10/23/2023
This is the quarterly Snohomish County Housing Update. But what does it mean?
This year, Q3 in the housing market felt a little different than previous years during the typical seasonality of the market. While homes get listed at the highest rate at the end of June, we should see home sales drop drastically each month in Q3 as both buyers and sellers prepare for the winter months ahead. With about 30% less homes listed overall this year compared to last, we didn’t see a big difference in homes listed as we typically do through the 3 months of Q3, thus extending the “selling season” that normally ends in June. It feels like the market is stuck in a “no man’s land” zone, meaning, there is very little inventory for buyers to chose from (which should cause price increases), but with interest rates being as high as they are, the buyer demand is still low due to buyer affordability.
Why is buyer demand so low? September saw the LOWEST number of mortgage applications in OVER 3 DECADES, showing the devastating impact mortgage rates are having on buyer affordability. So what are interest rates? They change every day but at the time of this writing rates passed through 8% and are currently sitting in the high 7’s. As we head into Q4, expect to see the housing market continue to stay mostly flat with a possibility of a small pull back in pricing as less and less homes hit the market. Home values in 2023 YTD have recovered much of the steep losses that we experienced in the back half of 2022, but it seems like we are unable to push much higher as we are hitting a theoretical ceiling. The experts believe the only way we are going to get out of this weird “no man’s land” market is to see the fed lower interest rates to help with buyer affordability.