Clickbait or Truth? Breaking Down Seattle’s Housing Headlines, plus a One Seattle Plan Update

Christian: [0:00] Hello, hello, and welcome to another episode of the Awesome in Seattle podcast. This is your host, Christian Nossum of the Awesome Nossum Group at Wilson Realty Exchange, Inc, and we are a local Seattle metro area group of real estate brokers, agents, whatever you wanna call us. And I have two awesome guests with me Like you, why don't you guys introduce yourselves?

Joanna: [0:22] Okay. Hi, I'm Joanna Beecher, and I am a real estate agent on the Awesome Nossum team.

Varun: [0:30] And hey, I'm Varun Jain. I'm a agent on the Awesome Nossum team too.

Christian: [0:34] Cool. All right, so today we are going to go over some of the latest news headlines, and try and help you understand what exactly is going on. Because even when we're reading these articles, the headline doesn't always match up with the article, which doesn't actually match up with the data. So we're gonna try and straighten all this stuff out for you guys. So we're gonna go over the current mortgage climate, we're gonna go over some articles from Redfin, from Zillow, and also from The Seattle Times, and we're gonna give you an update on the Seattle1 plan. There is an interim housing policy plan that was recently passed, so October is gonna be a pretty big deal, and we'll explain that as well. So let's just jump right in, and let's first start with mortgage rates. Joanna, what's going on there?

Joanna: [1:24] Well, as most of us who are watching them, like hawks, already know, still at our favorite number. They're circling around a 7%, where everybody's in love with that. So yeah, the 30-year fixed is circling right around that, and the Fed isn't giving a lot of strong signals about that coming down in the near future. Hey, we're hoping maybe by next year we'll show some signs of that budging a little bit. And kind of how that is presenting itself in our market is that it seems like buyer demand has become a little bit softer than it was at the same time last year. But, you know, people still want homes. They are … This is in response to several things that are happening right now, and I guarantee you it is not the mortgage rate, because as we've discussed as a team, that mortgage rate has been pretty consistent for the past few years, and people are definitely not shocked to see that number. They're not … They don't love it, but you're not shocked to see it. You were just hoping to see it come down a little bit. But it's definitely what else is happening in the, in the financial world of our, our country is, is more so what is affecting that. They're just coupling it with the 7% bubble of the mortgage rate. I will say, though, that when you're coming into the market as a buyer, even with that 7% rate or right around there, you can still have some really great ways to get yourself in the market to make your payment, your monthly payment a little bit more manageable, and that's where- Working with an agent that understands how to talk with the sellers about maybe getting you a, a credit from the seller to get your mortgage rate down for the next couple of years until hopefully the mortgage rate just comes down naturally. Yeah, there's, there's all different creative ways that you can still get into the market and not have a totally insane payment right off the bat. When the market is doing what it's doing at this moment in time and seeming a little bit softer, that means you can get deals. That means there's deals to be had, and to not shy away-

Christian: [3:40] Yep

Joanna: [3:40] is what we learned, right?

Christian: [3:42] Yep. And I think the thing to point out, too, there are different segments of the market that are-

Joanna: [3:49] Mm-hmm … Speaker: dead, and there are certain ones that are still super competitive, and then there's others- Yes … that are kinda in between. Yes. So that's where, again, you, working with an agent, a broker that understands those nuances in the market, in different neighborhoods. Like, it's very, very specific and local- Mm-hmm … to what exactly you're looking for. And we have ways that we help train and teach you, the buyer, how your specific market is, is working and what to expect. And so you have a very, very clear idea of whether your market's super competitive, or if you're coming in with a really low offer that maybe you're asking for the seller to pay your closing costs, or you're dropping the price by a bunch, or whatever, we're gonna help you prep for that upfront before you even go look at houses. Mm-hmm. That's how we- we teach you that upfront, and that helps our buyers feel a lot more confident about what to expect with, with their specific market. Right. To know if it's realistic what your plan is. Yeah. 'Cause you could be reading these, these headlines and be like, "Amazing. That means it's a buyer's market, and I'm gonna go in and I'm gonna get that house for hundreds of thousands of dollars less than what it's listed at." And that's not always true. So when we say when you look at the headline, that's not always actually what is happening in the actual article.

Christian: [5:15] Mm.

Joanna: [5:16] Read the article, ask someone who actually is working in the market every day to find out if your plan is gonna work out, you know, because it may, it may not. It may, it may not. Yeah.

Christian: [5:27] And that actually brings up the next thing that we wanna talk about, and that is a couple reports that came out from Zillow and Redfin showing that across the country we're starting to see a shift towards a buyer's market. Homes are sitting on the market longer. There's price reductions. And you're seeing this in cities that saw a huge run-up in prices- Mm during, uh, the COVID boom of real estate, and that's, like, Austin, Phoenix, and somewhat even Portland. A lot of Florida as well. But here's the big plot twist- Seattle is still holding very firm in the most, for the most part as a seller's market. So that means buyers aren't really able to always negotiate. Sellers are often still the one having the upper hand in these negotiations, 'cause we are still seeing multiple offers in some specific markets. And why is that? For the most part, it's because we have limited inventory still. People are still moving here, and because of that we're facing more competition. Sellers don't necessarily have to sell. We're not seeing, like, foreclosures or anything rise, which I've seen some headlines about that too, and we've kind of poked fun at those previously, especially in our home buyer class, where some stat will say, like, "Foreclosures increase 33%"- And then you look and it goes, yeah, they increased from three to nine or w- You know what I mean? Like it was such a small increase in the number, but since it was such a small increase, it made it look bigger because the percentage made it seem a lot bigger. So if you're a buyer in Seattle, don't let these headlines fool you- Mm-hmm … because you gotta understand your specific buying criteria and your market. And Varun, let's, let's just kind of throw it to you a little bit on this one, 'cause I know you have the data in front of you.

Varun: [7:22] Yeah. So it's very interesting how some of these headlines kind of talk about something, and when you read through the article, you figure out that it's only a part of the data that gets reflected in the headline. And then when you read through the article, it… the story's a little bit different. So interestingly, like I was looking at Zillow, because Zillow publishes what's called a Market Heat Index, and they classify markets as neutral market, sellers markets, buyers market, sometimes strong sellers market. Seattle, in their latest data that's available, is still classified as a strong sellers market. And again, that doesn't mean all of Seattle is sellers market. You might still be able to get a really good deal in certain segments or certain neighborhoods in Seattle, while other neighborhoods, let's say Queen Anne or Wallingford, which are very desirable, a single family home coming up in those neighborhoods is m- and it is well priced and updated, is not gonna stay on the market long. Because buyers are still moving up here, as you said. RTO is kicking back in, and people are moving back to Seattle for Amazon, for Microsoft, for Google, what have you, and they're moving into Seattle, so they al- obviously they need homes. A- and so, again, it depends on specific neighborhoods and specific property types, condo, town home, or single family homes, which determine whether or not it, it's a deal or not, or whether it's a buyer's market or a seller's market. So yeah, Zillow's kind of indicating that it's a… Seattle's still kind of a seller's market. I was looking at Redfin data as well. Redfin data shows our sales, closed sales did dip, because there was a kind of a scare and a pause in the market when the tariffs were announced. Yeah. And then a few weeks later, the tariffs were paused- And then there was a deal, and all of a sudden we see a spike in pending transactions because now the buyers that were on the sidelines are scared, are back in the market closing the- these deals. So there might be a lag in the data because we had a macroeconomic situation that caused some of the buyers to hit the brakes, and now they're back in, and so the market will continue to show strength. Yeah. And Seattle's kind of shown that historically as well. We've seen even during the '08, '09 crash, Seattle market recovered much faster than rest of the country because, again, we have a lot more companies here than people realize. It's not just tech. We have Boeing, which is huge. We have T-Mobile in telecommunications. We have Nordstrom and Starbucks that are headquartered here, here. So the macroeconomic factors surrounding Seattle are pretty strong.

Christian: [10:02] Yeah. And I'll say this from a anecdotal point of view. We've had clients that when the tariffs were announced, their stock portfolios dropped one, two, $300,000 overnight. And do you think that made… Like, if that happened to you, you're probably going, "Oh, maybe I don't wanna spend a million and a half or two and a half million dollars on this house right now. I just lost a ton of money. There goes my down payment." And that's exactly what happened, and that's why there was a pause in the market, not just locally, but nationwide. And since then, those buyers have come back because their stock portfolio, for the most part, has come back, if not gotten even better. And I think you s- even saw that with a Bloomberg headline or an article that said the majority of stocks have actually come back to their pre-tariff news. Yeah. The

Varun: [10:54] shock effect has worn down now there are more kind of firm plans in place versus the initial tariffs that were announced. And so majority of worldwide markets, not only just in the US, have recovered from the lows of post-tariff run-ups.

Christian: [11:09] Yeah. All right, let's shift gears. Let's talk about the Seattle 1 plan, or the 1 Seattle plan I should say. I call it Seattle 1. I don't know why it's called 1 Seattle. It makes more sense to me, but I didn't- I'm not the mayor. There's some interesting news and that is- Yeah … we don't have a firm plan. We have a tentative plan, which is pretty damn funny to me. So Seattle in, uh, was it the end of May? Very end of

Varun: [11:35] May?

Christian: [11:35] End of May. They passed a tentative interim 1 Seattle plan in order to comply with the state housing laws that were passed, and every city has to submit their plan to the state before the end of June. So Seattle is like, "We're not 100% sure what we're gonna do, but here's what I think we're gonna do. Here's a temporary one. And you know what? We're gonna come up with the firm one, we think, in October." Yeah. That's what they're saying. And we'll see if that, if there's another interim one. I don't know how this is all gonna play out. We're just gonna have to wait and see. But let's, let's kind of go over some of those changes, Varun, on, on what was happening in that bill or in the, in Seattle's plan that was passed.

Varun: [12:18] Yeah. So what Seattle passed was trying to meet the basic bare minimum requirement required by the state. The city council passed into code, and it is, I think, effective as of July 1, where four units will be allowed on every single family zoned lot in the city. Which means there'll be a lot more interest from investors and developers in certain neighborhoods. And but the key thing to note is it's not only just allowing for four lots, they have increased how much of the lot you can occupy. They have- there's a sliding scale on how much square footage you can build depending on the number of units you can build. Uh, and so th- they've taken some steps in the right direction to meet the, the state requirements. But this is, again, to underline the fact this is an interim plan because they wanted to pass a bare bones plan. Because remember, leading up to this, there were a couple of neighborhoods that had filed lawsuits against the city, was able to get all of those lawsuits thrown out, but that delayed getting the firm or final plan in. So the city is now working on a second plan, which they are proposing to be their final plan and schedule to release in October. We don't know if that timeline will still stay true, because that has some major zoning changes where a lot of the neighborhoods in the city will get up zoned and will go from either a single family zone to a low-rise zone or a single family zone to a mid-rise zone. A- and that'll need a lot of kind of community outreach and buy-in from those communities as well, whether or not they're ready for that change. But what has passed right now is four units on every lot. There are, as far as I could tell, there are no restriction on per unit sizes. There's a total square footage limitation and lot coverage limitations. Front yards can be now 15 feet instead of 20 feet. Side yards are 5 feet, 10- 10- And they had proposed- … 10 feet for the backyard. So yeah, it's a, it's a very different world now.

Christian: [14:24] And they had proposed a 10-foot front setback. Yes. So from the front of the house to, to the, the sidewalk or the street, it had been 10% or 10 feet, and this was a ridiculous, in my opinion, reasoning for making it 15 feet, and the reason was that you have more trees In the first 15 feet, but not in the first 10 feet? I don't understand that. That doesn't make any sense to me, but-

Varun: [14:54] Yeah. But a- again, it, the, again, these things are all part of the interim code. Yeah. The final code in October could look different. Some of the p- some of the parts might remain the same. Like, I don't see lot coverage, which is now at 50%, going up. But again, this is just a signal of things to come. So if you're an investor, home buyer, builder, you're thinking long term, keep an eye on this plan and how this is evolving. This will change how you can develop your property and change how neighborhoods will look like.

Christian: [15:29] Yeah. Mm-hmm. Let's touch on the recent Seattle Times article where the headline was, "Seattle-area homebuyers skittish amid high rates, economic uncertainty." And then the other headline in that article, the one that was at the front page of The Seattle Times was … Let me pull it up real quick. Is Seat- or in the Seattle area, demand for these homes is dead in the water Hmm. Is it really though? 'Cause it makes it seem as if all, the whole entire market is just dead, which is not accurate. Yeah.

Joanna: [16:04] No.

Christian: [16:05] So I wanna dig into that and kinda clarify, and we've been doing this lately a lot, and I love that because the headline is a headline for a reason. It's a lot of clickbait to try and get you to do it so that they get paid those advertising dollars from the ads that are sitting on that page, so.

Varun: [16:21] Yeah. Uh, like, it's very interesting how they chose that one line. There's another line in that same article, "Multiple offers are still happening on single family homes below one million- Mm-hmm … because you can't get anything for that." Quote from that article. They could have used that as a headline, but they used something else. Again, we know how this works, but yeah.

Christian: [16:40] Yes. Negative always gets more clicks, so they gotta go with the negative. So in reality, the median single family home sold in Seattle for a million dollars, and that's up 5% since last year. So the headline, Dead in the Water, the real estate market's dead in the water, which is what they're trying to make you think, yeah, it, it only went up 5%. How horrible.

Joanna: [17:04] Which is kind of what I was talking about earlier. It's, they're just … It's very misleading. Yes. So you really have to stay tuned in, and because of what the news is reporting, it's always a month behind.

Christian: [17:18] Mm-hmm.

Joanna: [17:18] So that's also a huge thing to remember, because they're not getting the stats from the NWMLS until, like- 30, yeah a month after.

Christian: [17:27] Yeah.

Joanna: [17:28] So it's, this isn't 100% accurate, and there's reasons why that Varun touched on about the, the macroeconomic moment, so yeah.

Christian: [17:37] Exactly. Yeah, and the other area where prices are clearly dead in the water is Snohomish County, where prices went up 1%, and Pierce- … County went up 5% again. So pretty bad. Even Kitsap- Yeah … County went up 2.5%. The one spot where prices did go down was the East Side. They went down 4%. Now, you gotta remember too, the median sale price for a single family home on the East Side is $1.6 million. Also, think about the demographic of who- Mm-hmm … is living on the East Side. The majority of those are tech or high ear- wage earners that have a lot of money generally in the stock market. When the tariffs happened or were announced, they got hit harder than other people. Mm-hmm. And so they were probably the ones, like we talked about earlier, that sat on the sidelines for a minute to see what was going on, because they were affected a lot more so than others. Yeah. So it's interesting to see the ones- I

Joanna: [18:35] do wanna bring up one thing. Yeah, go for it. That might be correct in the article. No, I'm not saying the article's not correct factually, but there is more of an opinion-based something that I was just reading here, and it's somewhat correct, I will say, that the buyer now has a bit more negotiating power that they haven't had since about 2018. Mm-hmm. And I do wanna say, in a lot of instances, that is correct. That's not saying that the prices are going down. That's not saying that it's just, it's not saying necessarily, like we were talking about earlier, about the real estate market here being softer. It's just maybe about, what? Maybe a little balance coming back into play. Yeah. Which is lovely. Yeah. You know, I love to see that for my buyers. Just seeing that maybe there can be negotiations now, that's huge, and that's just, like a, I don't think that's soft. I don't think that means that the Seattle market is in trouble in any way. I think that is phenomenal news for some buyers in some circumstances.

Christian: [19:44] Yeah.

Joanna: [19:45] Right?

Christian: [19:45] And one spot where the market could theoretically be k- titled dead in the water is condos, which I don't even think… I think that's still a complete over-exaggeration. Yes. 'Cause King County condos, the median sale price went for $570,000, which is down 4% from a year earlier.

Joanna: [20:06] Mm-hmm.

Christian: [20:06] So it's not like they're completely dead in the water. It's just they're down 4%.

Joanna: [20:12] Exactly, and there's just, there's a different, there's a different category for buyers that are looking for condos, and honestly, they're… I think investors are starting to look at condos maybe a little bit more. Who knows? You guys are investors. I know you're not specifically looking at them, but some people I've been talking to are thinking about doing that because of what the stock market did, and they're thinking- Yeah real estate is definitely gonna be a more stable way for their money to grow for them, and I think that's a great pivot for people to make that are scared of the stock market volatility, so.

Christian: [20:50] Yeah, we've had quite a bit of people recently reach out that did have a lot of money in the stock market, and they are actively trying to take it out of the stock market for a while, and then reinvest it into real estate, whether that's… And there's a lot of different ways you can go with that, whether it's- Mm-hmm … buying an actual property and keeping it as a long-term hold, or maybe it's gonna be a short-term rental, where it's a- Yeah … like, an Airbnb-type property. Mm-hmm. Or maybe it's a mid-term rental, where you're renting it to someone for three to six months or something like that, which would be, like, a traveling nurse is often who that-

Varun: [21:26] Yeah

Christian: [21:26] demographic is. Not always, but that's a pretty-

Varun: [21:29] Yeah … Speaker: common one. Another way, too, is we've had more and more people, Varun I'm sure as well, but because we do flip and build DADUs in Seattle, we've had more and more people reach out about wanting to be investors, where they lend us their money, and then they get a certain percentage return, which is much better than the stock market generally. And so those people have reached out to us going, "Hey, I hear you're doing this, and my friend said that you earn them this much money in six months or nine months or whatever it was. Can I get in on this?" And so we're having that conversation as well, which again, Varun has people reach out to him for the same thing. So- Yeah … there's a lot of different ways you can get a little piece of the real estate action, and, and it's not just all doom and gloom like some of these headlines are trying to say, so.

Joanna: [22:21] No.

Christian: [22:22] Yeah, so I think to wrap this up, the majority of m- m- like, people and- Interest rates, I guess, uh, on that topic, the majority of thought process there is that by the end of the year they're probably gonna be maybe as low as six and a half, maybe still in the high sixes, close to seven, which is where we've been. They're not expected to go some dramatically low number. Something that I say in pretty much every home buyer class at this point is if you're thinking you're gonna wait until rates get to the 3 or 4% range before you buy, you're probably gonna wait your entire life, because-

Joanna: [23:02] Yeah … Speaker: interest rates are probably never getting to that low again. Yeah. They were artificially low because the government was buying so many mortgage-backed securities to make it that cheap for us to have that money at that time. Right. So, you're waiting for that- Don't.

Christian: [23:20] No. Yeah, you're wrong.

Joanna: [23:21] Don't time the market

Christian: [23:23] Probably never gonna happen. Yeah.

Joanna: [23:23] You can't time it. You just have to know your strategy and know what that is. Don't go based on fear and- Mm-hmm … just educate. Educate yourself, right?

Christian: [23:34] And the big thing that we do, again, here at the Awesome Nossum group, is we do help you understand your specific market. So whatever that is, if it's condos, we're gonna help you prep to make a super strong offer that is probably gonna be under the asking price, potentially, depending on where you're looking.

Varun: [23:53] Yeah.

Christian: [23:53] Yeah. And then if you're in a single family home in a great neighborhood, under that one million, maybe up to one two, you might have a lot of competition still. Varun and I just listed one of his flips, and it was over one two, and we got multiple offers, and it sold for more than the asking price. So- Mm-hmm it really just depends on your specific market, what is going on. And we have tools in place that we have created that no one else has that really helps you get calibrated to your specific market so that you know exactly what it's gonna be like. You're not just basing your, your thought process on headlines or what your neighbor said or your coworker. Like, no, we're gonna show you the actual data. You're gonna get pre-underwritten for your loan, so you know your loan amount, and you know what your monthly payment's gonna be well before you ever get emotionally attached to a house.

Joanna: [24:52] Yeah.

Christian: [24:53] And that way, you're not making some rash decision where you feel like you got pressured or anything like that because you know what your max budget is before we even want you to see a house. And then we arm you with the knowledge and the data to know exactly what your market is doing, what you wanna buy, what is it doing, is it competitive, is it not, what's the average days on market, are the homes selling for over the asking price or under, what is it? You will be so prepared- Yes … that you will be able to make an offer when you want. When you find that house, you know what it's gonna most likely sell for- Yes … or about. And like a recent podcast that we just made, making an offer when there's a bidding war, it's not as scary as you might think. So if you haven't listened to that, make sure you check that out. That is it for this episode of the Awesome in Seattle podcast. I hope you got a lot out of it. If you are interested in chatting with us about potentially buying, then you should definitely come to one of our home buyer classes, beersandhomebuying.com (opens in a new tab). That's beers, as in more than one beer- 'Cause you can drink more than one beer while you bike. It's on us. So yeah, beersandhomebuying.com (opens in a new tab). We host those every single month other than December, so see you when the next one is for you, that makes the most sense for you. If they're too far away or you wanna talk sooner, just schedule a Zoom call with us. It's right on our website. It's super easy to do. If you are a seller and you wanna talk about what's going on with you and what you're potentially looking to do, just reach out. It's the same exact process. Very simple. Or you can just call or text or email us. All of our info's right on our website. And if you're someone that is thinking about potentially investing and wanting to do, like, a short-term loan for Varun and I for our investment properties, just reach out to us. We're happy to explain how that works. We can tell you exactly what we do. We can share some past people that have done that so you can feel more confident in what you're potentially gonna do, and so you can make a little bit more money than potentially what's going on in the stock market. So that's it for this episode of the Awesome in Seattle podcast. Thank you so much for listening. We will see you next time. Bye.