Reports Show Seattle Housing Market Inventory Dropping in 2023

July 7, 2023
Last updated:
July 7, 2023
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Ten months ago, we explained how Seattle housing market inventory levels had increased substantially, easing competition among local home buyers.

But much has changed since then. As of summer 2023, inventory levels within the Seattle metro area real estate market have declined sharply … again. Seattle Real Estate Inventory Down by -25%

At the end of June, published its latest housing market update with data for the nation’s largest 50 metro areas. This report showed that housing market inventory levels within the Seattle metro area declined over the past year.

According to the June 2023 report, the total number of active real estate listings within the Seattle-Tacoma-Bellevue metropolitan area declined by -25% over the past 12 months. New listings declined by -37% during that same timeframe. This means there are fewer homes listed for sale overall, and fewer new listings coming out of the market (compared to a year ago).

Inventory levels have declined in many housing markets across the country, over the past few months. This is partly due to a reluctance among would-be sellers to give up their current low mortgage rates, since today’s mortgage rates are significantly higher. These and other factors have caused housing market inventory levels to drop in many U.S. cities.

But the Seattle area real estate market has experienced even greater year-over-year declines than most parts of the country. For example, among the 50 U.S. metros included in the June report, Seattle had the second-biggest annual decline in new real estate listings. Only the Phoenix metro area surpassed it, with a whopping -47% drop in new listings.

Looking at It From Another Angle

For further evidence of this trend, we can look at Multiple Listing Service (MLS) data for the past couple of years. Toward the end of 2021, the Seattle area had about a 0.5-month supply of homes for sale. That was a record low and miles below what’s considered to be a balanced real estate market.

(You’re probably already familiar with COVID-related trends that depleted inventory levels nationwide, so we don’t need to revisit all of that.)

Housing supply started to rise during the second half of 2022, as the market cooled. This growth trend continued for several months. But at the start of 2023, another reversal occurred as Seattle real estate market supply began to drop again. It has been a real rollercoaster ride for the past few years.

When this article was published, in early July of 2023, the Seattle metro area was back down to about a one-month supply of homes for sale.

The overall pace of the Seattle-area real estate market, meanwhile, has increased since the start of this year. We can see this by examining several metrics, including the median number of “days on market.” This metric measures the typical length of time a home stays on the market before going under contract.

According to recent MLS data and other sources, the median number of days on market across the Seattle area has fallen sharply since January.

These two trends are connected. Usually, a sharp drop in the number of homes for sale will accelerate the market and lead to faster sales. That’s because there are more buyers competing for fewer properties. And that seems to be the case as of summer 2023.

What It Means for Buyers and Sellers

So, how does the recent decline in housing market inventory affect Seattle-area home buyers and sellers?

Let’s start with sellers. In many ways, the summer and fall of 2023 could be a great time to sell a home in the Seattle area. We just covered the main reason for this. Inventory levels within the local real estate market have declined over the past few months, increasing competition among buyers.

Granted, things aren’t as tight as they were at the start of 2022. But we’re still experiencing a shortage of homes for sale relative to demand.  A well-maintained home that’s reasonably priced would likely elicit multiple offers soon after hitting the market. That’s a best-case scenario from a seller’s perspective.

Seattle-area home buyers, on the other hand, have their work cut out for them. And this is nothing new. Our real estate market is known for having tight inventory conditions and fierce competition among buyers.

Here are some tips for buying a home in the Seattle area during the second half of 2023, when low inventory could present a challenge:

  • Get pre-approved for a mortgage. This will show sellers that you are a serious buyer and that you have the financial means to purchase a home.
  • Work with a real estate agent. A good agent will know the market inside and out and can help you find the right home for your needs.
  • Be prepared to act quickly. Homes in a tight market tend to sell quickly, so you need to be ready to make an offer as soon as you find a home you like.
  • Be flexible with your criteria. If you are too rigid in your search criteria, you may miss out on a great home. Be willing to compromise on things like location, size, or amenities.
  • Be prepared to negotiate. The seller may not accept your first offer, so be prepared to negotiate on price, terms, or other conditions.

Need mortgage financing? You can expedite the house-hunting process by arranging your finances ahead of time. And we can help! Sammamish Mortgage serves the entire Seattle metro area and the broader Pacific Northwest. We can pre-approve you for a loan to give you an added advantage in the market. Please contact our staff with any questions you have.

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