WASHINGTON - Seattle's housing market will likely remain a seller's market in the future. The housing market in Seattle had only 0.3 months of inventory last year, which was below the level needed for a buyer to secure financing. Despite the lack of inventory, the US housing market has been experiencing record low mortgage rates. Moreover, the supply of new homes on the market is limited, and the construction industry suffers from a labor shortage. This combination of factors can make it extremely difficult to sell homes.
A strong tech sector is driving Seattle's housing market. The city is home to many large tech companies whose workers don't want to live in small apartments during the housing crisis. Rather, they want a spacious home with an office area. These workers are well-paid and can compete with other buyers, which helps raise home selling prices.
Home prices in Seattle have continued to increase over the past year. The average home value in Seattle rose by 17.3% from last year. It is now worth more than $830,000. While this number is far from alarming, it is encouraging to know that prices are expected to continue to rise. As long as there is a shortage of homes, prices should rise.
Home prices in the Seattle metro area will be higher in 2023 than they were last year. In the first half of 2023, King County and Pierce County home prices will increase by 15.7% and 9%, respectively. Meanwhile, the median price of a home in Snohomish County and King County is expected to rise by 7.2%.
The US housing market has been a seller's market for the past several years, but the early predictions indicate that the market will turn around in 2023. This trend is good news for investors and home buyers with modest budgets. However, the US housing market is still a seller's market, which could cause pessimism for some investors.
While Seattle is experiencing a slowdown in prices, it still has a very hot rental market. Compared to other cities, Seattle's rental market is still thriving. According to Dwellsy, the median asking rent in Silverthorne, Colorado, was $3,500 last year, while Olympia, Washington, had a median asking price of $2640.
Another concern for Seattle real estate buyers is the high cost of mortgages. The 30-year fixed mortgage rate hit 5.42% last week, which is higher than the fifteen-year fixed rate of 4.65%. Rising rates will push homeowners to sell their homes and increase the inventory. Rising mortgage rates will also increase rent prices, as potential home buyers are priced out of the market.
Rent growth will remain strong in the short term. Home prices are high enough that many first-time home buyers will stay in the rental market for the foreseeable future. Although this trend may be less desirable in the long run, it should still be a favorable sign for buyers. The market is projected to increase by 5.4% a year through 2023. While this is lower than the 8.6% growth predicted by Zillow, it is significantly higher than the inflation rate.
