Seattle, Washington was a sellers’ real estate market in 2016, and will probably remain that way through 2017 as well. And possibly beyond. The reason? Low housing inventory.
Low Supply Makes Seattle a Sellers’ Market in 2017
Home prices in the Seattle area are expected to rise more slowly in 2017 than they did last year. Zillow, for instance, has predicted a gain of 4.7% over the next 12 months (through January 2018), compared to an 11.3% increase during 2016. This is good news. The superheated Seattle real estate market could use a bit of cooling.
But that doesn’t mean the market is shifting from sellers to buyers. On the contrary, the strong Seattle sellers’ market we saw last year could continue throughout 2017. This is largely due to a significant imbalance between local housing supply and demand. In short, there just aren’t enough homes on the market to meet the current level of demand.
Let’s look at the numbers. A widely accepted definition of a “balanced” real estate market is one that has about six months worth of supply. In other words, it would take six months to sell all of the homes currently listed. Some experts put the “balance” at seven months, but we’re splitting hairs here.
According to multiple sources, King County and Seattle both have less than a one-month supply of homes at the start of 2017. So Seattle is a strong sellers’ market at the moment, and it will probably remain that way for the foreseeable future.
Earlier this month, the Northwest Multiple Listing Service (NWMLS) published a report that included housing supply statistics for their entire service area. They singled out King County, Washington as having one of the lowest levels of supply.
As the reported stated: “The volume of new [real estate] listings surpassed the year-ago figure of 4,041, but supply still fell, dropping to only 1.4 months for the Northwest MLS market area covering 23 counties. Both King and Snohomish counties reported less than a month of inventory.”
So yes, Seattle is a sellers’ market in 2017.
Realtor.com: Seattle Has the ‘Biggest Housing Shortage’ in the U.S.
In 2016, housing inventory shortages were a big deal in many cities across the U.S., and some markets are still constrained.
The economists at Realtor.com studied this issue closely and published a report listing ten cities with the “biggest housing shortages” heading into 2017. Seattle topped the list.
According to Jonathan Smoke, chief economist for Realtor.com, only one in every 263 homes you see in Seattle is for sale. That’s one of the lowest levels of any city in the country.
According to the report:
“While the tech economy is relatively new, the housing shortage is not. Around 65% of Seattle’s land is zoned only for single-family homes … blocking developers from building high-density apartment buildings in most of the city. And then there’s the foreign investors, who have snapped up much of whatever paltry inventory has existed.”
This is partly why Seattle will remain a sellers’ real estate market during 2017, and possibly beyond. It’s a great place to live, and this draws people into the area. But there’s currently not enough housing to meet the demand.
Home Buyers: Here’s How You Can Succeed
The inventory situation in Seattle’s housing market is forcing home buyers to compete fiercely, especially for desirable properties in hot neighborhoods. If you’re planning to buy a home in the Seattle metro area in 2017, you’ll want to bring your ‘A’ game.
Fortunately, Sammamish Mortgage has created a wealth of resources to help you succeed. We’ve written the book on buying a home in Seattle — literally — and you can download a copy for free. It’s a 66-page e-book chock full of helpful home buying tips.
In addition to the book, we’ve also created a number of online tutorials to help you succeed in the 2017 Seattle sellers’ market. Here is some “required reading” to start with:
- The #1 Seattle housing-hunting tip
- Survival guide for Seattle home buyers
- How to buy in a tight sellers’ market
We can also help you prepare for the market by pre-approving you for a mortgage loan. Unless you’re paying cash for a house, you can bet the sellers will want to see a pre-approval letter from a mortgage lender. (And you probably would too, if the shoe were on the other foot.)
Getting pre-approved before shopping for a home makes a lot of sense, especially in a sellers’ real estate market like Seattle. Contact us to get started.