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October 2024 - Snohomish County Real Estate Health, Trends & Insights

Writer's picture: Joe FrankJoe Frank

Updated: Nov 9, 2024


The following October 2024 analysis is for Snohomish County (WA State) homes only. Housing data used for my analysis is relative to previously owned, single family homes (no condos), on a 1/2 acre lot or less.


Housing data is extremely location sensitive. Even within Snohomish County, there are zip codes, communities, and even neighborhoods that defy the numbers discussed below. Of course when you zoom out and look beyond Snohomish County, or even Washington State, you will likely see dramatic difference from the specific housing data and trends I’m discussing below.


You can view the latest Snohomish County housing data and charts along with other key housing and economic data here:  www.joefrankrealtor.com/data


If you’d like to learn about a different area whether within Snohomish County, or beyond, please contact me at joe.frank@exprealty.com and I’d be happy to provide you such data and an analysis.





Snohomish County Home Sale Prices


The average home sales price in Snohomish County as of September 2024 has remained relatively high at $809,000. The likely 2024 peak was 861,000 in July. Seasonality has taken hold and we’ll likely see average sales prices hover around the $800,000 range through the end of this year.


However, prices will likely change course as we head into the peak months, starting around February 2025. Of course the overall economy, global events, and interest rates will be a factor and could influence sales prices looking forward.


Another component of home prices to watch and that can help analyze the health of the housing market is the number of price cuts and the percent a home is selling over or under the asking price. For September 2024, on average, homes are selling for 1% under the asking price. In July they were selling on average for 0.2% over (ex. A house that was listed for $800,000 would have sold for $801,600).


The number of price cuts for Snohomish County in September was at 8.2% (i.e. on average, 8.2% of homes listed for sale reduced the price of their home in an attempt to sell it). This is a relatively insignificant percent (and much less than national average of ~ 25%), and less than the 9% in August for Snohomish County.


Zooming out and looking at Snohomish County home sales price action over the last few years, the rate of price appreciation has clearly plateaued. The price peak was $891,000 in April 2022. This stability suggests that while sellers are holding on to their price expectations, they’re adjusting to market demand that has weakened due to affordability as a result of high interest rates and low inventory.


As we move forward, it will be interesting to see what happens with home prices in relation to mortgage interest rates. In my opinion, if interest rates continue to drop (30 year fixed = 6.7%), it will either spur more buyer demand and drive home prices higher, or if they go low enough (under 5%), it could encourage home owners that locked lower mortgage rates in under 6% to sell (88.5% of mortgaged homes have a rate UNDER 6% and 78.7% have a mortgage rate under 5%! WOW!!) and find their next home, effectively increasing housing supply. This in turn could theoretically stabilize home prices, or even drive prices lower.


According to a January 2024 article from Redfin (data has likely changed since January), 88.5% of mortgaged homes have a mortgage rate UNDER 6%, 78.7% have a mortgage rate UNDER 5%, and nearly 60% have a mortgage rate UNDER 4%!

This data is eye-popping and drives home that the mortgage lock-in effect is real and still in play. If mortgage rates were to move under 6% and trend toward 5%, it could really loosen up the housing market (increasing supply) as more home owners would be willing to sell and find that next home that better meets their needs and budget!


This will be an interesting dynamic to watch as the Fed considers lowering the Federal Funds Rate later this year (potentially November and December) and throughout 2025.


 

Snohomish County Housing Inventory


Housing inventory has stabilized over the last three months. As of September 2024, the number of homes listed for sale was 624 (August = 626; July = 619).


This is significantly down from the high of July 2022 (1,088) and up significantly from the recent low of 139 from this past January.


I don’t normally examine new construction (new homes), but for the purposes of housing inventory, it plays a pivotal role to increase supply and stabilize home prices across the board. The number of NEW homes for sale in September was 226 (August = 212; July = 213). New housing supply has been on an upward trajectory since February of this year when it was at 125.


I know many of you are witnessing the new construction boom around Snohomish County, and I also know that not everyone is an admirer. I see both sides of it, as I have feel the impact to traffic around where I live as it’s grown increasingly busy over the last 10 years or so. The state, county, and city are not proactive in their approach to ensure highways can support the increased traffic (except adding stop lights) new home construction brings, especially considering we’re seeing mainly high-density constructions (apartments, condos, townhomes).


Placing frustrations aside, new construction is absolutely critical to ensure housing supply keeps up with demand. This in turn should help stabilize home prices. I’m sure we’d all like our kids to be able to afford a home one day.


 

Average Days on Market


Homes are taking longer to sell as of September at an average of 20 days before an offer is accepted. This is over twice as long as it took in May at nine days, but down from the January 2024 peak where it took 32 days for a seller to accept an offer.


The extended time on the market indicates buyers are more cautious due to the time of year, elevated home prices, and possibly waiting to see if mortgage rates further decline.



Seasonality Effects


The fall and winter months traditionally see a slowdown in the housing market, and the September 2024 data reflects the beginning of this seasonal trend. Generally speaking, beginning in August and lasting into January, fewer homes are sold, and sellers may need to offer discounts or incentives to attract buyers. Seasonality means fewer buyers are actively searching for homes, as families settle in for the school year and prepare for the holidays, leading to longer market times and potential price reductions.


Weather can also play a role – shorter and darker days (especially around here!) and less favorable showing conditions make it harder for homes to look their best. As a result, homes that linger on the market may see price reductions, particularly if sellers are motivated to sell before the year ends.



Impact of Fed Rate Cuts and Mortgage Rates


The Fed's previous and aggressive interest rate hikes significantly cooled the housing market as it drove mortgage rates to over 8% at one point (8.03% on 10/19/23 to be exact), and kept them elevated, which priced many buyers out of the housing market.

However, with the recent September Federal Funds Rate cut of 50 basis points (1/2 percent) and potential future rate cuts, the mortgage rate environment has changed, and the outlook appears promising as we wrap up 2024 and transition into 2025.

It’s looking likely (as of 10/11/24, ~ 82.4% chance) that we’ll see a 25 basis point cut by the Fed at the November Fed meeting (11/7/24).


The results of the recent Fed Rate cut, along with expectations of future interest rate cuts are already wrapped into current mortgage rates – this was illustrated when we hit a recent low of 6.14% (30 year fixed) on 9/14/24 as the Fed didn’t announce the rate cut until 9/18/24. However rates have since shot back up due to other economic, political, and world factors.


Nevertheless, mortgage rates have since trended back up, and currently sit at 6.62% as of 10/10/24. The Fed Rate is not the only component that influences mortgage rates, as there are other market and economic forces and risks at play (economic, political, world factors, etc).


As the Fed likely continues to cut down the Federal Funds Rate, most experts agree that mortgage rates will trend downward. However, it’s unlikely we’ll see mortgage rates back into the 3 to 4% range anytime soon. The general consensus is that we could get back into the 5% range, which would drive much more buyer demand, but it’s unclear at this point if the increased demand will drive home prices lower or higher – it will ultimately be decided by the number of homes for sale (housing inventory).



Looking Forward


The Snohomish County housing market is expected to remain sluggish through the fall and winter of 2024, with fewer sales and longer days on market due to seasonal factors and higher mortgage rates, and potential buyers waiting on the sidelines for lower interest rates.


However, if the Fed implements rate cuts, the spring market of 2025 could see renewed buyer interest, leading to stabilized or even slightly increasing home prices. Sellers should be prepared for a challenging next few months but can expect improvement if mortgage rates fall and buyer demand returns.


If you’re a buyer, now actually may be a great time to buy if you can locate a home that meets your needs. You will have much less competition, and if mortgage rates drop in the future, you can always refinance.


Please remember, I’m providing opinions on Snohomish County housing data only. Housing markets vary greatly from one market to the next, and even from neighborhood to neighborhood.


If you'd like to learn more about the Snohomish County housing market—whether by zip code, community, or neighborhood—or if you're curious about other counties, cities, or states, and the best times to buy, sell, or rent, please contact me. I'm happy to discuss this with you at no cost or obligation.


To view the Snohomish County housing trends, mortgage rates, and other data that I used for this market update, please visit: Joe Frank Realtor Data


Thank you for taking the time to read this article!


And as always, if you have any questions or comments, please feel free to leave below, email, text, or find me on social.


Cheers!

-Joe


Listen to the podcast for this blog article:

note: this podcast is AI created from this blog article.



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