Spring housing market brings more picks for buyers, yet little relief

An increase in homes for sale across the Seattle area offered more choices to shoppers last month but brought little relief for the many buyers struggling with high costs and a still-tight market.

New single-family home listings climbed by 17% from February to March in King County and even more in some outlying areas, according to new data the Northwest Multiple Listing Service released Wednesday. New condo listings jumped 22% in King County, with the largest number of new condos hitting the market in one month since summer 2022.

Weary home shoppers may welcome that influx. Along with a typical spring pickup in home listings, Seattle is seeing an increase in newly constructed town homes hitting the market, some just finished and others that didn’t sell last fall, said John. L. Scott agent Kimberly Shaeffer. “All of a sudden, we have this really large influx of new-construction town homes,” she said.

Despite this increase, the overall supply of homes for sale remains slim compared to the market’s recent high years. The number of single-family homes newly listed for sale in King County last month was the lowest level for March in at least seven years. 

Stubbornly high interest rates are keeping many homeowners who scored low rates during the pandemic from listing their properties for sale. Mortgage rates averaged nearly 7% in late March, a bit lower than the peak last fall but still high enough to squeeze many people trying to afford a home and keep homeowners on the sidelines.

Without a bigger influx of homes for sale, the market is tightening as home shoppers emerge for the usual spring rush. At current levels of demand, it would take about a month to sell all the single-family homes for sale in King County, the shortest period in nearly two years.

Meanwhile, home prices are holding steady across the Puget Sound region, with a small uptick from February to March, and substantial increases compared to a year ago. 

In King County, the median sale price in March was $945,500, 13% higher than in March 2023. The median single-family home sold for $760,000 in Snohomish County, up 5% from a year ago; $550,000 in Pierce County, up 5%; and about $535,000 in Kitsap County, up 3%.

The median Seattle home sold for $925,000, up 6% year-over-year, and the median home on the Eastside sold for $1.7 million, up 19%. Home prices also climbed about 7% in South King County and 11% in North King County.

Last month, two Seattle-area cities — Snoqualmie and Bothell — last month joined Zillow’s list of “million dollar cities,” where the typical home is worth $1 million or more.

Condo prices were a bit more volatile: In King County, the median condo price in March, $540,000, was down slightly from a month earlier after jumping 11% from January to February. In Seattle, where condos include those in multifamily buildings and some accessory dwelling units that resemble small single-family homes, the median condo sold for $587,500. 

Still, some anxious buyers are enduring bidding wars and paying well over the list price for homes throughout the region.

In the first few months of this year, buyers “wanted to take advantage of getting in earlier,” said Jen Cameron, an agent with The Agency in Kirkland. “They thought, ‘Well, once [mortgage] rates come down even further, the market is going to be flooded, so I would rather take my shot.‘”

The number of pending single-family home sales picked up across the region in March, eclipsing last year in most areas. Pierce County is a bit of an outlier in the region, with sales volume still 12% lower than a year ago.

Between high mortgage rates and high home prices, today’s market continues to shut out many potential buyers and keep would-be sellers from letting go of their homes. Across the U.S. between 2000 and 2022, a homebuyer upgrading to a 25% more expensive house would have needed to boost their monthly payment by about 40%. Now, that same upgrade would more than double the buyer’s monthly payment, according to a national mortgage data tracker. 

To lower their monthly costs, some buyers are putting more money down — a tough prospect for middle-class and first-time homebuyers. The median down payment in the Seattle area in February was about $165,000, up 31% from a year earlier, according to Redfin. And nearly a quarter of home purchases were all cash.

“The developers and dirt buyers are back out in full force,” said Shaeffer, with John L. Scott in Seattle. More affordable homes are drawing cash buyers, she said, who “are back out there kind of swooping in and pushing out the first-time homebuyers.”