Seattle’s Real Estate Market Has Simmered Down, But For How Long?

March 9, 2022
Last updated:
April 4, 2024
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Housing prices in Seattle slowed quite a bit from mid-2022 to mid-2023, but things have picked up slightly since. What will the rest of 2024 bring for the housing market in Seattle?

Real Estate Market – Seattle: 2023 Recap

Seattle’s real estate market was somewhat dull over the past year, with home prices barely increasing year-over-year. That said, housing inventory continues to remain very tight. Let’s go over some key points that characterized the market last year.

Slow Sales

Perhaps it’s no surprise that the number of home sales last year was relatively weak given the tight inventory situation in Seattle. The Northwest Multiple Listing Service (NMLS), which covers 22 counties in Washington State, reported64,208 closed sales in 2023. That’s nearly half of what was reported just 2 years earlier.

New listings declined Y-O-Y in every month last year.

High Yet Stagnant Home Prices

Seattle has long been one of the more expensive real estate markets in Washington State and the country as a whole. As of April 2024, the average home price in Seattle sits at $847,419, marking just a 0.7% increase from the same time last year.

Seattle’s home prices help keep the average price on the surrounding King County high. Right now, King County’s average home price is $831,108. That’s only 2.2% higher than where prices were the same month in 2023.

That said, demand for housing in Seattle continues to be driven by an increase in millennial buyers entering the market, as well as the tech jobs in the city that draw in interested buyers.

Having said that, the rate of price appreciation was certainly not very strong last year, partly due to rising mortgage interest rates.

Ongoing Low Inventory

Tight inventory continues to be a trend in Seattle and the surrounding markets throughout the Evergreen State. Right now, Seattle has just a 1.2-month supply of housing available. The supply is pretty much the same in King County. A balanced market is characterized by a 5- or 6-month supply, which means Seattle has nowhere near enough housing to meet the demands of prospective buyers.

It’s interesting that home prices didn’t increase any more than they did last year considering this tight inventory situation. But as supply fails to meet demand, the price of homes may continue to increase throughout the year.

What Happens Next For the Seattle Housing Market For 2024?

Home prices in Seattle were flat last year, and they’re expected to continue on this same pace throughout 2024.

Seattle Expected to See High Prices and Tight Inventory Throughout 2024

Inventory will remain very tight. Combined with continued buyer demand, this could fuel home price increases over the next few months, though experts aren’t entirely sold on this prospect. Despite the continued scarcity of inventory, however, closed sales are expected to remain relatively strong this year.

The Seattle real estate market is very competitive right now, including in the higher-price ranges. Multiple-offer situations will likely continue to be a regular occurrence given the high demand and housing scarcity.

Condos May Be a More Budget-Friendly Option For First-Time Buyers

First-time homebuyers looking to get into the market this year may need to set their sights on condos to keep the home purchases within a reasonable price range. Luckily, condominium inventory is up in various Washington State markets, including Seattle.

Suburban Living Continues to Be a Hot Trend

The recent health crisis prompted urban dwellers to rethink their living arrangements, given the lack of space, both indoors and outdoors. In an effort to gain more space, many Seattle homeowners chose to migrate out of the city center and seek out suburban options.

The rapid growth in work-from-home arrangements has also given residents plenty more flexibility in terms of where to live relative to work locations. This trend will likely continue throughout 2024, as more people look to move into homes that can accommodate home offices.

Such an exodus out of the downtown core is putting upward pressure on home prices in areas that have traditionally been much more affordable centers outside of Seattle. The increased competition among buyers in once-affordable locations will therefore continue to put more pressure on homebuyer hopefuls with tighter budgets.

Is Now a Good Time to Buy a Home in Seattle?

Even though home prices are high in Seattle, 2024 is still a good time to buy, for a few important reasons.

Mortgage Interest Rates Are Still High (But Expected to Slowly Decline)

Securing a low interest rate on a mortgage is a great way to keep housing costs low. But although rates were very low just a few short years ago, they’re quite high right now. As of this writing, the rate for a 30-year fixed-rate mortgage is 6.82%.

Mortgage interest rates have been on the rise for the past couple of years, but experts believe that rates will head downward by the end of this year and into the next. According to the Mortgage Bankers Association (MBA), mortgage rates may dip down to 6.1% by the end of the year.

Having said that, we haven’t really seen the rate of decline that experts had earlier suggested.

Rising Home Prices Give Buyers the Chance to Build Equity

Given the continued rate of price appreciation that is expected this year, albeit somewhat weak, buyers who purchase a home earlier on in the year will be able to ride the wave of price increases. Along with appreciation in property values comes a growth in home equity. The sooner buyers get in the market, the sooner they can take advantage of such equity growth.

Why Choose a Sammamish Mortgage?

At Sammamish Mortgage, we can help you get fully preapproved for a mortgage, even in the face of massive home appreciation rates.

Sammamish Mortgage has been in business since 1992, and has assisted many homebuyers in the Pacific Northwest. If you are looking for mortgage financing in Washington State, we can help you get pre approved. Sammamish Mortgage offers mortgage programs in Colorado, Idaho, Oregon, and Washington.

Contact a loan officer if you have any mortgage-related questions or concerns. If you are ready to move forward, you can view rates, obtain a customized instant rate quote, or apply instantly directly from our website.

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