In a previous report, we listed three trends that suggested the Seattle-area real estate market was heating up in 2023. One of those trends had to do with inventory levels.
The supply of homes for sale within the Seattle metro area has declined significantly since the start of this year. This in turn has increased the level of competition among buyers in our area, as well as the frequency of multiple-offer scenarios.
The current inventory shortage probably won’t abate anytime soon. But even so, home buyers within the Seattle real estate market could soon benefit from seasonal trends, increasing their chances for success.
The real estate market typically slows down in the fall months, and especially during winter. This might be a great time to buy a home in the Seattle area, because there will probably be fewer buyers in the market.
Here’s an update on current housing market trends in Seattle, and why buyers might want to consider making a purchase during the fall or winter of 2023.
Inventory Declines Continue in 2023
Earlier this month, Realtor.com published a housing market update with data for the 50 largest metropolitan areas in the U.S. These reports track a number of housing-related metrics, including inventory levels, home prices, and the typical time on market.
In their latest report, the authors singled out the Seattle metro area as having one of the biggest declines in new real estate listings over the past year:
“In July, none of the 50 largest metro areas saw new listings increase over the previous year. Declines were greatest in Phoenix(-44.3%) Seattle (-38.4%) and San Jose, Calif. (-35.3%).”
Note: In this context, we are talking about property listings found on the Realtor.com website. But because theirs is one of the largest property listing websites in the U.S., it also serves as a good indicator of actual inventory levels across the metro area.
The above quote relates to new listings, in particular. These are homes that have come onto the market in recent weeks. The Seattle housing market had an equally large decline (-38.7) in the total number of active real estate listings.
These numbers tell us two things: (1) supply levels are down when measured year-over-year, and (2) there are fewer homes coming onto the market today than a year ago.
As of later summer 2023, tight supply conditions have increased competition among home buyers across the Seattle area. First-time buyers, in particular, tend to have a harder time navigating a competitive market where multiple-offer scenarios are common.
But these dynamics could change over the coming weeks, as we enter what is historically the slower part of the year for home buying.
Benefits of Buying in the “Off Season”
Real estate sales activity tends to slow down a bit as we transition from summer to fall. And during the winter months, when colder temperatures and holidays further reduce the number of buyers, it can become even more sluggish.
If this seasonal pattern holds true during 2023 as well, it could benefit Seattle home buyers in several ways:
- Less competition: Generally, the fall and winter months see fewer buyers in the market compared to the busier spring and summer seasons. This reduced competition can give buyers more negotiating power and potentially lead to better deals.
- Motivated sellers: Sellers who list their homes during the fall and winter months may be more motivated to sell, whether due to a job relocation, financial considerations, or personal circumstances. This motivation could give buyers more room to negotiate.
- Opportunity for bargains: Homes that have been on the market for a while (which is more common toward the end of the year) tend to have more price reductions. This creates additional money-saving opportunities for home buyers.
- Attention from professionals: Real estate agents may have more time to dedicate to individual buyers during the off season, providing more personalized attention and assistance.
- Avoiding bidding wars: During the slower winter months, Seattle home buyers tend to encounter fewer bidding wars—or none at all. This allows them to make offers without the added pressure of intense competition.
Higher Mortgage Rates and Other Variables
It’s hard to say how all of this will play out over the coming months. Historically speaking, the real estate market tends to decelerate through the fall months and into the winter. And it typically warms back up again in mid to late spring.
But we are experiencing some unusual market conditions right now. For instance, higher mortgage rates have made some sellers reluctant to list their properties, because they don’t want to give up their low rates. This has reduced inventory within the Seattle real estate market, which increases competition among buyers. But those higher rates have also priced some buyers out of the market.
So there’s a lot going on, and that makes it harder to speculate about future housing market trends. Even so, there’s a good chance the fall and winter of 2023 could bring more opportunities for home buyers in the Seattle area.
Whether you buy a home in spring, summer, fall or winter, the same advice applies:
Make a strong first offer. Even in a slower market, you’ll probably still be up against other buyers. So you might not get a second chance to submit your offer. Make it as strong as possible the first time around.
Cast your net far and wide. A seasonal slowdown in market activity can benefit Seattle-area home buyers in several ways. But it won’t alleviate the current inventory shortage we are experiencing. When house hunting, try to expand your search area as much as possible to increase your chance of finding a home.
Pack your patience. The fall and winter months might bring a more relaxed house-hunting experience, with less intense competition. Even so, it might take you several weeks to find a suitable property within your budget. Patience and persistence are a necessity for Seattle home buyers.