Seattle housing cools as recession fears continue to linger

Dec 5, 2022, 1:40 PM
Aerial view of Laurelhurst. An upper class residential neighborhood in Seattle, Washington. Lake Washington sits on the left and Union Bay on the right. . (Photo by: Education Images/Universal Images Group via Getty Images)
(Photo by: Education Images/Universal Images Group via Getty Images)

Seattle had one of the fastest-growing housing markets in the country when tech giants like Amazon and Microsoft were hiring in droves. But with the current layoff environment, the housing market has been cooling.

According to a report from Redfin, housing sales are down 42.2% from last year, as prices rise by 7.6%. A similar study from RE/MAX shows that Seattle’s active housing inventory in October was up 130% year-over-year, the largest increase recorded so far in 2022.

Mass tech layoff could spell disaster for Seattle

The current median home sale price is $675,000, down from April’s high of $757,750.

As the market continues to cool, Matthew Gardner, Chief Economist for Windermere Real Estate, went on the Gee and Ursula Show to discuss why he thinks the downturn won’t last.

“I’m going to argue the fact that we’re not going to see a massive downward correction in home prices because so many of us refinanced our home through COVID,” Gardner said.

“By my calculations, there are probably 25 million homeowner households with mortgages rates at 3% or lower,” he continued. “Do you want to lose that mortgage rate? A lot of people will not move because of that, I think.”

Gardner said that means supply will be limited, but demand will still be out there.

“That can actually cause price stability, or actually allow prices to continue to rise again, I think we’ll start seeing that probably in the latter part of next year,” Gardner predicted.

There is likely to be a continued recession, though, as record-high inflation continues to plague the country. In Seattle, the Consumer Price Index showed that food prices were nearly 12% higher compared to last year.

“The trouble is, every time the [Federal Reserve] has done that, to slow down the economy, we have a recession. So soft landings, they are remarkably bad at, because they start raising interest rates too late, and they carry on too long.

“So, is there going to be a recession? That means we can lose jobs across the country. My last forecast is probably about 1.5 million jobs will be shed in America.”

Gardner thinks the reason so many companies are reducing staff is because of a lack of clarity on the direction they will be heading in the immediate future. This is partly due to the change from fully remote work that started at the beginning of 2020 with the pandemic, but now employers are trying to get staff back in the office.

Gardner does believe that the overall impact of layoffs will be limited, pointing out that due to the pandemic, there were more low-interest rates on loans from the government, causing the industry to overstep.

The new adjustment puts the job market closer to where it was in 2020 at the start of the pandemic. That’s not to discount the indirect jobs that were created through the tech growth, which are likely to see a decline as well.

“Now, you might say, ‘that’s gonna be terrible.’ We are so tech-centric here in Seattle. But if you think about the pandemic, in one month, the information sector is where most of those jobs are housed.

“They lost 800 jobs, but they got them all back the following month and added more than 20,000 since then. So we’re seeing some cutting of the fat. However, given the increase we’ve seen, if we were to lose a fifth [of the ] 10-15,000 jobs, that’s going to take us back to where it was given a half ago.”

Gee and Ursula Show

Gee and Ursula

Frank Sumrall

KIRO’s Darren Dedo recovering after battle with bilateral pneumonia

Through ECMO and amazing medical care, more than a month later, Dedo was able to join The Gee and Ursula Show remotely from his hospital bed.
1 day ago
Seattle Police...
Bill Kaczaraba

Gee & Ursula: Naming officer in pedestrian death was appropriate

Gee & Ursula believe that releasing the name of the police officer involved in the deadly pedestrian crash in Seattle was appropriate.
1 day ago
Gee Scott and Ursula Reutin Show

Scenarios: I’m not ok with my stepdaughter spending my husband’s money

On the Gee and Ursula Show, hosts Gee Scott and Ursula Reutin give advice to help other people in a segment called … Scenarios.
1 day ago
Bill Kaczaraba

Gee Scott on service charges at restaurants: ‘You’re getting no tip’

Right now, Washington state law dictates that all tips belong to employees, but which workers get the money is decided by management.
2 days ago
climate pledge...
L.B. Gilbert

Climate Pledge house band removed after calling Jeff Bezos a ‘jerk’

Climate Pledge Arena is without a house band after they got disinvited from their gig at Seattle Kraken games for making fun of Jeff Bezos.
2 days ago
The parents of Tyre Nichols, Mama Rose and Rodney Wells, attend a candlelight vigil for Tyre Nichol...
Gee Scott and Ursula Reutin Show

Mother of man killed by police ‘urging people to protest peacefully’

Tyre Nichols died after a traffic stop in Memphis turned violent with police. His mother is urging people to protest peacefully.
5 days ago

Sponsored Articles

safety from crime...

As crime increases, our safety measures must too

It's easy to be accused of fearmongering regarding crime, but Seattle residents might have good reason to be concerned for their safety.
Comcast Ready for Business Fund...
Ilona Lohrey | President and CEO, GSBA

GSBA is closing the disparity gap with Ready for Business Fund

GSBA, Comcast, and other partners are working to address disparities in access to financial resources with the Ready for Business fund.

Medicare open enrollment is here and SHIBA can help!

The SHIBA program – part of the Office of the Insurance Commissioner – is ready to help with your Medicare open enrollment decisions.
Lake Washington Windows...

Choosing Best Windows for Your Home

Lake Washington Windows and Doors is a local window dealer offering the exclusive Leak Armor installation.
Anacortes Christmas Tree...

Come one, come all! Food, Drink, and Coastal Christmas – Anacortes has it all!

Come celebrate Anacortes’ 11th annual Bier on the Pier! Bier on the Pier takes place on October 7th and 8th and features local ciders, food trucks and live music - not to mention the beautiful views of the Guemes Channel and backdrop of downtown Anacortes.
Swedish Cyberknife Treatment...

The revolutionary treatment of Swedish CyberKnife provides better quality of life for majority of patients

There are a wide variety of treatments options available for men with prostate cancer. One of the most technologically advanced treatment options in the Pacific Northwest is Stereotactic Body Radiation Therapy using the CyberKnife platform at Swedish Medical Center.
Seattle housing cools as recession fears continue to linger