The Moment Is Right to Buy in One of Seattle’s Coveted Neighborhoods

With a median home listing price of $829,000—nearly double the national average of $430,000, according to Realtor.com—Seattle hardly qualifies as a bargain. 

But for luxury buyers, this might be the moment to pounce on top-end properties. The spike in interest rates—along with  buyers being more cautious—have helped tame prices in the Emerald City’s most desirable neighborhoods.

“The upper end of the ultra high-end market is softer than we’ve seen in many years,” said Moira Holley, co-founder of Realogics Sotheby’s International Realty in Seattle. “In 2021, when there was brisk movement, we saw sales in the $30 million range. We haven’t had a sale at that price point since then.”  

Holley has the listing for Seattle’s most expensive property, a $22.5 million Madison Park waterfront home whose price has dropped more than 30% over the course of a year.

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Prices have also softened for seven-figure listings in prized Seattle neighborhoods like Queen Anne, Magnolia and Madison Park, Holley said. While homes in these central neighborhoods “tend to hold their value very well,” some sellers have been forced to reduce asking prices that were based on the sizzling pandemic market rather than today’s more tepid conditions, she said. Homes in the $2.5 million to $4 million range in those neighborhoods “are not selling at the 2020 pace, or even the 2021 pace,” she said. “But we are starting to see signs of a better market.”

Elliot Franklin, an agent with Engel & Volkers Seattle Eastside, agreed. “All three neighborhoods are spectacular, and in general haven’t been hit as badly as the broader Seattle market,” which saw a 2.4% decline in median listing home prices year over year, according to Realtor.com. 

But “we’re finding that properties that have been on the market more than 60 or 90 days have hung onto old pricing from when the market was better,” Franklin said. “I’ve seen one listing that had been on the market for 500 days, and the price had dropped more than $500,000.”

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Karen Abbey, who works alongside Franklin at Engel & Volkers Seattle Eastside, shared one dramatic example. “In Magnolia, 2530 42nd Ave W. was originally listed last July for $5.495 millionand is currently priced at $4.75 million,” she said. “The price adjustment indicates that the seller has reduced the asking price to attract potential buyers. This could be due to factors such as market conditions, competition with other properties, or the need to generate more interest in the property. 

Likewise, a Realtor.com search for homes in Queen Anne produced 15 properties with price reductions, including a four-bedroom, four-bathroom home whose $2.7 million asking price reflects a $98,000 price drop, and a four-bedroom, three-bathroom home reduced by $76,000 to $2.4 million

Jen Cameron, managing partner of the Agency Real Estate in Seattle, thinks prices have come down even more. 

“I’d say we’re down 10%-12% over last spring, and this is a moment of opportunity for the luxury buyer,” she said. “And when you’re talking about homes worth millions of dollars, the spread is even greater when home prices are down.” 

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Even if “extremely low” inventory means there’s less room to negotiate on price than there may have been a few years ago, “you’re still getting better prices than at any time since the pandemic,” Cameron said.

Magnolia “is its own village tucked into Seattle, and its homes have some of the most beautiful views of the Puget Sound,” she said. 

Queen Anne is “literally in the city center, smack in downtown Seattle, with oodles of historic homes, fantastic walkability and great stores.” Madison Park, on the eastside of Seattle, “is tucked next to Lake Washington, with some of the best walkability, shopping and dining. It’s got beautiful historic homes along with the Broadmoor Golf Club, a lovely gated community.”

High interest rates have been the main determinant in price adjustments, Holley, of Realogies, said. “The market was buoyant for quite a while, but interest rate hikes saw buyers pull back and sellers decide to stay put,” she said. “The market in general is off about 20% from recent highs.”

For true bargain-hunters, however, downtown Seattle’s languid condo market offers the biggest buying opportunities. Redfin reported last month that the average home sale price downtown slipped 12.2% to $572,000 in April compared to the previous year, with condos leading the decline.

“The downtown condo market has been soft since the beginning of the pandemic, and that’s where the great buys are right now,” said Holley. Downtown Seattle neighborhoods include Denny Triangle, Pioneer Square, Belltown and South Lake Union. “Downtown is very different from the adjacent neighborhoods. There are bargains, and it’s the right time to make a really good purchase with appreciation.”

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