What is likely to happen to the greater Seattle real estate market for the remainder of this year? What's going to happen in 2023? Well, this is exactly what today's blog is about.
Bring up the topic of real estate, and most people have an opinion. Now when it comes to predicting the future of the housing market, it's tricky and downright speculative. But, to make any sense of it, it's best to take a good look at current data, examine history, then make an educated interpretation of what is likely to happen next.
And as a broad stroke statement, there are only 3 things that could happen. 1) Home values will remain strong, maybe even going up. 2) Home values stay relatively flat. Or, 3) home values go down.
Let's talk about each one of these. There is a good case for those who believe that Seattle area real estate values are going to go down in the near future. In fact, values have already slid about 7-10% off their high earlier this year. When real estate values go up 50% (and in some cases more) in just 3 years, that's unsustainable. Another reason why some experts believe housing prices are headed downward is because we are either in or headed toward a recession. When we are in a recession, this is a time of uncertainty and fear in the market. It's no secret, the Greater Seattle area housing has become really unaffordable for many buyers. On top of this, higher interest rates and Inflation have become a major budgetary constraint. In plain English, it sucks for a lot of people.
Now, let's look at why some experts believe housing prices will remain strong. First, it's because we still have low inventory. Sure, we had much lower inventory just 6 months ago and last year. That being said, even though we have had a bump up in inventory, we still don't have enough housing. When I say we don't have enough housing, I'm talking about both rentals and owned property. Also, while home prices and rates are much higher, there are still a lot of people who make a ton of money and can still afford a home. Keep in mind where we live and our strong local economy. We have some of the highest income earners in America. Another reason why people say values won't dip is because of inflation. Yes, inflation can be good for homeowners. As the prices of goods and services go up across the board, home values tend to do the same during times of inflation.
As mentioned before, there is also the viewpoint that housing could stay relatively flat...not making any significant move up or down. This opinion takes the two opposing forces (meaning, the pressures that move home values up, and the pressures to suppress prices) and they kind of equal themselves to a flat market.
I'll tell you my humble opinion, but first, I'd love to hear from you. In the comments below, do you think the Greater Seattle area real estate is going down, up, or staying the same for the rest of 2022 and into 2023? Here's my take. I think our market is going to soften more. I think a soft housing correction will continue. Let me repeat, a soft housing correction, not a crash. In other words, my crystal ball, and take it with a grain of salt, we'll see prices slide another 5-7% in the next 3-6 months. But for all the reasons mentioned earlier, the market could level off, or even start going back up again next year. For instance, if in an effort to combat the recession and stimulate the economy the Feds decide to lower interest rates next year to below 4.5%, and the job market is decent, real estate values could go back up again.
Bottom line? In this rapidly changing and uncertain world, there are many variables. Seattle, Bellevue, and surrounding areas have a fluid, and constantly changing housing market. Nobody can pinpoint what home values will do in the future -- except for me. In case you couldn't tell. I'm kidding. But, what I'm not kidding about is that you really should watch our videos, click that like and subscribe button if you want to stay in the know. Please reach out for your specific real estate needs. Contact information in the description below. Thanks. Over and out!