Underscoring the uneven impact of the pandemic, sales of the most expensive Seattle-area homes surged in the third quarter of the year at more than double the rate of the area’s most affordable homes.
Sales of homes over $2 million, the top 5% of the market in King and Snohomish counties, jumped more than 35% from July to September, compared to the same three months last year, according to Seattle-based digital brokerage Redfin.
Sales of homes under $600,000 rose by half that amount, 18% — and for homes under $417,000, sales fell by nearly 4%.
“Luxury listings are skyrocketing because high-end homeowners have the financial means and the flexibility to move during this pandemic,” said Redfin chief economist Daryl Fairweather in a statement. “Meanwhile, buyers who are in search of more affordable homes are grappling with fewer choices and fierce competition.”
Around the Seattle area, more affordable homes have trickled slowly onto the market over the course of the pandemic. New listings plunged nearly 40% in March, only recovering in mid-July.
The major inventory crunch has pulled prices up — way, way up, in the case of the county’s most affordable homes, those that appeal most to former renters looking for more space as the pandemic stretches into its eighth month. Home prices in affordable Southeast King County jumped nearly 18% over last year, to a new all-time high of $552,000, according to the Northwest Multiple Listing Service.
That trend is reversed, though, in the luxury market. New listings of luxury homes jumped by nearly 52% in the third quarter, according to Redfin, compared to last year. And price growth stayed at a modest 4.4%.
Much of the new supply is coming from people who own multiple homes, said Coldwell Banker Bain’s head of luxury sales, Jennifer Cameron.
Between remote work and online learning, “There are some people whose lives have changed drastically,” Cameron said. “They’re realizing they don’t need three houses anymore. Maybe they can consolidate to two.”
Those sellers are letting go of their houses in the city, leaving for homes in places like the Methow Valley or Island and San Juan counties, Cameron said. Others seem to have the same idea: Home prices rose by 56% in San Juan County in September, to $908,085, and the number of closed sales doubled compared to last year, according to the Northwest Multiple Listing Service.
Those snapping up the newly vacated Seattle properties include tech employees financing their purchases with cheap money. Buyers of expensive homes are able to finance their purchases with jumbo loans in the low 3% range — interest rates unheard-of until the pandemic.
Even as Washington state unemployment claims hit a 10-week high, “Facebook, Microsoft, Amazon, Apple — all these places are still thriving,” Cameron said. “These people have money.”