Seattle Real Estate Market Update - Q3 2024
As we approach the end of 2024, it’s clear that Seattle’s residential real estate market has undergone significant changes over the past few years. The Seattle market has shifted from the frenzied competition of 2022 to a more balanced and buyer-friendly landscape, especially in the condo sector. This market update provides a comprehensive look at key trends in median sales prices, inventory levels, new listings, and the months' supply of inventory for condos and single-family homes from January 2022 to October 2024. Let’s gooooo.
Median Sales Price: Pricing Trends Show Stabilization
Seattle's real estate market saw substantial price growth in early 2022, but the rate of appreciation has cooled since then, reflecting changes in buyer demand, economic conditions (yep, interest rates are still hovering at 7%), and inventory levels. It feels safe to report that home prices in Seattle have stabilized, as we’re on track to report single digit appreciation rates for both condos (4.5%) and single-family homes (4.1%) from 2023.
Condos: The median sales price for condos started at $497,225 in January 2022, peaking around $589,000 by mid-2023 before stabilizing in 2024. By July 2024, the median price stood at $545,000. While prices have remained strong, the pace of appreciation has slowed, reflecting more moderate demand. The current median sales price as of September 2024 is $575,000.
Single-Family Homes: It’s impossible to forget when single-family home prices EXPLODED in 2021 and 2022, with a median price of $775,000 in January 2022 that climbed to a peak of nearly $1 million in mid-2022. However, by mid-2022, prices cooled slightly when interest rates spiked, with the median price hovering around $930,000. While still high, appreciation has slowed as inventory levels have risen and buyer competition has eased due to stubborn interest rates. The current median sales price as of September 2024 is $934,000.
My Hot Take on Pricing:
Prices for both condos and single-family homes continue to trend upward, but the rapid spike of interest rates in 2022 has given way to a more stable market in 2024. Single-family homes remain in high demand, but only the truly special homes, with fab locations, that are well prepared, properly priced, and presented are receiving multiple offers and selling over the asking price.
Condos on the other hand are taking quite a bit more time to attract a buyer, which often results in a lower sales price. In September 2024, the average days on market before receiving an offer is 29 days, up 81% from September 2023. With rising HOA dues and stubborn interest rates, the monthly payment is becoming increasingly more difficult to stomach for the entry level condo buyer.
A visual summary of the median sales prices for both condominiums and single family homes in Seattle, WA.
More Homes Coming to Market: Supply Growth and Seasonal Fluctuations
The number of homes listed for sale in Seattle has grown over the past two years, but not significantly for single-family homes, which is why prices haven’t come down. Seasonality does come into play when analyzing the data, so it’s important to remember that each year we experience cycles of increased inventory in fall/winter months, and sparser inventory in the spring/summer months.
Condos: The number of condos for sale rose from 202 units in January 2022 to a high of 988 units by July 2024. This increase in supply has eased the pressure on buyers, offering more choices and greater negotiating power compared to the limited options available in 2022.
Single-Family Homes: Similarly, the number of single-family homes on the market increased from 182 units in January 2022 to 1,256 units by July 2024. This inventory growth, especially in 2024, reflects a market in transition, where supply is somewhat catching up with demand.
Seasonal Trends:
Each year, inventory levels tend to peak during the spring and summer months and drop in the fall and winter. For instance, single-family home inventory hit its highest points in July 2022 (1,002 units) and July 2024 (1,256 units), and it’s lowest points in January 2022 (182 units) and January 2024 (463 units) while condo inventory showed a similar pattern.
My Hot Take:
It’s a great time to buy, if you’re able to. We’re currently experiencing record high inventory numbers and increased days on market, creating opportunities to shop with less pressure and negotiate, negotiate, negotiate!
The growth in inventory, particularly in 2024, signals that buyers now have more options, and the competitive pressures of previous years have eased. There’s no denying that is tough for some sellers right now, especially condo sellers, in the current market conditions. It’s important to have realistic expectations when listing your property for sale. Pricing is paramount, as well as being hyper aware of your local competition.
Months' Supply of Inventory: From a Hotttt Seller’s Market to a More Balanced Market
The months' supply of inventory (MSI) is a critical indicator of market balance. It measures how long it would take to sell all available homes at the current sales pace, with less than 6 months' supply typically indicating a seller's market.
Condos: The MSI for condos started at just 1 month in January 2022, reflecting intense competition and limited supply. However, by September 2024, the MSI rose dramatically to 7.1 months, indicating a strong buyer's market as inventory outpaced demand. It is a great time to buy a condo (I’ve sold more condos than ever this year!).
Single-Family Homes: While the single-family home market remains more competitive, the MSI has also increased from 0.4 months in January 2022 to 2.9 months by July 2024. Though this is still considered a seller’s market, the rising supply means buyers have more options than they did during the height of the pandemic-induced housing boom.
My Hot Take on Inventory:
The Seattle condo market has shifted into buyer territory, while the single-family home market is approaching a more balanced state. Rising inventory levels and the increase in MSI suggest a softening in the once red-hot market. But, will it last? It’s hard to say. Prices won’t begin to climb with any significance until interest rates come down at least a point and a half, and there’s no guarantee when that will happen. Even though the Fed rate has been cut, this doesn’t directly impact mortgage interest rates in the same way. Instead, mortgage rates follow the yield on 10-year treasury bonds, and those investors are a bit more cautious.
Final Thoughts: What Does This Mean for Buyers and Sellers in 2024?
The Seattle real estate market has evolved from a highly competitive seller’s market in 2022 to a more balanced environment in 2024, particularly for condos. While prices remain elevated, especially for single-family homes, buyers now have more options and negotiating power. Sellers, on the other hand, may need to adjust their expectations as the market becomes less frenzied and homes take longer to sell.
For buyers, 2024 presents a unique opportunity to enter the market with more leverage, particularly in the condo sector, where inventory has significantly increased. For sellers, pricing strategically and preparing homes to stand out will be crucial as competition among listings intensifies.
Most importantly, if you have specific questions about how you fit into Seattle’s dynamic real estate market, reach out! I have fielded so many call over the past couple of months from past and future clients. It’s tough to know what your options are, that’s where I come in :)