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Residence costs are lastly falling round Seattle—greater than most locations within the nation | The Global Today

Let’s investigate cross-check what’s occurring with the Seattle-area housing market in early 2023, we could?

Right here’s a take a look at the median house sale value for King County:

King County Home Prices

As you possibly can see, not solely are house costs down yr over yr (7%), however they’re additionally down 20% from the Could peak, and with one other month of flat costs, will likely be down from 2021 ranges, as effectively. That is nice information, after all it’s solely offset by the surge in mortgage charges that had been held artificially low for over a decade again to a extra typical degree over 6%.

Right here’s how the Seattle space stacks as much as the remainder of the nation, in response to the Case-Shiller Residence Worth Index:

Case-Shilller Year-Over-Year

Up to now simply Seattle and San Francisco are seeing year-over-year declines in house costs in response to Case-Shiller. And the declines we’re seeing in Seattle are nothing to sneeze at, both. Take a look on the month-over-month change in Seattle’s HPI:

Case-Shiller Seattle Month-Over-Month

That drop from almost a 6% month-to-month enhance in March of final yr to a 4% month-to-month lower by August is the steepest turnaround we’ve ever seen. Proper now the declines are bigger than any time since 2011 and 2008.

Concerning these mortgage charges we talked about earlier, right here’s a chart of weekly charges and the Mortgage Banker’s Affiliation Buy Index, which is an efficient indicator of early home-buying demand:

Mortgage Rates & Home Purchase Demand

Ever since round 2019 there was a fairly tight inverse correlation between mortgage charges and demand. When charges dropped between 2019 and 2021, demand surged. As charges have climbed via 2022 and into 2023, demand has dropped into the gutter. Personally I don’t see homebuying demand rising a lot in any respect so long as mortgage charges keep above 6%.

After all, excessive charges are suppressing listings as effectively. New listings are at their lowest ranges ever:

Monthly King County Single-Family New Listings

However since demand is being hit even more durable, months of provide is definitely creeping up all all through the Puget Sound area:

Months of Supply - Puget Sound Counties

For me the underside line in all of that is affordability. Right here’s a take a look at that chart:

King County Affordability Index

That’s tough. Even with the 20% decline in house costs since final Could, surging mortgage charges have stored the affordability index near the 2007 low. For my part, we nonetheless have a protracted method to go on this correction. I don’t know precisely the way it’s going to play out, however I don’t assume this sort of horrible affordability is sustainable in the long run for Seattle.

Should you’re a Seattle Bubble Member, the total knowledge for these charts and extra are uploaded to the members-only knowledge repository.

Need to be part of a dialog about this or different native actual property matters? We’re on Twitter (for now) at @SeattleBubble.

P.S. – For anybody following alongside at house, I’m now not employed by Redfin. My job was eradicated in the November layoff.

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