Jan 26, 2024 - News

Seattle housing inventory tanks

A "sold" sign tops a "for sale" sign outside a Seattle home.

A "Sold" sign outside a townhouse in the Queen Anne neighborhood of Seattle. Photo: Chona Kasinger/Bloomberg via Getty Images

The Seattle area ranks third in the country for the largest drop in housing inventory year over year, according to the latest Re/Max national housing report.

Driving the news: Last month, there were 3,711 homes on the active inventory list, compared with 5,224 last year, a 29% drop.

By the numbers: In a balanced market, per Re/Max, there should be about six months' supply of inventory, but as it stands, the Seattle area has less than a month's supply.

  • Home sales are down 11.7% year over year.
  • Home sale prices are up 7.1% year over year, and the current median home sale price in Greater Seattle is $675,000.

What they're saying: "With interest rates coming down, buyer demand has risen quite high," Lyndal Balliet, the COO and owner of RE/MAX Metro Realty and RE/MAX Eastside Brokers, told Axios.

  • "And with extremely low inventory, this should be a very interesting year in the Pacific Northwest," Balliet said.

Zoom out: Nationally, new home sales have increased in the past year while existing home sales fell, per Zillow.

  • In December, 664,000 new single-family home sales were sold, up 8% from the revised November figure of 615,000 and up 4.4% from December 2022.
  • The decline in mortgage rates at the end of the year, coupled with a steady supply of newly built homes, is supporting new home sales in many parts of the country.

Zoom in: The Seattle area is experiencing housing scarcity — including new and existing homes — that's expected to last decades, according to an Urban Institute analysis of recent construction trends, subsidies and zoning laws.

Yes, but: Seattle shoppers are getting creative in their paths to homeownership, John Manning, managing broker of Re/Max Gateway in Seattle, told Axios. According to the data:

  • 56% of local homebuyers would consider purchasing a fixer-upper that needs remodeling.
  • 13% percent would consider a "super commute" — buying a home two or more hours from where they work.
  • More than a quarter of homebuyers would consider purchasing a multifamily home to reduce monthly mortgage payments.
  • Nearly 30 percent would consider purchasing a home with a friend or family member.

What we're watching: Whether declining interest rates will remove the "golden handcuffs" from the two-thirds of mortgage holders in Washington state with rates below 4%.

  • According to Redfin, this would free them to sell their current homes, unleash inventory and make room for new buyers.
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