buyers

The Seattle area housing market right now reads like a mystery novel with half the pages missing. So far, the narrative has included a mix of suspense, a hint of optimism and a whole lot of uncertainty.

The year in residential real estate nears its end amid twists and turns like a good book but it’s waiting for the storyline to improve as we fill out the empty pages in 2024.

Suspense has centered on the Federal Reserve and its decision to raise, maintain or lower its short-term interest rate. The optimism comes from signals in economic data that show improving conditions and a likely end to rising mortgage rates in the coming months – a story that we are all looking forward to reading.

From health-care and auto workers – even Hollywood actors – Americans have hit the picket lines in greater numbers in 2023. At least 453,000 workers participated in strikes in the first nine months of the year, according to one tracker. Beyond labor strife, America’s home buyers and sellers appear to be on strike as well.

Worsening affordability issues and lower-than-usual inventory have prompted many consumers to watch this housing market from the sidelines – without the picket lines. Compounding the financial squeeze, home prices have risen in many cities outside Seattle.

Autumn marks a change – shorter days, cooler temperatures, falling leaves … and falling home prices. This is the season when buyers can take advantage of homeowners wishing to sell before the holidays and who show a willingness to budge on price or make other concessions.

We are starting to see all those signs following the release of September housing data from the Northwest Multiple Listing Service. Unfortunately for buyers, a combination of the typical seasonal trend and higher borrowing costs has slowed housing market activity to an excruciatingly slow pace – and there are concerning signs ahead.

There is a feeling of Halloween in the real estate world because this housing market is a bit scary these days. At least that’s what some economists have expressed.

The market is spooking many potential buyers and sellers thanks to stubbornly high mortgage interest rates. The inability to loosen rates – and therefore reduce monthly payments on future home purchases – has put a stranglehold on sales activity. Only buyers and sellers who must move are doing so.