2024 Projections for Seattle Real Estate

In 2023, the Seattle-area real estate market slowed down, signaling a departure from its trend of high home prices and bustling construction. Home prices stagnated, sellers hesitated to list their properties, and higher mortgage rates strained home shoppers. Commercial real estate also struggled as borrowing costs soared and remote work increased vacancies.

Experts predict that 2024 may mirror the same trend as this year. While there’s potential relief for homebuyers if mortgage rates drop and more homes enter the market, renters may not benefit from this shift. Here are five insights from experts regarding the upcoming Seattle-area real estate market.

Amidst an ongoing standoff between potential buyers and the housing market, Seattle-area home prices are projected to remain relatively stable in the upcoming year. The expected increase might range from 1% to 3% in high-value areas like Seattle and Bellevue.

Although there’s anticipation for a decline in mortgage rates, significant relief for home affordability seems unlikely in 2024. Even if rates drop, the challenge of finding an affordable home in the Seattle area persists, with median prices significantly higher than the projected prices for entry-level homes.

The lack of homes for sale is a critical factor contributing to this challenge. With limited inventory and a lock-in effect on current homeowners with lower interest rates, the housing supply remains constricted, holding back price drops.

Experts believe that unless mortgage rates significantly decline or a surplus of homes enters the market, the situation may not change in the upcoming year. The rental market, after experiencing fluctuations in recent years, is expected to witness rent hikes due to limited new apartment constructions.

In the commercial sector, office vacancy rates are expected to continue their upward trajectory, especially in tech-driven areas like downtown Seattle and Redmond. Employers are seeking newer office spaces with enhanced amenities to attract workers, leading to a slowdown in the market.

While office rents might remain stable or even decrease, landlords may offer more concessions to entice tenants, signaling a shift in the commercial real estate landscape. Additionally, the market might see an increase in office buildings changing ownership due to the repercussions of high-priced pre-pandemic acquisitions.

2024 could present opportunities for tenants with lowered office rents and increased landlord concessions, a possible silver lining in an otherwise challenging real estate landscape in the Seattle area.