The North Tacoma housing market has cooled significantly in the past six months, largely in response to increased mortgage interest rates.
Third Quarter Market Update
for North Tacoma
The North Tacoma housing market feels noticeably different than it did a year ago. Sales activity is down, and we’ve seen a modest retraction in home prices. This correction in the market is probably healthy in the grand scheme of things, but it still feels a bit unsettling.
The median home price in North Tacoma is exactly the same as it was a year ago ($600K), which means that the price gains we saw in late 2021 and early 2022 have essentially been erased. The good news is that we’re unlikely to see a further erosion in home values, given that inventory levels remain low and buyers seem to be adjusting to the increased interest rates. More likely is a modest increase in home prices moving forward.
209 single family homes were sold in zip codes 98403, 98406 and 98407 in the third quarter of 2022 – a significant 18% decrease in sales activity compared to the third quarter of 2021. This trend is likely to continue into 2023.
It feels like houses have been sitting on the market longer than in the recent past, but they’ve actually been selling pretty quickly – moving from active to pending in two to three weeks on average.
Inventory levels remain quite low in North Tacoma, with just one month’s worth of housing stock available.
Current Market Conditions
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- According to a recent Redfin analysis ranking the 100 most populous U.S. metro areas based on how quickly their housing markets are cooling, Tacoma was ranked #10. Neighboring Seattle was ranked #1. This news doesn’t come as a complete surprise, given how hot our markets were before interest rates started to rise.
- Mortgage interest rates are hovering around 7%, up one percentage point in September alone. Uncertainty and volatility in global financial markets are contributing to day to day rate fluctuations.
- Though single family housing starts jumped 3.4% in August, builder sentiment is at its lower level since 2014, according to data from the National Association of Home Builders. Rising interest rates and supply chain disruptions are among their top concerns.
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
