An astonishing 580 homes in the Seattle metro area have sold for $300,000 or more above their asking prices in 2021. That’s compared to only 16 homes during the same period in 2020.
And that’s just the high end, according to the latest analysis from Redfin.
The brokerage/listings portal said 4,078 homes in Seattle have sold for between $100,000 and $299,999 above asking price, compared with 362 last year. And more than 6,300 Seattle homes have sold for between $25,000 and $99,999 above asking price, up from about 2,000 during the same period last year.
“I’ve never seen anything like this housing market,” said Scott Petrich, a Seattle-area Redfin agent. “It’s fueled by employees of local tech companies like Amazon and Microsoft and companies with big offices in the area like Google and Facebook. A lot of them didn’t want to work remotely during the pandemic in small apartments, and that pushed them to seek out large homes with office spaces. Most of those people have the money to compete with other buyers and drive up prices.”
The median home-sale price in Seattle rose 26.1% year over year to a record $737,800 in May, partly because so many homes are being bid up above asking price, Petrich said. In May, 68% of Seattle-area homes sold above their asking price, up from 37.1% a year earlier.
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More than 74% of Redfin offers in the Seattle metro faced a bidding war, and the typical home sold in just five days, down from nine days a year ago.
After Seattle proper, five suburbs top the list of areas with the biggest increases in homes sold for at least $300,000 over list price — Bellevue, Redmond, Sammamish, Kirkland, and Issaquah. In the city of Seattle, 146 homes have sold for more than $300,000 over asking price so far this year, up from just eight during the same period last yea.
“I meet a lot of buyers dreaming of living over here because they see big homes listed at unrealistically low prices,” Petrich said. “But the reality is, people can’t get a home for the list price or even slightly over list price. Because buyers almost always have to pay way above the asking price to win a home, they should start their search with homes below their budget and make sure they have money in the bank to cover a low appraisal to make their offer stand out.”
Emily Cressey, a broker with HomeSmart in Seattle, lives on the north side of the city and said properties for sale are getting 20 to 30 offers each. Winning offers, she said, are usually 10% to 20% above asking price.
“People are putting up non-refundable earnest money of up to $50,000 on homes, and they’re even choosing to waive contingencies,” Cressey said. “That means if they lost their jobs, they would still be responsible for the earnest money. They’re even waiving appraisals. It’s just a crazy competitive market.”
A recent WalletHub study of 179 U.S. cities determined that Seattle is the top market for real estate agents to work in. In studying the cities, two factors were considered — job opportunity and competition, and real estate market health. Within those categories, each city was scored on a scale of 1 (the top score) to 179 (the lowest score) based on sales per agent, annual median wage for real-estate agents, housing-market health index, and more. Seattle scored a 1 and 43, respectively.
Builders in Seattle are struggling to finish projects due to the current astronomically high costs of lumber and other materials. A recent study from the National Association of Home Builders found that lumber prices are adding an average of nearly $36,000 to the cost of a new build.
“It seems like prices have gotten worse in the past four to six months, too,” said C.J. Christensen, president of Seattle design-build firm Estate Homes. “Trusses, any sort of beam or engineered lumber, those are getting harder and harder to come by. Even cabinets are increasing in prices.”
Christensen said it’s been tough, at times, having to quote someone a price and then come back with a higher one later.
“That’s just where we are right now, unfortunately,” he said. “We can’t absorb that kind of cash loss. If you want to build now, in this area, you have to pony up.”