Washington Real Estate Market: Predictions for 2024

Washington homes continued to sell at eye-popping prices last month. The median home sale price rose 11.6% year-over-year from $553,700 to $617,700 in January.

The number of homes sold also increased by 1,183 homes to 5,408. Interest rates are at 7.28%, but is Washington still a seller’s market? Let’s look at the facts.

Issaquah homes sold for a median sale price of $1,357,000 in January, up 88.2% year-over-year. There were only a few markets like Seattle and Tacoma in Washington where prices declined year-over-year.

Interest rates are at record highs, with few home buyers. But the inventory is so low that 30.2% of homes sold above the list price!

• If you are a home buyer: You can avoid bidding wars and avail seller concessions if you buy a home now. The 8.5% interest rate and mortgage payments are significant, but rates are unlikely to drop in the next few months. If they do, you can refi.
• If you are a home seller: You can lock in Washington’s high home prices. The scarcity of homes in WA makes it a seller’s market. Homes listed on MLS sell faster and for 17.5% more than off-MLS homes. That could be thousands of dollars in additional proceeds if you sell via Houzeo.

The current Washington real estate market statistics doesn’t reflect the national trend of high demand and low supply. Despite the strong housing demand, home sales tanked. The property prices in Washington have increased regardless.

So, How is the Real Estate Market in Washington?

Swell! Home values in Florida rose by 49.4% in the last 5 years. Home sales increased by 28% in January 2024 YoY despite the mortgage rate climbing to 7.28%! So, Washington’s housing market is strong, if not bullish.

Even if mortgage rates continue to increase alarmingly, home sales will not falter. So, if you want to sell a Washington property, now is the right time to list it on MLS.

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Washington Real Estate Market Statistics

• Average Home Prices: The average median home price in Washington is $617,700, up by 11.6% YoY. In 2024, the median sale price will keep increasing marginally due to WA’s tight inventory. The sale-to-list price ratio is at 100% in 2024.
• Home Sales: As per January 2024 data, home sales increased by 28% YoY! In January 2023, only 5,408 homes were sold, up from 4,225 in January 2023.
• Average Rent Prices: Rental costs vary statewide. An average tenant in Vancouver pays $1,746, while the one living in Seattle pays $2,260.
• Median Days on Market: The median days on the market for homes for sale was 31 days, up 6 days YoY.
• Pending Sales: The number of homes for sale declined by 2.3% YoY compared to 2023. Currently, there are ~16,000 homes for sale in Washington.
• Months of Supply: The average months of supply is 2 months. WA’s demand can’t be satiated with the low supply. WA’s house scarcity is worse than the national housing market.

Washington Housing Market Predictions 2024

Washingtonians have survived the shockwaves of skyrocketing mortgage rates and rising home prices of 2023. Here’s what we predict for Washington’s housing market:

1. Home Sellers Will Return to the Market in 2024: Sellers who chose the sidelines in 2023 will come back. Especially those who can’t avoid new jobs or want to move to a cheap place. Whitney, the analyst who predicted the 2008 financial crisis accurately, has forecasted that baby boomers looking to downsize will also add up to 30 million housing units. Yowaza!
2. Mortgage Interest Rates Will Stabilize by the 2nd Half of 2024: Mortgage rates hit 7.79% in October 2023, the highest level in 23 years. However, the rate dropped to 7.35% in November due to the softening labor market and slowing economy. Even the annual inflation rate went from 3.7% to 3.2%. We think the rates will remain above 6%, but they will stabilize in the second half.
3. The Number of Home Buyers Will Rise: The historically high interest rates averted buyers in 2023. But mortgage demand rose after the interest rates lowered to 7.35% in November. The easing inflation and stabilizing rates will bring back house hunters.
4. Home Prices Will Continue to Rise: Home prices rose steadily in the top metros across WA YoY, reaching $617K in January 2024. Experts predict home prices will continue to rise until the low supply-high demand dynamic changes.
5. New Home Constructions Sales Will Increase: Washington Building Permits Survey, 20,454 new private housing units were authorized increased by 12.8% from 2022. Washington’s housing market is in high demand owing to a growing population, a low unemployment rate, and a shrunken housing inventory.
6. iBuyers Will Continue to Make Lowball Offers: iBuyers offered 104.1% of market value in 2021. They offered 86% in 2022 and around 70% in 2023. Opendoor and Offerpad have lost billions of dollars in 2023. As they struggle to survive, they will make lowball offers.

Bonus Prediction: Buyer Broker Commissions Will Be Negotiable!

In a shocking turn of events, the jury in Missouri awarded more than $5 billion in damages to the Sitzer-Burnett plaintiffs. This motivated nationwide home sellers to file grievances against NAR’s Cooperative Compensation Rule.

NAR’s Cooperative Compensation Rule or Participation Rule states that listing brokers must offer competitive compensation to buyer agents if they want to list properties on an NAR-affiliated MLS.

Lawsuits like Moehrl, Gibson, Batton, Nosalek, and Batton 2 challenge the Participation Rule. They accuse NAR and other top real estate companies of colluding and conspiring to keep agent commissions high.

If the jury also finds the defendants guilty in these cases, buyer agent compensation may change. Buyer agents may become obsolete by 2025! Phew.

While buyer agents are unlikely to be obsolete in 2024, they may be open to negotiating commissions. That’s probably how they will still have some skin in the game.

When Will the Housing Market Crash in Washington?

A housing market crash in the Evergreen State is unlikely.

Washington boasts one of the nation’s most thriving economies, anchored by a median household income of $84,247. It is $6,000 above the national average. This prosperous environment will continue to attract businesses and individuals seeking new opportunities.

Redmond has the largest population and is the home to large companies like Microsoft and Nintendo of America. Redmond currently has a population of around 76,400, the fastest-growing city in Washington.

Washington’s job market is also strong. The unemployment rate is at 3.8%. Washington private-sector employment has increased 4.6% of the past 12 months. And Washington’s friendly tax policies are a cherry on the top. Washington’s affordability, natural beauty, and recreational opportunities will draw in homebuyers in 2024.

2024: Is it a Buyer’s or Seller’s Market?

2024 will be a terrific market for sellers. (And buyers, too!)

Home prices in Washington are rising and will continue to rise till the supply-demand dynamic changes. The number of houses for sale in WA was only 16,981 in January 2024. There is very limited inventory to satiate the demand from house hunters. This also makes it the best time to sell a house in Washington.

In fact, after the mortgage rate plummeted from a two-decade-high rate of 8% to 7.28% in January, new listings rose. This shows that those who refused to sell due to mortgage rate lock are finally acclimatizing to 7% rates. Come Spring 2024, more homeowners will follow suit and list properties on Washington MLS.

As home listings in Washington increase, home shoppers hugging the sidelines will also return. The recent uptick in mortgage applications shows that buyers are returning.

House hunters who could not find affordable homes in 2023 will also start shopping in 2024. The demand for Washington houses will increase – and that’s why sellers may be able to dominate the market.

However, new builds will compete for attention from buyers. Home builders have persuaded buyers to buy new construction homes with mortgage buydowns worth $30K in 2023! Builders will continue offering concessions in 2024, and home sellers may have to wage wars against them.

Listings of new constructions, baby boomers looking to downsize, and desperate home sellers will flood the market in 2024. The properties for sale in Washington will increase. So, whether you are looking for a condo in Independence City or seeking to live in a co-op in Jackson, you will find your dream home next spring.

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Disclaimer: This article is for informational purposes only. It does not constitute an offer, solicitation of an offer, or any advice or recommendation. Houzeo doesn’t provide any legal or financial advice. The views and opinions expressed herein are those of the author and do not necessarily reflect the views of Houzeo Corp., its affiliates, or its employees. However, the author does not make any representation or warranty, express or implied, as to the information’s accuracy or completeness, nor does the author recommend that the attached information serve as the basis of any investment decision.

Frequently Asked Questions about Washington Real Estate Market

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