The rates went up, every seller is in a panic, and everyone wants a Seattle real estate market projection? Are we headed for a slowdown? A price correction? Or just a slight shift from the norm? What is causing this? How long will it last?
My prediction for the Seattle real estate market for the rest of 2022 looks like borrowing money will be more expensive, which will lead to a more steady market.
In this month’s blog and video of Coffee With Roy, we are going to talk about market projections for Seattle’s real estate market. Before you dive into the blog and/or the video below grab yourself some coffee. Or enjoy some of Roy’s coffee.
Roy, What Kind of Coffee Are You Drinking Today?
Today Roy is brewing a French press with Stumptown’s Homestead Blend. This is his go-to grocery store coffee. When he needs to grab beans on the go or for hosting friends at home. This is the blend Roy prefers to pick up. It’s made in Portland, Oregon, and comes as whole beans. It’s what we like to call Diner Coffee. Not too bold, but a little bolder than my day-to-day cup. It’s a crowd-pleaser.
Coffee With Roy: Seattle Real Estate Market Projections 2022
Now that we’re all set with coffee, let’s get started like we do with each Coffee With Roy episode. Let’s do a quick recap of the numbers by looking at the demand rate. If you need a refresher on what demand rate is and why we like it as a market indicator, I did a video explaining demand rate here.
May 2022 | Seattle Real Estate Market Update
The demand rate can change neighborhood by neighborhood and day by day. So, let’s look at active and pending homes and how they stack up right now for May 2022. And if you need a refresher on what a Demand Rate is you can check out Coffee with Roy: February 2022 Seattle Real Estate Market Update
Seattle’s Real Estate Market Update aka the Demand Rate
The most recent press release by the NWMLS really articulates what we are seeing on the streets and how this is impacting the demand rate.
- Luxury Homes – Demand Rate 2.01
- Single Family Homes – 0.47
- Condos – 0.82
Below we are going to dive into exactly what these numbers mean.
Today, luxury homes (valued at $3M or above) are at a demand rate of 2.01. This is still very much a buyer’s market, but we’re at nearly half a percent lower than last month. All in all, you have an abundance of choices when you’re searching to buy a home above $3M.
Single Family Homes
Right now, single-family homes are at a demand rate of .47, which is up from last month. This could be in part due to there being more homes for sale than last month. Or, it could be a result of the combination of factors we will break down in a minute. Either way, we are still looking at slightly more than two buyers for every home in Seattle.
Seattle condos are at a demand rate of .82, which is nearly unchanged from last month. It’s still easier to buy a condo than a single-family home, but you might have competition. The best condos are selling quickly and in multiple offers. But condos are still the best home type for finding a deal in the city.
Now, let’s use these numbers to talk about my Seattle Real Estate Predictions for the rest of this year. Specifically: Are we headed for a crash?
What Are Your Seattle Real Estate Market Projections for the Rest of 2022?
Are We Headed for a Real Estate Market Crash or What We Like to Call Deal Season?
If you and I have spent any amount of time together, you’ve heard me talk about how Seattle’s housing market is seasonal. Inventory goes up and down, creating better and less good times for buyers to purchase or sellers to list. All the while, prices continue to tick or jump up season after season. Here at Team Diva, we say that “Deal Season” for buyers is August when everyone goes on vacation, or in December when everyone is hunkered down for the holidays (or also on vacation!).
My prediction is that we will see only a slight cooling of the market this year. In order to see a significant decrease in home prices, we would need to see 3 months of sustained decrease in demand.
Seemingly every year our market starts out super hot with a big gap between a home’s list price and its final sale price. At some point around June, we start to see these two numbers meet up and plateau. The number of listings begins to outpace the number of buyers in the market, which will create a cooling effect for a little bit. The effect can be greater or lesser depending on the area and the type of home, but it’s visible across the region. This normally happens around June 1st.
REALTORs, like Team Diva, who are working in this market can watch this change happen long before the recorded numbers show us what’s going on. Check out the Roy and Kim Show where we talk about the market a few times a month. You can find the latest episode here.
Demand For Homes is Decreasing
Right now we are seeing the number of offers in each multiple offer decreasing from 15+ to 5 or fewer. Some homes are not getting any offers at all. This increases the home’s days on market, and there is also more of a chance of those homes lowering the list price to find buyers. This year there are additional constraints that are making this happen even faster. Interest rates are up and are likely going to continue going up, which will stunt the number of homes selling for way above asking.
Another thing to keep in mind is that a slowing market does not equal cheaper homes right away. My prediction is that we will see only a slight cooling of the market this year. In order to see a significant decrease in home prices, we would need to see 3 months of sustained decrease in demand.
How Can Buyers and Sellers Use These Seattle Real Estate Market Projections to Their Advantage?
Hold strong and don’t give up. If you have been waiting for a “slow market,” now is the time to go get pre-approved. Have all of your documents in line so we are ready to jump when we start to identify homes that you love. If you wait until everyone is talking about a slowing market, you may have missed the boat. If the market does continue to slow, that’s ok. We haven’t had a true even market in the 8 years I’ve been a Realtor. Save for Q4 2018, the market has always been the hottest market ever.
Be realistic. Your home will probably not sell for 20% above asking for the rest of this year. Keep in mind that your home has already seen a 15-20% rise in equity since January. You will still need to make improvements before selling if you want to get top dollar. Make sure to watch our video about how to prep your home for sale in Seattle.
So Down to the Big Question: Are We Headed for a Crash?
Probably not. We are likely going to see frustrated buyers and sellers trying to make moves. And we are likely going to continue to have the same concerns we’ve had for the past 8 years, plus higher interest rates. Unlike the last housing crash, most homeowners have 30-50% equity in their homes. Current home buyers need to put down at least 20% in order to win a home in this current market.
So, if the prices were to drop or “correct,” they would need to drop more than 20% to start to affect the housing market in a major way here in Seattle. Frankly, I don’t see that happening. I think that the housing market is still so tight that if we were to start to see prices cut by 20% buyers I would start snapping up homes immediately. If I saw my dream home available for 20% less than it is now, I would be moving!
Thank You For Watching Coffee with Roy: Seattle Real Estate Market Projections 2022
There you have it! My prediction for the Seattle real estate market for the rest of 2022 looks like borrowing money will be more expensive, which will lead to a more steady market. This will help buyers and sellers more easily determine the eventual sale price of homes. Values will go up, but not at the same clip as they have for the first 4 months of this year. And that’s ok.
Previous Episodes of Coffee With Roy:
- February 2022 Coffee With Roy | Seattle Real Estate Market
- March 2022 Coffee With Roy | Seattle Real Estate Market
- April 2022 Coffee With Roy | Seattle Real Estate Market
Thank you for sharing a cup of coffee with me. If you have someone who can benefit from this info, share this blog post and the video with them. If you have something you want to know more about, let me know!