Real Estate Market Update - April 2024
Real Estate Market Update
The Seattle-Bellevue real estate market entered April, Q2-2024, following seasonal trends with an increasing supply of single-family homes on the market (For Sales) month over month while the quantity of properties going under contract (Pended) and Sold also increased. Overall market activity remains at historic +10-year lows, the same as it did in 2023. However, 2024 continues to be a stronger seller's market with an increasing rate of demand exceeding a decreasing supply of single-family properties in King County.
Many financial analysts and economists were forecasting 5 to 7 rate cuts by the Federal Reserve during 2024 based on the notion that decreases in the Consumer Price Index (CPI), Producers Price Index (PPI) and Retail Price Index (RPI) during October and November 2023 indicated inflation had peaked, unemployment had bottomed, and U.S. economic growth would slow. The finance industry expected the anticipated rate cuts would reduce residential mortgage rates. The Mortgage Banker’s Association forecasted in November 2023 and February 2024 the 30-year fixed rate mortgage would be 6.6% in Q2-2024. In March 2024, subject to Buyer’s credit score and down payment, a 30-year fixed rate mortgage was approximately 6.75%. However, the CPI, PPI, and RPI index reporting for January, February, and March 2024 indicated increases in the rate of inflation fueled by strong consumption and continued government spending. Many financial analysts and economists have revised their rate cut forecasts and now expect no more than two cuts and perhaps a delay of such cuts until after November 2024. The market is re-pricing 30-year fixed mortgage rates based on rate cut forecast revisions. Subsequently, the 30-year fixed mortgage rate increased to 7.57% in mid-April 2024, but is currently approximately 7.25%. However, this increase does not appear to have reduced Buyer demand—an indicator that the market is adjusting to current rates.
As reported last month, an increasing number of Buyers are adjusting to the reality of higher rates and moving forward to pursue lifestyle goals rather than defer them. The market continues reverting closer to the long-term 30-year fixed mortgage rate average of 7.74% for over 50 years (see January’s report for graph).
Guidance for Buyers
The pool of ready, willing and able Buyers exceeds the supply of homes for sale, which is at historic +10-year lows. Be prepared for the need to pre-inspect properties in a short amount of time and negotiate competitive offers that escalate in value. I would be happy to guide you through the process.
I do not recommend trying to time the market based on anticipated interest rate decreases, assuming you intend to own the home five years or more. It’s about time in the markets, not timing the markets.
Guidance for Sellers
The ideal time to sell (list) a property is from late February until mid-May when activity somewhat softens thereafter, however, it depends on the property and location. Generally, the market softens in mid-June until there’s a spike in activity in September and cools, thereafter, from October through December. Keep in mind you will likely require several weeks to schedule trusted contractors to prepare the property, if necessary, and stage it. Stagers may be booked-out four to six weeks and photographers three to four weeks. I understand that any related sales expenses (e.g. brokerage fees, listing preparation costs, staging fees, etc.) may be deducted from your taxable gain. Please consult with your Certified Public Accountant (CPA) to confirm. See this article, Sold Your Home This Year? Consider Writing Off Some Common Expenses.