The North Tacoma housing market remains sluggish. Home sales activity was 8% lower this spring than it was in 2024 and well below pre-pandemic levels.
Second Quarter Market Update
for North Tacoma
Persistently high interest rates continue to hinder the housing market in two ways. Most importantly, homeowners are reluctant to trade in the low interest rates that they have on their current homes in order to buy another property at a higher rate – so new listings are in short supply. At the same time, first time home buyers are continuing to struggle with housing affordability as home prices continue to rise – so buyer demand is down as well. Low supply and low demand equals a slow housing market.
169 single family homes were sold in zip codes 98403, 98406 and 98407 in the second quarter of this year – an 8% decrease in sales activity when compared to the second quarter of 2024.
The median home price in zip codes 98403, 98406 and 98407 is $665,000. That’s 3% higher than it was 12 months ago. After the rapid rise in home values that we saw during the pandemic, a 3% increase in home values feels small, but that’s actually a fairly normal rate of appreciation.
Though sales activity is down in North Tacoma, the houses that are selling here are selling quickly, in large part because inventory levels remain so low. Listings are moving from “active” to “pending” in 2-3 weeks on average.
A truly balanced market requires a 4-6 month supply of housing inventory. Even though inventory levels are up a bit from last quarter, they’re still quite low objectively speaking.
Current Market Conditions
- Mortgage interest rates are still hovering around 7%, fluctuating from week to week. Cost-sensitive buyers are paying close attention to the rate fluctuations, making them more interested in purchasing when rates drop and less so when they tick up again.
- According to Newsweek, demand for new homes has dropped to its lowest level in nearly three years, prompting home builders to pull back on construction. Affordability issues are largely responsible for weakening demand.
- According to the National Association of Realtors, 17% of all home buyers purchasing from mid-2023 to mid-2024 bought a “multi-generational” home, up from 14% the year before. Housing affordability is likely one of the key forces behind this increase.
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 Commencement Bay Brokers, specializing in residential real estate in Tacoma, Gig Harbor, University Place and Lakewood.
Contact Mark Pinto