SEATTLE — For the first time in nearly a decade, Seattle's housing market is in flux. The market cooling off faster than any other city in the country, with home prices selling for 2% less in August than in July, according to a recent Redfin report.
High mortgage rates are outpacing how much buyers can afford, which is leading to homes staying on the market for longer and sellers slashing prices.
It's something house flipper Diana Roger is seeing, too. Roger has been buying, remodeling and selling homes in the Seattle area for about eight years.
"I enjoy finding ways to sort of bring out the best in a home," said Roger.
She said her latest investment, a classic Pacific Northwest split level in Brier with quartz countertops in the kitchen and four bedrooms, would have been sold within five days last year when mortgage rates were often less than 3%.
But since early 2022, the interest rate on a 30-year mortgage loan has surged to nearly 7%.
“[The interest rate] really has an impact on the amount of monthly payments for borrowers to the point of, in some cases, the payments are up more than 50%," explained Doug Mielitz, vice president of mortgage production at Seattle Bank.
For example, Mielitz pointed to a home priced at $775,000. Principal and interest payment on a mortgage rate earlier this year would have been around $3,300. At today's rate, it's around $4,400.
“An $1,100 difference is meaningful for most people," Mielitz said.
"I think I'm experiencing what other homebuyers are, which is the shift in the market and the uncertainty of what’s going on, said Roger.
People looking to either increase home space for an expanding family or downsize are no longer able to.
Mielitz said people are asking themselves, "well if we sell our existing home, where are we going to go?"
Roger said within a year she went from getting multiple offers above the asking price before an open house to the Brier home being on the market for five weeks with no offers.
"People are pickier and really looking for value for their money and waiting for a home that is maybe 9/10 or 10/10," explained Roger, who is considering taking the home off the market while hoping rates improve by spring.
Mielitz said three months on the market was normal a decade ago, but it's just not what people are used to now. He encourages people not to shy away from the high rates but to map out how much they are willing to spend monthly on both the high and low ends before seeking a loan.
He also pointed to the Washington State Housing Finance Commission, which offers free seminars for people to navigate the home buying process.