For as long as Jim Pullin has been a Realtor in Seattle, the Pacific Northwest city has always been a popular moving destination.
But the past three years — and 2020, specifically — have been something else.
“I started as an agent up here in 2009, and I’ve been saying since then the only thing that would slow down the market would be some sort of national or international event,” said Pullin, a managing broker at Skyline Properties. “But a year ago, COVID-19 hit us, and we got even hotter.”
Home prices, he said, have always been high. But when inventory dropped to a third of its normal amount, everything changed.
“Prices spiked through the roof,” Pullin said.
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As Pullin explained, a large number of residents in Seattle and the Puget Sound region work at high-paying jobs for companies like Google, Facebook, and Amazon, to name a few. Most of those workers saw their net worth increase in the past year, and they chose to invest much of that new money into real estate.
That’s why, per Realtor.com, the average asking price for a home in Seattle is around $750,000 — up 3.4%, year over year — or $525 per square foot. The median sale price is even higher, at $795,000.
“February prices went up 18% month over month, March prices went up 20% month over month, and even April was up 12% month over month,” Pullin said. “That’s incredibly strong appreciation. The number of days on the market before an offer is accepted is usually six days, and everyone knows it’s going to sell above market value.”
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.
Interestingly, Seattle (and Tacoma, Washington) agents were found to make the 107th-lowest number of sales per year. But when agents are making five-figure commissions, the quantity doesn’t matter as much, Cressey said.
“I used to live in North Carolina, and you would get $3,000 for a sale you would get $15,000 for in Seattle,” she said. “It’s very competitive, and more agents are entering the field now. A lot of people looked at the pandemic as a time to get their real estate license.”
As is true in most of the country, 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 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.”