The Seattle housing market is heading towards a delicate balance. Thanks to surging housing inventory and stubborn mortgage rates, the breakneck pace of the last few years is gone, but robust economic fundamentals mean that while home sales are down, home prices are showing surprising resilience and are only expected to see minor, near-flat growth through the end of 2025.
In this deep dive, using the latest data from the Northwest Multiple Listing Service (NWMLS) and Zillow’s forward-looking forecasts, I will walk you through what the numbers truly mean. We will look at what’s really going up, what’s coming down, and what we can reasonably expect to happen next in the Puget Sound area, specifically across Seattle and All King County.
Seattle Housing Market Trends: Decoding Today’s Market
When evaluating whether we are in a Buyer’s Housing Market or a Seller’s Housing Market, we always look at three key factors: supply (inventory), demand (sales), and price resilience. The October 2025 data (compared to October 2024) tells a vivid story about how high mortgage rates are acting as a powerful brake on sales activity, even while new listings continue to hit the market.
The Supply Surge: Inventory is Back
The most dramatic shift in the Seattle Housing Market Trends over the last year is the sudden jump in available homes. For years, the story was low supply, bidding wars, and no time to think. That dynamic is changing fast.
For King County overall (Residential and Condo combined), the total active listings went up by 25.64% year-over-year. Seattle specifically saw a healthy jump of 17.30% in total active listings.
More inventory is great news for buyers because it means less competition and fewer situations where you have to waive contingencies just to get a foot in the door.
In real estate, we measure how tight the market is using Months of Inventory (MOI). This figure tells us how long it would take to sell every home currently listed if no new homes came onto the market.
- 0-3 months: Strong Seller's Market
- 4-6 months: Balanced Market
- 7+ months: Buyer's Market
| Region | Total Active Listings (Oct 2025) | % Change YOY | Months of Inventory (MOI) | Market Type |
|---|---|---|---|---|
| All King County (Res + Condo) | 5,719 | +25.64% | 2.67 | Seller's (but loosening) |
| Seattle (Res + Condo) | 2,298 | +17.30% | 3.04 | Seller's (but loosening) |
| Seattle Residential Only | 1,297 | +20.99% | 2.30 | Strong Seller's |
| Seattle Condo Only | 1,001 | +12.85% | 5.21 | Approaching Balance |
The takeaway is clear: While King County still officially favors sellers (below the 4-month mark), the key areas like Seattle’s condo market are nearing balance. In my professional experience, when MOI hits 5+ months, buyers finally feel like they have negotiating power.
Sales Activity and Mortgage Rates: The Demand Slowdown
If supply is up, sales should be up too, right? Nope. This is where high borrowing costs, specifically mortgage rates (which are still fluctuating but remain high compared to 2020-2022), are killing demand.
Think of it this way: Many potential buyers are priced out, trapped by monthly payment costs, and many current homeowners are stuck in what we call the “lock-in effect.” They don't want to sell their current home with a 3% mortgage only to buy a new one at 7% or 8%. This reduces overall mobility and slows down sales dramatically.
Looking at the closed home sales data for October 2025:
| Region | Closed Sales (Oct 2025) | % Change YOY |
|---|---|---|
| All King County (Res + Condo) | 2,144 | -6.90% |
| Seattle (Res + Condo) | 755 | -7.48% (Nearly 8% drop) |
| Seattle Residential Only | 563 | -7.10% |
| Seattle Condo Only | 192 | -8.57% |
The decline in sales is widespread. The market isn't collapsing, but it is certainly sluggish. This sluggishness is what gives buyers their biggest opportunity: there is less urgency.
Price Resilience: The Million-Dollar Question
Despite the slowdown in sales and rising inventory, why haven't the median home prices dropped significantly yet? This is the core strength of Seattle’s economy—a resilient job market filled with high-wage earners (mostly in tech).
Let's look at the median price change year-over-year.
| Region | Median Price (Oct 2025) | % Change YOY |
|---|---|---|
| All King County (Res + Condo) | $887,300 | +2.58% |
| Seattle (Res + Condo) | $899,000 | +2.80% |
| Seattle Residential Only | $1,049,999 | +7.97% |
| Seattle Condo Only | $577,562 | -0.42% |
This data is fascinating. While the combined average is only up slightly, the Seattle Residential Only market (single-family homes) held incredibly strong, jumping almost 8% year-over-year!
What this means: The most desirable, largest single-family homes in Seattle are extremely well-insulated from current economic pressures because the buyers for those homes are less reliant on the current fluctuating mortgage rates and are often using cash or large down payments.
On the flip side, the condo market, which is often the first entry point for buyers, has faced much more pressure. Prices here are essentially flat (-0.42% in Seattle condos). This tells me that the pressure caused by high interest rates is most keenly felt in the affordable segments of the market, where buyers are most sensitive to payment shock.
My professional opinion on these trends is this: The Seattle market is not experiencing a traditional slowdown driven by job loss or panic selling. It’s an affordability-driven slowdown. If mortgage rates were to drop even moderately (say, down to 5.5%), the accumulated demand would likely rush back in, instantly wiping out this new-found housing inventory and causing a new round of price acceleration.
Why is the Seattle Housing Market So Hot?
Seattle's housing market has been a seller's dream for years, fueled by a combination of factors that create intense competition for a limited resource: homes.
- Tech Boom and Job Market: Seattle's status as a major tech hub attracts a constant stream of employees from established companies and startups alike. This influx of well-paid professionals creates a strong and consistent demand for housing in the city and surrounding areas.
- Limited Supply: Geographically, Seattle is hemmed in by water on one side and mountains on the other, restricting urban sprawl. Zoning regulations and a hilly landscape further limit the developable land available for new construction. This constraint on new housing supply keeps the number of available homes lagging behind the growing number of potential buyers.
- Economic Factors: “Historically low interest rates” in recent years made mortgages more affordable, further inflating demand. While rates have risen in 2024, the market seems to be adjusting and staying relatively stable for now.
Seattle Housing Market Forecast: What Comes Next?
Now that we understand the current Seattle Housing Market Trends, the crucial next step is to look ahead. What do predictive models suggest for the final months of 2025 and all of 2026?
For this forecast, we turn to Zillow’s home value predictions for the Seattle-Tacoma-Bellevue Metropolitan Statistical Area (MSA). Currently, the average home value in this MSA is $733,309, which is down 1.0% over the last year, and homes go pending in around 23 days—a far cry from the 5-7 days we saw during the pandemic peak.
The Short-Term Outlook for Seattle Home Values (November 2025 – January 2026)
Zillow provides a monthly projected percent change for the MSA home value. This shows the immediate sensitivity of the market to seasonal changes and current rate volatility.
| Region | Projected Change: November 2025 | Projected Change: January 2026 |
|---|---|---|
| Seattle, WA MSA | +0.2% | -0.4% |
Interpretation: We expect a slight bump in November, perhaps reflecting final sales pushing through before the holidays. However, the projected -0.4% dip in January highlights the expected seasonal slump combined with ongoing affordability challenges. This brief projected decline is not a cause for alarm; it’s a typical micro-adjustment in a high-cost area struggling with high mortgage rates.
The 1-Year Price Prediction (October 2026)
The most important figure for long-term planning is the one-year forecast, projecting change from October 2025 to October 2026.
Zillow’s forecast for the Seattle MSA is for a change of +0.1%.
My interpretation is that a 0.1% change is effectively flat. This is what a balanced market looks like when it hits an affordability ceiling. We are not anticipating major surges, but we are also not predicting the collapse that many cash-strapped buyers might hope for. Flat growth allows wages and savings to catch up modestly, but it will not solve the housing crisis overnight.
Context: Seattle vs. Rest of Washington State
To fully understand the Seattle forecast, it’s helpful to see how we compare to other metro areas in Washington State. This exercise illustrates that Seattle is currently facing unique headwinds.
Here is a comparison of the projected 1-Year (Oct 2025-Oct 2026) home value growth across various Washington MSAs:
| Metro Area (MSA) | 1-Year Home Price Forecast (Oct 2026) |
|---|---|
| Seattle, WA | +0.1% |
| Bremerton, WA | -0.2% |
| Wenatchee, WA | +0.3% |
| Yakima, WA | +0.4% |
| Kennewick, WA | +0.5% |
| Longview, WA | +0.5% |
| Spokane, WA | +0.6% |
| Olympia, WA | +0.6% |
| Bellingham, WA | +0.9% |
| Mount Vernon, WA | +1.3% |
| Moses Lake, WA | +1.9% |
In my expertise, this comparison is eye-opening. Seattle is severely lagging behind smaller, less expensive markets like Moses Lake and Mount Vernon. Why? Those smaller markets still have more room for price appreciation because they remain relatively affordable and are seeing net population absorption. Seattle, on the other hand, has already hit its affordability maximum. We simply peaked faster. This flat forecast is the market trying to take a necessary breather.
So, Will Seattle Home Prices Drop? Can the Market Crash?
This is the question I am asked most often. Based on the data, the answer remains no, a crash is highly unlikely.
- Drop vs. Crash: The prices are not predicted to drop significantly—the forecast is +0.1%, which is statistically negligible.
- Structural Integrity: Seattle’s wealth engine (Tech, Biotechnology, Aerospace) is fundamentally strong, preventing the kind of massive job loss that historically causes housing crashes.
- Owner Equity: Unlike the 2008 crisis, most existing homeowners sitting on all-time low mortgage rates have massive amounts of equity. Panic selling, which fuels a crash, is not a factor. If the market gets tough, owners simply decide not to sell.
What we are experiencing is a tough-to-swallow “correction” where prices stop growing at crazy speeds, but they don't fall back to pre-pandemic levels. The high prices are here to stay for the foreseeable future unless a major recession hits the tech industry.
Looking Ahead: Late 2026 and Early 2027
Forecasting beyond one year is always tricky—we have to make assumptions about inflation and mortgage rates.
If the Federal Reserve manages to bring inflation down steadily through 2026, and we see mortgage rates drift downward toward the 5% to 6% range by the end of 2026:
- We will see the Seattle Housing Market Trends shift back toward sellers.
- Home sales will jump as pent-up demand is released.
- Home prices will likely pick up steam again, returning to modest year-over-year growth in the 3% to 5% range by early 2027.
If mortgage rates remain stubbornly high (7%+) or increase:
- The market will remain flat, continuing in this sensitive holding pattern. Housing inventory will continue to accumulate, leading to increasingly aggressive price cuts on poorly positioned homes.
For buyers, late 2025 and 2026 represent a rare window of opportunity: high inventory means selection, and flat prices mean no intense bidding wars. You just need to budget for the current cost of money—the mortgage rates.
Conclusion
The Seattle Housing Market Trends show a standoff between high affordability barriers and strong underlying wealth. While inventory is up and sales are slow, Seattle home prices are proving incredibly difficult to budge. Whether you wait for rates to drop or jump in now to secure higher inventory and negotiating power, patience and careful budgeting remain the best strategies for navigating the Puget Sound market in 2026.
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