Washington’s King County real estate market is currently experiencing seasonal growth. In May, both the median home price and home sales in King County have seen significant increases.
According to the latest market reports from Redfin, a Seattle-based internet real estate brokerage, Zillow, a company providing free real estate valuation services, and Northwest Multiple Listing Service (NWMLS), the median home price in King County reached $1 million in May, setting a new record high, even as the rising mortgage rates continue to keep many potential homebuyers on the sidelines.
However, the rate of increase in home prices in King County is slower compared to the peak of the housing market driven by the pandemic. Statistics show that the closest the median home price in King County came to $1 million was in April 2022, when mortgage rates began to rise.
In May, the median price for single-family detached homes in King County was slightly over $1 million, a 10% increase from the same period last year. Observations from local real estate companies indicate that this surge seems to be driven by the Eastside, where the median home price is $1.7 million, up by 17%. Meanwhile, the median home price in the city of Seattle is $965,000, a modest 7% increase.
The median price of condos in King County also climbed to $595,000 in May, an 18% increase from the same period last year. Accessory Dwelling Units (ADUs), which are residential units similar to small detached houses and fall under condos, are also sold based on condo prices.
Zillow’s senior economist Orphe Divounguy noted that while the number of people moving to Seattle is decreasing, the city, along with other expensive West Coast markets, continues to attract individuals for high-paying tech jobs. “When there are factors stimulating demand and suppressing supply, home prices will rise,” said Divounguy.
However, high home prices and mortgage rates are making it difficult for some potential buyers to break free from the housing affordability crisis.
Steven Bourassa, director of the Washington Real Estate Research Center, stated that as of the end of May 2024, the 30-year fixed mortgage rate stands at 7.03%, limiting the purchasing power of potential buyers compared to a few years ago.
Data from Redfin shows that at the current rates, a buyer with a 20% down payment purchasing a median-priced home in King County would face monthly mortgage payments of $5,800, a 10% increase from a year ago.
Zillow’s estimation of monthly payments differs, with their analysis indicating that for buying a standard mid-tier home in the area with a 20% down payment, buyers would face monthly mortgage payments of $4,000, a 13% increase from a year ago, more than double pre-pandemic levels.
While some people struggle to enter the market, others are still trying. Heidi Hurst, a broker at Windermere Abode real estate agency in Tacoma, Washington, noted that many buyers and sellers in the housing market are facing job changes or other reasons necessitating relocation. “We are in a market of necessity, not desire,” Hurst commented.
According to data from NWMLS, the number of new listings for sale in May exceeded the same period last year, especially in King County. There, the number of new listings for detached single-family homes grew by 35%, while the listings for condos increased by 40%. By the end of May, there were a total of 117,660 homes and condos for sale in the King County market, a 45% increase from May 2023 when there were 81,060 listings.
Steven Bourassa, the director of the Washington Real Estate Research Center, noted that the increase in inventory “should have an impact on stabilizing price levels over the coming summer months.”
Pending home sales in King County for May increased by 2.5% compared to the same period last year, while completed home sales saw a 19% increase, with 59,190 detached homes and 17,610 condos sold. The increase in home transactions is partly attributed to the surge in available housing stock in King County.
Buyer activity in viewing homes was also vigorous in May. From April to May this year, property showings arranged through NWMLS software increased by 5%, reaching 128,924 showings. The key boxes for viewing listed homes were activated 163,414 times in May, a 7% increase from April.
As sellers re-enter the market, some are pricing their homes too high for the current market. According to Zillow’s data, although many homes sell quickly, nearly a quarter of listed homes in May sold below their listing price.