Northwest MLS, the source for the most current, accurate market listing data in Washington state, today released its Market Snapshot for the month of December 2023.
The new year kicks off with some hopeful signs for buyers within the real estate market. Interest rates proceeded to drop through the month of December to a current rate of 6.61% from the November level of 7.1%, with the Fed signaling additional cuts on the horizon. Yet inventory remains stagnant in accordance with typical seasonal patterns, and low inventory persisted to pressure home prices in the region, which were up about 5% year-over-year. According to Selma Hepp, chief economist for CoreLogic, “strong home price gains over the course of the year indicate that home prices in most Washington state markets have fully recovered from 2022 losses and are reaching new highs once again.”
CoreLogic’s Home Price Index forecasts another 3.5% appreciation over the course of 2024.
Important takeaways from December’s data:
- NWMLS brokers reported 4,018 closed sales in December 2023, an 11% drop from the number of closed sales in December 2022. While 16 of 26 counties in Washington experienced year-over-year decreases in the number of home sales, seven counties saw year-over-year increases, including Clallam, Cowlitz, Grant, Adams, Walla Walla, Island and Kittitas counties.
- The median price of homes sold increased in 16 of 26 counties and decreased in 10 counties relative to December 2022. The three counties with the highest median priced homes sold were San Juan County ($1,450,000), King County ($775,000) and Snohomish County ($675,000). The three counties with the lowest median priced homes sold were Okanogan ($275,000), Ferry ($254,900) and Columbia ($152,750).
- The inventory of homes on the market has continued to decline throughout Washington, with 15 of 26 counties seeing a year-over-year decrease. Overall, there was a 20% decrease in the number of active property listings in December 2023 when compared to the same month in 2022.
- While still subject to inventory shortages, condominium sales appear to be less impacted by market woes. Compared to December 2022, the number of condominium sales in the state experienced a mere 6% decrease, while seeing a 7% increase in median sales price.
“Washington counties covered by NWMLS have followed seasonal trends in transaction volume and inventory levels, both seeing a typical drop when compared to spring and summer months,” said Mason Virant, associate director of the Washington Center for Real Estate Research at The University of Washington. “Inventory levels continue to be low as current owners with low-rate mortgages remain reluctant to sell. This has led to a continued decline in year-over-year transaction volume and inventory levels in the market.”
The current real estate market in Washington state is undeniably dynamic, offering both challenges and opportunities. The signs of recovery and growth, particularly in property values, are encouraging for those invested in the market. However, the persistent issue of low inventory creates a complex landscape, especially for buyers and sellers.
For buyers, the scenario is a double-edged sword. On one hand, the reduced interest rates present a unique opportunity to enter the market under more favorable financial conditions. This could be an ideal time for first-time buyers or those looking to upgrade to seize the moment. Yet, the limited inventory means choices are restricted. Buyers need to be prepared to act swiftly and decisively when the right property comes along, balancing their needs and budget constraints.
Sellers are facing a more favorable market, with property values appreciating. It’s a promising time to sell, as the demand driven by lower interest rates and limited inventory can lead to competitive offers. However, strategic thinking is crucial. Sellers must consider the timing of their sale and price their properties judiciously to maximize returns. Overpricing in a sensitive market could lead to prolonged listing periods, while underpricing might mean missing out on potential gains.
In this intricate market, having knowledgeable and experienced real estate professionals by your side is more important than ever. Whether you are looking to buy your dream home or sell your property for the best possible price, we are here to guide you through every step. Our expertise in navigating the nuances of the Washington state real estate market ensures that you make informed decisions.
Don’t let the complexities of the market deter you. Contact us today to discuss your real estate needs and discover how we can help you achieve your property goals in this evolving market. Whether it’s finding that hidden gem in a limited inventory or strategically positioning your property in the market for a successful sale, we are committed to providing you with exceptional service and results. Let's turn these market challenges into opportunities together!