May 2023 Market Report

Why is the Market so Stagnant?

I am getting this question a lot, both from buyers and sellers and even some real estate agents!

The fact is that the rapid increase in rates last year created chaos in our market and new dynamics started playing out very quickly.

Interest Rates

Interest Rates went from 2.75% in January 2022 to nearly 8% by October. That is the quickest increase in rate history.

When you pair that rapid increase in rates, with home appreciation of 51% on homes in Snohomish County from 2020 to 2023, you have an affordability crisis on your hands.

To make things even more interesting, sellers are very reluctant to list their home, as they likely have a rate that starts with a two or a three. Going all the way to a 7% interest rate when they go to buy is creating a pause to really evaluate if moving is necessary, and rightfully so.

Inventory Supply

We still have really low inventory levels, and this is resulting in a unique dynamic where some listings are getting multiple offers and price escalations whereas others are sitting on the market for a while.

The difference is how the listing is priced. If you try to test the market right now expect your home to sit and likely not sell at all.

If you price it to comparable that have closed in the last 60 days, you will be in good shape.

What Does This Mean for Buyers?

For buyers, you need to get a game plan together on how you are going to buy a home in this unique market, so talk to a lender early on and meet with your agent to create a customized game plan for your own situation and needs. You may be really surprised at what your monthly payment will be so get that hammered out early.