Seattle-area housing market picks up, but buyers feel the squeeze

The Seattle area’s spring housing market continued to heat up in April, with more activity and higher home prices across the region, particularly in King County.

The number of new listings and home sales climbed throughout the Puget Sound region in April, a typical seasonal uptick. But costs continue to soar, according to new data the Northwest Multiple Listing Service released Monday.

The median single-family home sold for $980,000 in King County in April, up 12% from April 2023. Median homes sold for $799,500 in Snohomish County, up 4% from a year earlier; $565,000 in Pierce County, up 8%; and $550,000 in Kitsap County, up 6%. Median means half sold for more and half for less.

The median home sold for $997,900 in Seattle, up nearly 13% from last year.

King County condo prices also soared in April, with the exception of Southwest King County, where the median condo sold for $327,450, a drop of 6% compared to a year ago. The median condo sold for $599,000 in Seattle, up 11%; and $722,500 on the Eastside, up 17%. (Seattle condo prices reflect both condos in multifamily buildings and accessory dwelling units sold as condos, which often resemble small single-family homes.)

Despite high prices and high mortgage rates, “affluent” home shoppers continue to scramble for the limited number of houses for sale, said Bellevue Re/Max agent Steve Volpone, who recently saw 100 people come through a five-bedroom rambler he listed in Sammamish in a single weekend. 

“Your average folks get pushed out, but the high-income earners are the ones that are driving this market,” Volpone said.

New listings of single-family homes were up in all four counties compared to the previous month, including a nearly 18% jump in King County. 

Yet the supply of homes remains limited compared to recent years. One reason: The so-called “lock-in effect” continues as many homeowners hold on to their ultralow mortgage rates instead of selling and trying to buy a new home. 

Mortgage rates averaged around 7% throughout April, increasing a bit as the month wore on. While some industry observers say home shoppers are getting used to this new reality, high monthly mortgage payments are keeping some would-be buyers out of the market entirely. 

Even as high mortgage rates dampen demand, a “rising tide” of millennials and other young people are looking for homes in markets across the country, including the Seattle area, said Wells Fargo senior economist Charlie Dougherty. Those buyers are “very price sensitive, but they also are getting married and having kids and looking to purchase a home,” Dougherty said.

The size of that group rivals baby boomers at their peak in the 1980s, and their push toward homeownership is driving up demand and home prices nationwide, “making the affordability crisis even worse,” Dougherty said. 

Pending sales, in which the buyer and seller have agreed to a deal but the sale hasn’t yet closed, increased across the Puget Sound region in April, including a nearly 15% jump in King County compared to a year earlier.

The jump in pending sales in the Seattle area this spring has been among the largest increases in the country, according to Redfin. 

Buyers are unlikely to find much relief from high mortgage rates in the near term. Fannie Mae’s latest forecast predicts mortgage rates will average 6.6% this year and 6.1% next year. Wells Fargo expects a similar trend, predicting that mortgage rates will end this year at 6.5% and end next year at 5.9%, Dougherty said.

While cities all over the country are dealing with a shortage of homes for sale, listings are flying off the market faster in Seattle than in many other areas. Nearly 80% of Seattle-area homes that sold in March did so within two weeks. That share ranked second in the country after only Rochester, N.Y., according to another Redfin analysis.

Last month, it would have taken about one month to sell through all the single-family homes for sale in King County at current demand, according to a measure known as months of inventory. That’s a better outlook for home-shoppers than during the peak of the pandemic-fueled market in 2021, but far short of the four to six months the listing service considers a “balanced market.”

“The increase in year-over-year sales transactions signals that buyers and sellers are beginning to adjust to the higher interest rate environment,” said Mason Virant, associate director of the Washington Center for Real Estate Research at the University of Washington.

Deputy business editor Rania Oteify contributed to this article.