In February 2023, King County home prices tumbled 7% with the median home sold for $800,000. The biggest difference in 2023 is the increase in mortgage rates. Higher rates mean less purchasing power for potential homeowners and in turn creating less competition for homes. Some home sellers are waiting to see if rates would dip down again and markets would pick back up. Others want to make sure their jobs are safe before making a move.
The inventory was already tight before but now with homeowners with lower mortgage rates – they are staying put longer and not listing their homes. Others are becoming a landlord instead of selling especially if they have extremely low interest rates on their current property.
To attract potential buyers, sellers are taking on more home improvement projects such as painting, upgrading carpets or replacing light fixtures and faucets before listing their properties. Buyers are demanding more to compensate for higher mortgage rates.
Find an experienced local mortgage broker. If you find yourself in a bidding war, a local broker as opposed to a big bank can make all the difference.
The new year will bring Seattle a new housing market - one without the runaway prices and jaw-dropping bidding wars. Yet still difficult for anyone but the region's wealthiest shoppers. Here's what real-estate forecasters expect for in 2023.
After 2 years of home prices shoot up by double-digit percentages - prices are now on the decline driven by elevated mortgage rates and fear of rescission.
Seattle-are prices could fall faster than the national trend with as much as 10% according to Redfin in part because Seattle home prices are already high and combined with current rising mortgage rates environment - this could push mortgage payments even more out of reach of prospective buyers.
Could I afford to buy a house?
The median mortgage payment here in King County is about $4,300 (median means half of mortgage payment is more than $4,300 and half of mortgage payment is less than $4,300). Here's the current median prices in greater Puget Sound Area.
By another estimate, Seattle homebuyers must earn $169,000 a year to afford the median home with 20% down payment. With persistence inflation and stagflation in 2023 - elevated mortgage rates appear to be here to stay after super-low mortgage rates of between 2% and 4% during the pandemic years. Fannie Mae projects rates will hover around 6% throughout 2023. Check out our temporary rate buydown option to help you manage your rate for the first few years of your loan payment.
Many people buy a house and stay put for years so they can build-up some equity when they eventually sell. However, this may not be the case for people who bought in the past few years (between Jan. 2021 through Sept 2022) and to sell in 2023 due to extenuating circumstances.