North Tacoma home values dropped after peaking in May/June of last year, but the worst of the market correction seems to be over.
First Quarter Market Update
for North Tacoma
North Tacoma home prices seem to have stabilized in the past few months, but the pace of the market has been more sluggish than usual. Fewer homes were listed for sale in the first quarter of this year than in years past, and it took longer for those listings to sell. We expect sales activity to pick up as we head into the spring season, but we’re unlikely to see anything resembling a normal market until 2024.
In the first quarter of this year, the median home price in North Tacoma was $615K – essentially the same as it was in the first quarter of last year. It’s not that the market has been flat for the past 12 months. It’s just that home prices surged in the first half of 2022 and then dropped by a comparable amount in the second half of the year. Further erosion in home values seems unlikely, given persistently low inventory levels.
105 single family homes were sold in zip codes 98403, 98406 and 98407 in the first quarter of 2023 – a 19% decrease in sales activity when compared to the fourth quarter of 2022. This is actually an improvement from last quarter, when sales activity was down 58% year over year. We seem to be moving in the right direction.
Though select houses have been selling quickly, the average time on market in the first quarter of this year was quite a bit longer than it was last year.
Inventory levels remain low in North Tacoma. A lot of home owners are reluctant to let go of their super low interest rates in order to make a move, which means they’re not putting their houses on the market. Inventory levels are unlikely to improve until and unless interest rates drop.
Current Market Conditions
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- According to the Mortgage Bankers Association, new mortgage applications have been at their lowest level since the early 1990s, down 44% from this time last year. Not a surprise, given the current mortgage rate environment.
- The number of homes that went on the market in the Seattle metro area in February of this year was 42% lower than in February of 2022.
- Realtor.com predicts that the number of homes sold in the Seattle metro area in 2023 will be 10% lower than in 2022.
- Despite persistent affordability issues and significant market headwinds, Realtor.com predicts a 7% increase in median home prices in the Seattle-Tacoma-Bellevue area in 2023, fueled almost entirely by low inventory levels.
In the current real estate marketplace, it remains critical for buyers and sellers to seek expert advice. If you’re thinking about buying or selling a home in the area, please contact us to discuss how we can put our knowledge and experience to work for you.
Mark Pinto is a top-producing Realtor with Windermere Chambers Bay, specializing in residential real estate in Tacoma, Gig Harbor, University Place and Lakewood.
Mark Pinto: (253) 318-0923
MarkPinto@windermere.com
