Tech layoffs, economic uncertainty and high mortgage rates continue to keep a lid on the Seattle-area housing market.
June marked a continuation of a sluggish year with more homeowners listing their properties for sale than a year ago, but many of those homes are lingering unsold and would-be homebuyers are hanging back, skittish about their budgets and job security.
Yet, even amid tepid demand, home prices continued to climb across much of the region in June, according to data the Northwest Multiple Listing Service released Thursday.
“The prices are kind of defying gravity,” said Windermere principal economist Jeff Tucker.
King County’s median single-family home price reached a record high of $1.034 million in June, a tick above the last high of $1.03 million in April and a 7% increase from June of last year.
Median prices climbed nearly 5% in Pierce County to a median of about $590,000 and almost 4% in Kitsap County to $600,000. Snohomish County was a bit of an outlier. The median single-family home sold for $815,000, down about 2% from last year. (Sale price data reflects deals that closed in June, which likely took place about a month earlier.)
Seattle home prices climbed fastest within King County. The median single-family home sold for nearly $1.1 million, up 13% from a year earlier, even as prices declined in most other areas of the county.
The median King County condo sold for $576,000, up 4% from last year. Condos include homes in multifamily buildings as well as some small backyard homes that resemble single-family houses but are sold as condos.
Buyer demand has leveled off in recent years but continues to lag prepandemic levels.
In the first half of this year, King County homebuyers closed deals on 29% fewer sales than in 2019 and 40% fewer than at the market’s peak in 2021. Compared to last year, though, sales in the first half of the year dipped just 2%.
Rising prices alongside lagging demand feels counterintuitive, and it’s hard to be certain about various factors at play.
The trend could reflect sellers who don’t feel much pressure to sell at a lower price and are willing to stick to their guns on their ideal price, Tucker said. Many homeowners are sitting on rock-bottom mortgage rates secured early in the pandemic, lessening the incentive to move quickly.
Brokers also note that demand for single-family homes is steadily stronger than demand for condos and town homes, helping keep those prices high.
Seattle-area home prices could eventually soften a bit, though, as a slower summer season arrives and as the supply of homes for sale continues to climb.
The number of active single-family home listings in King County last month soared 50% from a year earlier. Inventory also climbed in Snohomish, Pierce and Kitsap counties.
The number of homes for sale is climbing all over the country, but the Seattle area stands out with among the most significant rebounds, according to a nationwide analysis from Realtor.com.
The Seattle area, including Tacoma and Bellevue, had 61% more homes for sale in May than the region averaged between 2017 and 2019, the third highest increase among major metro areas.
That means buyers have more to choose from. For sellers, “The days where you could put up a sign and get lots of offers are perhaps paused for now,” said Seattle Coldwell Banker Bain agent Ken Graff.
Would-be buyers hold back for various reasons.
For many, the prices have simply soared out of reach, especially as mortgage rates average nearly 7%. Meanwhile, the tech workers who dominate Seattle’s housing market may be able to afford today’s high costs but worry about their job security. And for some, broader uncertainty about the economy looms large.
“When headlines are scary, the market pauses,” Graff said.
Layoffs and the rapid advance of AI have tech workers nervous about home buying, said Urban Living agent Matt Goyer. “These people who would normally be buying the $2 million to $5 million homes — all of a sudden they’re super skittish.”
For many others, though, the high cost of housing is the primary barrier
“The way homes are priced in this region really locks out large swaths of households,” said Tucker, the economist. “Large sectors of the economy just don’t pay enough to afford to buy a house in this region.”
Among those still hoping to buy sometime soon, their appetite for homes can vary drastically. Some detached houses remain in high demand while town home and condo listings struggle to find buyers.
“You’re trying to sell the $1 million house around Green Lake? No problem, multiple offers. Trying to sell a $1 million town house? Yeah, sorry, you’re screwed,” Goyer said.
Those corners of the market with a glut of supply can offer a glimmer of hope for buyers able to bear the prices. Goyer recently worked with a buyer who wanted to offer a price he worried was “insultingly low” for a town home on the market. To his surprise, the seller took it.
In that segment of the local housing market, buyers find the upper hand.
“One seller won’t negotiate?” Goyer said. “Fine, go to the next seller.”
