This year has been a record, historic and at times quite disturbing year for real estate in Seattle. But what were the most significant trends of 2021, and what are they helping us to predict for 2022?

As the year ends as oddly as the last, real estate has once again broken records across the country. The pandemic is raging and in America the concept of working from home has shifted from a temporary measure to a permanent one for many workers. This trend has changed where, how – and perhaps most importantly, why – people buy homes in this country.

The combination of virus-linked home buying habits, a volatile stock market, low interest rates, a shortage (and inflated prices of) building materials, rising house prices , general inflation and a growing disparity in the distribution of wealth has been added. to a crazy, unprecedented year for real estate – and that includes the Seattle market a lot.

Prices


According to a study published by Seattle Redfin, the typical American home sold for almost $ 400,000, up 24.4% from 2020. In Seattle, the typical home sold for $ 725,000, a little less than 3% more than last year.

It may not sound like a lot, but remember that 2020 was the first year of the pandemic and the behavior of the real estate market has changed dramatically by then. To see the effect of the pandemic, which obviously still affects the market, comparisons to Seattle markets in 2019 and before are more illuminating – like the one published in the Seattle Times, based on the Case-Shiller Index.

This graph, based on the Case-Shiller index, better shows the remarkable gain in real estate values ​​since before the pandemic.

Seattle weather

The price increase since 2019 is quite spectacular.

Incidentally, this year has resulted in double-digit increases in some areas of Seattle: Norada Real Estate Investment’s year-end blog tells us that in “the map regions of Eastside and Southeast King County, prices have jumped by more than 26% compared to last year ”.

What drives prices up? And will they go down in 2022? To answer this, we need to consider other market indicators.

Inventory

Redfin reported that nationwide, “the housing supply fell to an all-time low – there were just 1.38 million homes for sale in June, down 23 % year on year “. All over the country, supply exceeds demand.

Consider that since 2010, Seattle’s population growth has increased by almost 19%, which, according to the U.S. Census, makes it the fastest growing city among the nation’s 50 largest cities.

Seattle's main coastal seaport.

Seattle’s main coastal seaport.

Soltan Frédéric / Getty Images, Getty Images

Add to this influx the factors of a technology market paying the 2nd highest salaries in the country. Market performance in Seattle has kept pace with its growing connection to big tech:

“Over the past 10 years, Amazon has more than tenfold in the city of Seattle, from approximately 4,000 employees in its hometown to over 45,000,” wrote Norada Real Estate Investments. “During the same period, the median price of homes in the city fell from $ 420,000 to $ 720,000, according to Northwest MLS.”

Big tech is a lot of money, and Seattle has fallen to second place, behind Silicon Valley, as a city for the tech industry.

Big tech is a lot of money, and Seattle has fallen to second place, behind Silicon Valley, as a city for the tech industry.

Kmatta / Getty Images, Getty Images

Days on the market

Redfin reported that a typical home in the United States sold in just 15 days, “the lowest median days on the market in history and down from 39 days in June 2020”. Over 60% of American homes were taken off the market within two weeks. In Seattle, that number was cut in half: the typical Seattle home sold in just seven days.

Bidding wars

The low number of days on the market correlates with a record number of overbidding offers this year. Why let a house dwell on MLS when someone offers you 20%, 30%, or 50% more than asking for your listings on day one? Indeed, data from Redfin shows that nationwide, more than half of homes were sold above the list price: “56.5% of homes were sold above the list price” in 2021, up 29.6% from 2020.

But what about Seattle? After the initial freeze the virus put on real estate in 2020, bidding wars escalated and by the end of this year, bidding was a common feature of home sales. This year the bidding wars escalated. In Seattle, 55.7% of homes sold for above asking price in 2021.

The luxury market

Luxury homes obviously command a hefty price tag, but the pandemic has put a premium on that existing premium. Because these homes include features such as huge spaces, offices, gymnasiums, residences / estates, large lots with exterior features like swimming pools and sports fields, and are often located on or near the waterfront sea ​​and / or open land, they can offer a sanctuary. And confinement can be quite pleasant in a sanctuary.

Redfin data shows that “the median selling price of luxury homes in the United States jumped 25.8% year over year to reach $ 1,025,000” nationally. In Seattle, the typical luxury home sold 12.58% more than the year before, and in that market the highest price of all went to the waterfront property. The selling price of luxury single-family homes in King County has increased by up to 50% since 2019, and the most expensive condo sales in 2021 had either waterfront or water views.

17 story "Big Wheel" at Pier 57, Seattle Waterfront, Seattle, WA, USA

17 story “Ferris Wheel” at Pier 57, Seattle Waterfront, Seattle, WA, USA

Stuart Westmorland / Getty Images, Getty Images

What’s new for 2022?

We expect the same in 2022. Unless the Fed raises mortgage rates significantly, unless supply suddenly exceeds demand, and of course, barring (another) unforeseen disaster, it is Seattle market is unlikely to cool down in the coming year.

Anna Marie Erwert writes from both the perspective of the tenant and the new buyer, having (finally) achieved both statuses. She focuses on national real estate trends, specializing in the San Francisco Bay Area and the Pacific Northwest. Follow Anna on Twitter: @AnnaMarieErwert.



Previous

VJD Cricket Method: Himachal Pradesh defeated Tamil Nadu to win first Vijay Hazare Trophy title

Next

Harvard Business School's Case Method Officially 100 Years

Check Also