Fewer listings are turning into sales
Six months into the year, it's tempting to blame rising inventory for the shift toward buyers. But inventory is a symptom. Rates are the disease.
Mortgage rates opened January near 6.1% and climbed steadily from there, back above 6.5% for most of the summer, sitting at 6.7% as of late July. That's held demand back all year. Fewer listings are converting to pending sales, fewer pendings are closing, and inventory is piling up.
Seattle's closing rates have fallen for 5 straight years
Look at closed sales as a share of new listings: 82% in 2021, down to 55% through the first half of this year. Every single year lower than the one before it.
Months of supply hasn't been this high since 2011
Months of supply hit its highest level since 2011. Seattle sits at 3.2 months, Eastside at 4.7.
Eastside home prices are down ~9% from last year, the sharpest H1 decline outside of the 2023 rate-shock correction. Seattle's H1 average is down 0.9%, its first negative H1 in three years.
What we're seeing on the ground 👀
Not every segment is softening the same amount. Condos, townhomes, and less-established outlying areas are cooling faster. Single-family homes, especially in-city, are still proving resilient. See below! ;)
Investors are showing up under $750K in Seattle, competing directly with first-time buyers for the same affordable inventory. That's added real pressure at the entry-level price point specifically.
High rates are slowing buyers down, but they're not going away. The move from the low-6s to high-6s this summer has been enough to pause or slow a real slice of active searches, but that demand is building up behind the scenes.
Opportunistic buyers are winning, like always. If you don't need to buy right now, or don't have a timeline, this is your market. You can wait for the right property and land it without competing for it. The tradeoff: you have to be willing to walk away from anything that isn't right.
What we've been up to...
In a slower Eastside market, it took us three weeks and a price reduction, but we found the right buyer for our NW Contemporary in Medina. It sold for $3.5M, a great outcome all around. I already miss spending time there, but the sellers offered me a sweetheart deal on their 1980s baby grand, so I get to keep a piece of her with me.
We also listed and sold our Mercer Island traditional, which was met with huge demand: 6 offers within days and sold for 11% over list.
Our Hillman City Craftsman did well too with 7 offers and a pending sale at 20% over list (whoa!).
The takeaway: listing presentation and pricing are the only things you control. Set yourself up for success by being thoughtful and realistic. Days on market is your enemy.