If there is one question I get more than others it’s “What is going to happen in the market?!” quickly followed by “should I make a move now or wait?!”.
While I don’t have a crystal ball, I can help empower you to make the best decisions for your situation by arming you with some crucial insights…and then updating them frequently as we move through the year.
Since late 2019, the housing market in Seattle picked up quite a bit following a temporary slowdown in 2018 and much of 2019. Since then, home prices have been on a rapid incline due to several factors, including low inventory, high buyer demand, and low mortgage interest rates.
Here are my top three data-based predictions for the Seattle real estate market through 2022.
1: Low Inventory and Increased Home Prices
Seattle has seen some of the fastest price appreciation among major cities throughout the country.
This was evident throughout much of 2021, as home prices in Seattle rose drastically year over year. However, with significantly fewer homes on the market than needed for Buyers, many Sellers find the question of “where will I go when I sell” a stumbling block to listing their home.
Low interest rates continue to make it easier for Buyers to afford their monthly mortgage payments and opened the market to first time home buyers even with price increases.
With more Buyers in the market and fewer homes being listed, we can expect to see Buyer demand overwhelm the amount of homes for sale.
2: Affordability Will Continue to Be an Issue for Most
While home prices declined in Seattle a couple of years ago, they crept back up and remain some of the highest prices in Washington. The price for a home in the city is still far more expensive than most other cities in the state of Washington. This makes housing affordability an issue.
According to reports, homebuyers and owners need an annual income of $106,618 to be able to afford the principal, interest, taxes, and insurance payments on an average-priced house in the city. For many households, this number is not easy to attain, therefore making homebuying in Seattle difficult.
However, mortgage rates are very low right now. As of this writing, the rate for a 30-year fixed-rate mortgage is 3.11%. Although this is a little higher than where rates were a year ago, they are still quite low compared to years past, and they’re expected to stay relatively low for the next few months at least.
That said, the Mortgage Bankers Association (MBA) expects the rate for a 30-year loan to average 4% by the end of 2022.
Considering this, it might make more sense to buy a home in Seattle sooner rather than later to take advantage of low rates before they continue to inch up.
3. Demand Will Continue to Rise
Despite the expectation that demand for real estate and home sales would eventually plummet due to COVID-19, this simply hasn’t happened.
In the Seattle housing market, in particular, low mortgage rates are actually fueling demand and aiding some buyers to get more affordable mortgages. As briefly mentioned, these buyers are not letting the chance to get historically low mortgage rates pass them by—and this is predicted to be the case for as long as rates remain low.
Ultimately, all signs point to the mortgage rates for 2022 remaining low. As mentioned, rates will likely go no higher than 4% next year. With this, the Seattle housing market prediction is that demand and home sales will continue to rise, driven by low mortgage rates.
Disclaimer: This article contains housing-related predictions that are based on current conditions, and those conditions could change over time. These forecasts are the equivalent of an educated guess and should not be viewed as certainties. Portions of this article originally appeared on https://www.sammamishmortgage.com/ an excellent resource for local lending.