February 2024 Greater Seattle Real Estate Market Update

It's easy to get caught up in national real estate headlines, but the Seattle area real estate market is much more resilient and robust than the national averages provided. We're glad you're here to get a more true representation of what's happening in the local real estate landscape. There's actually some good news to report! Values are on the up, and buyer confidence is returning.

Inventory at a Glance

In Seattle, the available inventory hovers at a 1.3-month supply for single-family homes and a 2.6-month supply for condos. This indicates that we're still in a strong seller's market. A six-month supply indicates a balanced market and anything over six months' supply swings into a buyer's market.

Housing supply scarcity continues to keep pressure on values, which is why we're not experiencing a dramatic drop in pricing despite interest rates in the 6-7% range. I anticipate seeing 6-8% price appreciation in home values in 2024 across King and Snohomish Counties. However, I think it's entirely possible that Snohomish will outpace King County in appreciation values by a few percentage points.

Housing Prices

February's Median Sales Prices:

Seattle

• Single-Family Homes: $930,000 - up 16.5% year over year (YOY).
• Condos: $570,000 - up 6.7% YOY.

Edmonds

• Single-Family Homes: $892,000 - up 4.3% YOY.
• Condos: $653,000 - up 55% YOY.

Burien

• Single-Family Homes: $760,000 - up 27.4% YOY.
• Condos: $570,000 - up 6.7% YOY.

Every January and February, our market experiences a wildly early start to the spring real estate market due to pent-up buyer demand from October through December. I want to remain optimistic that more inventory is on the way for 2024; however, I don't think enough inventory is on the way to meet the demand for housing. According to the National Association of Realtors, 78% of homeowners with a mortgage have an interest rate of 5% or less. Many don't want to part with their interest rate and are staying put (or turning their property into a rental) while they wait for interest rates to come down.

The problem with that strategy? Properties are getting more expensive, which may price some people out of purchasing their next home any time soon. There's a lot of buzz in the media about Boomers holding the housing inventory hostage. But, where are they supposed to go? Life is expensive for them, too! In fact, probably more expensive for us millennials and gen-zers. Many Boomers rely on their home equity to carry them through to the end, and I don't think they will be releasing their homes for sale at a rapid pace any time soon. 

Interest Rates

It seems that consumers in our area are gaining comfort with the new normal of interest rates, which have ranged from 6-7% throughout Q1. In late 2023, we got in the car with the Federal Reserve with the promise of a trip to our favorite place: the land of lower interest rates. And in 2024, we keep asking, "Are we there yet?" The more we ask, the farther we seem to be from the destination.

The markets are predicting a ZERO chance that the Fed will announce a cut at its next meeting on March 19-20. They’re predicting a 75% chance of a rate cut by the Fed’s June meeting and a 100% chance that they will do at least one cut by their July meeting. It is very possible that when the first cut occurs, this will create a turning point in the bond markets, and there could be a decent rally in the bond and lower mortgage rates.

Until then, my local lenders anticipate rates to hang around 6-7% range. Savvy buyers know that these rates won't be here forever, and they are moving forward with their purchase, knowing that home prices are unlikely to come down, with the plan to refinance their mortgage in a year or two. 

What does this mean for you?

For Sellers:

• Strong Position: Sellers remain in a strong position due to the low supply, with properties still fetching competitive prices.
• Market Movement: The uptick in values could be a signal to list now if you're planning to make a move-up purchase. If you're not planning a move-up purchase, holding off until spring 2025 might be a better strategy.

For Buyers:

• Interest Rates: They're not going anywhere fast. If you can afford the monthly payment now, you will be sitting pretty when it's time to refinance in a couple of years when you're saving hundreds of dollars per month on your mortgage payment.
• Market Opportunities: It's tight right now. This market isn't for the faint of heart. Buyers are competing for homes across the county. Be prepared for multiple offers - this means waiving contingencies and paying over the asking price for the home.

The Seattle real estate market, while adapting to the national economic climate, continues to demonstrate fundamental strength. We advise our clients to engage with these market conditions proactively and with the support of our expertise.

We are committed to providing strategic guidance and support tailored to your unique real estate goals. For a deeper discussion of how these market conditions affect your real estate portfolio or purchasing power, reach out to us! We're here for you as a resource.

This market update is provided for informational purposes only and should not be construed as financial advice. Always consult with a financial advisor before making any significant real estate decisions.