Market Statistics for RE Magazine for 2Q 2023
Market Statistics for RE Magazine for 2Q 2023Existing home sales declined in the second quarter 2023 by 5.7 percent to a seasonally adjusted annual rate of 93,680 units compared to the previous quarter, and dropped 23.6 percent compared to a year earlier.
Building permit activity dropped 28.0 percent from a year earlier, totaling 9,939 new units authorized. Of these, 5,125 were issued for single-family units.
The median price home sold in Washington during the second quarter was $654,900,0.1 percent higher than a year earlier, and 14.3 percent higher when compared to the previous quarter’s median price of $572,900.
Housing affordability has continued to fall from the previous quarter for both median-income and first-time buyers. The median-income buyer Housing Affordability Index stayed above 100 (meaning that the median-priced house was affordable to a household with median income) in only 2 of Washington’s 39 counties.
Inventories of homes available for sale totaled 12,243 single family homes at the end of the second quarter, a 40.4 percent increase from the previous quarter and a 17.7 percent decline from a year ago. The inventory level represented a 1.8-month supply, an imbalance where demand exceeds the supply of homes on the market.
With further increases to interest rates, housing affordability continues to decline across Washington State, reducing demand as buyers struggle to qualify for mortgages, decreasing demand and buyer activity. On the supply side, the increased costs of construction have affected single and multi-family development, with total building permit volume down more than 28 percent in 2Q 2023 compared to a year prior. While permit activity has decreased year-over-year, single-family permit activity did increase quarter-over-quarter by almost 42.7 percent which is encouraging. Buyer activity has slowed as a result of reduced purchasing power caused by the high interest rate environment. This has allowed inventory to rebound by 40.4 percent quarter-over-quarter, although still down year-over-year by 17.7 percent. Sale prices have increased very slightly year-over-year by 0.1 percent, as sellers remain reluctant to lower their list prices despite the reduction in buyers’ purchasing power. Prices did increase dramatically (40.4%) from 1Q 2023 as some buyers have come to terms with the new reality of today’s interest rates and were willing to pay higher prices for their homes. Affordability continues to be a problem in almost all counties (37 of 39) for median income and first-time buyers.
Washington Center for Real Estate Research
Runstad Department of Real Estate
University of Washington
This article originally appeared in the Special Winter 2024 issue of RE Magazine.