Reasons for optimism in 2024 as 2023 concludes with a whimper As King County closed out the year with historically low sales and a lack of new listings, prices remained rigid in a market that has been eagerly awaiting the start of a new year.
new listings throughout the year, it was the lowest count in at least the past decade and 26% below 2022’s count (which happens to be the next lowest total). What’s different compared to sales is the composition of home types, where new condo listings composed one quarter of the total in 2023 versus 22%—both the share one year ago and on average over the past-decade. Although this sales and listings dynamic wasn’t much to celebrate over the holidays, median prices remained rigid again in December. Yes, the overall median sold price fell 0.6% month- over-month (although when split out by home type, the median condo price was up 6% while residential was down 3%), but on a year-over- year basis the median price was 10% higher. This was the highest year-over-year change in the median price in King County since May 2022 and the first time there has been consecutive year-over-year increases in the overall median price since November 2022. While overall market sentiment in King County may not be at its highest, there is certainly a growing sense of optimism to kick off 2024, thanks to expectations of lower interest rates on the horizon and a US economy that continues to defy expectations and register strong growth. If 2024 plays out the way we hope, it will be fascinating to see how much, and how quickly, market sentiment evolves throughout the year.
Sentiment—or the “view or attitude towards a situation or event”—is inherently difficult to measure. One approach is to use market data to infer how individuals participating in the market are “feeling” at a high-level. Another approach is to compile opinions and thoughts from an on-the-ground perspective, speaking to brokers, sellers, and buyers. This latter approach would help us understand the sentiment in a given market, though quantifying it would be the more challenging task. The reason this commentary began with a deep dive into sentiment (ok, maybe the Oxford dictionary definition was a step too far) is that there seems to be a consensus that has permeated King County in 2023. With 22,473 sales—the lowest total in at least the past 10 years—very few new listings (relatively speaking) hitting the market, and prices remaining rigid across both residential and condo home types, the sentiment appears to be that 2023 was an arduous year for King County’s housing market. With the broad-
based ebbs and flows that have plagued the years since the conclusion of the pandemic, sentiment entered a year-long interlude in 2023 where activity, at least overall, was subdued. Looking specifically at the month of December, sales (at 1,288) were down 19% compared to November and were 13% lower than those from one year earlier. In looking at the full-year total for sales, 2023’s count was 25% lower than 2022’s and 34% below the past-decade annual average; whatever the cause—waning confidence, high interest rates, a lack of listings, or some combination of the three—sales activity was somewhat lackluster in 2023. That said, there is some optimism for the year ahead on account of the expectation that the Federal Reserve will begin trimming the federal funds rate for the first time since March 2020, which could entice some buyers back into the market. Similar to sales, new listings have been well below their historical averages as sellers remained on the sideline in 2023. With 28,173
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