Seattle-area home prices pick up as spring market inches closer

Seattle-area home prices continued to pick up in February as the market approached the busy spring season and shoppers vied for a limited supply of homes for sale.

The number of pending sales and closed sales, as well as the median price of homes, climbed in most Seattle-area counties from January to February, according to data the Northwest Multiple Listing Service released Tuesday.

Some of last month’s uptick reflects seasonality: The market typically picks up after the start of a new year. But local real estate brokers say the activity also reflects a slight dip in mortgage rates earlier this year that drew some home shoppers back to the market. 

Hoping mortgage rates could dip further this year, some buyers entered 2024 “ready to go,” said Seattle RE/MAX agent Sandy Walsh. “That set off a little bit of a rush to get out there.”

Median home prices ticked up 8% in King County from January to February. Pierce and Snohomish counties saw smaller 2%-3% upticks, and Kitsap County recorded a 5.5% dip.

Buyers across the region continue to face higher prices compared to a year ago.

The median King County home sold for $914,500 in February, up 14% from a year earlier. Median homes sold for about $751,000 in Snohomish County, up 9%; $550,000 in Pierce County, up 4%; and $519,500 in Kitsap County, up 4%. (Median means half sold for more and half for less. Prices reflect closed sales, which likely took place about a month earlier.)

In King County, the largest year-over-year jump in single-family home prices was in the southwestern part of the county, including Burien and Federal Way, where the median home price of $678,500 was up 16% from a year ago. The median single-family home in Seattle sold for about $927,000, up 12%.

Condo prices are also climbing. The median Seattle condo sold for $558,000, up 8% from last year, and on the Eastside, the median condo sold for $665,000, up 23%. Seattle condo data includes condos in multifamily buildings and an increasing number of backyard cottages sold as condos.

While buyers were less interested in condos early in the pandemic, in part because of uncertainty about how the virus spread, “people are interested in them again because now we know the [COVID] situation and…it can be a very affordable way to get into homeownership,” Walsh said.

Home shoppers received a bit of welcome news in February: More for-sale homes hit the market. King County sellers listed nearly 1,850 single-family homes for sale last month, a 38% jump from January and 31% higher than the same time last year. 

Still, fewer homes are hitting the market than during the height of the recent housing frenzy. New listings in King County are roughly in line with the years leading up to the pandemic, but fall short of the 2,100-plus listings that hit the market each February between 2020 and 2022.

Rather than listing their homes for sale, many homeowners continue to hold onto their properties and the super-low interest rates they secured in recent years. Mortgage rates started climbing sharply in 2022, eventually increasing from the 3%-4% range to a high of nearly 8% in the fall of 2023. 

Rates then dipped around the start of the new year. In recent weeks, rates have ticked up again, averaging about 7% in late February. 

“Although seller reluctance has continued to stifle inventory levels, year-over-year inventory levels have improved slightly,” Mason Virant, associate director of the Washington Center for Real Estate Research at the University of Washington, said in a news release.

At current levels of demand, it would take about five weeks to sell through the single-family homes for sale in King County. That’s more breathing room than buyers had several years ago, but still short of the four to six months brokers consider a balanced market.

The limited supply of homes is one factor that has contributed to “pent-up demand,” said Seattle Windermere agent Cassie Walker Johnson.

A four-bedroom Craftsman Walker Johnson’s office recently listed in Seattle’s Bryant neighborhood received seven offers, all willing to pay above the home’s asking price of $1 million. The house sold in February for nearly $1.17 million. Another in Issaquah drew five offers and is poised to close for more than its list price, she said.

“We’ve definitely seen some big shifts just between January and February,” Walker Johnson said.

In Kirkland, RE/MAX agent Walsh listed a three-bedroom rambler that she said drew 43 offers. The home sold for nearly 30% above its list price. 

While that’s an extreme outlier, bidding wars with a handful of offers are relatively common, Walsh said. “We are eating up the inventory faster than we’re creating it.”

To cope with high costs, buyers are selling stocks and making higher down payments, Walker Johnson said. And brokers say fewer buyers are able to hold onto contingencies, such as the ability to do their own inspection after making an offer. 

As costs remain high, Walker Johnson offered some advice for buyers: Decide on your firm maximum budget and stick to it — even when you start finding yourself emotionally drawn to homes. 

While some homebuyers count on being able to refinance to a lower interest rate later, “the reality is that we don’t know what that’s going to look like,” she said. “Look at what you can afford today realistically.”