The Tacoma housing market is leaning towards being a seller's market. With prices on the rise, homes selling swiftly, and a significant percentage of properties selling above the list price, sellers hold a favorable position. However, buyers should be prepared for a competitive environment, where quick decision-making and strategic offers are crucial.
Nestled in the scenic beauty of the Pacific Northwest, Tacoma, WA has captured the hearts of both residents and potential homebuyers alike. With its stunning natural landscapes, vibrant cultural scene, and booming economy, it's no wonder that the Tacoma housing market has been a topic of interest for many.
Tacoma Housing Market Trends in 2024
In February 2024, the Tacoma housing market continued to show resilience and growth, with home prices surging by 5.7% compared to the previous year, reaching a median price of $460,000, according to Redfin. This upward trend in prices is indicative of the city's robust real estate landscape, characterized by active demand and limited supply.
Tacoma's Current Market Dynamics
Tacoma's housing market is notably competitive, with homes typically selling after just 20 days on the market, a significant decrease from 32 days recorded the previous year. This accelerated pace reflects heightened buyer interest and swift transactions. Additionally, in this vibrant market, it's common to see multiple offers on properties, often accompanied by waived contingencies.
Moreover, the median sale price in Tacoma surpasses the national average by 11%, further underscoring its desirability among homebuyers. On average, homes in Tacoma sell for around the list price and spend approximately 16 days on the market before going pending. For sought-after properties, the competition can drive prices up, with hot homes selling for about 2% above list price and going pending in as little as 5 days.
Market Trends and Insights
Examining recent migration and relocation trends provides valuable insights into Tacoma's appeal. From December '23 to February '24, 21% of homebuyers in Tacoma considered moving out of the area, while the majority, constituting 79%, opted to remain within the metropolitan region.
Interestingly, Tacoma attracts homebuyers from across the nation, with 3% searching to relocate from outside metropolitan areas. Among these, San Francisco homebuyers exhibit a particularly keen interest in Tacoma, followed by New York and Washington.
Tacoma's Market Outlook
Looking ahead, the future market outlook for Tacoma remains promising, albeit with some considerations. While demand continues to outpace supply, fostering a seller's market environment, there are indications of slight moderation in price growth, as evidenced by the 0.5 percentage point increase in the sale-to-list price ratio year-over-year.
Despite this, the prevalence of homes selling above list price and the relatively high percentage of price drops underscore the dynamic nature of the Tacoma housing market, where both buyers and sellers must navigate shifting conditions.
Tacoma Apartment Rent Prices
As of March 2024, the median rent for all bedroom counts and property types in Tacoma, WA is $1,600. This is -20% lower than the national average. Rent prices for all bedroom counts and property types in Tacoma, WA have decreased by 1% in the last month and have decreased by 7% in the last year. The monthly rent for an apartment in Tacoma, WA is $1,525. A 1-bedroom apartment in Tacoma, WA costs about $1,467 on average, while a 2-bedroom apartment is $1,734. Houses for rent in Tacoma, WA are more expensive, with an average monthly cost of $2,450.
Tacoma Housing Market Forecast for 2024 and 2025
The Tacoma housing market, like many others across the nation, remains an area of keen interest for both buyers and sellers alike. According to Zillow, the average home value in Tacoma stands at $470,030, reflecting a 3.3% increase over the past year. Homes in this region tend to move swiftly, with an average time to pending status of approximately 16 days, emphasizing the competitive nature of the market.
Key Metrics Decoded
For Sale Inventory: As of February 29, 2024, the Tacoma market recorded 398 properties available for sale. This figure provides crucial insight into the supply side of the market, influencing pricing and buyer options.
New Listings: In February 2024, Tacoma welcomed 149 new listings. These fresh entries into the market contribute to its overall inventory and shape buyer perceptions and choices.
Median Sale to List Ratio: The median sale to list ratio, standing at 1.000 as of January 31, 2024, is a significant indicator of market competitiveness. A ratio of 1.000 suggests that, on average, properties are selling at their listed price, highlighting equilibrium between buyer demand and seller expectations.
Median Sale Price: Reflecting transactions from January 31, 2024, the median sale price in Tacoma was $435,000. This metric serves as a benchmark for assessing the overall affordability and value proposition of homes in the market.
Median List Price: As of February 29, 2024, the median list price for homes in Tacoma stood at $475,641. This figure, when compared to the median sale price, offers insights into pricing trends and seller expectations.
Percent of Sales Over/Under List Price: These metrics, recorded as 32.8% and 40.3%, respectively, for transactions in January 31, 2024, shed light on pricing dynamics and negotiation patterns within the Tacoma market. A higher percentage of sales over list price may indicate heightened competition among buyers, while a significant percentage under list price could suggest negotiating leverage for purchasers.
Are Home Prices Dropping in Tacoma?
Based on the available data from Zillow, there is no indication of home prices dropping in the Tacoma housing market. Instead, the average home value has experienced a 3.3% increase over the past year, reflecting sustained demand and market resilience. While fluctuations in pricing may occur due to various factors, the overall trend suggests stability and potential for continued growth.
With a relatively low inventory of 398 properties for sale as of February 29, 2024, and a median list price of $475,641, sellers may currently hold the upper hand. Additionally, the median sale to list ratio of 1.000 indicates a balanced market, with properties generally selling close to their asking prices. However, the presence of 32.8% of sales over list price suggests pockets of heightened competition, which could tilt the scale slightly in favor of sellers.
Will the Tacoma Housing Market Crash?
Predicting a housing market crash with certainty is challenging, as it depends on numerous economic, social, and regulatory factors. While the Tacoma market currently shows signs of strength, including steady price appreciation and competitive activity, potential risks such as economic downturns or changes in interest rates could impact its trajectory. However, there is no conclusive evidence to suggest an imminent crash at this time. Vigilance and monitoring of market indicators remain prudent practices for both buyers and sellers.
Is Now a Good Time to Buy a House in Tacoma?
Determining whether now is a favorable time to buy a house in Tacoma depends on individual circumstances and objectives. Despite the competitive nature of the market, favorable interest rates and the potential for future appreciation may make it an attractive proposition for buyers seeking long-term investment opportunities. However, buyers should conduct thorough research, consider their financial readiness, and consult with real estate professionals to make informed decisions aligned with their goals.
Tacoma Real Estate Investment Overview
Tacoma, Washington, has emerged as a favorable destination for real estate investors due to its strong housing demand and sustained growth. As the state's third-largest city, Tacoma has a population of around 220,000, and it's growing at a rate of 0.78% annually. Furthermore, it is a satellite city located at the southern end of the Seattle metropolitan area, which is home to approximately a million people. The Tacoma housing market has remained resilient in recent years, and real estate investors have found favorable returns in the short term.
Top Reasons to Invest in Tacoma Real Estate:
- Strong Demand: The demand for housing in Tacoma has consistently remained strong due to its growing population and proximity to the Seattle metropolitan area. Additionally, Tacoma is home to several prominent employers, including Joint Base Lewis-McChord, MultiCare Health System, and the Port of Tacoma. This demand is expected to continue to increase, making Tacoma an excellent destination for real estate investors.
- Affordable Prices: Despite being a part of the Seattle metropolitan area, Tacoma offers more affordable housing options compared to Seattle. The median home value in Tacoma is around $470K, while the median home value in Seattle is > $800K. This affordability factor makes it an attractive destination for first-time homebuyers and real estate investors alike.
- Positive Growth Outlook: According to the Zillow Home Value Index (ZHVI), Tacoma's average home value has steadily grown over the past year, indicating a positive growth outlook. Additionally, the Tacoma housing market is expected to continue growing in the coming years, making it a favorable destination for real estate investors.
- Low Vacancy Rates: The vacancy rates in Tacoma are relatively low, indicating a stable and active housing market. This is good news for real estate investors looking to rent out their properties as they can expect a steady stream of rental income.
- Diverse Housing Options: Tacoma offers a diverse range of housing options, from single-family homes to townhouses and condos. This diversity makes it easier for real estate investors to find a property that suits their investment goals.
- Economic Growth: The economy in Tacoma has been growing steadily, with several new businesses and industries moving to the area. This economic growth is expected to continue in the coming years, which will likely further boost the demand for housing in Tacoma.
In conclusion, the Tacoma housing market offers a favorable destination for real estate investors due to its strong demand, affordability, positive growth outlook, low vacancy rates, diverse housing options, and economic growth. With these factors in mind, it's easy to see why Tacoma is becoming a popular destination for those looking to invest in real estate.
How Should Buyers Invest in This Market?
There is no one-size-fits-all answer to how buyers should invest in the Tacoma real estate market, as each buyer's situation is unique. However, there are some general tips that can help buyers make informed investment decisions:
- Work with a local real estate agent: Working with a local agent who is familiar with the Tacoma market can be invaluable. They can provide insight into market trends, help buyers identify investment opportunities, and negotiate on behalf of their clients.
- Conduct thorough research: Buyers should do their due diligence and research the Tacoma market before investing. This can include analyzing historical sales data, examining current market trends, and identifying areas with potential for growth.
- Consider long-term investment goals: Real estate investing can be a long-term strategy, so buyers should consider their long-term investment goals. For example, if a buyer is interested in rental properties, they should consider factors such as rental rates, vacancy rates, and potential for future rental demand.
- Have a solid financial plan: Investing in real estate can be expensive, so buyers should have a solid financial plan in place. This can include having a pre-approval for a mortgage, a solid down payment, and a plan for ongoing maintenance and repairs.
- Diversify investments: Investing in real estate can be a great strategy, but it's important to diversify investments to minimize risk. Buyers should consider diversifying their investments across different types of real estate, geographic locations, and asset classes.
References
- https://www.zillow.com/tacoma-wa/home-values
- https://www.nwmls.com/
- https://www.zumper.com/rent-research/tacoma-wa
- https://www.redfin.com/city/17887/WA/Tacoma/housing-market
- https://www.neighborhoodscout.com/wa/tacoma/real-estate
- https://www.realtor.com/realestateandhomes-search/Tacoma_WA/overview
- https://www.fhfa.gov/DataTools/Tools/Pages/FHFA-HPI-Top-100-Metro-Area-Rankings.aspx?