Source: The Seattle Times —
The new year will bring Seattle a new housing market, one without the runaway prices and jaw-dropping bidding wars, yet still difficult for anyone but the region’s wealthiest shoppers.
Economists say home prices are likely to fall or flatten here and across the country. Fewer people will buy homes. Rents, too, may climb far more slowly than they have in recent years, as people stay put.
But Seattle’s defining inequality will remain: Rents and home prices will remain far out of reach for many.
Here’s what real estate forecasters expect for the year to come.
Home prices: flat or falling?
The pandemic frenzy is over. After two years that saw home prices shoot up by double-digit percentages, particularly in suburban areas like the Eastside, prices are now on the decline.
To put it more existentially: “Waning affordability and consumer confidence have negatively affected the psyche among prospective homebuyers,” read one analysis published by Morningstar, an investment research company.
Seattle is likely to see a sharper decline. The region is already one of the fastest-cooling housing markets in the country.
Seattle-area prices could fall far faster than the national trend — as much as 10% — said Redfin chief economist Daryl Fairweather. Windermere economist Matthew Gardner has a more modest prediction. He expects average sale prices for single-family homes to dip 5.3% in the Seattle area in 2023.
Seattle could see a sharper downturn than other markets in part because, when home prices are already this high, rising mortgage rates can quickly push mortgage payments out of reach, Fairweather said. Add to that: If rents level off (more on that in a minute), even highly paid tech workers might hold off on buying homes.
“Even people who are well-off will just make the rational decision to rent because a monthly mortgage is more than what they may be able to get in rent,” Fairweather said.
So, will I be able to afford a house?
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