to Sell a Home in Seattle: A Comprehensive Guide,” we dive deep into each and every step it takes to be a successful home seller. This includes our Diva Difference philosophy, which will help you sell your home regardless of what the market throws your way.
Other Home Selling Guides to Help You Get the Process Started
- The Diva Difference – How to Sell a Unique Luxury Home in Seattle
- How to Sell a Home in Seattle – Detailed Guide
- Guide to Selling a Condo in Seattle
- When is the Best Time to Sell Your House in Seattle
Thank You For Watching Coffee with Roy: February 2022 Seattle Real Estate Market Update
I’m so glad you joined me for Coffee with Roy: Seattle Real Estate Market Update! When you need to know what’s happening in Seattle’s real estate market throughout 2022, just tune in for a quick update. And be sure to have your favorite coffee roast on hand, too!
I’m Roy Powell with Team Diva Real Estate at Coldwell Banker Bain. And next month, make sure you let me know which coffee I should be drinking. If you have any questions at all, I’m happy to chat. You can reach out to me at 206-786-3884 and follow me on Instagram and Facebook.