Seattle Housing Market – Trends and Predictions for 2024
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Experienced Seattle realtor and FastExpert partner, Margo Christophilis, shares her insight on the dynamic Seattle housing market. Read on for an inside perspective on Seattle real estate.
Welcome to the ever-evolving world of real estate in the Greater Seattle area, where the Seattle housing market is as dynamic as the stunning landscapes that surround it!
As a trusted real estate agent, I’m here to provide you with an insider’s glimpse into the trends and predictions shaping our local Seattle housing market. Whether you’re a prospective buyer eager to find your dream home, an investor seeking opportunities, or a homeowner curious about the value of your property, the Seattle real estate market promises excitement, innovation, and possibilities in 2023 and beyond. So, let’s embark on this exciting journey together and explore what the future holds for our beloved city’s housing market.
The Seattle Housing Market is: Competitive
In one word, the current housing market in Seattle can be described as “competitive.” Now, let’s delve into the details and examine the factors that make this market such an intriguing and dynamic landscape for both buyers and sellers.
Unprecedented Demand
Seattle’s housing market has been on a remarkable upswing in recent years, driven by the city’s thriving tech industry and its status as a vibrant cultural hub.
The demand for homes has surged to unprecedented levels, resulting in a race among buyers to secure their own piece of this beautiful metropolis. Neighborhoods across the city have experienced a surge in popularity, with each one offering its unique charm and amenities.
The velocity of the Seattle housing market is staggering and has only picked up since last year. Despite rising prices, homes sell in approximately 10 days, which is 4 days quicker than a year ago.
In addition, 32% of homes sell above their list price, even with the higher mortgage rates, indicating that the Seattle housing market has hot homes and demand is strong.
Inventory Crunch
While demand soars, the supply of available homes has been struggling to keep pace. The inventory crunch has been a defining characteristic of the Seattle market, with a limited number of properties available for sale.
The housing market of Seattle has historically faced a shortage; however, that shortage of homes has only intensified in recent months with home inventory down more than 21.5% from a year ago.
In addition, supply remains constrained with only 1.71 months of inventory in the MLS database. That’s down from both a year ago (1.84 months of supply), and from last month (1.76 months of supply).
This scarcity of options has been known to intensify the competition among buyers, leading to bidding wars on some homes and often driving prices higher. While not as frequent as this time last year, the right home will still receive multiple offers!
Rising Home Prices
With demand outpacing supply, it’s no surprise that Seattle’s housing prices have been steadily climbing. Homeowners have seen their investments appreciate significantly, making it an opportune time to sell.
For buyers, this may mean stretching their budgets or exploring neighborhoods on the outskirts of the city to find more affordable options.
According to a new report from Northwest Multiple Listing Service, housing prices on homes sold in August 2023 rose 2.5% from a year ago. This marks the first year-over-year increase since January.
In addition, home prices in Seattle command a median sale price of $793K, far above the national median price of $435K.
While the housing market has slowed in recent months compared to the frenzy during Covid, the Seattle housing market remains competitive and desirable. The median price of homes is not expected to decrease significantly.
Rising Interest Rates
The trajectory of interest rates has been closely watched by both buyers and sellers. Historically low mortgage rates in months prior had been a driving force behind the surge in demand, making homeownership more attainable for many.
However, the rising mortgage rates over the past few months have certainly influenced buyer behavior and impacted the housing market dynamics. Some buyers are now opting to wait on the sidelines, while others are securing their dream home with the hope to refinance in the future.
According to Freddie Mac, the average interest rate on a 30-year home loan reached 7.23% at the end of August 2023 – the highest since 2001. We all held our breath as it subsequently dropped to 7.12% earlier this month.
As some buyers sit on the sidelines, the escalating rates remain a deterrent to would-be sellers who bought or refinanced their home in recent years and don’t want to swap their 3% rate for a 7% mortgage.
Slowing Sales Activity
While home prices are on the rise and demand is surging in Seattle WA, the year-over-year comparisons showed declines in new and active listings, pending sales, and closed sales. This is similar to the rest of the national average and reflects the housing market slowdown that has occurred over the past year.
The Northwest Multiple Listing Service (NWMLS) members reported 7,189 pending sales during August 2023, which was the lowest level since April’s total of 7,137. Pending sales are also down nearly 25% from a year ago at 9,552.
Agents and other industry watchers point to the rising mortgage rates as the culprit for declining sales.
Timing the Housing Market
Is it a good time to sell a home in Seattle? Or is it a good time to buy a home in Seattle? Here in Seattle, you will hear both!
Sellers
Yes, it is a great time to sell because of the low inventory! Buyers are still out there and waiting on the right home, in the right neighborhood. Home prices remain elevated and average homes sell quickly.
In the more sought-after neighborhoods, we are still seeing 5+ offers and homes going over asking! This shows that location is a BIG deal for buyers in Seattle, and some will not let interest rates get in their way.
Buyers
As for these buyers, it is still a great time to buy because the high interest rates mean less competition. While many of these homes receive five offers, that is still less than the 10+ we were seeing a year ago. It’s important to hire a real estate agent you trust and work closely with them to navigate the market.
We like to remind our buyers that if/when the interest rates take another dip, all the buyers waiting on the sidelines will come back out to shop! Getting the home now may be the advantageous option – marry the house, date the rate as they say!
Who is the Typical Seller and Buyer?
A Washington Post article called Millenials the “Unluckiest Generation“, and claims that Baby Boomers are dominating the real estate market. However, that is not exactly the case for the Greater Seattle area.
While we do have quite a few buyers and sellers in that generation, as a tech giant, Seattle also draws many young professionals and their budding families. With popular companies such as Amazon and Microsoft offering relocation services, there are buyers coming to Seattle from out of state as well.
As the tech sector grows, so does the luxury market for homes. Yet these homes have also experienced a relatively more significant drop in price compared to mid-tier home prices. As housing affordability has deteriorated, buyers have had to alter their budget look for home with a lower list price.
Another type of buyer and seller we have seen a rise in this last year is those who need a new home due to divorce. Some may suggest that this is a byproduct of the Covid-19 pandemic, but as we all know, divorce will always be a factor in real estate.
Why is Everyone Moving to Seattle?
As mentioned, many are relocating to Seattle because of job opportunities. The job market is thriving in Seattle
While this may be a leading cause, we also believe that folks are moving to Seattle and surrounding areas for its beauty! In addition to our happening cities, here in the Pacific Northwest we have mild seasons, lush forests, towering mountains, and stunning beaches! There is truly something for everyone here.
Greater Seattle Housing Market Predictions
Unfortunately, we don’t expect interest rates to lower any time soon. In fact, mortgage rates may rise again in the coming months.
Despite the higher mortgage rates and low inventory, and considering the level at which inventory is down (more than 21.5% from a year ago), we believe that over the next few months, homebuyers will experience the best selection and availability of homes for sale until Spring 2024.
This is also due to the reduced number of homes that come on the market over the winter months. We also expect home prices will rise after January 1st, particularly in the more affordable and mid-price ranges, as a result of the limited supply.
Conclusion
In the bustling world that is Seattle’s real estate market, one thing remains constant: the importance of having a trusted real estate agent by your side.
As we’ve explored the competitive landscape and evolving trends, it’s clear that navigating this market can be a challenging task. Whether you’re a seasoned investor, a first-time buyer, or a homeowner looking to make a strategic move, the expertise of a real estate agent is invaluable.
MORE GREAT INFO:
>>The Best (and Worst) Time to Sell Your Home
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