Let's dive into what's happening with the Tacoma housing market. Is it a good time to buy or sell? Here's the short answer: The Tacoma housing market is competitive, with a median sale price of $465K in February 2025, up 2.2% year-over-year. Homes are selling in around 21 days. We'll unpack all of this and more to give you a clear picture of what's going on.
Current Tacoma Housing Market Trends:
Home Sales
Let's look at the number of homes actually being sold in Tacoma. According to recent data from Redfin, there were 182 homes sold in February 2025. Now, that might sound like a lot, but it's actually down 6.7% compared to the same time last year. This indicates that maybe the frenzy has cooled off a bit, or that supply might be a little tight. Fewer sales could mean fewer choices for buyers, or it could point to people holding onto their homes for longer.
Home Prices
This is what everyone wants to know: How much are homes going for? The median sale price of a home in Tacoma in February 2025 was $465,000. That's a 2.2% increase compared to last year. While prices are still rising, the rate of increase has slowed down compared to the huge jumps we saw in recent years. The median sale price per square foot in Tacoma is $334, up 11.0% since last year.
Are Home Prices Dropping?
While the median sale price is still higher than last year, we're not seeing dramatic price drops overall. There might be individual homes where sellers have to reduce their asking price, but the overall trend is still upward, though not as steep as before. So no, home prices are not dropping, but prices are rising slower compared to last year.
Comparison with Current National Median Price
How does Tacoma stack up against the rest of the country? Well, the national median home price in January 2025 was $396,900. That means Tacoma's median price of $465,000 is about 17% higher than the national median. That's a significant difference, and it reflects Tacoma's desirability and relative affordability compared to even pricier markets like Seattle.
Here's a quick table to summarize:
| Location | Median Sale Price (Feb 2025) | Year-over-Year Change |
|---|---|---|
| Tacoma, WA | $465,000 | +2.2% |
| National (Jan 2025) | $396,900 | +4.8% |
Is Tacoma a Buyer's or Seller's Housing Market?
Okay, the big question: Is it a buyer's or seller's market in Tacoma right now? Based on the data, I'd say it leans towards a seller's market, but it's becoming more balanced. Here's why:
- Homes are still selling relatively quickly (around 21 days).
- The median price is still up compared to last year.
- 33.5% of homes sold above the list price
However, homes are selling in an average of 21 days compared to 20 days last year.
All of these indicate that it's still a competitive market but not at the same level it was a year or two ago.
Market Trends
So what are the underlying trends shaping the Tacoma real estate market? Here are a few key factors:
- Continued Demand: Tacoma is a desirable place to live, with its natural beauty, proximity to Seattle, and relatively affordable housing (compared to Seattle, at least). This continues to drive demand.
- Migration Patterns: People are still moving into Tacoma from pricier areas, as shown by migration data. For example, Spokane and San Francisco are the top two cities where homebuyers are moving into Tacoma from. At the same time, people are leaving Tacoma, heading mostly towards Phoenix, Portland, and Bellingham.
- Economic Factors: The overall health of the economy, job growth in the region, and consumer confidence all play a role in the housing market.
- Interest Rates: Mortgage interest rates are a huge driver of affordability.
Impact of high mortgage rates
Speaking of interest rates, the current average 30-year fixed mortgage rate is around 6.63% (as of early March 2025, according to Freddie Mac). This is significantly higher than the rates we saw a few years ago.
High mortgage rates have a few key impacts:
- Reduced Affordability: Higher rates mean higher monthly payments, which can make it harder for people to afford a home.
- Cooling Demand: Some potential buyers will be priced out of the market, which can lead to a slowdown in demand.
- Price Stabilization: Higher rates can put downward pressure on home prices, preventing them from rising as quickly as they have been.
- Limited Inventory: Some homeowners who might have considered selling may choose to stay put, as they don't want to give up their existing low-interest mortgage rates.
Most forecasts predict that mortgage rates will remain at or slightly above this level for the foreseeable future. If you're trying to time the market, that makes it extremely difficult.
My Thoughts & Opinions on the Tacoma Market
As someone who's been watching the Tacoma housing market for a while, here are my personal thoughts. I believe that Tacoma will continue to be a desirable place to live, and I expect housing prices to continue to appreciate over the long term. However, I don't expect to see the same kind of rapid price increases that we saw during the pandemic.
What does this mean for buyers? Don't expect huge price drops, and be prepared to compete, especially for desirable properties. Shop around for the best mortgage rates, and be prepared to make a strong offer.
What does this mean for sellers? You're still in a good position, but don't expect bidding wars on every home. Price your home competitively, and make sure it's in good condition.
It's also important to remember that real estate is hyper-local. Trends in one neighborhood might be different than in another. Work with a local real estate agent who knows the market inside and out.
Here's a table summarizing the pros and cons for buyers and sellers:
| Pros | Cons | |
|---|---|---|
| Buyers | Slower price appreciation than the past few years. More negotiating power. | Interest rates are still relatively high. Competition for the best properties is still there. |
| Sellers | Prices are still up year-over-year. Tacoma is a desirable location. | Not as many bidding wars. Need to price competitively. |
Tacoma Housing Market Forecast 2025
Predicting the future is always tricky, but based on current trends, here's what I expect to see in the Tacoma housing market over the next year:
- Moderate Price Appreciation: I expect prices to continue to rise, but at a slower pace than we've seen in recent years.
- Relatively Stable Interest Rates: While there might be some fluctuations, I don't expect to see major changes in mortgage rates.
- Balanced Market: I think we'll see a more balanced market, with neither buyers nor sellers having a significant advantage.
- Continued Demand: I expect demand for housing in Tacoma to remain strong, driven by its desirability and relative affordability.
Remember: These are just predictions, and things can change quickly. Keep an eye on the data, and talk to a local real estate agent to get the most up-to-date information.
Should You Invest in the Tacoma Real Estate Market?
Tacoma, Washington, has emerged as a favorable destination for real estate investors due to its strong housing demand and sustained growth. As the state's third-largest city, Tacoma has a population of around 220,000, and it's growing at a rate of 0.78% annually. Furthermore, it is a satellite city located at the southern end of the Seattle metropolitan area, which is home to approximately a million people. The Tacoma housing market has remained resilient in recent years, and real estate investors have found favorable returns in the short term.
Top Reasons to Invest in Tacoma Real Estate:
- Strong Demand: The demand for housing in Tacoma has consistently remained strong due to its growing population and proximity to the Seattle metropolitan area. Additionally, Tacoma is home to several prominent employers, including Joint Base Lewis-McChord, MultiCare Health System, and the Port of Tacoma. This demand is expected to continue to increase, making Tacoma an excellent destination for real estate investors.
- Affordable Prices: Despite being a part of the Seattle metropolitan area, Tacoma offers more affordable housing options compared to Seattle. The median home value in Tacoma is around $470K, while the median home value in Seattle is > $800K. This affordability factor makes it an attractive destination for first-time homebuyers and real estate investors alike.
- Positive Growth Outlook: According to the Zillow Home Value Index (ZHVI), Tacoma's average home value has steadily grown over the past year, indicating a positive growth outlook. Additionally, the Tacoma housing market is expected to continue growing in the coming years, making it a favorable destination for real estate investors.
- Low Vacancy Rates: The vacancy rates in Tacoma are relatively low, indicating a stable and active housing market. This is good news for real estate investors looking to rent out their properties as they can expect a steady stream of rental income.
- Diverse Housing Options: Tacoma offers a diverse range of housing options, from single-family homes to townhouses and condos. This diversity makes it easier for real estate investors to find a property that suits their investment goals.
- Economic Growth: The economy in Tacoma has been growing steadily, with several new businesses and industries moving to the area. This economic growth is expected to continue in the coming years, which will likely further boost the demand for housing in Tacoma.
In conclusion, the Tacoma housing market offers a favorable destination for real estate investors due to its strong demand, affordability, positive growth outlook, low vacancy rates, diverse housing options, and economic growth. With these factors in mind, it's easy to see why Tacoma is becoming a popular destination for those looking to invest in real estate.
How Should Buyers Invest in This Market?
There is no one-size-fits-all answer to how buyers should invest in the Tacoma real estate market, as each buyer's situation is unique. However, there are some general tips that can help buyers make informed investment decisions:
- Work with a local real estate agent: Working with a local agent who is familiar with the Tacoma market can be invaluable. They can provide insight into market trends, help buyers identify investment opportunities, and negotiate on behalf of their clients.
- Conduct thorough research: Buyers should do their due diligence and research the Tacoma market before investing. This can include analyzing historical sales data, examining current market trends, and identifying areas with potential for growth.
- Consider long-term investment goals: Real estate investing can be a long-term strategy, so buyers should consider their long-term investment goals. For example, if a buyer is interested in rental properties, they should consider factors such as rental rates, vacancy rates, and potential for future rental demand.
- Have a solid financial plan: Investing in real estate can be expensive, so buyers should have a solid financial plan in place. This can include having a pre-approval for a mortgage, a solid down payment, and a plan for ongoing maintenance and repairs.
- Diversify investments: Investing in real estate can be a great strategy, but it's important to diversify investments to minimize risk. Buyers should consider diversifying their investments across different types of real estate, geographic locations, and asset classes.
