The Real Estate Disaster: What You Need To Know

0:00How terrible is the Seattle real estate market? And now by Seattle, we mean King County, which is bigger than Seattle. And we will even touch on why. What are the things that have happened to cause the Seattle real estate market to potentially implode? Beth, we're gonna talk about August numbers. How bad are they? Let's start with price. What is going on with? Yeah, so first I wanna say that traditionally August is one of our slowest months of the year. It's right up there with December. Okay, so it's always an off time because in the Seattle, greater Seattle, Western Washington area, it's peak time. Like the sun's out, it's as beautiful as it could ever be. We forget about how gray and jury it was. Where it's for reveling in the beauty of summer. Blue sky. Everyone's on vacation, outside, hiking, not thinking about moving.

1:01Right. However, we still are data from the Northwest MLS came out. It's a couple days ago comparing August, 2026 to August, 2025. Which is a fair compare, right? Too obvious. Yeah, it's just a fair. Two down months, compared against each other, what do we got? Okay, one of the most interesting things I saw was, well, Seattle, so Seattle proper within the city of Seattle, the prices are down 8% year over year. That's a significant hit. Like that's not a blip, that's a big draw. Yeah, I mean, see, and again, Seattle historically was almost like, it was $9.99 forever, right? So it took an 8K hit. Big hit and now it's $9.20. It went from a million year ago to $9.20 this year. There you go. Big change. And then the interesting thing was the city of Seattle had been resilient up to now where it was kind of fucking the trend.

2:02Right. And which was interesting. It's not anymore. So it was kind of lagging, but it's catching up now. And they are now seeing higher inventory and all the challenges we've been seeing on the east side for a while. So east side is the other side of King County that's more higher price. The tech heavy suburbs that is mostly what we see there. And so east side prices are down 5.97% year over year. OK. And so, but countywide, it's 7% down. So kind of right in the middle there. OK. All right. So again, Seattle, proper down 8, King County, higher in. Again, a higher in down 6% might be a bigger absolute number. Like, what are the absolute numbers? Yeah, the absolute number. So for the east side, last year was 1,537. This year, it's 1,445. Yeah. So I'm almost 100 grand. Yeah. It's a big hit. Big hit. And we've been seeing it's no surprise to agents that work around this area. We've been seeing this for a while and having some real conversation.

3:03Point, yeah, direct conversations with. And I think most people get it by now because everyone watches their neighborhood and sees what's going on. They see the increased inventory. They see the price cuts, et cetera. Yeah. All right. So prices down 7% county wide. That's significant. You know, that's that's borderline correction territory. I put 10% correction. Yeah, 10% correction, right? OK. Yeah. So active listings. There were some interesting things here. Up 27% in Seattle. Oh, Jesus. We've been seeing a lot on the east side for a while. So I'm not surprised to see we're up 45% on the east side. Well, well, well, well, time out. So Seattle proper, the the the old million dollar now 920. That's up 27%. Yeah. But your east side, the 1.51.6 area, it's up 45%. 45% and there's some areas even more than that and little pockets.

4:07And so like my pocket, which is basically red men, some mammage, those areas that are kind of like Microsoft heavy. Yeah. Are it's up 82% year over year. So call me call me crazy, but you're not done dropping in price. Call me crazy. I don't know. I mean, it'd be fair to say because normally we're starting to see. And what that is is the spring inventory didn't flush through the system. Correct. That's exactly. And I've been coaching because normally there be new ones coming on, but the old ones would be dropping off. They'd be sold eventually or taken off the market. And we're just not seeing that yet. Now, we didn't talk about this pre roll. So you may not have the data, but the number just jumped out at me. Do you have average days on market this year versus last or is that right? I do. I thought you might ask that. So average days on market is 32, which actually is less than I thought it would be. OK. What was it last year? Oh, what just happened?

5:08I can still hear you. So keep on. Your camera turned off. This is good. OK. I don't know how to change that, but anyway, we can still hear you. So keep going. OK. I'll just keep talking. Sorry, people. Average days on market is 32. It was 28 and 2025. Oh, I would have expected it to be much. So I guess that's almost 20%. But yeah, I would have expected it to be more. OK. I've been telling people. Hold on. There you go. OK. Sorry, guys. We're swinging it here. That's right. I'm not a tech person. Anyway, let it back. I would have thought it would have been much higher, actually. I've been coaching a lot of my clients that will either sell in the first 10 days or it could take 80 to 120 days. The people that are most active and looking will come. They'll be the first ones there. And we might get lucky and get a buyer right away. If most people have seen everything and they're looking for the new stuff.

6:08And they'll jump on it. Yeah. Or you've got to be ready. It doesn't mean anything is wrong or that we're doing anything. We shouldn't be doing or not doing something we should be doing. But that's just this is the market right now. Let me ask you this question. Again, you do such a good job of coaching your clients. I'm assuming you're going to you ask them a question like this. Like how motivated are you or how aggressive? Because again, at some point, right, you know this August is slow. Sure. Now we're in to September. It's going to get really slow by November. Yeah. I mean, are there some people you're like, Hey, you know what? Let's just let's just wait to January 15. I mean, are you some people we are having that conversation now where so we do seasonally. We see a little bit of a bump in September and October. Okay. And then it then it slows it dies off over the over the holidays. Okay. And for some people, you know, it is a bit of a read every year in our market. It's a reset. When we get to January, like whatever happened before, it's a reset. Got it. But we don't know what's going to.

7:09I mean, I'm very careful to say like we don't really know what's going to happen. But yeah, yeah. And sorry, my camera's still glitching. That's okay. We can see her here though. So that's cool. Yeah. I should turn it off again. This is crazy. Yeah, you're off. That's okay. As long as you can hear. Okay. I can't handle that glitching. Anyway, sorry folks. That's okay. So let's move on to pendings. So again, you got some data on pendings. What's going on with activity? These are down 14.8% in Seattle, but up 4% on the east side. Hmm. So that tells again, I think you said it earlier, but that really tells me that East Side got hit first. Yeah. Right. And now Seattle is kind of catching up. I feel like we've had the brunt of our correction on the east side because it has been really dramatic. Mm-hmm. You know, I'm seeing prices down in some communities, easily $100,000 over, early, you know, not even a year ago. Yeah. Yeah. There's only so much that that hit can take, you know, though, you know, could there be more sure?

8:10I mean, anything possible we never know. Right. Yeah. And then closed sales in Seattle, they're down 16%. Oh, God. East Side down 7.74%. So they're like, okay, that's a little better than I would have thought given all that excess inventory. Yeah. Yeah. Yeah. The other thing that I saw and again, you probably don't have this data. I'm not even sure it's reported in Seattle. But cancellations for the month of July were up for like four, I think there were 13.1%. That's national numbers. Yeah. Again, not all pendings become closed as you know. That picture of sorry. I can't never mind. I thought it's even better. Sorry. Sorry. So I'm just distracting. Anybody. I'm just curious. Are you getting a feel for cancellations? Like how many people get in contract and then bounce out or maybe you don't have that data? You know, I don't have that data because the way they keep track of our data is mucky with cancellations and relays and things like that. Sometimes it's a price chain. It's not a natural withdrawal.

9:10And so sometimes we don't know if it's, it's, it doesn't, it's not easy number for us to track. So I don't have that. No, that makes sense. Well, let's get to some reasons why. One of the things that we talked about was a, and why, I think this is Washington State why not Seattle or King County specifically. Yeah. And Washington State, these things, didn't Washington State adapt what's called a millionaire tax? They did. It's going up on the ballot. It's not going to, it hasn't started yet. It won't start until I believe of 2029, I think, or something like it's a ways out there. But just the fact that it passed is enough to get a lot of people nervous. Yeah, moving now. Moving. Yeah. And this, I've been really vocal about it. And that is for, for now, at least for those making over, it's the, the, the, the, the portion that's over a $1 million income per year. Yeah, and those are going to be your business owners, your high tech engineers. It's going to be your executives with stock options. Seattle and in your, like King County, I mean, let's just be real.

10:12King County is full of people making a million bucks a year. Yes. And some of them are going to just have to ask a legitimate question. Can I work somewhere else? Can I work remote? Is it time to move on? Can I move my business? I mean, I saw some people, one billionaire left Seattle moved to Vegas. There was a big article in Vegas about another Seattle billionaire movement. And there's Howard Schultz and yeah, yeah, yeah, the show. Yeah. Yeah. So what is this, is this, is this something you as a real estate agent are actually hearing? Or is it just three or four billionaires squawking? I have not heard it much. Like the, I hear people concerned about it. There's a lot of people really concerned about it. But I haven't had, I personally haven't had anyone cite that as the reason why they're moving. Okay. So the people that I'm working with mostly that are moving now, we're planning on moving for a long time and they are going to move no matter what. So they're retired. They're moving somewhere else for other reasons. They, they're getting a divorce.

11:12It's in a state sale, things like that. Like those are the kind of, and they don't really motivated sellers. Yeah. The other thing is the, there's a capital gains tax that was enacted years back in Washington. And it's not, interestingly, it's not for real estate. Thank you. Nar for that lobbying. Not on real estate, but it is on stock sales. So your capital gains for stock sales. There's tax on that. And yes, and then estate taxes for Washington state are very high. So for some folks, you know, it makes more sense to move away in their later years to avoid that strategically for their estate. Yeah. The other thing that I always struck me about the millionaire taxes is, frankly, it's not the people that are going to leave, which there will be some. But what always struck me is it's going to prevent the next millionaires from coming. It's like, why would we want to go to an area that's going to tax me for success?

12:14So just go to Idaho or somewhere else, Vegas or Florida or Texas. And you're just going to lose that next Microsoft, that next Amazon, that next Starbucks, they're going to incorporate somewhere else. Right. And there was an article that was, I saw in the Seattle Times, it originated elsewhere, but they were talking about the tech jobs in the Seattle area are largely rooted around Amazon and Microsoft, which have been growing, but they're also cutting their employees in a low-e based base. In San Francisco, it's different. It's like a gold rush again for AI money, but that is not happening here as much, at least not yet. Well, that's because it's under a tech. I mean, why would you, why would you want to be AI entrepreneurs start up, who's, would walk into a 10% tax if they're successful? You'd be like, nope, I'll just, should I go to Idaho before I go to Seattle? Right. So San Francisco, there's already a tax there.

13:15Not a million-air tax, no, I mean, it's still 13%. So don't get me told. So that's even more than the million-air tax, and that's on everybody. You know, the million-air tax is 10% only on what's over a million. So, but the reason why I think that, you know, they go over the talent is, you know, because California is not necessarily a business friendly state either. No, it is not. It's very correct. No, yeah. It's probably one of the top five least businesses. Yeah, I know, but San Francisco is going game busters right now. So because of the AI. Did you hear? Well, 144 homes. 144 homes in San Francisco in the last six months sold for seven figures above asking. Banana's. Can you believe that? Yeah. So that goes to show you like, there's, there's more than just like, there's a lot of different factors here. Like, there's the tax and all that other stuff, but then it's like, these people are making a ton of money. They're buying houses and they don't care what it costs. Yeah.

14:16It's like just new, yeah, probably a lot of. So what, so you've been in the market a long time. You've seen the cycles in Seattle. You're not just some fly-by-night agent. You're a top one percent agent for a reason. You know, where does this party go? I mean, it kind of feels like to me, you're probably going to slog through the rest of the year just because it's the slow part of the year. But then we're going to really see what Seattle has the next spring selling season because in my opinion, you've already missed two spring selling seasons. Yes. You got the tariffs and then the war. So this one, this one's important. It is and it's, I'm hesitant to try to make any predictions because of course. Of course. You know, we don't, we don't know what's going to be going on with interest rates. See, that's the other thing is like interest rates matter. When we go down to six, people are willing to forget or five, nine, nine. The people are willing to forgive a lot of other things. They're not as much willing to do that right now. One more thing if I can sneak it in for another reason that I think is impactful is I've

15:17been hearing that some folks with HB1 visas are feeling insecure about those visas and that's a large part of our buyer pool on the each side. So huge. So again, that's just something I hear. I haven't heard too much more about that, but I know that that has been cited as one of the reasons. So. Well, anything you can do to damp and demand, you're going to feel it in a market where the inventory is up, you know, whatever it was, 45%. Yeah. That's, yeah, 45% in, in your part of the east side houses are still selling and a lot of them are still selling. I mean, it's down, but they're a lot still selling and people just need to be hyper realistic. They got to prep their houses, right? Buyers. I mean, well, in the way, expected, expected a bargain and they're going to get it. And they're going to be asking for concessions and, you know, I don't blame them for that. So a lot of them wait, a lot of buyers wait for the price to come down, a big price drop.

16:18We price it where we think it should be. And then there's a price drop after that. And then the buyers come in under that usually. Got it. Well, again, I've been telling people it's a great time to be a buyer because you can find that motivated seller. You can get seller credits. You can get discounts. You can in some cases get seller financing. So again, if you're a buyer, it's time to be aggressive. Don't pay list price, folks, if you're a buyer, in my opinion. That's right. And there's opportunity here. So I mean, we do see cycles that never last. It feels like it will in the thick of it, but it doesn't, you know, have been through several cycles. Yeah. They have the different, the dynamics are different in each one. Remains me seeing how much a cumulative hit can be taken and when we'll come out of this. So, well, the good news is you and I will be touching base each and every month on what's going on. So we will stay in tuned and wish you the best of luck. Beth, is somebody wanting to reach out to you and get connected or get a referral? What do they do? Yeah, they can reach out to me at BethTroversoGroup.com or they can reach out to me on school.

17:23I'm in there too. Awesome. Thank you so much. Have a great time.