Aaron Morrow & IHST Puget Sound Market Update - January 2025

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Happy New Year! As we step into 2025, the Puget Sound real estate market offers a blend of seasonal adjustments and promising trends to watch. Whether you’re a buyer, seller, or investor, this year is shaping up to bring opportunities driven by increasing inventory, moderated mortgage rates, and legislative developments to boost housing production

Market Highlights:

• Active Listings: The seasonal slowdown was in full swing at the end of 2024, with active listings decreasing by 15.1% month-over-month (12,558 listings in November vs. 14,795 in October). However, year-over-year growth remains strong, with a 23.4% increase compared to this time last year.
• Closed Sales: Closed sales surged 24.7% year-over-year, reaching 5,446 in November 2024, compared to 4,367 at the end of?2023. The total dollar value of sales increased 31.7% to over $4.3 billion.
• Median Sales Price: Prices saw a slight month-over-month dip (-0.77%) but rose 7.3% year-over-year to $645,000 (from $601,342 at the end of 2023).?Highest Median Sale Prices: San Juan ($857,500), King ($837,350), and Snohomish ($760,000).

Steven Bourassa, Director of the Washington Center for Real Estate Research, sees a bright spot in new Washington legislation aimed at addressing housing shortages. Initiatives include increasing residential density and promoting accessory dwelling units (ADUs), which could moderate home prices over time. While results will take a few years, the groundwork is being laid to create more affordable housing options.

Meanwhile, mortgage rates, which hit multi-decade highs in 2024, are beginning to ease. Lawrence Yun, Chief Economist for NAR, predicts rates could dip to 6% in 2025, opening the door to homeownership for an estimated 6.2 million more Americans.

Michael Frantantoni, Chief Economist at the Mortgage Bankers Association, predicts a promising spring market, driven by increasing inventory, more stable interest rates, and growing buyer activity. If you’ve been waiting on the sidelines, this could be the year to make your move.

County Break Down:

Advice for Buyers, Sellers, and Investors:

For Buyers: If affordability has been a hurdle, the outlook is improving. Keep an eye on mortgage rates as they continue to stabilize and inventory expands. With more homes coming to market and fewer bidding wars, 2025 could be your year to buy.

For Sellers: The market remains strong, with higher year-over-year activity and price growth. Though winter sees fewer buyers, motivated purchasers are still out there. Preparing your home for a spring listing could position you for success in a market with growing demand.

For Investors: Legislative changes promoting ADUs and increased density offer long-term opportunities to maximize property value. With more buyers re-entering the market and rental demand remaining steady, now is a great time to assess your portfolio and capitalize on Puget Sound’s evolving housing landscape.

As always, if you’d like personalized advice or insights into your specific market, don’t hesitate to reach out. Here’s to a successful and prosperous 2025!

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