Projections for Seattle’s real estate market in 2024 show signs of upturns and cautious optimism. After a period of leveling off in 2023, the market anticipates nuanced shifts in home prices, mortgage rates, inventory, and the commercial real estate sector.
According to Mason Virant, the Associate Director of the Washington Center for Real Estate Research, we can expect an increase in home prices ranging from 1% to 3% in areas like Seattle and Bellevue that tend to have higher prices. Similarly, Matthew Gardner, who previously served as the economist at Windermere, tentatively predicts a 3% growth in the price of single-family homes for sale in King County. However, Zillow’s algorithm-based estimation suggests that home values will go up by 1% by the end of 2023 and then experience a decrease of 1% by the close of 2024.
Affordability remains a key concern in Seattle’s housing market, with the median single-family home and condo prices presenting significant hurdles for aspiring homeowners. Despite potential dips in values and marginal price increases, the core issue of affordability persists. The ever-changing waves of real estate pricing reflect the broader narrative of housing challenges in the city.
Mortgage rates, a pivotal factor in the real estate equation, might experience a slight decrease in 2024. Currently hovering just below 7%, economists project a continuation of this downward trend. However, the consensus is that rates are unlikely to drop significantly, with projections from Fannie Mae, the National Association of Realtors, and others expecting rates to stay above 6% in 2024. That scenario poses a challenge for potential buyers, as significant drops in rates are deemed necessary to alleviate the growing struggle for homeownership.
The “lock-in effect” contributes to the limited inventory of homes for sale, as homeowners with favorable interest rates find little incentive to sell and upgrade. While a potential drop in mortgage rates could encourage more listings, the degree of this impact hinges on the magnitude of the rate decrease.
Apartment rents, having experienced fluctuations in recent years, are poised to climb again. The limited construction of new apartments and challenges in financing construction projects contribute to the projection of a 4% increase in apartment rents in the Seattle area in 2024. The persisting trend aligns with a shift toward renting being perceived as a more practical housing option, especially as paths to homeownership become increasingly elusive.
The enduring impact of the COVID-19 pandemic continues to influence the commercial real estate sector, particularly in the office space domain. Remote work has led to indefinite vacancies, especially in tech-heavy areas like Redmond. Predictions for 2024 indicate that office vacancy rates may continue to rise, with companies seeking newer spaces with enhanced amenities to attract employees back to the office.
In 2024, Seattle’s real estate landscape is ultimately poised for subtle shifts. While experts anticipate some adjustments in home prices, mortgage rates, inventory, and commercial real estate, the overarching challenges of affordability and the evolving dynamics of remote work continue to shape the future of the city’s real estate market. As Seattle navigates these property dynamics, the resilience of its real estate market remains a focal point in the Emerald City’s growth.
