The Washington state housing market has experienced some notable changes in recent times. In this blog post, we will take a closer look at the current state of home values in Washington, explore the market trends over the past year, and provide a forecast for some of the major metropolitan statistical areas (MSAs) in the state. By understanding these key factors, potential buyers and sellers can make informed decisions in this dynamic market.
Washington State Housing Market Forecast
Zillow: The average Washington home value is $578,460, down 4.4% over the past year, and goes to pending in around 8 days.
Key Figures:
- Typical Home Values: $578,460
- 1-year Value Change: -4.4%
- Median sale to list ratio (June 30, 2023): 1.000
- Percent of sales over list price (June 30, 2023): 45.7%
- Percent of sales under list price (June 30, 2023): 31.7%
- Median days to pending (July 31, 2023): 8
Top 10 MSAs in Washington Where Prices Are Expected to Grow by 2024:
- Oak Harbor, WA: The expected growth by July 2024 is projected to be 4.8%, showing a positive trend from the current value of 0.4% (as of July 31, 2023).
- Seattle, WA: The housing market in Seattle is forecasted to grow by 5% by July 2024, with an incremental growth of 0.8% by August 31, 2023.
- Bellingham, WA: The anticipated growth in Bellingham's housing market is 5.5% by July 2024, starting from a current value of 0.4% (as of July 31, 2023).
- Bremerton, WA: The market in Bremerton is predicted to grow by 5.8% by July 2024, with an initial growth of 0.6% by August 31, 2023.
- Wenatchee, WA: With a current growth of 0.2% (as of July 31, 2023), Wenatchee's housing market is projected to grow by 5.9% by July 2024.
- Mount Vernon, WA: Mount Vernon's housing market is forecasted to grow by 6% by July 2024, starting from a current value of 0.6% (as of July 31, 2023).
- Kennewick, WA: The housing market in Kennewick is anticipated to grow by 6.2% by July 2024, with an initial growth of 0.5% by August 31, 2023.
- Olympia, WA: Olympia's housing market is expected to grow by 6.3% by July 2024, starting from a current growth of 0.6% (as of July 31, 2023).
- Aberdeen, WA: The housing market in Aberdeen is predicted to have a growth of 6.4% by July 2024, showing a gradual increase from the current value of 0% (as of July 31, 2023).
- Ellensburg, WA: The market in Ellensburg is projected to grow by 6.4% by July 2024, with an initial growth of 0.3% by August 31, 2023.
These projections indicate promising growth in various regions across Washington State, reinforcing the dynamic nature of the housing market in the coming year.
Impact on Buyers and Sellers
The ever-evolving dynamics of the housing market in Washington State exert profound effects on both buyers and sellers, shaping their strategies, expectations, and decisions. As we delve into the intricate interplay between these two vital components of the real estate landscape, we uncover a tapestry of challenges, opportunities, and shifting trends.
Impact on Buyers:
Adaptation to Market Conditions: For buyers, fluctuating market conditions often necessitate swift adaptation. In a scenario where the average home value has seen a 4.4% decrease over the past year, informed buyers are presented with a unique window of opportunity. They may find properties at more favorable prices compared to previous years.
Competitive Landscape: However, the competitive landscape remains intense, with a substantial 45.7% of sales closing above the list price. This environment prompts buyers to be strategic, responsive, and willing to make competitive offers to secure their desired properties.
Timely Decision-Making: With homes typically going pending within 8 days, buyers must be poised to make timely and well-informed decisions. The pace of the market demands a keen understanding of the local trends, realistic budgeting, and the ability to act swiftly to seize opportunities.
Impact on Sellers:
Pricing Strategies: Sellers, on the other hand, must carefully craft their pricing strategies in response to market shifts. While the -4.4% 1-year value change might raise concerns, the 31.7% of sales below the list price underscores the importance of setting a competitive and appealing price point to attract potential buyers.
Optimal Timing: Given the 8-day median days to pending, sellers are presented with a swift sales cycle. Strategic timing becomes critical, as listing a property during a period of increased buyer activity can lead to quicker sales and potentially more favorable terms.
Navigating Negotiations: Sellers must also navigate negotiations within a market where 45.7% of sales exceed the list price. While this can be advantageous for sellers, it requires a balance between capitalizing on demand and ensuring a fair deal for both parties.
Forecast Impact: Looking ahead, the forecasted growth in various Washington regions, such as Seattle and Bellingham, signals potential opportunities for sellers to capitalize on the appreciation. However, staying attuned to market trends and aligning strategies with shifting buyer preferences remains pivotal.
In conclusion, the Washington State housing market's impact on buyers and sellers is a complex dance influenced by factors like pricing, competition, timing, and market trends. Navigating this landscape requires both sides to remain adaptable, informed, and strategically astute to achieve their real estate goals.
Will the Housing Market Crash in Washington?
There is undoubtedly a slowdown in the pace of home sales in the Washington housing market, but it is more of a return to normalcy. This is neither a crash nor a bubble; housing demand is still present. The slowdown is ideal for buyers who are weary of being outbid in a hot Washington real estate market or who are experiencing buyer fatigue.
The current trends suggest that a sudden and significant crash is unlikely in the near future. Although rising mortgage interest rates may slow down the rapid price increases seen in recent years, the market is still expected to remain relatively strong.
There are several reasons why the housing market outlook in Washington appears positive. For one, the state's real GDP experienced growth, and the tech industry and international trade continue to drive the economy. Additionally, population growth is driving demand for housing, and the state is adding new housing units to keep up with the growing population.
While rising interest rates may slow down the rate of price appreciation, real estate experts predict that prices will either level off or slightly rise in the near future. It's important to note that unexpected events can always impact the housing market, but for now, the Washington housing market appears to be on a positive trend.
The All-Transactions FHFA House Price Index serves as a valuable tool for understanding the ever-changing dynamics of the housing market. By meticulously tracking changes in house prices over time, this index offers insights that can unveil significant trends and patterns. Let's delve into the quarterly index values for Washington, offering a closer look at the state's housing market trajectory.
All-Transactions House Price Index for Washington
- Q1 2023: 934.99
- Q4 2022: 938.28
- Q3 2022: 966.46
- Q2 2022: 975.15
- Q1 2022: 911.13
Q1 2023: The index value stands at 934.99. This indicates a slight decrease in house prices compared to the previous quarter. While the decline may raise some concerns, it is essential to consider the broader trends to gain a comprehensive understanding of the market.
Q4 2022: The index value was 938.28, showing a relatively stable housing market during this period. The marginal decrease in house prices may suggest a leveling off or a temporary adjustment in the market.
Q3 2022: With an index value of 966.46, this quarter reflects a moderate increase in house prices compared to the previous quarter. It indicates a positive trend where the housing market experienced growth and appreciation.
Q2 2022: The index value of 975.15 reveals a continued upward trajectory in house prices. This indicates a period of robust growth in the Washington housing market.
Q1 2022: The index value stood at 911.13, reflecting a significant increase in house prices compared to the previous quarter. This suggests a period of strong appreciation and market growth.
These quarterly index values provide a window into the ebb and flow of Washington's housing market. The progression from Q1 2022 to Q1 2023 showcases a growth trajectory, indicating potential market resilience and evolving demand. Whether it's the steady climb in Q2 2022 or the subsequent dip in Q3 2022, each value tells a story of the state's real estate landscape.
Sources:
- https://fred.stlouisfed.org/series/WASTHPI#
- https://www.zillow.com/wa/home-values/
- https://www.neighborhoodscout.com/wa/real-estate
- https://fred.stlouisfed.org/series/ACTLISCOUWA#
- https://www.redfin.com/city/13296/NE/Washington/housing-market
- https://www.statista.com/statistics/306793/washington-gdp-growth/
- https://en.wikipedia.org/wiki/Economy_of_Washington_(state)
- http://choosewashingtonstate.com/why-washington/our-key-sectors/ict/
- https://ofm.wa.gov/about/news/2022/06/washington-tops-78-million-residents-2022
