Could Washington Transition Into a Buyer’s Market in 2024 or 2025?

Earlier this week, the National Association of Realtors (NAR) published a report that showed a real estate market shift in 2024 and possibly into 2025. In short, they believe the market has become more buyer-friendly over the past year, and that it might continue going forward.

So, what does this mean for Washington State? How do national trends affect the real estate market in Washington? Could Washington transition into a buyer’s market in 2024, or into 2025?

Even the highly competitive Seattle-area housing market has become more favorable toward buyers in recent months (though it continues to march to its own drumbeat).

Here’s an in-depth look at these latest real estate trends and how they might affect Washington state home buyers and sellers between now and 2025.

Report Reveals ‘Slow Shift’ to a Washington Buyer’s Market in 2024

On July 23, the National Association of Realtors (NAR) published an article entitled: “Market Is Shifting Slowly in Buyers’ Favor.”

Here are some key highlights from that report:

• Fewer sales and more inventory: Existing-home sales dropped year-over-year, while inventory increased, indicating a shift from a seller’s market to a buyer’s market.
• Longer time on market: Homes are taking longer to sell these days, on average, suggesting that there’s less competition among buyers.
• Increased buying power: More buyers are insisting on home inspections and appraisals, and sellers are receiving fewer offers.
• Record median prices: Median existing-home sales prices reached a new record high, but further large increases are unlikely.
• Balanced market: Supply and demand dynamics are approaching a balanced market condition.

In a separate but related statement, NAR’s chief economist Lawrence Yun explained:

“We’re seeing a slow shift from a seller’s market to a buyer’s market. Homes are sitting on the market a bit longer, and sellers are receiving fewer offers. More buyers are insisting on home inspections and appraisals, and inventory is definitively rising on a national basis.”

Of course, real estate market conditions can vary significantly from one city or state to the next. National trends can help us gauge the general direction of the market. But when it comes to home buying in Washington in 2024 and 2025, conducting local research is paramount.

To that end, let’s zero in on the state of Washington to see what’s happening as of summer 2024, and where the market might be headed in 2025.

Current Housing Conditions in Washington

For the most part, the state of Washington has mirrored the real estate market trends and developments outlined above. This means home buyers could have an easier time finding and purchasing a home in 2024, compared to a year ago.

But overall, the housing market across Washington is more competitive for buyers when compared to national data.

Here are some recent Washington housing trends for 2025 that buyers should know about:

• Washington has a lower number of “months supply” when compared to the U.S. as a whole. Statewide, the housing market inventory situation has improved since the unprecedented shortage that occurred during COVID. But there’s still a relative shortage of homes for sale. As of this writing, WA State has a roughly 1.9-month supply of available housing.
• As of June, the state of Washington had a much lower median “days on market” compared to the national median. This means that, on average, homes listed for sale in Washington tend to sell faster than in most other parts of the U.S.
• Lastly, some good news for home buyers. The state of Washington currently has a much higher percentage of price reductions among sellers. As of June, about 19% of homes listed for sale nationwide had a price cut. During that same month, more than 30% of Washington real estate listings had a price reduction.

It’s an interesting time for the Washington real estate market. Despite lower-than-average inventory levels, home sellers appear to be more willing to reduce their asking prices. This could be due to a lack of affordability, which tends to reduce demand from buyers.

Slower Home Price Growth These Days

Another positive trend for home buyers has to do with home prices.

In Washington, house values are currently rising at a much more gradual pace than in years past. So buyers might not feel the same level of urgency these days.

• According to Zillow, the median home value for the state of Washington is currently around $601,851. That’s 4.2% higher than a year ago, compared to their data.
• The median price for the nation as a whole is currently $363,438, following a gain of 3.8% over the past year.

So while home prices in Washington exceed the national average, they’ve been rising at roughly the same pace over the past 12 months.

Looking forward, housing market analysts do not expect a sharp rise in home values any time soon. In fact, the latest forecasts predict that prices in many markets (including Washington) could level off through the rest of this year and into 2025.

Potentially Lower Mortgage Rates

Right now, the 30-year fixed-rate mortgage rate is 6.77%, according to Freddie Mac. While still somewhat elevated, particularly compared to a couple of years ago, rates appear to be stagnating. In fact, industry experts, including the Mortgage Bankers Association (MBA), agree that we could be seeing rates a bit lower by the end of 2024 and even lower in 2025.

This is good news for buyers looking to take out a mortgage at more affordable rates.

How Buyers Can Benefit From a Changing Market

Housing market inventory conditions have improved, and sellers in Washington appear to be more willing to negotiate over the price and other terms.

These are positive developments from a home buyer’s perspective. And if mortgage rates decline further later this year (as some have predicted), it could shift the market even more toward favoring buyers.

Here’s how changing market conditions can benefit buyers:

1. More negotiating leverage. In a cooler market, buyers can negotiate for better prices, contingencies (like home inspections and appraisals), and repairs from sellers.
2. More time to decide. When homes stay on the market longer, buyers can take more time to carefully evaluate properties, research neighborhoods, etc. They feel less rushed.
3. More inventory and choices. Housing market forecasts suggest that more homes could become available over the coming months. This would give home buyers in Washington a wider selection of properties to choose from, increasing the chance for success.
4. Fewer bidding wars. Home buyers in Washington dislike bidding wars, and for good reason. It makes it harder to buy a house and also drives up the sale price. The current shift in the real estate market could make bidding wars a rarity later this year and in 2025.
5. Possibility of seller concessions. In the coming months, sellers across the state of Washington might become more willing to offer concessions. This can include closing cost contributions and other incentives for home buyers.
6. Ability to include contingencies. In a slower market, home buyers typically have an easier time adding contingencies to their offers. Contract contingencies give buyers added protection from low appraisals, bad inspections results, and other things beyond their control.

Looking Forward Into Later 2024 and Into 2025

So, could Washington transition into a buyer’s market in 2024 or 2025?

The bottom line is, we’re not in a buyer’s market just yet. But, if the real estate market continues along its current trajectory of cooled home price increases and potentially lower interest rates, home buyers in Washington could enjoy more negotiating leverage.

Need Financing?

If you’re thinking of buying a home in WA State, you need to get off on the right foot by getting your finances in order, and that includes getting pre-approved for a mortgage. At Sammamish Mortgage, we’ve been helping home buyers and owners arrange for the financing they need since 1992, and we’re ready to help you, too. Reach out to Sammamish Mortgage to get a rate quote and get the mortgage application process started!