2020 Year in Review

Speaker 1: [0:09] Hello, hello, and welcome to another episode of the Awesome in Seattle podcast. Today's episode is all about the 2020 year in review for the Seattle area market. Real estate market, I should say. My name's Christian Awesome. I'm the host of this Awesome in Seattle podcast. Uh, I'm a real estate agent with the Awesome Nossum Group. We are a group of Seattle area real estate agents at Wilson Realty, and I'm, I'm here with my co-hosts, the wonderful Jason Saldarriaga.

Speaker 2: [0:39] Wait, who, me? What? Me?

Speaker 1: [0:43] Yes, you.

Speaker 2: [0:44] Oh, wow.

Speaker 1: [0:44] And and the awesome Les Cutting.

Speaker 3: [0:49] Hello.

Speaker 1: [0:51] That was so lame, Les. Wow. Oh,

Speaker 3: [0:52] sorry. Wait, you guys want me to spice it up a little bit?

Speaker 1: [0:55] Spice it up a little, man. O- o- You're the one with the most personality on the entire team, and you come in with a- All right … "Hello." Hola, como estas? Uh, is

Speaker 3: [1:03] that better?

Speaker 1: [1:04] Sure, sure. We'll go with it. All right, so in today's episode, we are gonna be reviewing the Seattle area real estate market in 2020. We're gonna go over everything that happened. We're gonna go over the stats for here in Seattle, as well as some of the suburbs. We're also gonna compare those to the national data. We're also gonna go over which areas saw the highest and the least appreciation. Uh, and then don't worry, we're gonna do a whole separate episode with our predictions for 2021. If you wanna hear that, just search for it. It's r- we're, we're gonna release them at the same time, so don't worry. It's out there, just search for it. So yeah, that is it. So let's, Les, let's start with the national real estate market. What the heck happened?

Speaker 3: [1:45] All right, well, so before we get into Seattle, which I know that's what everyone's here, let's just take a look at the whole year, and the national market too. Rates hit a 15-time record low in 2020. How many times did you guys, Jason and, uh, Christian, tell your clients that, "Hey, rates are super low"? Like, how many times did you guys have that conversation last year?

Speaker 2: [2:06] 15 times 15 times,

Speaker 3: [2:08] right. 15 exactly. Right. And that's how many times it hit a new record low. Exactly. Yeah. There we go. So from October to October, home prices nationally rose 8.4%, which is a lot. Prior to that, I believe it was an average of what? Around 5 or 6%? Correct me if I'm wrong. If even that, yeah. If

Speaker 1: [2:28] even that. I think it's even lower, but yeah.

Speaker 3: [2:29] Okay, so somewhere in that ballpark. And home prices generally rose mostly in large cities and the coast of the countries, but smaller, uh, metropolitan markets also saw strong gains. For example, like Pittsburgh, Cleveland, Cincinnati, Indianapolis, Kansas City, Boise, Austin, and Memphis. And these people saw about 10% appreciation year over year. And the reason why is because of coronavirus. I mean, coronavirus had definitely a big part in that because a lot of people had the ability to work from home. So with that being said, a lot of people, and I think we've had some clients that chose to work, I mean, they had the ability to work from home, so they moved out of state. Um, we've helped a few people do that as well. Another thing I wanna talk about is foreclosures. So the common train of thought is that the market is going to plummet and do the exact same thing that 2008 did, and that's not the case. The difference between now and back then is that people have so much equity, and prices have gone up so much, that people are gonna be forced to sell. And as a result, you may see people, more listings pop up on the market rather than them be foreclosed on, like we did back in 2008. So we've seen the similar trend in Seattle, but you guys are gonna get to that. So yeah.

Speaker 2: [3:48] Yes, we are. Buckle up, because I'm about to take you on a number journey. Uh-oh. I'm gonna throw so many numbers at you. We're talking about Seattle now specifically. Like, uh, Les said, a lot of these moderate sized cities in the US have seen significant appreciation in the last year, which has really been led to the, or led by, or driven by the work from home dynamics. In Seattle as a whole though, you kinda see the same thing, where people are now- Maybe they still wanna stay in the Seattle area, but they're not as tied to the city center. Maybe they're gonna be working remotely 100% of the time, or even if they're working remotely two or three times a week moving forward, it's allowing them to move farther from the, the city center. And the numbers I'm gonna throw at ya kind of relate to this. They, they illustrate this dynamic. In King County for the last year, home prices were up 10% year over year. In Snohomish, prices increased slightly more, about 12%. In Pierce County, where we've seen phenomenal appreciation the last few years, in fact, Tacoma has been the number one housing market in terms of appreciation, at least one of the last few years, if not multiple, Pierce County was up more than 16%. Again, Seattle doing very well, but the surrounding area is doing even better, it seems. Traditionally, the more affordable area in southwest King County, which includes cities like Federal Way and Burien, saw prices jump about 15%. And then if you go a little east, cross the water to the east side, which is the most expensive market in King County, home prices soared 17%, which is just Crazy. This is the largest increase of any area in King County. In fact, there are little spots within this area that saw even more dramatic incre- a- appreciation. Kirkland Bridle Trails saw about 50% increase year over year. Um, that doesn't mean pri- that doesn't mean home prices per se ac- You know, if you owned a house, it increased by 50%, but the s- the median sales price increased by 50%. So- Mm-hmm. But still incredible. Incredible. As a general rule, the housing market is very competitive. Redfin releases a lot of really interesting data on this. They do their own kind of internal data collection. I'm not sure exactly how they get some of these, their numbers, but it, it is interesting to see what they release. And they recently stated that homes in Seattle receive four offers on average, and they sell in around 11 days. I will say just anecdotally, four offers on average seems about right. There are houses that are getting 20 to 30 offers, and then there are houses that are sitting. And if you're including condos in this, then it's really gonna dramatically lower the amount of offers per property and increase the amount of time that properties are sitting, because condos are stagnated a little more. They're more suppressed or subdued than single family homes. Yeah. Which we'll talk about a little bit in a second. But inventory was low all year long. It's still low. I don't see that changing too much. Uh, we'll see how things pan out over the next six months or so, but there's a lot of buyers out there. One of the most imbalanced markets in the country is Seattle, so congratulations to everyone listening who's local. Congratulations. Yeah.

Speaker 1: [7:26] Congrats on trying to buy a house in one of the most, if not the most imbalanced market in the nation.

Speaker 2: [7:30] Yep. According to the US Census, Seattle's population, just to take a step back and really talk about the underlying dynamics at play here, Seattle's population grew by a whopping almost 24% fo- uh, for the last decade, um, from 2010 to today. Crazy growth. That is way above the national average of 6.3%. This is really the underlying dynamic at play that is leading to the supply-demand imbalance. There's so many people moving to the city, so the city is growing very quickly, but the housing inventory is not keeping pace. Seattle has needed about 90,000 housing units to keep up with the demand, but we only produce about a third of that, so this can definitely help explain the imbalance that we're discussing right now. Keep in mind, we have had a few podcasts, and it's a recurring theme with us, ADUs, accessory dwelling units. That includes DADUs, which have DADU issues. Take a listen to the podcast. Uh, those are the, the, the detached ADUs. We are seeing an increase in the amount of permits for ADUs, but there's just nowhere near enough to make up for this imbalance with supply and demand, so it's a drop in the bucket. King County did have about a 60% increase in new listings compared to a year ago, so a lot more houses being listed, but they're getting sold really quickly, and so the supply is really down. In fact, the supply of single-family homes was down 35%, and like I was saying before, condos are acting a little differently. They're more suppressed. Those are up. The supply of condos is actually up about 45%. So in other words, condos are sitting on the market. They're not selling very quickly, whereas people are listing single-family homes, and it… They're not staying on the market, so the plot, supply of those is down Quite dramatically. Yep. The median sales price, just so everyone knows so we're on the same page, in Seattle as of today is about 725,000. It hovered around 750,000 for the last few months. It took a dip in December. Um, I think a lot of that had to do with just the dynamics of what was being bought in December. Um, it's not uncommon for there to be quite a dip in December and January of each year.

Speaker 1: [9:59] Yep.

Speaker 2: [9:59] And condos, again, just generally speaking, people are moving away from condos as a general rule because of COVID restrictions. People are now working from home. They want more space, because now they might have one or two home offices. The kids have spent a year now at, uh, taking classes in, at home, you know, doing everything remotely. And so the needs of people, it, it's dramatically changed. Um, and then you're sitting in a condo thinking, "Why, why am I spending all this money to be so centrally located when everything's closed?" And so it's really pushed the dynamics a bit. It's accelerated a lot of the dynamics over the last year. It's been interesting to see. Christian, I'm gonna shoot it over to you. I would love if you would dive a little deeper into specific neighborhoods. I just kind of gave an overview of the Seattle area, but how are specific neighborhoods performing?

Speaker 1: [10:52] Yeah, let's go over the areas that are hot and not. So, Southeast Seattle actually went up a ton. It went up 23.3%. It was quite hot. So we're talking, like, the Columbia City, that area, part of Seattle. It just was on fire, and a lot of that has to do with, again, if it's, if it was more affordable, that, those were the areas that were tending to be super hot. Jason already talked about East Side and how that went up just insanely. Uh, and Kirkland, like we said, the Kirkland Bridlechair Trails area went up 50%, 5-0. The average price went from 850 in December of 2019 to 1.275 million in December 2020. So, very insane. That doesn't mean, like Jason said, I'm just gonna repeat this, it doesn't mean if you have a house there that it went up 50%. It has to do a lot with what was selling, the price ranges that they were selling in. But you can bet that your house did go up quite a bit. Another area, in Snohomish County, the Lynnwood, Edmonds, Mountlake Terrace, kind of Brier, which Brier's pretty small, but that whole area, it went up 20.1%. So again, the suburbs that are just outside the city, that area was very hot. It was more affordable. You could get more house for less money than you could in Seattle, and people were jumping on it. And then again, we, we kind of touched on it earlier, but Tacoma, Tacoma went up 20.9%. It was insane, very hot, and I believe I just saw an article, I didn't read it yet, but I believe I just saw an article saying that Tacoma was the number one market in the nation again for the second year in a row. So- Some not so hot areas. This isn't, this isn't like this is all that bad in, in comparison. But the Queen Anne Magnolia area, that only went up 6%, which the rest of Seattle was kinda doing a 10%-ish, so a little slower, still not bad. But I think a lot of the reason, again, is affordability. That area is a very expensive area, so there wasn't a lot of people that were jumping at, uh, buying there necessarily like they were in other areas. West Seattle, I mean, once the bridge did its thing and was shut down, we all could have guessed, uh, very easily that that area was going to be hurt. It still appreciated, still went up 2%, but compared to the rest of Seattle, that was, that was just not great. Downtown, Belltown, that core area, it went down 1.7%. Now, in that area, it is all condos. There's not a single single-family home. So you're thinking, with condos, you're thinking communal living. People really, because of coronavirus, were not wanting to share living spaces or hallways or elevators or anything where they're sharing air, so makes sense that, that it just went down. And then condos in the Central Seattle area, so we're talking like Capitol Hill and then the Central District, condos in that area actually went down 5.9%, which was pretty interesting. And there are some deals to be had there right now. With the vaccine rolling out, however slowly it might be, I see that as, you know, a long-term deal area right now. So if you are in the market for a condo, if you are willing to get a condo, might not be a bad spot to look, that Downtown or, or kinda Capitol Hill, Central District area, because you can get some deals there. That's it for neighborhood-wise. Uh, again, to recap what we kinda saw, basically communal areas that are close to the city core, those didn't do so well. Areas that were more affordable and further away from the city, where you get more home for your money, those areas went up quite a bit. So that's in general what happened. It makes sense. Like Jason said, people needed more space. They didn't have to get to work downtown or even necessarily, you know, necessarily going onto the East Side, uh, although the East Side went up crazy as well, so That is it for our 2020 Seattle area market recap. As you can see, the market was really, really healthy this year. We saw a lot of appreciation. There was more action in the suburbs, less in the city core, and, and that's kinda what happened. If you are interested to see what we think and what some of the other experts out there think is going to happen and predict in the 2021 market, just watch or listen to the next episode. Just stop listening to this as soon as it's over, click on that next one. I think you are going to be pleasantly surprised. And that is it for today's show. Thank you very much for listening. Jason, Les, thanks so much for co-hosting this with me. I always appreciate you guys and your insight. And that is it for today. If you like this, please subscribe. Please share it with your friends, and, uh, we will see you next time on the Awesome in Seattle podcast.

Speaker 3: [15:48] Great. Bye, guys. Bye.