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Summary: Are you planning to buy a home in Seattle? If so, you’ll want to know the temperature of the market first. According to certain indicators, it seems that Seattle will remain a seller’s market in 2020. This article will explain why.
Seattle, Washington has been a seller’s real estate market for the last couple of years, and the scales will probably stay tilted in that direction during 2020. This is the result of strong demand from buyers and a limited inventory of homes for sale.
Seattle Still a Seller’s Market in 2020?
It should come as no surprise to anyone who lives in Seattle that the local real estate market currently favors sellers or buyers. This has been the number-one real estate news story of the last couple of years, generating a slew of headlines and media coverage.
Related: Tips for Seattle home buyers
But what about 2020? Will Seattle continue to be a seller’s market this year? Based on current conditions, the answer is a resounding yes.
Exhibit ‘A’ — The Supply Situation
Let’s start with the supply situation. According to housing experts and economists, a balanced real estate market has somewhere around five months worth of supply. When inventory levels drop far below this level, the market tends to favor sellers over buyers.
As of January 2020, Seattle had just over a one-month supply of homes for sale. So the market is still very constrained, from an inventory perspective. This is true for many cities across the country. In fact, the national average was around three months worth of supply in January. And even that is below what’s considered to be a balanced market.
But few cities can rival Seattle in this department. The city currently has one of the lowest levels of housing supply of any city in the country. That’s one of the reasons why Seattle will remain a seller’s market in 2020. There just aren’t enough homes listed for sale to satisfy the current level of demand.
Exhibit ‘B’ — The Demand Situation
And speaking of demand, homes across the Seattle metro area are selling quickly and often above the original asking price.
Real estate analysts use the “median days on market” measurement to get a sense of how quickly homes are selling in a particular area. More than half of new listings go pending in the first 30 days that they are on the market. This is yet another indicator that Seattle is still a seller’s market.
Demand for homes remains strong across the metro area, with a boost from tech workers.
According to John Deeley, chairman of the Northwest Multiple Listing Service:
“The Seattle [housing] market is inundated with technology workers, both newly relocated and those that have been renting and are ready to set down roots.”
Prices Expected to Start Rising Again
For about a year-and-a-half from mid-2018 to late 2019, home prices in Seattle actually decreased. Some might say that this price cooling was bound to happen after the few years of double-digit gains that we saw in prices in Seattle. More specifically, home prices dropped 2.3% over the past 12 months. But they are expected to make a comeback of sorts in 2020.
As of January 2020, the average price for a home in Seattle is $741,800. According to Zillow, home prices in Seattle are expected to rise 4.2% over the next 12 months.
That’s one of the reasons why Seattle got higher loan limits for 2020.
Here’s the bottom line to all of this. Due to the high level of demand and severely low inventory, Seattle will likely remain a seller’s market through much or all of 2020.
Not long ago, we created a survival guide for home buyers who were planning to enter the Seattle real estate market. That guide is still very relevant to current market conditions, so it is well worth a read.
Ready to Apply For a Mortgage in Seattle?
Whether it’s a buyer’s or seller’s market, teaming up with the experts in real estate and mortgages can help you get a great deal and secure the right mortgage for you. At Sammamish Mortgage, we offer many mortgage programs for borrowers across the Pacific Northwest, including Washington, Oregon, Idaho, and Colorado. We’d love to help. Get in touch with Sammamish Mortgage today to get started.