Snohomish County Real Estate Market Update March 2024

SNOHOMISH COUNTY HOUSING MARKET AT A GLANCE

snohomish county housing market report

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 3 KEY INDICATORS
SNOHOMISH COUNTY HOUSING MARKET

  • SALES ACTIVITY INTENSITY:
    • 82.5% (EXTREME FRENZY)
  • INTEREST RATE:
    • 7.08% (ACCEPTABLE)
  • INVENTORY LEVEL:
    • .6 Month (SEVERE SHORTAGE)

THE BIG DEAL
We are all patiently waiting for the economy to reach the perfect balance between normal and recession, so the Fed can start cutting rates.  This will start the process of releasing the pent up demand.

SNOHOMISH COUNTY HOUSING REPORT JANUARY 2024 | FED RATE CUTS TO COME IN 2024?


This article will be about the current and future state of the Snohomish County area housing market.  Refer to the table of contents to skip to your interest.

We started with the Snohomish County housing market at a glance and the 3 key indicators, then the Snohomish County market video discussing the 3 key indicators and how they affect the market.

We deep dive into what story the statistics are telling us.  We will hear from the 29th most influential person in real estate, Lennox Scott and what he sees happing in the real estate market.  We look at Sales Activity, Market Intensity, Price, Interest Rates, Timing and Job and Population Growth.  A complete list of the MLS Infospark stats for Snohomish County housing market trends.

Lastly, don't forget to check out the newest Snohomish County homes for sale.


Hey Snohomish County homebuyers, as we delve into the Seattle housing market for March 2024, the landscape reveals a series of dynamic shifts and patterns worth noting. With a blend of optimism and caution, let's explore the current state and anticipate the road ahead in this ever-evolving market.

Market Dynamics and Key Trends:

    • Interest Rates and Their Impact: The Snohomish County housing market is currently navigating through the complexities of higher interest rates. These rates have made buyers more cautious, yet they also open up unique opportunities within the market.
    • Inventory Fluctuations: A key trend is the noticeable decline in inventory, coupled with an increase in sales in certain areas, pointing to strong demand despite a reduced number of available homes. In January 2024, Snohomish County saw a significant decrease in active listings year-over-year, paired with a modest rise in closed sales, highlighting the market's resilient and competitive nature.
    • Pricing Insights: In Snohomish County, the median sales price saw a 5.12% year-over-year increase, reaching $760,000. This price stability, amid inventory and interest rate fluctuations, indicates a market still appealing to a wide array of buyers and sellers.
    • Condominium Sales: The market has also experienced a surge in condominium sales, marking a substantial year-over-year growth. This trend suggests a segment of the market adapting to broader changes affecting single-family homes.
    • A Glimpse into the Future: Market experts maintain a positive outlook for the Snohomish County housing market, predicting moderate growth and a move towards a more balanced market. Sellers are advised to price strategically, while buyers should remain vigilant to shifts, especially as interest rates might adjust.
    • Navigating the Market: For both buyers and sellers in Snohomish County, the current market conditions underscore the importance of being well-informed and strategic. Success in this market requires a nuanced understanding of its dynamics, whether you're looking to capitalize on its competitive nature or navigate the challenges of interest rates and inventory shortages.

    A significant point of discussion revolves around interest rates, which have been a pivotal factor for both buyers and sellers.

    The Federal Reserve's monetary policy, particularly its stance on interest rates, plays a crucial role in shaping the real estate landscape. As of now, the Fed has not implemented any rate cuts this year, maintaining a cautious approach amidst various economic signals. However, there's a growing anticipation that the first rate cut could occur as soon as June.

    This awaited adjustment comes amidst a backdrop of high interest rates that have undeniably impacted the housing market, constraining affordability and influencing buyer behavior. Higher rates have led to a cautious approach from potential buyers, who are observing the Fed's moves for any sign of relief that could improve their purchasing power.

    The prospect of an impending rate cut by the Fed is significant, as it could potentially unleash pent-up demand within the market. Buyers who have been sidelined due to the higher cost of borrowing may see this as an opportune moment to enter the market, hoping for more favorable conditions. This anticipated move is watched by market participants, as it could signal a shift in the current dynamics, providing a much-needed boost to market activity.

    Sellers, too, are closely monitoring this situation, as a reduction in interest rates could lead to an increase in buyer interest, possibly enhancing the competitiveness of the market. This scenario underscores the importance of strategic pricing and presentation, with sellers needing to align their expectations with the evolving market conditions.

    Seasonally we should be seeing a significant increase in activity in March and into the summer.  We have seen activity pick up significantly the last couple of weeks in particular.

    It remains a confusing real estate market and has some unpredictable ups and downs for buyers and sellers.  On the one hand, we see 65-75% of new listings go pending in the first 30 days and most of those are multiple bid competitive situations. On the other hand, we are seeing 16% of listing with a price reduction.

    What is the difference?  Listings Must Be Turnkey (New Construction, Fully Updated, or in Extremely Good Condition) if you want it to sell quickly for over asking.  Everything else sits for a few weeks and either gets a lower bid or does a price reduction.

    This is producing an interesting situation where the market can be in favor of both a seller and a buyer depending on the condition of a new listing.

    If a home comes on the market and it is a little beat up, priced too high, or is in a bad location it is possible it may sit for a few weeks or months giving a buyer an advantage and the possibility of negotiating a lower price or seller credits.

    Until we get an influx of listings or the interest rates become unmanageable... We do not have enough houses to sell.

    When we have a low amount of listings that means we are still in a Seller's Market.

    To maximize your home selling/buying experience:

    • Sellers need to be Market Ready Day One to take advantage of the low supply and ensure their homes sell swiftly and for top dollar.
    • Buyers need to readjust to the new normal and get themselves Buyer Ready Day One.  Not every listing is a multi-bid scenario but we need to be ready when they are.

    It is always OK to buy/sell within the same market timing.  In this market, most sellers are sitting on big equity and can take their time to get their home ready for sale.  After we sell we have a much higher chance of buying our move up or move down without having to arrange for temporary housing.

    The doomsday stories about a potential crash just seem to not want to go away.  We have seen severe inflation and many recession-like activities.  I have found that the best way to understand how the real estate market is responding is to look at the data and match it up with the eye test.

    We tend to look heaviest at the 3 key indicators to determine the health of the market.

    The percentage of new listings that go pending, or under contract, in the first 3o days.  We call this the "Sales Intensity Scale". During the pandemic, we literally had to make up a new adjective to label what was happening as we were seeing over 90% of new listings go pending in the first 30 days.  We called that an Ultra and Uber Frenzy Market.  We are currently sitting at 82.5% of new listings.  We call that an EXTREME FRENZY Market.  A median or average type market would be around 30%.

    Inventory levels continue to stay low and are at .6 months supply what we consider a Severe Shortage Inventory Level.  When there are not many homes to buy and many people looking to buy homes that is simple Supply and Demand.  Not enough supply for all that demand.

    Interest rates play a huge role in the demand.  If people can not get financing, or financing that matches their needs, that will limit the demand.  Right now interest rates are right around 7% (Mortgage News Daily).  Data shows that we will tolerate interest rates up to the 7% range and continue buying homes.

    BONUS TIP:  With some listings, it is possible to negotiate for Seller's concessions.  Look for homes that have been on the market longer than 7-10 days.  Generally, these concessions would go towards your closing costs.  Now might be a good time to negotiate seller concessions towards buying down your interest rate.  Either a permanent or temporary 2/1 buydown.

    If you are thinking of buying a home in Snohomish County right now and are worried that the interest rates have increased it is important to contrast that to what you gain.

    THE RENT VS BUY CONVERSATION

    BUYING A HOME MEANS AVOIDING RISING RENTS

    When you rent:  Your monthly payment usually goes up every time you sign a new lease

    When you buy:  Your fixed-rate mortgage payment is locked in for the length of your home loan

    HOMEOWNERS OWN A VALUABLE AND TANGIBLE ASSET

    “. . . the average U.S. homeowner now has about $290,000 in equity.” (Corelogic)

    When you rent: You won't get any return on your investment as you pay your rent monthly

    When you buy: As home prices rise, and as you pay down your home loan, you build equity.

    OWNING YOUR HOME GROWS YOUR WEALTH OVER TIME

    “A monthly mortgage payment is often considered a forced savings account that helps homeowners build a net worth about 40 times higher than that of a renter.” Dr Lawrence Yun

    When you rent:  When the cost of renting goes up, it's more difficult to save money for a down payment to buy a home.

    When you buy: As you build equity through the years, you give your net worth a big boost.

    Snohomish County rent remains high and according to the Bureau of Labor Statistics, it is the second highest victim of inflation at 8.3% rise from last year.

    According to Zillow the average rent for a Seattle 3-bedroom home is $3,400 per month.  This equates to approximately a $600,000 home (view 3 Bedroom Snohomish County homes for sale in the $500K - 700K price range) with 20% down on a 30-year fixed 7% bought down to as low as 5% with a temporary 2-1 buydown interest rate loan.

    As we find ourselves in recession-like situations the best hedge for inflation is real estate.  

    We should stay in an Extreme Frenzied to Frenzied market meaning that 35 - 85% of homes sell in the first 30 days through the Fall of 2024.

    Seattle has the 2nd highest percentage of tech workers in the country. "Seattle Overtakes Boston as Third-Richest US City by Household Income" (Bloomberg)

    MULTIPLE OFFER CITY

    The new year has kicked into gear with limited inventory and strong buyer demand which has created many multiple offer situations. As we enter the spring market, we expect to see an increase in the number of new resale listings coming onto the market, although it is still below normal. Additionally, with an increase in new resale listings comes an increase in new buyers ready to purchasJ Lennox Scott


    LENNOX SCOTT

    CEO of John L. Scott Real Estate


    lennox scott ceo of john l scott
    SNOHOMISH COUNTY REAL ESTATE GRAPHS & DATA

    SALES ACTIVITY AND INVENTORY


    Sales activity

    With .6 months of supply if no other homes were listed in the next 15 days we would run out of houses to buy.

    If you are looking for homes over 1.5 mil you are seeing more inventory with 2.2 months supply.

    677 homes were sold in Snohomish County last month.

    As you can see from the table above anything below 5 months is considered low.  Low inventory means higher demand.  Higher demand drives the price up.

    In Snohomish County homes in the 350K-1mil price range are the most commonly listed and sold.

    DAYS ON MARKET

    intensity scale

    82.5% of homes are selling in less than 30 days in Snohomish County. A normal market is closer to 30%.

    Houses in the $750K-1m price range are selling 694.7% of the time in the first 30 days.

    Because there are less homes for sale and there are still many buyers trying to buy… the homes that do list are usually selling fairly quickly.

    PRICE

    AVERAGE SALE PRICE: $747,011

    SINGLE-FAMILY RESIDENTIAL:  $809,466

    CONDOS: $536,744

    AVERAGE SALES PRICE 5 YEARS AGO: $479,482

    % INCREASE OVER 5 YEAR SPAN: 36%

    LISTINGS SELLING COMPARED TO LIST PRICE: 101%

    TIMING
    yearly housing cycles

    As you can see from the John L. Scott 6 phases to a yearly house cycle chart we are just getting started on the accelerated Spring Market.

    JOB AND POPULATION GROWTH

    WHILE WE ARE NOT SURE HOW THE EMPLOYMENT NUMBERS WILL END UP HERE IS THE CURRENT UNEMPLOYMENT SITUATION

    CURRENT UNEMPLOYMENT RATES


    wa unemployment rates

    WA Employment Security Department

    Where Counties are Growing[Source: U.S. Census Bureau]

    Snohomish County added a few thousand to their population in 2021.

    SNOHOMISH COUNTY HOUSING MARKET STATS


    STATS PROVIDED BY: INFOSPARK

    • $747,011 was the average sold price for listings in Snohomish County.
    • 978 new listings went on the market this month.
    • 813 homes were for sale during the month.
    • 822 homes went pending in Snohomish County.
    • 677 homes sold this month
    • .6 months of inventory available in Snohomish County.
    • 30 was the average days on market for a home to sell in Snohomish County.
    • 101% was the average listing price vs. sales price percentage
    • $385 was the average price per square foot in Snohomish County.
    • $498,507,385  was the total closed sales volume for Snohomish County.
    • 7.09% was the interest rate
    • 82.5% of homes sold in the first 30 days in Snohomish County.

    SNOHOMISH COUNTY HOMES FOR SALE


    Image
    SEARCH SNOHOMISH COUNTY

    SNOHOMISH COUNTY HOUSING MARKET SUMMARY


    The Snohomish County real estate landscape in February underscored a market that's both vibrant and resilient.

    With 978 new listings introduced and 677 homes sold within the month, the dynamism of the market is evident. The average sale price for listings stood at $747,011, reflecting the high value of homes in this region. Particularly striking was the swift pace of sales, with homes averaging just 30 days on market before being sold, and an impressive 82.5% of homes selling within the first 30 days. This rapid turnover is a clear indicator of a highly active market.

    The inventory level in Snohomish County was notably low at just 0.6 months, pointing to a market where demand outstrips supply. This scarcity is further highlighted by homes selling at 101% of their listing price on average, signaling strong competition among buyers. With an average price per square foot at $385 and a total sales volume of nearly $498.5 million, the robust health of the market is undeniable.

    As we move forward, the Snohomish County market is poised for an exciting phase. Despite the current interest rate of 7.09%, the low inventory and the strong performance in sales suggest a market that is likely to remain vibrant. For those contemplating selling, the conditions are highly favorable, marked by low inventory levels and historically high sale prices. This presents an opportune moment for sellers, whether they are looking to upscale, downscale, or simply change their living situation.

    The strong job market, particularly in the tech sector, continues to support the housing market's strength, providing a stable economic backdrop for real estate investments. As we anticipate the upcoming months, particularly leading into the summer of 2024, the Snohomish County real estate market is expected to remain a lively and promising field for both buyers and sellers. Now, more than ever, is a pivotal time for taking action in the real estate market, given the unique combination of low inventory and high demand that defines the current landscape.

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