Market Summary
Rates have unfortunately been creeping higher throughout the month of February putting a significant strain on purchasing power for new home shoppers. Jumbo mortgage rates at the end of January were sitting in the high 5 and sub 6% range and have crept up over a full point to around 7% on average for buyers with 20% down payment and a credit score over 725.
Overall Home Sales Volumes
The total volume of Seattle homes sold a year ago during the month of February (2022) was 770 units, While February of 2023 (last month) we saw closed volume of 474 units sold city wide. This represents a 38% decline in sales volume year over year. Seattle prices have remained relatively strong, with the average price of a sold home for February 2022 coming in at $907,053 and an average cost per square foot of $593. Last month’s data, for year-over-year comparison, showed January of 2023 average sold prices climb to $854,861 with a cost per square foot of $536. Closed Sales This Month- New Construction Homes
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Median Sales Price This Month- New Construction Homes
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Alchemy Index
7
Index Overview
We’re pinning our Seattle real estate market index at 7 as of March 5, 2023. Average days on market are creeping down from 35 last month to 13 this month meaning transactions are happening faster despite the higher rates. Homes are selling for an average of 99% of asking prices (when that number was 96% just last month.) Builders are still discounting slightly to move inventory, but there is still tough competition and relatively low days on market for previously owned homes.
Market Outlook
We’re hearing that the next couple of months are going to bring fluctuating and frustrating mortgage rates. We’ll likely see rates fluctuate by 1 and a half points during this time - between 5.75% and 7.25% on average. We’ll see market buzz and activity when the rates drop, and we’ll see it slow down when rates rise. This is a good time to look for short term buy-downs like 2:1 buydowns to keep rates low in the short term until we see some better rates more consistently.
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