Spring 2024 Market News
2024 brings relief to buyers and sellers as rates potentially hit their peak in Q4 of 2023 and are predicted to come down this year into the high 5% range or around 6%. So far rates have dropped from a peak close to 8% but are still in the high 6% range fluctuating between 6.5%-6.8% (today’s rates are at 6.8%). The pace of rate drops is expected to be slow.
Due to the high interest rates, it is not surprising that 2023 saw the slowest rate of home sales since 2008.
In 2024 expect to see some new sellers come to the market, but recent data shows 80% of US residents have mortgage rates below 5%. Therefore many sellers may be hesitant to sell with such historically low interest rates. Mathew Gardner, chief economist of Windermere suggested that seller’s will be motivated to sell when rates come withing 1-1.5% of their current rate.
Home prices did come down in 2023 by an average list price of 16% in King County and 8% in Snohomish but not as much as predicted. Chronic low inventory of homes for sale kept housing prices stable in 2023 with expected moderate rises in 2024. So even though list prices fell, due to competition in many areas spurred by low inventory, sales prices escalated. In the end 2023 recorded sales prices only fell by approximately 3% in King County and 5% in Snohomish over 2022 prices. Unfortunately it appears housing affordability will get worse, not better. This will be especially challenging for first time home buyers.
There are several complex factors impacting home prices in the region. Builders are struggling to deliver new construction starts at a pace that can lower home affordability. Construction costs have softened, yet there are still not enough homes on the market to match demand. In 2023 permit applications fell to an all time low in our tri-county area of King, Snohomish and Pierce, Furthermore, construction costs in Seattle are outpacing the rest of the country.
All told, here in Greater Seattle residential market it is still a seller’s market in the foreseeable future (whereas in some periphery residential areas and the commercial market it is very much a buyer’s market). Sellers can likely expect multiple bids in 2024 and a strong sales price for their listings, especially as rates drop as the year progresses. Buyers will need an experienced advocate to help them navigate the current lay of the land, but with the right support and tools, they can arrive successfully in their new home.