sellers

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.

Ah, for the good old days of 2019 – when we could stomach home prices closer to the mid-million-dollar mark and housing options were somewhat plentiful amid a mildly competitive buyer environment.

The market has, ahem, evolved in the four years since. After a pandemic-induced free-for-all, where newly listed homes could be off the market in hours and prices soared into a stratosphere more recognizable by the Blue Angels, we are now “enjoying” a period of rest and re-evaluation in summer 2023. Variations between the two years are stark, to say the least

The Seattle/King County housing market inched forward – and a little sideways – as the number of new and unsold listings continued to expand in June while fresh signs of a slowdown approached. Home prices continued to confound buyers by climbing toward record highs as summer began.

The county saw the combined number of single-family, townhome and condo listings increase in June by 4.4% from May to 3242 units – the highest monthly figure since last September. While that percentage may appear strong, it’s nothing compared to the April-to-May rise of 18%, signaling a probable cooling of new listings in the future. Meantime, unsold listings rose a solid 12% for the month to 3013, including 11% (1344) higher in Seattle and 10% (815) stronger on the Eastside.

Home prices and mortgage rates. These are the two most frequently discussed items by both the people working in residential real estate and the customers and clients they serve. It’s the bacon and eggs of the housing market – two staples that are often linked to one another.

And the May report for Puget Sound residential sales is no different. Unfortunately for buyers, both figures – prices and rates – are climbing, raising the hurdle to homeownership even higher for many.