Market Update — October 2023
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 September 2023 in, here’s an overview of the key aspects of the local real estate market. The real estate data below is collected from Northwest Multiple Listing Service (NWMLS).
Median price: The chart below shows the latest median sales prices of homes over the past three years in the Greater Seattle area over the past three years:
New construction: 724 new construction homes were sold in September 2023. The median sale price of new construction homes was $698,866 (+2.4% MOM).
Months of inventory: At the current rate of sales, it’ll take around 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 data point confirms the enduring shortage of supply relative to demand in the area.
Homes sold: 5,722 homes were sold in September 2023 with the median price of $600,000. This translates to a dollar value of about $4.2B.
New listings: 7,551 new listings were added to the NWMLS database in September 2023. This is a decrease of -19.9% from September 2022, which exacerbates the low supply. This indicates fewer property owners are likely to be interested in selling their homes exacerbating the chronic shortage of supply.
Mortgage rates: The Freddie Mac rate has inched upward over the past month hovering just below 7.5%.
Average 30-Year Fixed Mortgage Rates — September 2022 to September 2023 (Source: Freddie Mac)
Broader economy
August’s Personal Consumption Expenditures (PCE) showed that headline inflation increased by a lower-than-expected 0.4%. The year-over-year reading rose from 3.4% to 3.5%, though the increase was due to revisions in prior reporting. Core PCE, the Fed’s preferred method which strips out volatile food and energy prices, rose by 0.1% in August with the year-over-year reading falling from 4.3% to 3.9% – the lowest level in two years.
The Fed has hiked its benchmark Fed Funds Rate (the overnight borrowing rate for banks) eleven times since March of last year to try to slow the economy and curb inflation. While inflation is still elevated, it has made a big improvement from the 7.1% peak seen last year and is now less than half that amount at 3.5% on the headline reading
