Real Estate Market Update - September 2024
Real Estate Market Update
The volume of residential real estate sales in the greater Seattle-Bellevue area for 2024 to date appears to exceed 2023, which indicates an improving market stimulated by declining interest rates, as Q3 ends and Q4 begins. However, based on seasonal trends, I anticipate Buyer (demand) and Seller (inventory/supply) will both decrease from September until January 2025.
The 30-year fixed rate mortgage rose to over 8% for the first time in 23 years, as reported in October 2023, causing national mortgage demand to fall to its lowest level since 1995. The Federal Funds Rate was reduced by 50 basis points on September 18, 2024, for the first time since 2020. Currently, based on a minimum downpayment of 25% and a credit score of at least 765, a 30-year fixed rate mortgage is approximately 5.875%. The Federal Reserve is expected, by most analysts, to reduce the Federal Funds Rate at their next meetings in November and December if supported by future economic data regarding inflation, consumption, employment and GDP. It appears that 2025 will be healthier real estate market than 2024.
I anticipate that new listings/inventory and sales will decrease from September into January according to seasonal trends, however, lower interest rates may mitigate such seasonality.
Guidance for Buyers
The fall is a good time to buy, especially as mortgage interest rates have decreased, because of reduced competition and excess supply/options. However, we’re still in a Sellers’ 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
Listing a home for sale at the end of the year is not a terrible strategy in the Seattle-Bellevue area. It’s still a Sellers’ Market although Buyer activity and inventory is decreasing into the holiday season. If scheduling permits, the ideal time to sell (list) a property is from February until mid-May as Buyer activity exponentially increases. Keep in mind that it will take approximately 2 months to schedule contractors to prepare the property, if necessary, and stage it. Stagers will be booked-out 6-8 weeks and photographers 3-4 weeks. I understand that any related sales expenses (e.g. brokerage fees, listing preparation costs, staging fees, etc.) can 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.