Real Estate Market Update - March 2023

The greater Seattle-Bellevue real estate market is following the seasonal trend in 2023 and I anticipate increasingly stronger Buyer activity in April as mortgage interest rates have dipped below 6% towards the end of March.  It appears the Federal Reserve will pause (or possibly cut) further Fed funds rate increases as inflation is coming under control, which will increase the Housing Affordability Index.  This decrease in mortgage interest rates during the middle of the selling season should have a compounding effect on home Buyer activity through May.

As previously reported, Q1-2022 may have been the strongest Sellers’ market of record. The average sold price for single-family properties in King County was $1,031,000 in January 2022 and peaked at $1,284,000 in April 2022, which is a 24.5% increase. However, after the 20% price correction from Q2-2022 to Q4 2022, the average single-family home is approximately $1,020,000 in January 2023. Based on current market dynamics and seasonal trends, I believe property values are at the trough of the dip and will begin to gradually increase (appreciate) until June.

Buyers should keep in mind the average 30-year mortgage interest rate from 1971 to 2023 was 7.75%.  I believe Buyers that delay purchasing a home now at a slightly higher interest rate will face stronger competition in the future while paying more for a home.  If mortgage interest rates decrease to 5.25% or less, we’ll experience the hot Seller’s market that we’ve typically experienced in the Puget Sound area since about 2015.  Many first time Buyers could be priced-out.

I’m here to help you or someone you know with their real estate goals.

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