SEATTLE/BELLEVUE REAL ESTATE MARKET UPDATE - OCTOBER, 2022
It is October. So it's officially time for another market update here in the Pacific Northwest. The leaves are changing colors. It's becoming more and more beautiful. The weather is cooling, as is the housing market. So today we're going to talk about just like we do every month at a very high level. What is it that I'm seeing out day in, day out in real estate?
If you want specifics or data, reach out to me. I'd be happy to provide that if you're currently in the market looking to purchase a home. It is challenging and I do feel your pain. It seems like the buyers out there have not gotten a break because while the market was hot, it was crazy competition and it was almost impossible for you to get into and wait at home.
Now things have slowed down. You do have more options, but the interest rates have skyrocketed. And for those of you that are looking I know you are talking to your lender and you truly understand what difference an industry can make in your monthly payment. For those of you that are not, I just want to give you a quick example so you get the point of reference and the reference for the pain.
So there was an article in Bloomberg that at a high level said, let's assume you have a 20 $500 a month budget for housing. And so this example excludes your taxes and insurance. So your payment would be a little more. And it also assumes a 20% down, 30 year fixed mortgage. But if those under those conditions for 20 $500 a month at a 3% interest rate, you could purchase a home that's up to $758,000.
And as the rate has gone up to 7%, what we basically are today, your budget is now only $476,000. So there's literally about $300,000 less of a home that you could purchase. And here in the Pacific Northwest, especially in King County, there is not much that you could find to purchase for under $500,000. So a lot of buyers are feeling that pain, especially the first time homebuyers who maybe don't have a chunk of equity to roll in from their previous home.
They're having a very, very hard time. And as a result, number of transactions is coming down. There was just an article yesterday in the Seattle Times that talked about and mentioned that in King County, the prices have dropped by 12.4% since spring. However, the rates and the payments have increased substantially faster. Right. So as a result, a lot of the buyers are simply holding off.
With that said, even though it is challenging and more expensive, there are some opportunities and deals to be had out there. And I keep telling everybody, if if you're looking to buy for investment purposes or because you want to get rich off the equity, it's a weird time, right? None of us have a crystal ball. We don't know where things are going to go.
So make the decision that's right for you. However, if you're looking to purchase because of your lifestyle and if you can afford the payment and you know what, and you find a home that checks all the boxes, there are truly some opportunities out there. And for example, I currently have under contract, I have a buyer and we are now purchasing a home over in Coronation.
It's a beautiful acreage property. It was originally listed for $2.8 million few months ago is sat on the market it's a properties impeccable but clearly the sellers were a little too overly optimistic when they went live at 2.8. So they had a multiple price reductions and the most recent asking price was $2,250,000. And we negotiated, went back and forth and now we're under contract for 2 million and $100,000.
So there's a $700,000 discount that he's receiving from the original asking price. So if you're looking and there's the properties that you find that check all the boxes, but the asking price is a little too high or more than you want to spend. Asking price does not mean purchase price in today's market. Right. And every seller is different.
Every seller's motivations are different. So some of them might stick to their guns ending in the heels and you might not come to terms. Some others maybe have already moved out to a different state or whatever, and they want to move on to the next chapter and they are highly motivated to sell and this also actually ties into eye track just to see the trends in real estate, what's happened in King County, residential, single family homes week over week, and the trend that we're seeing is that the number of listings is about consistent since early July or so, week over week.
So so for example, over the last seven days, we had 501 new listings come on the market. Yet the more significant number is that we had 577 price reductions of existing inventory that's already out there. So and that's a consistent trend week over week, over the last few months that I've been tracking, the number of price changes or price reductions, many cases outpaces the number of new listings.
So what this tells us is that basically many sellers come on the market way too high. They're ambitious, and then they don't get their asking price and they walk the price down. And then eventually the home sells, which is an indication of more of a balanced market, which is where we are today. If you're selling a home, my recommendation doesn't change much from last few of these videos that I've done right.
It is more important than ever to make sure that your home stands out and showcases beautifully again. You got more new listings, more homes on the market, and you're competing for fewer buyers. So as a result, if you don't stand out, your house is going to get overlooked and another house is going to sell. Also, I think it's very important we just talked about how every seller has different motivations.
Right. So ultimately it's your house, it's your decision, what you want to list a house for. But what we are seeing is that homes are price correctly, still tend to sell quickly and get good offers. In many cases multiple offers. However, homes that get priced too high end up sitting on the market. They go price reduction after price reduction after price reduction.
And then ultimately some buyer ends up getting a deal. So depending where you are and what's your motivation for selling if you're motivated to sell? My recommendation would be to listen to your broker at work closely understand what's happening in the market today versus where we were a few months ago. And price your home equity. So at a high level, that's what's going on in the real estate market.
And we're now heading into the second part of October and then November and December and we do expect things to slow down even a little bit more. Right. And historically, there's always been seasonal trends to real estate. Over the last few years. They've been nonexistent because the housing market was on fire year round, because we had such little inventory and a lot of pent up demand.
However, things now are more balanced. There will still be people looking to sell and they'll still be people looking to buy. That doesn't change, but things will be a little slow. So if you have any questions about anything we talked about, or more importantly, if you want any specific information that pertains to your neighborhood or your situation or whatever the case may be, please feel free to reach out to me any time.
And if you got value out of this video, please be sure to like and subscribe below and I'll catch you next month.