Seattle-area home prices dropped more than anywhere else in the country, according to the new Case-Shiller home price index released Tuesday. The index showed the region’s largest monthly drop in home prices since the late stages of the housing bust.
Just this past May – which in hindsight appears to have been the peak of the current market – homes in Seattle were selling on average for 6.3 percent above the list price. Now, they’re going for 0.6 percent below asking.
The actual list price of homes is dropping at a similar rate. In all, sales prices have dropped nearly 7 percent, or $55,000, in Seattle since the spring.
The last time the average home here sold for below list price was during a brief lull at the end of 2014.
It’s important to note that Seattle is only dropping back down toward what a normal market looks like. Among the nation’s 50 biggest cities, the average home sells above list price in only five of them.
See: Balance “finally returning” to housing market as buyers welcome more choices, moderating prices.
In most of the country, it’s normal, and even expected, for buyers to negotiate the list price down. But in Seattle, the asking price had become merely a starting point destined to be bid up in a furry of offers and waived contingencies.
Now however, the drop in competition level, driven by a weakened buyer pool, has changed the way people shop and bid on homes. Buyers are more likely to avoid bidding wars and the dangers that come with them, like fast-paced deals and waiving inspections, which had become standard in recent years.
It’s a similar, though slightly less dramatic story across the broader metro area: The typical home from Tacoma to Everett now goes for 0.4 percent below list price, down from the spring peak when homes went for 4.6 percent above asking.
The detailed report on the market cooling came Tuesday with the monthly release of the nationwide Case-Shiller home price index. The index shows single-family home prices across the metro area fell 1.6 percent in August on a month-over-month basis, the biggest drop in the country.
The last time the index showed prices dropping that much on a month-over-month basis was 2011, when the region was in the final stages of the housing collapse.
Still, on a brighter note for home owners. On a year-over-year basis, prices in Greater Seattle still grew 9.6 percent. That pace while the lowest in three years, still shows significant appreciation. The increase was mostly driven by demand for the cheapest homes in the region, which are mostly in Pierce County and north Snohomish County.
The most recent numbers show the median house costs $668,000 in King County, $485,000 in Snohomish County and $353,000 in Pierce County.