|There is an old saying in real estate: location, location, location. A property’s location has the biggest influence on its value. Through the pandemic years, we saw changes to this idea due to the ability to work at home. Before remote working became more common, homes located in neighborhoods close to job centers, such as Seattle, were at a premium. They still are, but with more people working from home, there was a huge rush to suburban and even rural locations which quickly increased home values in those neighborhoods. Couple this re-organization of our communities with the lowest interest rates in history and you have an incredible run-up in prices over a two-year period.
In Snohomish County, in April 2020, the median price was $520,000 and in April 2022 the median price was $830,000 – this is a 60% increase in 2 years! In King County, in April 2020, the median price was $720,000 and in April 2022 the median price was $995,000 – this is a 38% increase in 2 years! In contrast, historically annual price appreciation is closer to 3-5%.
Higher interest rates, WFH finding its balance, and inflation have created the shift we are experiencing in the market. While it might give some an uneasy feeling, it is in truth a good thing. The price growth that we saw from 2020 to 2022 was not sustainable and returning to historical appreciation norms will put us back in a healthy balance.
Prices and Equity
Helpful info for buyers
Some neighborhoods are still in a seller’s market environment, and some are in balance, it depends! A seller’s market is considered 0-2 months of inventory, a balanced market is 2-4 months and a buyer’s market is 4+ months. Additionally, some neighborhoods’ market conditions vary by price point, so it is important to take a forensic approach to the analysis of each location from a macro to a micro perspective. For example, in southwest Snohomish County between $700,000-$800,000 it is still a seller’s market; but from $800,000-$900,000 it is a balanced market.
In King County, days on market for homes that sold in June for over list price was 5 days, which accounts for 50% of the sales with an average escalation of 6%. Conversely, 30% of sales in June sold under list price or took a price reduction and averaged 13 days on market and 27 days on market respectively.
As we head into the dog days of summer, I am digging deep into the data on this new market and taking inventory of the opportunities it provides for both sellers and buyers. If you are curious about the value of your home in today’s market or are considering a purchase, please reach out. No pressure and no obligation. I’m happy to simply chat about how these changes may affect your long-term goals and I am dedicated to providing you with information that helps you make the most informed decisions for your future.
July 20, 2022
Understanding the real estate market shift: Location is key!
by Cori Whitaker