sitting tight versus fight or flight High interest rates continue to weigh on King County’s housing market, with buyers pulling back at a time when more sellers are coming to market. These conditions have yielded declining home values and pushed inventory to its highest level in almost a year.
reaching its lowest level since March. Expect more price softening in the coming months as current conditions persist into the near- and medium- term. Buyers aren’t likely to return in great numbers until they receive some clarity about, and relief from, the Federal Reserve vis-a-vis stable, and then lower, interest rates. Meanwhile, as the impact of today’s high borrowing costs continue to cascade through the economy—slowing output and putting some pressure on the labor market— more homeowners, at the margin, may consider listing their homes, providing a modicum of buoyancy to the supply- side of our market.
We are now one and a half years into the Federal Reserve’s unprecedented rate-tightening cycle, and with interest rates at their highest level in two decades, both the economy and our local housing market have been surprisingly resilient to-date. But that’s starting to change, and for our housing market, that change has manifested in more buyers sitting on the sidelines and more sellers bringing listings to market—which means growing supply and downward pressure on prices. Fewer willing buyers translated to fewer transactions last month: there were 1,914 MLS sales in King County in September, which was the lowest monthly total since January, and the second consecutive monthly decline in sales. And while the typical seasonal pattern is fewer sales in September than in August, last month’s decrease of 14%
outpaces the typical decline of 10%. Additionally, September’s sales count was a whopping 38% less than the past- decade average and even 22% less than one year ago, when sales through the latter half of 2022 were historically low. More sellers and fewer buyers translated to more supply last month: there were 4,014 homes available for sale at the end of September, which was up 5% from August (compared to the usual increase of 0.8%) and represents the highest total of any month since October of last year. It’s worth noting, however, that inventory remains 19% lower than one year earlier, and 36% below its long-run average. These changing market conditions have begun to impact home values, with the median sold price in King County declining in September (by 4%) and
Copyright © 2023 rennie group of companies. All rights reserved. This material may not be reproduced or distributed, in whole or in part, without the prior written permission of the rennie group of companies. Current as of October 16, 2023. All data from Real Estate Board of Greater Vancouver and Fraser Valley & Rennie. While the information and data contained herein has been obtained from sources deemed reliable, accuracy cannot be guaranteed. rennie group of companies does not assume responsibility or liability for any inaccuracies. The recipient of the information should take steps as the recipient may deem necessary to verify the information prior to placing any reliance upon the information. The information contained within this report should not be used as an opinion of value, such opinions should and can be obtained from a rennie and associates advisor. All information is subject to change and any property may be withdrawn from the market at any time without notice or obligation to the recipient from rennie group of companies. E.&O.E. 3
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