Seattle housing market sees uptick amid high interest rates

Proposal to convert office buildings to housing

Seattle's Land Use Committee will vote on legislation to allow existing office buildings be converted to residential spaces.

SEATTLE - High mortgage interest rates continue to challenge the Seattle housing market, but recent data suggests a potential turnaround.

The Northwest Multiple Listing Service (NWMLS) released its July 2024 report, revealing a mixed but generally positive outlook for the housing sector in Washington state.

Despite the ongoing burden of high mortgage rates, which have deterred potential buyers and sellers, there are promising signs of market improvement.

Home sales increased by 5.9% year-over-year, with a total of 6,615 closed transactions in July 2024, compared to 6,247 in July 2023.

The number of active listings also saw a significant rise, up 37.7% from the previous year. At the end of July, there were 15,122 properties listed for sale, an increase from 10,982 listings in July 2023. This surge in inventory was observed across most of Washington, with 25 out of 26 counties experiencing double-digit, year-over-year increases. The largest inventory gains were seen in Douglas (+80.8%), Pierce (+51.2%), Walla Walla (+49.6%), Lewis (+49.3%), Snohomish (+47.8%) and Mason (+43.7%) counties.

This graph shows a year-over-year increase in active listings in King County, Wash. (Northwest Multiple Listing Service (NWMLS))

The median sale price for residential homes and condominiums rose to $650,000 in July 2024, marking a 5.7% increase from $615,000 in July 2023. King County led with the highest median sale price at $880,000, followed by Snohomish at $775,000 and San Juan at $740,000. Conversely, Columbia County had the lowest median sale price at $270,000.

Consumer and broker activity showed a slight decline in July. Keyboxes at listed properties were accessed 156,268 times, a 4% decrease from June’s 163,536 accesses. Additionally, scheduled property showings fell slightly from 119,775 in June to 117,298 in July. However, the number of properties eligible for the Down Payment Resource (DPR) program increased by 19.8% to 17,515.

Steven Bourassa, director of the Washington Center for Real Estate Research at the University of Washington, commented on the Federal Reserve’s stance.

"Although the Federal Open Market Committee did not lower rates at its July 31st meeting, it suggested that it might do so in mid-September," Bourassa said. "A weak jobs report combined with low inflation suggests that the Fed will indeed lower rates next month, with additional rate cuts expected at subsequent meetings."

As the market adapts to high interest rates and fluctuating conditions, the recent uptick in home sales and inventory provides a glimmer of optimism for the Washington real estate market.