September Real Estate Market Update

The market is moving at a steady pace with more balance than a couple years ago, though likely to get more active due to interest rates dropping by nearly 1.5% over the past year.

As we enter Autumn, the market continues to move forward at a good pace albeit a bit slower than in 2023 with more inventory and moderating price appreciation. However, we're seeing signs of a potentially active Autumn market as mortgage rates are continuing to drop from their May peak which is easing affordability for buyers. Let's dive into the numbers...

Inventory: the balance of supply & demand is still favoring sellers with just 2.5 months in King & Snohomish County in August. These are the highest levels we've seen in the past 5 years and about 0.7 months greater than August 2023. However, they are still well below the 'balanced' market range of 4-6 months.

Time on Market: it took just 9 days in King County and 6 days in Snohomish County for the average listing to sell in August, which is 2 days longer in King County and 4 days quicker in Snohomish than in July.

Selling to Listing Ratio: largely steady with 100.2% in King County and 100.3% in Snohomish... which is about where it's been since June, and similar to what we saw in Summer 2023.

Median Home Prices: in King County $860,000 which is 4.9% higher than 2023, and Snohomish $749,973  which is 11.1% higher than 2023.

Mortgage Rates: ended 2023 around 7.79%, levels not seen in nearly 25 years... however they moderated through the early Spring down to 6.60%, only to rise back to 7.22% in May. Since then they've been steadily declining and are now down to 6.35%, and most economists are expecting them to continue to trend lower to around 5.5% to 6.0% in 2025.

What Does It All Mean?
While our regional economic growth is slowing (which is good as it's getting inflation in control), we're still growing with nearly full employment (economists believe 4% unemployment is actually full employment) and rising wages. In addition, we continue to be a desired destination for people to move to for economic opportunity, natural beauty and culture which puts pressure on housing prices when combined with our more than 25 years of not building enough affordable homes to keep up with demand.  All of this has kept our home values and market stable in spite of some mistaken predictions of a 'crash'.

As we look forward to late 2024 into 2025, we expect to see the pace of sales to pick up as interest rates continue to moderate. We don't expect to see a major growth in inventory, competition or price appreciation as this new buyer demand will likely be met with more available homes as many sellers will finally take action on moving to their next home after feeling stuck by mortgage rates or uncertainty. Unfortunately, for those continuing to hope and even wish for a 'correction' or 'crash' so they can get a 'deal', we don't see the economic data indicating this is on the horizon... default & foreclosure rates are at historic lows, inventory is low, mortgage rates are declining and the economy is steady. So, as we've been saying for 3+ years now... taking action sooner than later is likely the best option if you're looking to buy your first home or move up/down/around (for more on this see our 'The "Actual" Cost of Waiting' article).