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Homebuying activity remains constrained, highlighted by November's 24% annual drop in single-family home sales in the four-county metro around Seattle.
Northwest Multiple Listing Service data released Wednesday also shows median sales prices appreciated 2.8% in Pierce County, 3.6% in Snohomish County, 7% in King and nearly 9% in Kitsap.
Home prices will rise in 2024, but not much, Windermere Chief Economist Matthew Gardner predicted this week. Many forecasts suggested prices would fall in 2023, but the lack of inventory propped up values. Gardner doesn't expect prices to drop but thinks growth will be only 1%.
A slight decrease in interest rates, from 7.8% in October to 7.2% as of Dec. 1, has improved the outlook of the market, Mason Virant, associate director of the Washington Center for Real Estate Research at the University of Washington, said in a NWMLS release.
But the decline in seasonal inventory continues to drive home prices upward, spurring an increase of 4.6% in prices from November 2022 across the MLS, which covers most of Washington.
Inventory will continue to be suppressed because owners with low-rate mortgages are loath to sell as reflected by the number of new listings last month — down about 8.5% annually. This has led to a continued decline in year-over-year transaction volume and inventory levels in the market.
Gardner points to data showing inflation and the broader economy are starting to slow, which he said should rein in mortgage rates, but only a bit to around 6% by the end of next year.
Among Gardner's other predictions for 2024:
- New construction will gain market share but will come at a cost to builders through lower list prices and increased incentives like mortgage rate buy-downs.
- Housing affordability likely will worsen as home prices continue to rise as the pace of borrowing costs far exceeds income growth.
- Sales activity will increase but only modestly, remaining the lowest in 15 years, and demand will exceed supply, meaning sellers will still have the upper hand.
Mortgage volume in Seattle metro, 2022
| Rank | Prior Rank | Business name/Website |
|---|---|---|
1 | 1 | BECU |
2 | 2 | KeyBank |
3 | 3 | Wells Fargo Bank N.A. |
