Should I buy a home in Seattle over the next few months or wait until 2024? What will the Seattle housing market in 2024 look like? What’s the general outlook and forecast for the Seattle, Washington, housing market in 2024?
These are common questions among local home buyers who are planning to make a purchase. After several tumultuous years within the real estate market, many future buyers are now scratching their heads about how to formulate a plan.
We’ve created this report to help you make a more informed decision.
This report does not predict the future. No one can make entirely accurate Seattle housing market predictions in 2024. But we can examine current housing market trends in the Seattle area to make an educated guess about what it might be like in 2024.
Seattle Housing Market Forecast for 2024
Like most metro areas across the U.S., the Seattle real estate market has experienced unusual conditions over the past few years. As we enter the fall of 2023, the market has settled into a kind of “new normal.”
Home prices have seemingly rebounded from their post-pandemic slump (a trend that occurred nationwide) with the prospect of steady gains ahead. Inventory levels, meanwhile, remain low and could present a challenge for Seattle-area home buyers well into 2024.
Home prices could rise at a slow but steady pace.
Home prices across the Seattle metro area have declined slightly over the past year. The same can be said for almost every city and metro area in the U.S. It’s part of a nationwide market “correction” following the overheated sales pace of 2021 to 2022.
But that downturn seems to be over.
As of September 2023, Seattle-area home prices had posted several consecutive months of steady gains. So, the “bottom” of the real estate market appears to be behind us regarding home values. Looking forward, prices could continue to climb at a moderate pace, more in keeping with historical trends and norms.
According to Zillow, the median home value for the Seattle-Tacoma-Bellevue metro area is currently around $706,000. That’s 5.8% lower than a year earlier, by their estimate. But when we look at the month-to-month trends, we can see the start of an upward trend.
The median home price within the Seattle housing market rose for the last four months. It peaked at around $768,000 in June last year, dropped to a post-pandemic low of about $694,000 by April 2023, and has risen steadily.
Zillow’s researchers also issued an optimistic forecast for the Seattle housing market in 2024. They predicted that the median home value would rise by around 3.9% during the 12 months from August 2023 to August 2024.
Low inventory will continue to drive competition among buyers.
You can’t discuss Seattle housing market trends or predictions without looking at inventory levels. This is one of the area’s primary drivers of local market conditions. And anyone who has purchased a home in recent months will tell you it’s still pretty tight, which points to continued supply issues in the Seattle housing market in 2024.
As of last month, the Seattle-Tacoma-Bellevue area still had less than a two-month supply of homes for sale. That’s slightly improved from the record-low supply levels we saw during the pandemic but still somewhat lower than historical norms.
And it doesn’t seem like this will change anytime soon. One recent report showed that Seattle had one of the most significant new real estate listing declines over the past year.
In late August of 2023, researchers from Realtor.com published a housing market report that, among other things, showed where inventory levels were rising and falling the most.
To quote that report:
“In August, only Milwaukee (+6.8%) and Jacksonville (+4.0%) saw new listings increase over the same time last year. Declines in new listings were greatest in Nashville (-27.2%) Cincinnati (-25.0%) and Seattle (-24.7%).”
In this context, “new listings” refers to homes that have come onto the market relatively recently. The Seattle metro area had a significant year-over-year decline in total property and new listings. This means that a real estate market that was already tight has become even faster over the past year, with fewer properties coming up for sale.
Seattle-area home buyers should pay close attention to these trends. Whether you’re planning to buy a home over the next three months or sometime in 2024, you could be affected by low supply levels. But patience and persistence can help you succeed even with such trying conditions.
Homes will continue to sell faster than the national average.
Home sales in the Seattle area have been outpacing the national average for a long time now, and that will probably continue in 2024 as nicely.
As of last month, properties listed for sale across the Seattle-Tacoma metro area spent a median of just eight days on the market before going under contract. The national median was closer to 29 days during that same timeframe. The Seattle real estate market currently has one of the fastest sales paces of any metro area in the country.
This is another trend that could challenge home buyers in 2024. But when buying a home, there’s a solution for almost every challenge.
Even during the frantic days of 2021, when a nationwide home-buying surge accelerated the market like never before, Seattle home buyers found ways to succeed. Buyers can improve their chances of success by expanding their search area, working with an experienced agent, and making a solid offer the first time.
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Mortgage rates remain high, though they may dip by the end of 2023 and into 2024.
Another potential trend in Seattle’s upcoming real estate housing market is that mortgage rates may finally start to plateau.
Mortgage interest rates continue to make it more difficult for homebuyers to enter the real estate market. As of the latest report from the Mortgage Bankers Association (MBA), the rate for a 30-year fixed-rate mortgage on conforming loan balances increased to 7.27% from the week before, continuing its upward trend. The same direction was seen on the rate for 30-year fixed-rate mortgages with jumbo loan balances, which increased to 7.25% from the week before, as of September 13, 2023.
These high rates are affecting more than just homebuyers. With these high mortgage rates, homeowners have little incentive to refinance their mortgages. According to the MBA’s latest report, mortgage refinancing decreased to 29.1% of total mortgage applications from the previous week.
This situation also reduces the incentive for homeowners to sell their homes and purchase a new one with rates this high.
The MBA expects mortgage rates to gradually decrease by the end of 2023 and into early 2024 as the economy slows. According to MBA analysts, mortgage interest rates may continue to fall throughout much of 2024 and dip to 5.4% by the fourth quarter of next year.
That means buyers may soon see a light at the end of the tunnel in terms of cooling mortgage rates, though how much rates will slow within the Seattle housing market in 2024 remains to be seen. Should rates decline, homebuyers may be in a better position to afford a home purchase, and homeowners may have more incentive to refinance to take advantage of lower rates.
Rent may become more affordable.
Not only are housing prices very high, particularly in Seattle and surrounding areas, but rental prices are also an issue for renters. The average rental price for a 1-bedroom unit in the city as of September 2023 is $1,975, according to Zumper.
That’s a 4% decrease from last year but still relatively high. For a 2-bedroom unit, the price skyrockets to $2,750; for a 3-bedroom unit, the price hits $3,400.
However, according to the MBA, the rent cost may be somewhat alleviated by an increase in multi-unit housing starts. Currently, roughly one million new multi-family units are being constructed, which will help improve the inventory situation and bring a little more balance to the supply-demand factor.
These units are expected to become available sometime within the next couple of years, which will hopefully keep asking rental prices in more affordable ranges. So, you have five data-based predictions for the Seattle housing market in 2024. Overall, the local housing market will continue to be shaped by tight inventory conditions and faster-than-average home sales. Add the prospect of steadily rising home prices and potentially lower mortgage interest rates, and we have all the ingredients for another competitive year.