2023 Year In Review

Christian: [0:03] Welcome to another episode of the Awesome in Seattle podcast. This is your host, Christian Awesome, of the Awesome Nossum Group at Wilson Realty Exchange, Inc. And first up, Happy New Year, everybody. Happy New Year. Thank you both of you- Happy New Year … for being here. Happy New Year. Today is one of my favorite episodes of the year, and we are doing a year in review. So what the heck happened in 2023? What does it mean? And stay tuned, in two weeks, our next episode is gonna be our 2024 real estate market predictions for the Seattle area. So that's my second favorite episode. They're both good. So we will not be giving you our predictions for this one, but we will be going over what the heck happened and what that means, and that'll kinda help you understand what is gonna happen in 2024. So- Let me introduce my lovely co-hosts. To my left, your right, I have Joanna Beecher-

Joanna: [0:55] Hello … Speaker: of the Awesome Nossum Group. Yes.

Christian: [0:57] And to my right, we have the wonderful mortgage expert, Dan Keller of New American Funding. What, well,

Dan: [1:02] what if I wanted to be lovely?

Christian: [1:03] Um, you could be lovely. Okay. She's lovely. Lovely, lovely or

Dan: [1:06] wonderful.

Christian: [1:07] You're lovely. You, yes. Yes. Yes. I love it. You could also be awesome.

Dan: [1:11] I think you own the awesome.

Christian: [1:12] Yeah, kind of.

Dan: [1:12] Kind of got that-

Christian: [1:13] Literally … trademarked. Literally. Yeah. Own. Yeah. All right, so let's dig into this. So overall, this was a pretty cold year for the housing market. High interest rates, thanks Dan, it's all your fault- Yep coupled with low inventory made for a lot fewer sales. Many buyers just couldn't afford to buy, and some of the buyers that could afford chose not to because of those high interest rates, and it just made affordability tough. So meanwhile, many sellers didn't want to give up their low interest rate, so they just decided not to sell, not to come on the market, because they were having a interest rate below 6% or 4% or wherever they were at. Some experts anticipated that with such high interest rates, prices would drop in 2023, and if you listen back to our 2023 predictions episode, you'll see that we brought that up as a potential. We didn't think that was actually gonna happen, and lo and behold, it didn't happen at all. Median sales price in Seattle for single family homes and condos for 2023 actually increased $10,000, which from 750 to $760,000 between January 2023 and December 2023. That's a whole whopping 1.3% increase in price- Mm … which honestly is exactly what you and I predicted. So if you listen back again to our 2023 real estate market predictions episode, I said somewhere between negative one and plus 1%. You went basically dead on 1%.

Joanna: [2:43] Nailed it.

Christian: [2:44] You were off by .3. Oh. I'm sorry. We were actually both wrong. But very, very, very close to what we- Yeah … anticipated. If you wanna listen to that again, it's just the 2023 real estate market year predictions. We experienced, i- interestingly, even though the market was pretty stable, we actually experienced kind of two different markets at times, where some homes were super competitive with multiple offers and it sold for over, while others were not competitive at all, and you were able to negotiate quite a bit. You helped nu- numerous people throughout the year, Joanna. Do you have a couple quick examples kind of showcasing that?

Joanna: [3:19] I do. Glad you asked.

Christian: [3:21] Yeah.

Joanna: [3:22] Well, first of all, I do wanna start by saying that both, I have an example of a competitive situation- Mm-hmm … and I have an example of a not competitive situation. Mm-hmm. And in both of those scenarios, I do wanna preface that by saying both of these buyers sets came to a beers and home buying class. And that is how they both felt very prepared to actually even go into the market- Yeah … in the first place. Yep. So-

Christian: [3:53] It's a great first step into- Absolutely understanding the market and what to expect, and how to buy a house.

Joanna: [3:57] Yep. And the first couple that I'm gonna talk about, Kaylin and Eric, they actually came to a home-buying class a long time ago. Mm. Mm. I say a long time ago. I guess a year ago about. And they did their strategy session after the class. Mm-hmm. And then they came up with their roadmap, and they followed that roadmap. And then they came back, and they were like, "We are ready to go," and boy, oh, boy, were they ready to go. It's so great once you feel that prepared after going to the class and then having your strategy session, and you feel super prepared. The way you can go about your home search and buying your home is just gonna make things so much easier. But on that note, they came back. They were raring and ready to go. Mm-hmm. They knew what they wanted, and basically, we found them a house that was competitive. Beautiful house. There were, at the time, I believe we g- we went up against six other offers. Now, prepped them, you know, by doing all of the good things that your realtor should be doing for you, is, you know, making sure they understood what they were getting into- Mm-hmm … as far as, like, how to even get an inspection through in a competitive situation, which doesn't always work.

Christian: [5:10] Yep.

Joanna: [5:10] But we did get one through.

Christian: [5:12] Nice.

Joanna: [5:12] Which is kind of shocking. Yeah. I'm just

Christian: [5:14] gonna say that. Really shocking, honestly, for a competitive situation.

Joanna: [5:16] Yes. Yeah. But we did. Um, but we also, we went up against some other people, like I said, but we won, I believe by just- Like, m- less than $2,000- Yep … we came in. A little bit higher. And the, just the way I was able to negotiate with the listing agent. It was a great experience that we somehow won that. Mm-hmm. I think a lot of it had to do with they were pre-underwritten.

Dan: [5:39] Yep.

Joanna: [5:39] I know for a fact that was one of the main reasons. Mm-hmm. So also very important to know. But yeah, it went off great. They're very happy in their new home, super excited about it still. So that was great. Definitely a success story. The next one I wanna talk about- Mm-hmm … is some home buyers that came to the class in November, and they-

Christian: [5:58] They

Joanna: [5:59] closed … they cruised through. They literally- Yeah … closed the first week of December.

Christian: [6:03] Yeah. They were- Which was insane. They were- The fastest I think we've ever had someone go- Yeah from, "I might wanna buy a house," to, "Oh, here's your keys."

Joanna: [6:11] Just finding out, like, they were more prepared than they thought. Yeah. And I think that's

Christian: [6:15] one of the most- Which happens more often than I think people realize. Like- It- yes … most, yeah, I think that happens a lot. Dan, I think you probably have experience with this too, where people come and they start talking to you about getting pre-approved and all that stuff, and they don't realize that they are way farther ahead than they thought.

Dan: [6:30] Yeah. I think the education fast-tracks that, right? Mm-hmm. Absolutely. The class, the strategy session. Then they're like, "Well, what's next?" I'm like-

Joanna: [6:36] Mm-hmm … Dan: Buy a house.

Christian: [6:37] Yeah. Yeah. That's it. It- you're ready.

Dan: [6:39] You're ready. Yeah, yeah.

Joanna: [6:40] And they actually did, like, they were speaking with you, Dan- Mm … and they were realizing some things between talking with you and- Yep looking at what's going on in the market, and touring with me, and then they realized, like, they were hopeful to find something that they could buy-

Christian: [6:56] Mm-hmm … Joanna: all in cash, which they ended up being able to do. Mm-hmm.

Joanna: [7:00] And it was great, but like- Mm … from beginning to end, working with us, it was just- Yeah … it was very quick, but that's because they were very devoted to the process. Mm-hmm. They nailed the process. Yep. And they did every step, and they, it was just great. The whole experience from my side, from their side, it was just, it was lovely. And- And

Christian: [7:21] what was interesting about them too is that they actually came to our first ever how to tour a house class. Mm-hmm. So we just started doing this. After our beers and home buying class, we offer both strategy sessions that are free, that's just a one-on-one with us and a lender to help you understand your budget, and then in addition to that, we also offer a class where we go and we look at a house that is currently for sale, and we teach you the red flags to look out for, a ton just about home ownership and, and fixing up houses and things like that.

Joanna: [7:53] Yeah.

Christian: [7:54] Totally free. They came to the first ever one of that.

Joanna: [7:56] Second one.

Christian: [7:57] Oh, was that the second?

Joanna: [7:58] Mm-hmm.

Christian: [7:58] Okay, so they came to the second one.

Joanna: [7:59] Mm-hmm.

Christian: [8:00] And the interesting thing is they hadn't done a strategy session yet. Nope. Which is normally the first step after a class. This was their first foray into home ownership, was looking at the house.

Joanna: [8:10] Yeah.

Christian: [8:10] So then they realized, "Oh, I guess we could do this." Then they did the strategy session, then they started shopping, and then they bought a house.

Joanna: [8:18] Yes. And they found a home that was not competitive, that had been on the market for a bit of time, and so we did, we got every single contingency- Mm-hmm … that makes sense through, and I'm glad we did. Mm-hmm. But it was also great. Like I said, it closed very quickly. It is, you know, when you have cash-

Christian: [8:37] You can

Joanna: [8:37] do it … in the works, you can do that. Yeah. So also- But you

Christian: [8:39] also did a great job negotiating. Like, you got it below the asking price, and we got stuff- And we got- … from the inspection.

Joanna: [8:45] Mm-hmm. Yeah, it was great. The whole process was a win, I think, on all levels. So yeah, I have, I had some great experiences.

Christian: [8:53] And I think that just is, uh, kind of a great example of the market in 2023.

Joanna: [8:58] Mm-hmm.

Christian: [8:58] There were some situations that were super competitive, because the house either was looking great and priced well, or there were situations where maybe the house was overpriced or didn't look great in photos for whatever reason, and those ones just kind of sat, and that's when you can negotiate. So-

Joanna: [9:15] Yeah … Speaker: prediction, I'm gonna break one early, I think that's probably gonna be more of 2024 as well. It's still happening now.

Christian: [9:21] Yeah, yeah.

Joanna: [9:22] I mean, we're still early in the year, but-

Christian: [9:24] Yes … Joanna: yes. But it is already

Joanna: [9:25] happening. It is already happening now, yeah.

Christian: [9:28] All right. So I wanna go into condos. So I'm gonna go into prices first, and, and kind of the curious case of condos. I feel like Benjamin Button when I say that. Mm-hmm. But the median Seattle condo in 2023 sold for 585, which was an increase of a whopping 14%.

Joanna: [9:48] Wow. Whoa.

Christian: [9:49] That's insane. So I started thinking about what that meant, and I think the reason why is because of so many more DADUs being built. DADU, again, is detached accessory dwelling unit, and ADUs, accessory dwelling unit. In order to sell those, you have to technically make them condos, even though you get normal, normal financing, not condo financing. They are technically, in the city's eyes, condos in Seattle. So I believe that a lot of the reason that home prices for condos went up so high and so quick was because there were so many DADUs built, ADUs built, even single family homes that were technically condos. So one thing that developers were doing in 2023, that's- this is kind of when it really ramped up- Mm-hmm … is they took what was once a single home, tore that down, and they would build three homes on that house, or on that lot. Yeah. One big one- Generally 1,800 to 2,200 square feet, depending on the location and that would sell for around 1.1, 1.2 million up to, you know, 1.5, 1.8, depending again, on the location and the size. There would be an attached, and by attached I mean barely attached ADU, and it's usually like a closet or the garage is attached to the ADU or something like one tiny piece of a wall was attached to this ADU. Those were usually 1,000 square feet, sometimes three bed, usually two bed. Those would sell for around 650 to 750 and then you would also have a DADU built on that. So three structures built on one lot that usually had only one single family home. Those are all technically condos. That I think is a big reason why home prices for condos- Mm-hmm … or sale prices for condos jumped up so much in 2023. Single-family homes, meanwhile, technically went down 3% from last year. So the median sale price for those was 850 in Seattle, and this is only Seattle that we're talking about. The metro area's a completely… well, not really a big different number, but it is a different number.

Dan: [11:59] Mm-hmm.

Christian: [11:59] And that's, yeah, that's kinda what's going on with, with sale prices. So let's talk about mistakes that buyers made in 2023. So I wanna hear from both of you, actually. What do you guys think the biggest mistake… Joanne, I'll start with you. What do you think the biggest mistake you saw people make in 2023 was?

Joanna: [12:15] I think one of the biggest mistakes that I feel I saw maybe from going from home buyer class to, you know, strategy session-

Christian: [12:26] Mm-hmm … Joanna: things like that, were people second-guessing themselves and just saying, "I am still nervous or scared." Mm-hmm. Or, you know, and not talking through what's actually going on in the market and cutting themselves off from learning- Mm … about what's happening to, so to make a better decision. I feel like that goes hand-in-hand with clickbait and misinformation, or just not fully getting the full story of what these clickbait articles are representing. So I think that might have been the biggest mistake, giving into your own fear- Mm-hmm … when it's maybe not warranted- Yeah … Joanna: and you just need a little bit more education. Part of being a real estate agent is being a part-time therapist, and that is honestly what we are half the time, and that's- Mm-hmm walking people through these fears and helping them understand them and explore them and do research and give them- Right … the info that they need in order to make an informed decision.

Joanna: [13:22] And listen to someone who is in this field and doing this every day. Mm-hmm. You can't… I'm not saying parents and family members and buddies don't have their, your best interest at heart. It's just that maybe r- hearing what they read in articles, you know-

Christian: [13:38] Mm-hmm … Joanna: isn't necessarily pertaining to your specific needs in the real estate market, right? Yeah, yeah. It's like, I don't know, my dad told me that he used to buy houses on a handshake. That is a different world- Little different … from where we are today. Yeah.

Joanna: [13:53] So you can't just go off of what your parents say, and when I have dealt with parents, that's been a whole- Often what they say,

Christian: [14:00] yeah … Joanna: thing. Yeah. So, yeah. All right, so Dan, what were some of the biggest mistakes that you saw buyers make in, or potential buyers make in 2023?

Dan: [14:09] Yeah, I mean, outside of just the idea of not buying, not buying because of blank, whatever- Yep I think that was one of the biggest mistakes. I think it was, what I was telling my first-time home buyers, and buyers in general, that I think 2023 was one of the best years since I've been in the mortgage industry, since 2008, to buy a house. Yep,

Christian: [14:26] I would agree. I agree.

Dan: [14:26] You know, the market had corrected, you had high interest rates, which, which slowed the market down a little. Mm-hmm. You could actually negotiate, you could get a home inspection, and you know, we saw zero issues with appraisals in 2023. Yeah. Yeah. So they, people weren't overpaying for homes, so I thought it was a great year. And then people, the idea that you're not married to the, the mortgage that you get, the fact that you can refinance or rework that mortgage down the road was just the big upside. But outside of those, I think the biggest thing was people trying to just do this on their own. Yeah. And I'll give you a really great example. I, you know, I've been in the market for a Blackstone grill-

Christian: [15:05] Mm-hmm … Dan: for about the last year. I've had some friends get, you know, have them, and, and, uh, I'm just, we have two high school kids, and they have friends over, whether it be for breakfast or making smash burgers or whatever. And, you know, I've delayed getting it because I've been kind of doing what our clients do, researching online. Mm-hmm. Researching online. And then I went into an appliance store and I talked to a guy that sells them, and of course, just like real estate agents, just like lenders, they're gonna pitch you on why you should buy this, right? Yeah. Not you guys, not us, but you know, they look at us as salespeople sometimes. Yes, yes. I looked at him as, "Hey, he wanted to sell me a Blackstone." I happened to be working in an open house for a builder one weekend, and the builder came through, and we're sitting there talking, and he goes, "I gotta head home. I got about 14 teenagers coming over for burgers." And I'm like, "Oh, wow, you got your work cut out for you." And he was like, "Actually, not really, 'cause I got the Blackstone." And he was like blah, blah, blah, blah, blah, and I'll save you, spare you the story, but having a conversation with someone that's already done it. Yep.

Dan: [16:05] He's done the research. He has smokers. He has grills. He has the Blackstone. He's used it, and he was able to answer all my objections or issues that I was- Mm-hmm … that was holding me back from getting one- Mm-hmm … was it. I liken that to what we do for a living. Mm-hmm. Like, we've done this for multiple years, multiple different markets. Yep. We know the market. We know- I've watched you guys tell people, "Don't buy this house."

Christian: [16:28] Totally.

Dan: [16:29] You know, wait. Do that a lot. Mm-hmm. Yeah. You know, I sat down with your clients that you gave an example to, and I said, "Okay, here's the game plan. If you can find a home at this particular price or less, yeah, pay cash for it." Mm-hmm. Because that w- that made them feel better having their cash parked in real estate than having it parked in stocks, right? But if you find a house that meets your needs that's over X, hey, I can come in off the bench and get you financing. Mm-hmm. They had a strategy. Yep. They were crystal clear on it. They were very clear on what they were looking for in a home- Yeah … because of the music. Yeah. Yeah. And so, um, I just liken it all to home buyers that try to navigate this market on their own instead of leaning on pros, like the home buyer class, the strategy session, the how to tour a home, the mortgage planning meetings with me. You get so much out of those from professionals that aren't gonna lead you down the wrong road. So- Mm-hmm … I think that was the biggest thing. Buyers that followed that plan, they won big time.

Christian: [17:23] Yep.

Joanna: [17:24] I agree. That's- you know, I feel ex- it's exactly right. When people don't understand the value they're getting up front- Yeah especially when they work, I'm just gonna, like, toot our own horn right now- Mm-hmm … but it's true. We offer a lot of value up front with- and we don't ask anything in return.

Christian: [17:40] Yep.

Joanna: [17:40] At all. Mm-hmm. So- Other

Christian: [17:42] than loyalty … Joanna: other than loyalty. Mm-hmm. And that's, you know, that's a big deal- Mm-hmm … these days, always, but especially these days. But yeah, the reason we ask for that is because we are giving a lot of value up front. Give a ton. And I think that's important. Yeah. Yes. Yeah. Well, this process of buying a house is not easy.

Joanna: [17:58] No.

Christian: [17:58] It's pretty simple- Yeah … and we break it down, and we make it very simple. It's a very simple process to follow. But it is not an easy process.

Dan: [18:07] Yeah.

Christian: [18:08] So having- Nuances … someone, yeah, there's so- Yeah … much nuance in it. Mm-hmm. Having experts on your team to help walk you through this step by step- Mm … is huge- Yeah … and will save you tons of money. Yes. Because if you make the wrong step anywhere in that process, you could waste thousands and thousands and thousands of dollars- Mm and have so many unforeseen headaches- Yes … down the road that just suck. Yeah. So don't do that.

Joanna: [18:33] Yeah.

Christian: [18:34] Yeah,

Dan: [18:34] yeah. Don't do it on your own. You got some pros- No … or find the pros. Yeah. Yeah. Uh, but you're listening to this, so you've got three of them sitting right in front of you. Exactly. Yes, you do.

Christian: [18:43] All right, let's look back at rates. Rates was a huge part of- Yeah … what happened in 2023 in the Seattle area real estate market. And Dan, let's, let's just kinda give a recap of what kinda- Mm … happened. So from your perspective, being in that industry, what the hell happened?

Dan: [19:01] Yeah, I wanna explain the why behind the what, and I think I do this with every single one of our clients. I think when you understand the why did rates go up- Mm … so the why behind the what, you have a better idea of, you have that, more of that confidence, a better idea, for example, in my situation, how to actually use the grill properly, how to take care of it, right? Mm-hmm. Over the last year, year, year and a half, we saw the greatest increase in mortgage rates over the last 60 years in a short period of time. Yeah.

Christian: [19:32] Yeah, it was crazy.

Dan: [19:33] It was crazy, but understanding the why behind this. But why did we see this? Well, we pumped $5 trillion of stimulus into the economy during 2020 and 2021. It took time for that to filter its way out, okay? And it did so in the form of inflation. So that caused massive inflation in our country, okay? And we needed… You're not gonna… And then the Fed did their best, but you're not gonna beat down the inflation that we saw overnight. It's gonna take time. Mm-hmm. And that it did. It took all of 2022, all of 2023, until the very end, and I'll get to this in a second, of 2023, where we finally saw the Fed pull back raising the Fed rate. Mm-hmm. Because they felt like, "Okay, inflation's starting to show signs of coming down," and it has. But the, I think the damage has been done. Yeah. You know, I read some, some articles the other day. In October of 2023, we saw United State c- the United States consumer credit, so basically credit card debt in America, jump over a trillion dollars for the first time in American history, okay? I read another article the other day that 50% of Americans right now, 50%, half of Americans right now, are 30 days to 60 days behind on a credit card or an auto loan.

Christian: [20:49] Mm.

Dan: [20:50] So what that's telling you is Americans are leveraged right now. Yep. They're leveraged. They continued the habits, the spending habits- Yep the financial habits, that, that were there and available when money was cheap. Yeah. When the economy was good, and then inflation happened. Mm-hmm. So the inflation rate went up to, depending on which metric you're looking at, 6 to 8%. It's now down in the 3s, but let's just be real. Eggs didn't go up 6%. Eggs went up 600%. Mm-hmm. Milk, the co- the things that we need- We spend our money on every single day … yeah, every day, went up. Yeah. And that crippled Americans. And so- What we had to do, what the Fed had to do by raising the Fed rate and by mortgage interest rates going up, is they wanted to slow down the economy so that they could get inflation back under control. They feel like they've got it under control. And since then, and that's all I was saying last year is inflation. Inflation- Mm-hmm … just watch inflation. When CPI or inflation starts to level off or come down, you'll see mortgage rates do the same, and then you'll see the Fed stop raising the Fed rate. That happened middle, end of 2023. Now, mortgage rates spiked to their highest that I've seen in my entire career, and probably yours too. Yep. In October of last year, we saw about 8.2% to 8.3% for a 30-year fixed rate. That lasted about a month, and then we saw the- Killed the

Christian: [22:11] market … it killed it. Like, no one was selling, no one was buying. It was just like- Yeah crippling.

Dan: [22:16] Crippling. Yeah. Went up from about 7.75 to about 8.25. And, uh, and then we saw that lasted for a few weeks, and then we saw the decrease happen. And since then, we've been on a really nice downward, you know, little, uh, ski slope, ski trip- Yeah … down the hill, where I- when I say that, we're coming down the other side now. Yep. So-

Christian: [22:36] Rates have been dropping.

Dan: [22:38] Yeah, they've been dropping. I mean, we're here in, uh, the second week of, of January, and we're at about 6.5% to 6.6% right now on a 30-year fixed. Yeah. That's great. We're heading into a really good area.

Christian: [22:48] Way less than 8.2 or whatever.

Dan: [22:50] It's beautiful. Yeah. It's a beautiful thing. And we've already seen, and just not necessarily the mortgage applications go up, but I, like I mentioned earlier, that I am a preferred lender for a builder. Mm-hmm. And so I have to sit once a weekend. I sit on site for about three or four hours. October and November were dismal. Yeah. To the point where I'm like, "Why am I here?"

Christian: [23:11] No one else is,

Dan: [23:12] other than me. No one's here, and the people that were coming through were, like, wanting to offer 100 grand low. The builder was saying no, and, and great job by doing that, 'cause once it turned, he was getting full price again. Yep. And so, but just traffic was down. I think it was cons- it was the consumer confidence. Confidence was down. Mm-hmm. Fear. Yeah. Are they gonna continue going up? What's this gonna do to the housing market? Yep. So we saw that threshold. We got to see that threshold in 2023, which is right around that 8% mark. We hit that ceiling, and we bounced down rather quickly. Yep. And we're in the mid-ish sixes right now, and all the signs in front of us show that we are gonna continue to stay there or drop. So I'll end with this. Last year, 2023, my key word to watch was inflation. They can get inflation under control, mortgage rates will be under control and start dropping. This year, watch the 10-year treasury.

Christian: [24:02] Mm-hmm.

Dan: [24:02] So the 10-year treasury is always kind of an indicator of what and where rates or mortgage rates are going, and you have a lot of really smart economists predicting that the 10-year treasury will be down into the low threes, maybe upper twos this year, depending on a couple of different economic events. So I went back over the last 40, 50 years, and I have a graph of the 10-year treasury with the 30-year fixed rate mortgages over the top of that.

Christian: [24:28] Mm-hmm.

Dan: [24:29] And I pinned every single time the 10-year hit 3%, where were 30-year fixed rates? Four and a half to five and a half percent.

Christian: [24:38] Wow.

Dan: [24:39] So people always ask me, "Dan, what are you predicting?" And w- I don't wanna get into predictions. Yeah, tell ' em,

Christian: [24:43] Dan.

Dan: [24:43] Come on. No, but I wanna, I wanna leave you guys with this, 'cause the prediction episode will be money. I wanna leave you with this. Watch the 10-year this year. Yeah. That's the key word- Yep … in mortgage finance this year.

Christian: [24:52] Cool. All right. And like Dan teased, we will go over that a lot- Yeah, yeah in the 2024 predictions episode. All right, so let's go over national real estate and what happened, kinda big picture, not just our local Seattle area. But what happened big picture, Joanna?

Joanna: [25:07] Okay. Well, in short, we had record mortgage rates, high inflation, and persistently high housing and rental prices.

Christian: [25:15] Mm-hmm.

Joanna: [25:15] But we're gonna break that down. So home prices nationally went up 2.1%. Mm-hmm. And the median home price for national was $428,000. Nice. Nationally, we saw the same story as in Seattle. Many buyers, especially first time buyers, sat out this year. True.

Christian: [25:34] Mm-hmm.

Joanna: [25:35] And sellers who have low rates decided to wait to move, which created a big lack of inventory, you guys. And that can create some competitive situations as well. If a good property came on, looks good, pricing is good, it would definitely become competitive, like we just said. Yeah. That was the same nationally as it was in Seattle.

Christian: [25:53] Mm-hmm.

Joanna: [25:54] Now, I did wanna bring something up that I thought was pretty interesting as I was doing my research, that I know a lot of people here think that, "Well, I'm gonna get beat out by a cash buyer. I'm gonna get beat out by a cash buyer," right? Well, okay, nearly 33% of homes were purchased with cash in 2023, which is-

Christian: [26:12] Nationwide … Joanna: up- nationwide, yes, which is up from 2022, which was only 30.7%. So it's up a little bit. Mm-hmm.

Joanna: [26:20] But, and it's the highest share in a decade that it's gone up. Wow. So-

Christian: [26:25] Makes sense, 'cause people with the cash, they didn't wanna get the higher interest rates- Exactly so they're gonna utilize their cash to buy real estate.

Joanna: [26:30] Exactly. And here's the thing, though. The, while the share of all cash, all cash purchases continued rising, the number of cash sales fell year over year alongside all the other sales metrics.

Christian: [26:43] Hmm.

Joanna: [26:43] But where they saw the most cash being used was for affluent home buyers, 'cause if they could afford, just like you just said- Yep if you can afford to pay cash, to, you know, get over the mortgage rate hurdle, then they would use that. Mm-hmm. So it was mostly in the luxury market where the cash was being used. Yep. Now, in September, one in three home buyers were paying all cash, and this is the highest share, share since 2014.

Christian: [27:09] Hmm.

Joanna: [27:09] And they were seeing most of this in the inexpensive metro areas and, like, the top migration destinations that people were purchasing in.

Christian: [27:18] That makes sense.

Joanna: [27:19] Yes. Yeah. Places like, well, Cleveland, Ohio- Mm-hmm … was the highest with a 51.9%- Wow … of people buying their homes in cash. Wow. Next was West Palm Beach, Florida. Mm. And that was just a little lower at 51.2%. Then you've got Jacksonville, Florida- Mm-hmm … coming in at 47.9, Cincinnati, Ohio coming in at 44.4%. This is, like, crazy metrics to me. Some money in Ohio. Right? I know. Ohio. Well- And then Miami, Florida 42%. Mm-hmm.

Christian: [27:48] Yeah. Wow. So- Ohio is not the most expensive place. Right.

Joanna: [27:51] No, that's what they were saying, right?

Christian: [27:53] Yeah. So that makes a lot of sense then. Wow. If you could pay cash-

Joanna: [27:56] Yeah … Speaker: you don't need a ton of it in order- You don't to buy there. It's a different market than Seattle. Completely different market. That's for sure. Yeah. So that's some of the national, like, buying news. Mm-hmm. But I will say, talking about, like, this is going to affect the buying market, too.

Christian: [28:11] Mm-hmm.

Joanna: [28:11] After surging in 2021 and 2022 rent price increases, they flattened down in 2023- Yeah which was great. Down about .5% year over year in Seattle.

Dan: [28:24] Mm-hmm.

Joanna: [28:25] Good for the renters. The median rent in 2023 was $1,976, which was the 17th most expensive large city in the nation. Um-

Christian: [28:36] So Seattle had the 17th highest rents in-

Joanna: [28:39] The nation … the

Christian: [28:39] nation.

Joanna: [28:40] Got it. Mm-hmm. And that being said, I don't-

Christian: [28:44] This is, like, Seattle metro.

Joanna: [28:45] Yeah, Seattle metro area, 'cause in the, in that, like Bellevue, Issaquah, and Kirkland- Mm-hmm … were the most expensive-

Christian: [28:51] Yeah … Joanna: areas to rent. That makes sense.

Joanna: [28:54] Mm-hmm.

Christian: [28:55] So I guess in general, 2023, as a recap, interest rates skyrocketed. The market stalled when that happened toward the end of the year, and then after they started to come back down, the market really started to pick back up. Right in December, when the market is usually pretty dead and we have very little inventory and very few buyers, that's when we actually saw almost as much business as what we saw in the heat of summer, when it's supposed to be the craziest. Yeah. And that was kind of a shock, which I think is going to lead to a very t- busy 2024, which is what we're gonna talk about in next week's episode, or two weeks from now, of 2024 predictions, so make sure you listen to that for what is to come. So thanks so much for joining us for this episode of the Awesome in Seattle podcast. If you are interested in learning how to buy a house, come to one of our home buyer classes, BeersandHomebuying.com (opens in a new tab). Beers with an S, as in the alcoholic drink, and Homebuying.com. Totally free. They're only an hour. Some venues have food. Some venues don't. But it's free beer for an hour while you learn how to buy a house. Totally laid back. We have them all over the Seattle metro area, so check out the website for the class that is close to you and that makes sense for you. So Dan, thank you so much for your insight. Yeah. Do you need to give your MLO number or anything? I

Dan: [30:16] should. Might as well. Yeah. My, my Washington State MLO number is 115349. Nice. And, uh, it's always great talking about this, all the way back to when we had the radio show. I know. So it's good.

Christian: [30:25] Seattle Real Estate Radio, back in the day. Thank you, Joanna, as well. Great job. My pleasure. And, uh, we'll see you on our next episode.

Joanna: [30:32] Bye, guys. Bye.