Market Update — January 2023
“The first step towards getting somewhere is to decide that you are not going to stay where you are.”
We believe timely and relevant data is key to making good decisions. To this end, we are committed to providing our community and clients with actionable data and insights about the local real estate market.
Local real estate market
With the data from December 2022 in, here’s a snapshot of the key aspects of the local market. The data is collected from Northwest Multiple Listing Service (NWMLS).
Median price: The chart below shows the median sales prices of homes over the past five years. Since our buyers typically buy properties in King, Snohomish, and Pierce Counties, here’s the YOY median closed price increase in these counties over the past 12 months:
King: +8.1%
Snohomish: +11.8%
Pierce: +8.4%
To put these numbers in perspective, note that S&P 500 and Nasdaq have moved by -19.4% and -12.8%, respectively.
And here are the median sold prices of residential properties over the past three years:
New construction: 726 new construction homes were sold in December 2022. The median sale price of new construction homes was $740,000.
Months of inventory: At the current rate of sales, it’ll take 2 months for every listed home to sell. To put this number in context, note that the months of inventory for a balanced market is considered to be 4 to 6 months. So the current value of 2 indicates the persistent shortage of supply relative to demand.
Homes sold: 4,524 homes were sold in December 2022. This translates to a dollar value of $3.11B.
New listings: 2,980 new listings were added to the NWMLS database in December 2022. This is a decrease of -35.5% from December 2021. This indicates fewer property owners are interested in selling their homes exacerbating the chronic shortage of supply.
Mortgage rates: Mortgage rates have climbed down from their peak in October 2022. Buying down rates remains a popular strategy for buyers to lock in lower rates.
30 Year Fixed Mortgage Rates — January 2022 to January 2023 (Source: Freddie Mac)
Broader economy
Consumer Inflation Continues to Ease: The Consumer Price Index (CPI), which measures inflation on the consumer level, showed that inflation decreased by 0.1% in December. 2022 On an annual basis, inflation declined from 7.1% to 6.5%. Core CPI, which strips out volatile food and energy prices, rose 0.3%. As a result, year-over-year Core CPI decreased from 6% to 5.7%. All of these figures were in line with estimates.
