July Real Estate Market Update

With the first half of the year in the books, let’s look back and see how the market is progressing with our key market metrics.

Inventory - continued to rise seasonally, though not as much as we typically expect, with just a 0.2 of a month increase up to just 1.6 months in King and 1.1 months in Snohomish county.

Days on Market - held steady at just 6 days.

List to Sell Price Ratio - declined slightly to 101.3% in King County and rose slightly to 101.5% in Snohomish County.

Median Home Price: rose by 0.36% in King County and by 9.63% in Snohomish County… these levels are only off by 1-2% from their peaks last year, and up 23-42% from just 3 years ago.

Mortgage Rates: rose slightly this past month to 6.71%, as you’ can see have stayed consistent this year starting at 6.42% dropping as low as 6.09% in February and then rising again to peaks of 6.79% late May… all this in spite of Federal Funds Rates increasing 0.75% during the same period.

Market Volume… is the biggest difference in today’s market… as we’re seeing far lower numbers of listings and closed sales this year compared to previous years. We’re down 27% in King and 35% in Snohomish County compared to last year… and compared to the peak market activity year of 2021 we’re down 45% & 50%.  We’re currently at levels of market activity last seen in 2008-2009… however the biggest difference in today’s market is home prices are rising because back then inventory levels were 10-11 months… about 6-10 times what they are today.

Conclusions

Our market is incredibly resilient. Despite mortgage rates increasing more than 3.5% over the last 16 months, we’re continuing to see steady demand for homes which keeps values continuing to rise across the region. Clearly mortgage rates are the key driver of lower market volume, we expect to continue to see strong demand as more and more people recognize rates are not going to dramatically decline in the near future. When rates do decline below 6.00-6.25%, we expect many Sellers and Buyers getting back into the market which will further drive demand and competition.