Housing prices in Seattle dropped a little in the autumn of 2021, but they are already rising again. The closing months of the last year showed that the Seattle real estate market is not slowing down any time soon.
Seattle’s real estate market had a fantastic year in 2021, with low availability, skyrocketing prices, and high sales, but it is unlikely to be as hot in the coming months. So, what will the housing market in Seattle look like in 2022? Firstly, let’s go through some main factors that defined the market in the last year.
Sales that Break Records
Despite the city’s ongoing inventory shortage, Seattle saw record-breaking sales in 2021. The Northwest Multiple Listing Service (NMLS), which includes 22 counties in Washington State, reported 107,354 completed deals in 2021. This was the first year that annual sales exceeded 100,000. Furthermore, closed sales climbed by more than 33% over the previous year.
Prices at an All-Time High
Seattle has long been one of the most expensive housing markets in Washington State and the US overall. The average home price in Seattle in February 2022 is $915,340, which is a solid 13.4 % rise from the same period last year.
Seattle’s housing prices add to the surrounding King County’s high average price. Today, the average house price in King County is $857,498. This is 20.2 percent higher than where prices were in the same month in 2021.
Demand for property in Seattle is fueled by an increase in millennial buyers entering the market and the city’s tech sector, which attracts prospective buyers.
However, the rate of price rise may be slower in 2022 than it was last year, owing partly to rising mortgage interest rates. After that, however, the price growth rate will stay pretty strong.
Inventory at an All-Time Low
Low inventory is still a problem in Seattle and the surrounding markets across the Evergreen State. At the very moment, Seattle has a 0.64-month supply of housing available, and King County has even less, with a 0.49-month supply.
Typically a balanced market has a 5- or 6-month supply. At no time throughout the year did Seattle have more than a one-month supply of homes on the market, indicating not enough homes to satisfy the wants of potential buyers.
Truth to be told, the increase in house prices during 2021 was driven mainly by the lack of available inventory. And as supply continues to fail to satisfy the demand, housing prices will continue to rise.
What will happen in the Seattle housing market in 2022?
House prices in Seattle skyrocketed last year, and they’re expected to rise at a very healthy speed throughout 2022, but not quite at the same rate of appreciation.
Seattle is expecting high prices and limited inventory
Throughout 2022, inventory will stay extremely limited. This, together with ongoing buyer demand, will almost certainly fuel home price hikes in the coming months. Closed sales are likely to remain relatively strong this year, despite the continued scarcity of inventory.
The Seattle real estate market is quite hot today, even in the higher price ranges. Given the increasing demand and shortage of homes, multiple-offer scenarios are expected to become more common.
Condos may be a more affordable option for first-time homebuyers
To keep house sales within an acceptable price range, first-time homebuyers that are looking to enter the market this year may need to focus on condos. Fortunately, condos inventory has increased in several Washington State areas, including Seattle.
Suburban living is still a popular choice
Given the scarcity of space, both indoors and outdoors, the latest health crisis led city people to reconsider their living choices. As a result, many Seattle homeowners choose to shift out of the city center and seek suburban options in order to get more space.
The fast expansion of work-from-home arrangements has also provided residents with a good amount of flexibility in terms of where to live regarding employment locations.
As a result of this departure from the downtown area, house prices in places that have traditionally been much more affordable areas outside of Seattle are rising. In addition, as a result of growing competition among homebuyers in formerly inexpensive areas, homeowners on a tighter budget will face even more pressure.
Is it a Good Time to Buy a House in Seattle?
Despite Seattle’s high property prices, 2022 is still a great time to buy for a few major reasons.
Mortgage rates are still relatively low (But Rising)
Securing a low-interest rate on a mortgage is a good way to keep housing costs down, and rates have been meager in recent years. On the other hand, Mortgage interest rates have been rising over the last year, and analysts predict that they will continue to grow throughout 2022. Mortgage rates will hit 5.5% by the end of the year, according to the Mortgage Bankers Association (MBA)
Naturally, buyers would like to enter the market sooner rather than later to take advantage of relatively low-interest rates before they climb higher. Despite their growing tendency, rates are expected to stay relatively low this year.
Growing house prices allow buyers to build equity
Buyers who purchase property early in the year will be able to ride the wave of price increases, given the expected rate of price appreciation this year. Home equity grows in tandem with property value appreciation. Therefore, the sooner buyers enter the market, the sooner they may benefit from such equity growth.
Need Information About Seattle Mortgage Loans?
Even in the face of massive home appreciation rates, our Washington mortgage broker can help you get fully pre-approved for a mortgage.
LBC Mortgage has been in business since 2008 and has helped more than 1000 homebuyers. We can help you in getting pre-approved for mortgage loans in Washington State.
LBC Mortgage has loan programs available in California, Florida, Texas, North Carolina, and Washington.
If you have any mortgage-related questions or concerns, don’t hesitate to contact our loan officer. Then, if you’re ready to go forward, you may check rates, get a personalized instant rate quote, or apply right now on our website.