The Seattle-area housing market is experiencing a resurgence, fueled by rising home prices and a surge in sales activity. This is great news for sellers who can capitalize on the competitive market, but it presents challenges for buyers struggling to keep pace with the rapid price increases and limited inventory. Here are the latest trends in the Seattle housing market as seen in the previous month.
Seattle Home Prices on the Rise Across the Puget Sound
The median home price saw significant growth across all four counties in the Puget Sound region: King, Snohomish, Pierce, and Kitsap. King County, which encompasses Seattle, witnessed the most dramatic increase with a staggering 12% year-over-year jump, pushing the median home price to a whopping $980,000, according to the stats released by NWMLS.
Even surrounding areas haven't been spared, with Snohomish County experiencing a price rise, Pierce County growing, and Kitsap County increasing by 6%. Seattle itself continues to be a frontrunner, with the median home price reaching a remarkable $997,900, reflecting a nearly 13% increase compared to last year.
Condo prices followed a similar trend, with significant surges in most areas except Southwest King County. Notably, Seattle and the Eastside witnessed substantial condo price increases.
Seattle Housing Market Inventory Challenges: Lock-In Effect and Buyer Hurdles
While there has been a recent uptick in new listings, overall housing supply in the Seattle market remains limited. This scarcity is partly attributed to the “lock-in effect.” Homeowners, incentivized by their ultra-low existing mortgage rates, are hesitant to sell and potentially face higher rates in the current market. This limited inventory, coupled with high buyer demand, creates a competitive environment in the Seattle market where bidding wars and quick sales are the norm.
Despite the increase in listings, the current supply falls short of buyer demand in the Seattle market. This, combined with high monthly mortgage payments, discourages some potential buyers from entering the market altogether.
Seattle Real Estate Market Pace: A Double-Edged Sword
The Seattle real estate market moves at a breakneck pace. Redfin reports that approximately 80% of homes sold in the Seattle area in March were off the market within two weeks, placing it second only to Rochester, N.Y. This rapid turnover reflects the intense competition for available properties in the Seattle market.
While the market isn't quite as tilted towards sellers as it was during the peak of the pandemic-driven market in 2021, it still leans in their favor in the Seattle market. It currently takes about one month to sell through all single-family homes in King County at present demand levels. This may be a slight improvement for buyers, but it's still far from the balanced market conditions many would prefer.
Hence, the Seattle housing market is complex. While it's a seller's market overall, with soaring prices and limited inventory, there are signs that it might be starting to cool down slightly. Understanding these trends is crucial for navigating this dynamic Seattle market, whether you're a buyer looking to enter or a seller aiming to capitalize on the current conditions.
Seattle Real Estate Market: Seller's vs Buyer's Market
Seattle is still considered a seller's market in 2024, though there have been some shifts. Here's what to consider:
- Low inventory: There are more buyers than available properties, which gives sellers leverage.
- Faster sales: While not as fast as in the past, homes are still selling relatively quickly.
- Price appreciation: Housing prices are still rising year-over-year.
However, there are signs of a slightly less competitive market:
- More listings: Inventory is increasing compared to the height of the seller's market.
- Fewer bidding wars: While homes may receive multiple offers, it's not as common as before.
Why is the Seattle Housing Market Always So Hot?
Seattle's housing market has been a seller's dream for years, fueled by a combination of factors that create intense competition for a limited resource: homes.
- Tech Boom and Job Market: Seattle's status as a major tech hub attracts a constant stream of employees from established companies and startups alike. This influx of well-paid professionals creates a strong and consistent demand for housing in the city and surrounding areas.
- Limited Supply: Geographically, Seattle is hemmed in by water on one side and mountains on the other, restricting urban sprawl. Zoning regulations and a hilly landscape further limit the developable land available for new construction. This constraint on new housing supply keeps the number of available homes lagging behind the growing number of potential buyers.
- Economic Factors: “Historically low interest rates” in recent years made mortgages more affordable, further inflating demand. While rates have risen in 2024, the market seems to be adjusting and staying relatively stable for now.
Seattle-Area Housing Market Forecast for 2024
The Seattle-Tacoma-Bellevue area, also called the Puget Sound region, is a major metropolitan area in Washington state. It's the 15th largest in the US, with over 4 million residents. Seattle is the anchor city, known for tech giants and a vibrant coffee scene. Tacoma is a port city with a historic feel, while Bellevue is a business center. The area boasts stunning natural beauty with mountains and water surrounding it.
The average home value in the Seattle-Tacoma-Bellevue metropolitan area stands at $743,574, reflecting a 4.4% increase over the past year (Zillow). Additionally, properties typically transition to pending status within an expedited timeframe of approximately 7 days.
The 1.7% 1-year market forecast as of March 31, 2024, suggests that home values in the Seattle area were expected to appreciate by 1.7% over the following year.
The real estate market of Seattle also shows a median sale price of $641,667, slightly lower than the median list price of $701,317, indicating a market where properties are generally being listed higher than what they are ultimately selling for. However, it's noteworthy that a significant percentage of sales, 43.5%, are occurring under list price, suggesting that buyers may have some negotiating power.
On the other hand, 34.3% of sales are happening over list price, indicating competition for certain properties or in specific segments of the market. This could be due to factors such as low inventory levels, high demand, or desirable property features driving up prices.
As depicted in this graph, home values have increased year-over-year. This upward trend is expected to persist, with forecasts indicating continued growth over the next year.
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ALSO READ: Washington State Housing Market Forecast