Seattle’s ‘strong, chaotic’ housing market saw record-breaking price increases in May

Seattle’s intensely competitive housing market continued to see record-breaking growth in May, and the summer season is looking to be just as hot as low inventory in the region persists.

A new report from the Northwest Multiple Listing Service found median sale prices for homes in the region soared 30% compared to a year ago, a new record high. In King County, the median home sale price hit $775,000 in May, up 23% from the same time last year. In Snohomish County, median prices hit $655,000, increasing nearly 35% year over year.

“Everything is about breaking records this past year with record-breaking housing prices, record-breaking low inventory, and record-breaking consumer savings rates during the pandemic,” remarked Meredith Hansen, owner/designated broker at Keller Williams Greater Seattle. “All this equals a very strong, chaotic market that may not slow down for the next year.”

Despite hopes in April that homebuyers could be getting some relief with more homes added to the market and moderating prices, listings remain lower than expected in May. The report found that active listings from April to May declined for the first time in 20 years, down 4,824 listings — or 46% — compared to last year.

“Last month’s listings came in lower than we would normally see due to the month starting on a Saturday and ending with a holiday weekend,” noted J. Lennox Scott, chairman and CEO at John L. Scott Real Estate. “New resale listings typically go on the market on Wednesday, Thursday or Friday. In today’s instant-response market, new listings often go pending over the weekend or early the next week.”

And the day of the week a home is listed does have significance for buyers and sellers: last week, a market-report from Zillow found that homes in Seattle sell the fastest when listed on a Thursday, moving from for sale to pending sale in just six days.

Homes are also selling for well over asking price, reflecting possible bidding wars driven by competition. NWMLS found residential homes in the Puget Sound region — comprising of King, Snohomish, Kitsap and Pierce counties — sold for 108.6% over the asking price. And that high demand is expected to continue into the summer.

“Frenzy-level buyer demand has not waned,” Scott said. “The local market is still virtually sold out in the more affordable and mid-price ranges, as well as into the luxury ranges in some areas.”

However, there are some bright spots as the region recovers from the pandemic: Seattle’s market for condominiums is finally stabilizing. The NWMLS report found condo inventory in May was down nearly 36% from a year ago while pending sales shot up 83.7%.

Windermere Chief Economist Matthew Gardner noted that many condo owners decided to sell amid the height of the COVID-19 pandemic and more out of the urban downtown core, leading to high inventory and lower demand. Some downtown properties even began offering price reductions to attract new buyers, giving them the upper hand.

“The good news is the Seattle condo market has settled back down with inventory dropping and sales rising. Because of the shift in this market there was a price reset, but this appears to be luring buyers who previously thought they could not afford to buy downtown, leading to more balance between supply and demand,” Gardner said.