Seattle Is the Worst-Performing Housing Market in America. Here's What to Do About It.
I went live last week to say the quiet part out loud: by the numbers, the Seattle metro, from Everett to Tacoma, is the worst-performing housing market in the country right now.
The scorecard (Redfin, September)
Pending sales: -24.4% year over year, worst of the 50 biggest metros. Next worst was Los Angeles at -16%.
Median sale price: -4.4%, also worst of the 50. Redfin's latest weekly data has us at -4.8%, with a metro median around $790,000.
Active listings: +22.9%, the biggest jump in the country.
Why it's happening
Rates are the big one. They were just under 6% before oil prices spiked this spring. Now they're over 7.4%. Here's what that does to a typical Seattle-metro home ($790,000, 10% down, monthly principal + interest):
At 6%: $4,262
At 7.5%: $4,971
Difference: about $709 more a month
That's before taxes and insurance. Add high fuel costs pushing up the price of everything, plus a state that keeps layering on taxes, fees and regulation, and buyers are hitting the brakes.
This is a correction, not a crash
King County is at about 5.1 months of supply. That's the start of a buyer's market, but nowhere near the roughly 11 months we hit in the 2008 crisis. Prices are down single digits, not 30%.
What to do now
Sellers: No wish pricing. In a market like this, you have to get in front of the ball. Price it right, present it right, and know your competition.
Buyers: Winter is deal season. The data shows buyers get the biggest discounts off list price in the winter months, and with rates this high, this winter could be stronger than normal. Look for seller credits and rate buydowns.
First-time buyers: Two of my favorite strategies right now are owner-occupying a duplex to fourplex (you can use regular residential financing) and buying a home with a big enough lot to add a detached ADU.
Investors and landowners: Deal season is your season too. And if you have land, Washington's newer ADU rules may let you add a unit, or sell a corner of your lot.
Got a question about your neighborhood or a specific zip code? Hit reply. We'll dig into the data for you.
— Anton