The Seattle real estate market remains strong, but there may be signs of downward pressure on prices due to rising mortgage rates. But just how much will they actually decline?
Redfin forecasts home prices to decrease by a few percent in 2023, but experts do not anticipate it will lead to the collapse of the local housing market.
The growth in Washington, and while there will be declines, it won’t resemble a full fledge housing market crash.
Seattle Housing Market: Overview
For years, Seattle’s housing market was flourishing due to big companies like Boeing and tech startups. But things have started to change recently.
Inventory levels have grown, yet they remain far below what is needed to meet demand. This indicates there is still fierce competition in this space.
Due to intense competition in the Seattle housing market, home prices have skyrocketed over the last few years – often selling for more than their listed value.
It’s essential to comprehend how the Seattle housing market is doing, as this will enable you to determine if now is an appropriate time to buy.
Inventory and days on the market are two important elements to take into account when deciding whether or not to purchase in Seattle.
The number of homes for sale is also an important factor.
will I be able to afford a house
When looking to purchase a home in Seattle, it’s essential to determine how much you can afford. Your income and savings for a down payment all play into this calculation.
Furthermore, you should factor in how much your mortgage will cost you. This varies based on loan type, interest rate, private mortgage insurance (if applicable), and other fees.
Prequalifying for a mortgage is another essential step in buying your dream home in Seattle. A qualified agent can assist you in this process.
Affordability calculators are an invaluable resource for estimating how much you can afford to spend on a home.
They’ll also tell you how much money should be set aside each month for monthly payments, property taxes and other associated costs associated with homeownership.
Even though prices are rising, now is still an excellent time to purchase a home in Seattle. Although there isn’t an abundant supply of homes on the market, you can expect more properties at lower price points.
Seattle Housing Data: Inventory and Days on market
Seattle’s housing market is characterized by low inventory levels. At 2.5 months of supply, it is lower than the national average of 2.7 months of available properties.
Seattle’s homes are selling quickly and for top dollar. In February, the median number of days a home was on the market dropped to seven from seven in January while its sale-to-list price ratio slightly increased.
However, it remains below pre-pandemic rates of 10-12 days for single family homes and 9-11 days for condos in Seattle.
Furthermore, the number of new listings is up both month over month and year over year, suggesting sellers feel confident enough to put their houses on the market.
Due to this, buyers are paying significantly above list price. Seattle’s sale-to-list price ratio has reached an all-time high of 106.5 for single family homes and 111% on the Eastside.
why did the housing market in Seattle get so hot
Real estate markets tend to move at different speeds and in distinct cycles. Some areas sell quickly after listing, while others take months or even years before sales take place.
But in Seattle, a burgeoning tech economy has revolutionized the way people purchase homes.
As more people pursue computer and mathematical careers, their salaries have increased, making home ownership more accessible.
This has translated to higher property values across many parts of the city – particularly in desirable neighborhoods.
However, high housing prices are also creating a healthy demand for rental properties. These investments allow investors to build a portfolio without having to contend with high interest rates and other factors reducing home values.
The Seattle housing market has reached a critical juncture, which could bode well for prospective home sellers.
Unfortunately, the current trend of home price increases is cooling off, leading to more competition and reduced demand in the city.
how much can we expect prices to fall in seattle
Home prices are declining across many parts of the US, and Seattle is one of the quickest-cooling housing markets. That could add further pressure on real estate affordability in the region, according to Redfin chief economist Daryl Fairweather.
Fairweather noted that home prices remain uncompetitively high, even with lower interest rates. He predicted that those who can afford a mortgage may choose not to purchase a house at all.
A sharp decline in home sales would have a dramatic effect on the local housing market.
At present, there is only 2.52 months’ supply of homes available for purchase in the city; Redfin anticipates that supply to reach its peak between May and June.
If this trend continues, buyers should have more choices and room to negotiate. However, they should still keep an eye on inventory levels.
how did the crash (2008) affect home prices in Seattle
In one word housing “bombed“!
Lets take a look at what happened to Seattle during the Great Recession.
- The median home price in Seattle peaked in 2007 at $400,000, before dropping to a low of $290,000 in 2011.
- The number of foreclosures in Seattle rose from 1,400 in 2006 to 6,000 in 2008.
- The Seattle housing market crash led to a decrease in home values of nearly 40%, with some neighborhoods experiencing a decrease of over 50%.
should I sell now?
As a homeowner in Seattle, you may be considering when the time is right to sell your house. Prices have continued to climb despite interest rates reaching 14-year highs, prompting many buyers to pause and assess their affordability for purchasing a new home.
However, if you want to maximize your home’s sale price, now is the best time to list it before the market cools off in winter. Historically speaking, sales prices typically peak during spring and then decline throughout the remainder of the year.
According to five years’ worth of data from the Northwest Multiple Listing Service (NWMLS), single-family home prices in Seattle typically peak between March and May and decline during the fall and winter months.
By listing your home during these months, you’re more likely to get more money for it than if you listed it at any other time of the year.
This is especially true if your residence is situated near a popular attraction like Pike’s Place Market or Fremont Street.
what are the cheapest places near Seattle to buy
Seattle is an idyllic city with plenty of activities to enjoy, but it comes at a steep price tag. Fortunately, there are other ways to appreciate Seattle’s beauty without breaking your budget.
One such affordable suburb is Kent, located less than 25 minutes from downtown Seattle on the shores of Lake Washington. Here, homes are priced at half the cost of those in downtown Seattle.
Residents appreciate its close-knit community atmosphere that’s family-friendly and close to everything the city has to offer. There are a range of housing options here, from new construction to older mid-century homes in established neighborhoods.
Another great option is Federal Way, an upscale suburb located just east of Maple Valley that’s experiencing a strong housing market right now. It boasts plenty of green space and stunning views, plus top-rated schools.
What Housing Experts Saying About the housing market outlook
What do housing experts predict about the Seattle housing market outlook for 2023 and 2024?
Some analysts anticipate a continued decline in home prices during 2023, while others predict no change.
According to a Zillow press release, home values have been rising fastest in areas that are “family friendly.” This pattern is due to the influence Millennial home buyers have had on local housing markets over the last nine years.
The Seattle real estate market remains a seller’s market, with inventory remaining above the four to six month level.
It is an encouraging sign for those considering buying a home in the area. If you can remain patient and wait for the market to change, now could be an ideal time to purchase.
Purchasing a house can often be an expensive venture. That’s why many are searching for ways to reduce their housing expenses.
One option is to find a condo or co-op. These tend to be less expensive than single family homes and provide more space at the same price point.
The Seattle metro area can be expensive to live, but there are options for those on a tight budget. For instance, you may choose to live outside of downtown but still be close enough to everything that happens there.
With the assistance of a real estate expert, you can locate a property that suits both your lifestyle and budget. Furthermore, you may be eligible for concessions that will enable you to purchase the home of your dreams at an affordable price.