Reduced inventory motivates increased home prices

Northwest MLS, the source for the most current, accurate market listing data in Washington state, today released its Market Snapshot for the month of November 2023.

Market Recap

A slight decrease in interest rates has raised cautious optimism – interest rates had fallen to around 7.2% as of December 1, 2023, in comparison to 7.8% in October 2023, and a continuation of that decrease would have a positive impact on the market in general. However, the decline in seasonal inventory continues to drive home prices upward, spurring an increase of 4.6% in prices from November 2022:

• NWMLS brokers reported 4,367 closed sales in November 2023, which is a 16% drop from closed sales in November 2022 (5,194). However, this is a slight improvement from October’s year-over-year change in closed sales, which decreased 18% when compared to October 2022.
• While most counties in the NWMLS report (19 of 26) saw a decrease in the number of homes sold, seven of the counties saw a year-over-year increase, including Grant, Okanogan, Kittitas, Walla Walla, San Juan, Adams and Ferry counties.
• The median sales price increased year-over-year in 21 of the 26 total counties included in the statistical report. Overall, the median price for homes sold in November 2023 was $601,341, up 4.6% when compared to November 2022 ($575,000). The three counties with the highest median priced homes sold were San Juan ($975,000), King ($799,925) and Snohomish ($703,635). The three counties with the lowest median priced homes sold were Grant ($327,999), Ferry ($313,750) and Adams ($221,500).
• When compared to the same month last year, November 2023 experienced a 17% decrease in the number of active property listings on the market. The total volume of homes for sale has continued to decline, with 19 out of 26 counties seeing a year-over-year decrease.

Although the number of sales transactions and housing inventory levels typically drop in the fall and winter months, the expected seasonal slow-down continues to be exacerbated by the high interest rate environment for buyers relying on mortgages.

“With the 30-year fixed mortgage rate currently just over 7.2%, the purchasing power of prospective buyers remains stunted relative to a few short years ago,” said Mason Virant, associate director of the Washington Center for Real Estate Research at The University of Washington. “Moreover, current owners with low-rate mortgages continue to be reluctant to sell. This has led to a continued decline in year-over-year transaction volume and the inventory levels in the market.”