Seattle Home Prices Are Rebounding
July 18, 2023
Today’s news may leave you feeling uncertain about home pricesĀ and fearing the possibility of worse times ahead. The reason behind this unease is that current headlines are creating an unnecessarily negative outlook. However, if we consider a year-over-year perspective, it becomes clear that home prices did experience a decline, but this is primarily due to comparing them with an extraordinary peak in a āunicornā yearĀ that went well beyond the usual norms.
To avoid an unfair comparison to the previous peak, we must examine monthly data, which presents a significantly different and more positive narrative. While local home price trends continue to differ by market, the national data provides valuable insights.
TheĀ graphsĀ below useĀ recent monthlyĀ reportsĀ from threeĀ sourcesĀ to show the worst home price declines are already behind us, and prices are appreciating nationally.
Looking at this monthly view, we can see the past year in the housing market can be divided into two parts. In the first half of 2022, home prices were going up, and fast. However, starting in July, prices began to go down (shown in red in the graphs above). By around August or September, the trend started to stabilize. But, looking at the most recent data for early 2023, these graphs also show that prices are going up again.
The fact that all three reports show prices have been going up for three or more straight months is an encouraging sign for the housing market. The month-over-month data indicates a national shift is happening āĀ home prices are rising again.
Craig J. Lazzara, Managing Director atĀ S&P Dow Jones Indices,Ā saysĀ this about home price trends:
āIf I were trying to make a case that the decline in home prices that began in June 2022 had definitively ended in January 2023, Aprilās data would bolster my argument.ā
Experts believe one of the reasons prices didnāt crash like some expected is because there arenāt enough availableĀ homesĀ for the number of people who want to buy them. Even with todayāsĀ mortgage rates, there are more people looking to buy than there are homes available for sale.
Mark Fleming, Chief Economist atĀ First American,Ā explainsĀ how more demand than supply keeps upward pressure on prices:
āHistory has shown that higher rates may take the steam out of rising prices, but it doesnāt cause them to collapse entirely. This is especially true in todayās housing market, where theĀ demand for homes continues to outpace supply, keeping the pressure on house prices.”
Doug Duncan, Senior VP and Chief Economist atĀ Fannie Mae,Ā statesĀ home price growth is exceeding expectations thanks to that high demand:
ā. . .Ā housing prices continue to show stronger growth than what was previously expectedĀ . . . Housingās performance is a testimony to the strength of demographic-related demand . . .ā
Hereās How This Affects You
- Buyers: If you’ve been holding off onĀ buyingĀ because you were worried the value of your home would go down, knowing home prices have bounced back should bring you some relief. It also gives you the opportunity toĀ ownĀ something that usually becomes moreĀ valuableĀ as time goes on.
- Sellers: If you’ve been waiting toĀ sellĀ your house because you were concerned about how changing home prices would affect its value, it might be a good idea to team up with aĀ real estate agentĀ to list your house. You don’t have to wait any longer because the latest data suggests things are turning in your favor.
Bottom Line
The latest data reveals that the worst is already over if you delayed your moving plans due to concerns about home prices dropping. Prices are appreciating nationally, so let’s get in touch to keep you informed about what’s happening with home prices in our area.