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 2024
According to Zillow, the average home value in Washington currently stands at $571,248, reflecting a 2.2% decrease over the past year. Notably, homes are going pending in a mere 12 days, indicating a brisk demand for real estate in the state. This data is current as of September 30, 2023.
Key Statistics (As of August 31, 2023)
- Median Sale to List Ratio: 1.000
- Percent of Sales Over List Price: 42.3%
- Percent of Sales Under List Price: 33.9%
- Median Days to Pending: 12
Top 10 MSAs in Washington Where Prices Are Expected to Grow by 2024:
The Metropolitan Statistical Area (MSA) housing market forecast for Washington in 2023 and 2024 is a topic of significant interest. MSA regions often provide insights into localized real estate trends within the state.
Moses Lake, WA: This MSA is anticipated to experience a 0.3% growth in home prices by October 31, 2023, with a further increase to 0.9% by the end of 2023. Looking ahead to September 30, 2024, a substantial 4.3% growth is projected.
Centralia, WA: Centralia's MSA is expected to see a 0.2% rise in home prices by October 31, 2023, and an additional 0.5% by December 31, 2023. By September 30, 2024, an impressive 4.1% growth is forecasted.
Othello, WA: The MSA in Othello, Washington, is predicted to have a 0.2% increase in home prices by the end of October 2023, followed by a 0.6% rise by December 31, 2023. Looking to September 30, 2024, a 3.9% growth is expected.
Spokane, WA: Spokane's MSA is anticipated to experience modest growth, with a 0.1% increase in home prices by October 31, 2023, though no change is expected by the end of 2023. By September 30, 2024, a 3.2% growth is projected.
Aberdeen, WA: Aberdeen's MSA may face a minor decrease in home prices, with a 0% change by the end of October 2023 and a -0.1% decline by December 31, 2023. However, a 3.1% growth is forecasted for September 30, 2024.
Shelton, WA: Shelton's MSA is expected to see a 0.2% increase in home prices by October 31, 2023, and an additional 0.4% by December 31, 2023. By September 30, 2024, a 3.1% growth is projected.
Yakima, WA: Yakima's MSA is likely to experience a more substantial growth, with a 0.4% increase in home prices by October 31, 2023, and a further 0.7% rise by December 31, 2023. Looking ahead to September 30, 2024, a 2.9% growth is forecasted.
Pullman, WA: The MSA in Pullman, Washington, is expected to have a 0.4% increase in home prices by the end of October 2023, with a more significant rise to 1.1% by December 31, 2023. By September 30, 2024, a 2.9% growth is anticipated.
Longview, WA: Longview's MSA is predicted to see a 0.2% increase in home prices by October 31, 2023, and an additional 0.4% by December 31, 2023. By September 30, 2024, a 2.6% growth is expected.
Port Angeles, WA: The MSA in Port Angeles is forecasted to experience a 0.2% increase in home prices by the end of October 2023, with a slight further rise of 0.3% by December 31, 2023. Looking to September 30, 2024, a 2.5% growth is projected.
These forecasts provide valuable insights for both buyers and sellers in the respective MSA regions, helping them make informed decisions in a dynamic real estate market.
Impact on Buyers and Sellers
The evolving dynamics of the Washington State housing market have varying implications for both buyers and sellers. Understanding these impacts is crucial for making informed decisions in the real estate arena.
Impact on Buyers
1. Pricing Opportunities: For buyers, the current market presents unique opportunities. With the average home value in Washington decreasing by 2.2% over the past year, some may find that properties are more affordable than before. This dip in prices can be particularly appealing to first-time buyers and those on a budget.
2. Competitive Environment: Despite lower home values, the market remains competitive. Homes are going pending in just 12 days, highlighting the high demand for real estate in the state. Buyers need to act swiftly when they find a property of interest, as the quick turnaround time may lead to bidding wars and a sense of urgency.
3. Favorable Mortgage Rates: The state's housing market forecast suggests that interest rates are expected to remain relatively low. This is positive news for buyers as it can result in lower monthly mortgage payments, making homeownership more accessible and affordable.
4. Location Matters: The MSA forecast is valuable for buyers as it highlights regional trends. Those considering a move within the state or relocating to a specific MSA can use this data to make informed decisions. Some regions are projected to experience notable growth in home prices, which might influence their choice of location.
Impact on Sellers
1. Pricing Strategy: Sellers should be mindful of the 2.2% decrease in average home values over the past year. This suggests that a well-thought-out pricing strategy is crucial. While the market is competitive, overpricing your property could deter potential buyers. A balance between pricing competitively and maximizing your return is essential.
2. Quick Sales: The fact that homes are going pending in just 12 days indicates a favorable selling environment. Sellers can expect a relatively quick turnaround if their property is priced appropriately and well-presented. This quick sale can be advantageous in terms of reducing holding costs and moving on to the next phase of life.
3. Regional Considerations: For sellers in the MSAs, the regional forecast is particularly relevant. Understanding the expected price growth in your area can help sellers time their listings to maximize returns. For instance, if an MSA is projected to experience substantial growth in home prices, it may be beneficial to wait for that upward trend before listing your property.
4. Negotiation Leverage: In a market where homes are in demand, sellers may have more negotiation leverage. This can include receiving offers at or above the asking price and having the flexibility to choose the most suitable buyer. However, sellers should remain reasonable in their expectations to attract serious buyers.
In summary, the Washington State housing market's impact on buyers and sellers is nuanced. Buyers have opportunities for affordability and favorable mortgage rates, but they must navigate a competitive environment. Sellers need to price their properties strategically and consider regional forecasts, all while potentially benefiting from quick sales and negotiation leverage.
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
