Washington Real Estate 2024: Rising Prices Amid Supply Shortage

September 15, 2017
Last updated:
November 28, 2023
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Seasons change quickly, and much like the change in temperature, so too do home prices and real estate markets change. This begs the question: Will home prices in Washington State heat up this season, or will the market remain stagnant throughout 2024?

The best way to answer these questions is to look at current supply and demand trends. If you’re thinking of buying a home in Washington State this year, you’ll want to assess trends and price forecasts in the local real estate market.

Tight Inventory Continues in Washington State

In major cities across Washington, there is a serious shortage of housing supply relative to demand. This means that home buyers are competing fiercely for limited inventory. Some parts of Washington State are seeing incredibly tight inventory.

Right now, Washington State has about a 2.2-month supply of housing inventory. That’s well below what’s considered to be a balanced market.

And with low inventory typically comes an increase in home prices. While prices have dipped over the recent past, they’re on their way up and are expected to increase into 2024, which we’ll get into next.

Home Prices in Washington

High demand and low inventory are still the driving factors within Washington’s housing markets. And it will start pushing prices north. The median home sales price in Washington now sits at $568,346 as of November 2023.

Related: Co-borrowing on the rise in WA

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Supply of Homes Still Below Average

In some ways, the real estate market in Washington is something of a special case. In the state’s major population centers like Seattle, there is currently only a 2.2-month supply of homes for sale. That’s well below the national average, as well as the average is seen in other states.

And in the surrounding King County, there’s only a 1.98-month supply of available homes for sale to meet buyer demand.

This, combined with steady demand from buyers, will probably keep Washington house values rising through the winter and into next year.

Related: Is now the time to buy a home?

Is New Construction Lagging Behind?

With all of this housing demand in Washington, you would think the home building industry would be ramping. But that’s actually not the case.

Home construction was picking up in Washington and across the nation prior to the coronavirus pandemic. But since the virus hit the US, construction slowed down, which had further impact on housing inventory.

According to recent data, Washington State needs to see another 1.1 million homes built by 2044 to keep up with demand. But home builders are facing barriers to boost construction as a result of material shortages and higher borrowing costs.

In other words, we can probably expect demand to outstrip supply in most housing markets across the state, at least for the foreseeable future. And this will continue to put upward pressure on home prices in Washington throughout 2024.

Disclaimer: This article includes forecasts, data and trends provided by third parties not associated with our company. We have compiled this information as an educational service for our readers.

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