Tacoma Real Estate Market Update

March 13, 2023 9:00 am

REAL ESTATE MARKET UPDATE

Revised March 13, 2024

At the end of February there were 969 homes on the market in Pierce county representing a 1.6 month supply. There was a nearly equal number of pending sales. Both of those facts point to a seller’s market as we head into the 2024 season. Mortgage rates are stubbornly high around 7% according to George Lane at Edge Home Finance (although he says there is a half point rate buy down that pays for itself in 12 months presently!)

George notes there is a pent up demand in the home market. The reason for this actually ties in with our feature story. Homeowners these days are older on average largely because young buyers have had to put their homeownership dreams on hold. The price of homes shot up over several years through the pandemic due to high demand, short supply and very low interest rates. The low rates made high prices affordable on a monthly basis. But now interest rates have more than doubled, which has also doubled the monthly cost of ownership. Many of the would-be youthful homebuyers simply continue to rent or to live with their parents even as their incomes rise over time. They are itching to buy a home; at least some of them are! George predicts that a mortgage rate around 5% will pull a huge number of young buyers into the market.

Inflation has proven difficult to bring down to the Fed’s target, so we may not see lower interest rates right away, but I think any movement in a downward direction is going to start attracting new buyers who can suddenly just afford a home.

Our listings so far this year have moved quickly. We have had a few bidding wars this year so far and very short market times. In Pierce County it is taking an average of a month and a half to sell, but that will come down as the tulips pop out of the ground and the real estate season gets underway!