Real Estate Market Update - July 2024
Real Estate Market Update
We entered the seasonal summer slowdown (slump) indicated by reduced Buyer activity beginning in June for the greater Seattle-Bellevue metro area. The peak of the 2024 selling season was in May, as reported and forecasted last month. Thereafter, the quantity of single-family homes for sale (supply) has continued increasing while the quantity of homes sold (demand) has decreased month over month. Based on seasonal trends, I expect a spike in home sales (and $/sq. ft.) during August before supply and demand both decrease until January. The summer season is a good time to buy, especially as mortgage interest rates have stabilized, because of reduced competition and excess supply/options, although we’re still in a Seller's market.
Mortgage rates stabilized in mid-April and currently appear to be on a downward trend to approximately 6.5% by end of year, assuming the Federal Reserve lowers the federal funds rate by 50 basis points during this period to respond to slowing economic conditions and the declining rate of inflation. Currently, the 30-year fixed rate mortgage is approximately 6.8% based on a minimum down payment of 25% and a credit score of at least 765.
Guidance for Buyers
The summer season is a good time to buy, especially as mortgage interest rates have stabilized, because of reduced competition and excess supply/options. However, we’re still in a Seller’s market. 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 market generally softens beginning in mid-June (referred to as the “summer slump”), but it depends on the property and location, until there’s a spike in activity in mid-August and cools from October through December. Keep in mind that 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.