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Snohomish County Real Estate Health, Trends & Insights for September 2024

Writer's picture: Joe FrankJoe Frank

The Snohomish County housing market's strength is waning as we head into fall based on data from AUGUST 2024.


Following is an overview and analysis on the latest AUGUST data and opinion on what the future may hold for housing prices and interest rates in Snohomish County.


Despite slight fluctuations throughout the year, the market continues to favor sellers, with home prices maintaining strength, quick sales, and competitive bidding.


The following data and analysis is relative to re-sale homes (no new construction), single family residential (no condos), on a 1/2 acre or less located in Snohomish County.




Home Prices:


  • August 2024:  The average sales price is $830,000, reflecting a steady market despite a slight dip from July's $862,000.

  • Year-Over-Year:  Prices have increased from $761,000 in August 2023, signaling strong market resilience.

  • Trend: While prices are below the April 2022 peak of $891,000, they remain well above 2023 levels, indicating a persistent market, due to continued low inventory (relative to pre-covid inventory).



Inventory Levels:


  • August 2024: 599 homes are for sale, up significantly from 426 in August 2023, providing more options for buyers, but still historically low.

  • Trend: Inventory is increasing, but it remains below the 2022 peak, keeping the market very competitive and prices elevated.


Market Activity:


  • Days on Market: Homes are selling quickly, with an average of 18 days on the market in August 2024, slightly up from 13 days in July 2024.

  • This is a trend we’ll likely continue to see as we head into the fall and winter months where homes generally take longer to sell, especially around the holidays. The wildcard here is if interest rates and therefore mortgage rates trend down, it could juice the market for increased activity, even in the fall and winter.

  • Sales Price vs. List Price: Homes sold for 99.3% of the original list price in August 2024, indicating continued strong demand, though slightly less intense than earlier in the year.



Interest Rates and Future Outlook:


  • Current Rates: The Federal Reserve has maintained interest rates (the Fed Funds Rate) between 5.25% and 5.50% (as of 9/1/24, it's 5.33%), keeping borrowing costs high and limiting buyer affordability.


  • Expected Rate Changes: Anticipations of the Fed cutting interest rates on September 18, 2024 (and potentially November and/or December), would bring the Fed Funds rate to around 5%, which could enhance buyer affordability and stimulate further market activity.


  • Likelihood of Future Fed Rate Cuts: Use the CME Fed Funds Watch tool here to monitor the chances of future rate cuts. The tool is currently indicating (as of 8/29/24) there's a 93.3% chance of a rate cut in September (2024).


  • Current Rates: With the Fed Funds Rate at 5.33%, borrowing costs are high, limiting some buyer affordability.


  • Expected Rate Cuts: Anticipated rate reductions later in 2024 could lower mortgage rates, making homes more affordable and potentially boosting market activity.



Market Outlook for 2024-2025:


  • Seller’s Advantage: Sellers are likely to continue benefiting from high demand and relatively low inventory.


  • Potential Buyer Relief: Expected interest rate cuts could attract more buyers, increasing competition and possibly stabilizing or modestly increasing home prices.

  • Could the Mortgage "Lock In" get "Unlocked"? Could lower interest rates create more inventory, and therefore potentially drive prices lower, or at least stabilize prices to improve home buyer affordability? The logic here is that many would-be home sellers are “locked” into an existing low mortgage rate ~ 3 to 5%, and therefore feel it’s not in their financial best interest to sell (unless they have to due to a new job, divorce, etc) as they’d then likely need to quickly turn around and buy another home at a much higher interest rate, and therefore their monthly payment would increase dramatically (see my blog article here for more details). However, if mortgage rates were lower, say trending toward 5%, those homeowners may be more likely to sell their existing home to go find that next home that’s perhaps a bit larger, or in the school district or neighborhood / community they prefer since the new payment would be more in line with their budget / existing mortgage payment.


  • Price Stability: Prices are expected to remain stable or see modest growth, balancing strong demand with increased buyer activity from lower interest rates.



Summary


The Snohomish County housing market remains strong, with sellers enjoying favorable conditions due to high demand and low inventory. Buyers, though facing challenges from higher mortgage rates, may find relief later in 2024 and into 2025 as the Fed’s rate cuts begin to materialize and make their way through the banking system and into mortgage rates.


Overall, the market is likely poised for stable to modest price growth, with ongoing seller advantages through the remainder of the year. The wildcard that nobody can predict is when will lower mortgage rates appear, and what will they do to existing home inventory and prices.


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

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