The median home price in King County soared to a record high of nearly $1 million last month, a statistic that underscores vanishing housing affordability and the worsening economic gulf in the Seattle area.
But that number alone doesn’t reflect other factors hinting at a different trend: The local housing market may be beginning to cool.
King, Pierce and Snohomish counties saw fewer new listings of single-family homes for sale, more listings still on the market at the end of the month and fewer pending home sales in April than the same time last year, according to new data released Thursday by the Northwest Multiple Listing Service. And it would take slightly longer in all three counties to sell through all the homes for sale at current demand than it would have the previous month, all pointing to a less frenzied market.
Those trends echo predictions by national and local economists that, because of rising mortgage rates and other factors, housing markets across the country were unlikely to continue the breakneck pace of growth seen since the pandemic began. The average mortgage rate for 30-year fixed mortgages is at about 5.3% this week, the highest point since 2009, according to Freddie Mac.
“Things do seem to be leveling off,” said Kristina Loper, a Keller Williams agent in Tacoma.
Still, prices are up and some buyers are still facing competition. “The haves are more likely to get the house than ones trying to get their foot in the door,” Loper said.
The median single-family home in King County sold for $995,000 in April, up 7% from a month earlier and 20% from last April. Just before the housing bubble burst, the median single-family home in King County sold for $481,000 in July 2007, according to past Seattle Times reports. (Median means half of homes sold for more and half sold for less.)
King County’s priciest homes are selling on the Eastside, where the median home price last month hit $1.7 million. In Seattle, the median home sold for about $1 million. The median home price was $660,000 in Southwest King County and $780,000 in Southeast King County.
The median Snohomish County home sold for $839,298, the median Pierce County home sold for $579,980 and the median Kitsap County home sold for $565,000. Prices in those counties were up 4% to 5% from March and up 15% to 24% from last year.
One key caveat is that those price figures reflect closed sales, which mostly took place about a month earlier. The prices for most sales that went pending in April will be included in next month’s data.
“I’m not seeing 10-plus offers like I did back in March,” said Ally Bosak, a John L. Scott agent in Bothell. “But having said that, the buyer pool is still very large and multiple offers are very much happening in certain neighborhoods.”
Sarah Zhang and Andrew Gapic found a tough market when they went searching earlier this year.
Hoping to find space to work from home and eventually have room for a child, the couple set out to find a three-bedroom home somewhere in Seattle for around $700,000. It didn’t take long to realize that was “completely impossible,” Gapic said.
Zhang and Gapic, who both work in tech, tapped their savings and stocks, upped their budget closer to $1 million, started looking at town homes and braced for competition.
“We talked to our lender and figured out what our max, max price was, then filtered for listings $200,000 under that. That was the buffer it would take to win,” Zhang said.
The couple lost out to other buyers on several offers before getting a modern town home between the Leschi and Mount Baker neighborhoods listed at $900,000. The couple paid $990,000 and closed in March.
“We were truly on the cusp of going back to renting,” Gapic said. “At some points, we were like, ‘Should we just stop looking and look later when we have more money?’ ”
Cyrus Fiene, a Coldwell Banker Bain agent in South Lake Union, argues low supply continues to create a tight market, made worse by recent investors and homeowners who locked in low rates earlier in the pandemic and now are hesitant to sell.
“The only solution to this situation is new housing and that’s not an overnight solution,” he said.
But brokers are also seeing some signs of a cool-down.
Loper, in Tacoma, listed a “great town house” in University Place that only drew one offer.
“I was shocked,” she said.
Bosak recently listed a spacious five-bedroom home in Everett at $1.2 million that attracted no offers by the date the seller planned to review them. According to Bosak, when she started calling buyers’ agents, “the feedback was they thought this would be a multiple-offer situation that would go dramatically over the list price. The buyers were scared of offering, just burned out,” she said. The home eventually sold for more than the list price, Bosak said.
In King County, the number of pending sales dipped 5% from March to April. They were down 15% from the same time last year and 17% from April 2019, before the pandemic. Sales typically pick up throughout the spring and peak around May.
Fewer King County condos are selling, too. The median price stood at $518,000, down 4% from March but up about 13% from the same time last year.
Across King, Snohomish, Pierce and Kitsap counties, it would take between two and three weeks to sell all of the single-family homes for sale at current demand, based on a measure known as months of inventory. That’s a bit more breathing room than in March, when it would have taken two weeks or less. At the same time, that is far below the four to six months the listing service once considered a balanced market.
It’s not just Seattle. Nationally, pending home sales and new listings are both down compared with the same time last year, and more homes are posting price drops, according to data from red fin.
Lawrence Yun, chief economist for the National Association of Realtors, told a recent industry meeting that inflation, rising fuel prices and higher mortgage rates will make homes less affordable and slow the market.
The full effects of those factors in Western Washington remain to be seen. Rising mortgage rates may not drive down prices but typically result in fewer home sales, according to a historical comparison by Windermere chief economist Matthew Gardner.
Fiene said he expects homes to stay on the market longer even if prices don’t drop. But, he said, “it hasn’t been long enough that they’ve gone up for us to feel the effects yet.”