Published September 6, 2023
September Market Report!
The late summer market cooled slightly from July's gains based on higher interest rates and hotter weather pulling buyers away from the market - at least for the moment. Let's dig into the numbers.
Mortgage rates peaked at 7.23% in late August which is higher than our peak rates in November 2022 and the highest we've seen in 23 years (December 2000). Thankfully rates are starting to fall and as of early September we've seen rates drop to 7.12% with the near term forecast for them to continue below 7% in the coming weeks.
Despite higher rates Inventory remained practically unchanged from July to August in the region. King County decreased to 1.8 months from 1.7 months... and Snohomish increased from 1.3 months to 1.4 months. These changes are not practically significant and still indicate a seller favored market though we do see clear signs rates are driving down the volume of buyers and sellers.
The List to Sell price ratio declined in Snohomish County from 100.3% to 99.5%... which is notable, whereas in King County remained nearly unchanged at 100.6% (down only 0.2% from 100.8% in July). This is consistent when looking at Days on Market as well, where marketing time increased from 9 to 14 days in Snohomish County and stayed at just 7 days in King County.
Prices followed the trends above with the lower inventory and marketing time in King County continuing to drive prices higher up 2.5% month to month to a median price of $819,646 whereas Snohomish County gave a bit of ground falling 2.5% to $675,000.
What Does This Mean?
We're seeing a couple things in these numbers:
Interest Rates Holding Back Sellers.... many sellers are holding off on their plans due to interest rates which has created the lowest volume of new listings in more than two decades. This lower volume of Sellers combined with the current Buyer demand from those relocating to the area, tired of renting or seeking a home better fitting their needs is keeping the market balance still favoring Sellers with low inventory.
Buyers Moving Forward In Spite of Rates... each week we're hearing more buyers (and sellers) recognize rates are not going to dramatically drop anytime in the near future, and waiting for a substantial drop just means putting life on hold or waiting to build wealth & security through homeownership. Many are taking action knowing the market is less competitive today and giving them the opportunity to win a great home and then refinance when rates do drop back into the 6% and 5% range in the coming years.
What's Next?
The turbulence of the Spring and late Summer market caused a number of Sellers & Buyers to pause their plans much like we saw in 2020 with the initial interruptions from Covid. With mortgage rates expected to decline through September and October we are anticipating a more active Autumn and Winter market where people move forward with the plans they put on ice earlier in the year.
