North Tacoma home values have been rising month over month since the beginning of this year, but we haven’t quite regained the value that we lost in the second half of 2022.
Second Quarter Market Update
for North Tacoma
The median home price in North Tacoma is 3% lower now than it was last spring. We’ll probably continue to see year over year “losses” until 2024, but it’s important to recognize that home values are rising month over month. With buyer demand continuing to outpace supply, home values are likely to continue rising as we move through 2023 and into 2024.
More homes are sold each quarter in zip codes 98406 and 98407 than in zip code 98403, which makes 98406 and 98407 more representative of the North Tacoma housing market as a whole. Median sale prices are down year over year in 98406 and flat in 98407. As a result, the median home price in North Tacoma is lower now than it was 12 months ago.
159 single family homes were sold in zip codes 98403, 98406 and 98407 in the second quarter of 2023 – a 30% decrease in sales activity when compared to the second quarter of last year. Sales activity isn’t as slow now as it was in late 2022, but we definitely did NOT have a traditional spring market this year.
Select houses have been selling quickly, but the average time on market in the second quarter of this year was more than twice as long as it was during the second quarter of 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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- The Fed has paused their interest rate hikes temporarily, but additional rate increases are expected this year. That means that mortgage interest rates are almost certainly going to get worse before they get better. Relief isn’t expected until 2024.
- Housing affordability continues to be a challenge in Tacoma, where approximately 37% of homeowners are considered “house poor”. That means they’re spending more than 30% of their income on housing. Tacoma ranks #1 in the state and #22 in the nation when it comes to housing un-affordability.
- The U.S. mortgage delinquency rate remains extremely low at 3.1%, making a meaningful increase in foreclosures unlikely.
- According to the National Association of Realtors, pending home sales have been down this spring because of persistently low inventory levels.
- Bankrate ranked the Seattle-Tacoma-Bellevue metro area at #2 on their list of the best places to start a career, which means we’re likely to continue seeing transplants to the area
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
