The desirability of living in Northeast Seattle is no secret. From the lovely Lake Washington neighborhood to the region’s proximity to the acclaimed University of Washington, Northeast Seattle combines an ongoing vibrancy with a wonderful, welcoming feel. And while it is primarily a residential district of Washington’s equivalent of Silicon Valley, it is nonetheless home to a wealth of lively restaurants, excellent bars and lounges, terrific shops, and splendid arts and culture.
Whether you own a glorious piece of Northeast Seattle real estate and have decided to sell it or are scouting out homes in the area, you undoubtedly want to have a grasp on where the real estate market is headed. Will it be in the seller’s favor, or will it shift to more of a buyer’s market? Will it be immune to broader economic changes? Most importantly, what will be the wisest way forward as we move into the new year?
Having answers to these questions is vital before making a real estate decision. Read on for realtor Ryan Rockwell’s summary of where the Northeast Seattle housing market is headed and how to capitalize on it.
Rising mortgage interest rates will trigger changes
At the start of 2022, the average loan interest rate for a 30-year fixed mortgage was 3.22%
. This low rate fueled the frenetic run of home sales across the nation. And yet the Federal Reserve has hiked up interest rates in an attempt to counter inflation. Interest rates have surged to just over 7%
, and experts predict they will rise another 1.75% by the end of 2022.
It’s uncertain how buyers will respond. This increase may cause prospective buyers to put their hopes of purchasing a home on hold for now because future monthly mortgage payments might be untenable. Others, however, have intensified their search for a prime piece of Seattle real estate (and elsewhere in the nation), hoping to lock in these rates
before the Federal Reserve raises them again. Still others might be unaffected by the spike and will forge ahead.
What seems to be sure, however, is that the growth rate in home prices will slow and prices will drop
, which we have already begun to see across the nation. This presents a unique opportunity for prospective buyers. They will have to pay a higher interest rate than buyers who got into the market in early 2022, but they may also pay less for the property itself. Further, buyers will have the chance to refinance once mortgage loan interest rates drop. If you are eager to own a home in Northeast Seattle and it is financially feasible to do so, now may be an opportune time to start exploring residences with renewed urgency and sincerity.
Rental prices might continue to rise
The average monthly cost of a rental in Seattle is $2,334
— and this number is expected to ascend as we move into the future. But it’s a double-edged sword, so to speak. For homeowners in Northeast Seattle who plan to leave the city, they can easily pull in a handsome passive income — and the same holds true for investors. At the same time, the rising rent costs may push some hopeful homebuyers further into the sidelines (or out of the game entirely) as they watch their savings for a down payment dwindle to keep pace with the new rental rates and the increasingly high cost of living.
If you’ve recently researched the cost of living in Northeast Seattle
, you may have noted that it is 37.5% higher
than the national average, rendering the ability to save for a home in the area nearly impossible for some. Others, however, are part of Seattle’s positively prospering job market where the average salary in the city is $85,000
, well above the $53,861
that the US Bureau of Labor Statistics deems the median salary in the country. Seattle is one of the most expensive cities to call home, and yet its employees also earn impressive wages. And between its flourishing music scene and abundance of outdoor activities, it’s a flat-out fantastic place to live.
Supply chain interruptions will slow new construction
Inventory in Seattle grew to an astonishing low
in the past two years when the real estate market hit record highs throughout the United States. Issues with the supply chain
and a dearth of laborers have also slowed the construction of new homes across the nation, which has only exacerbated the issue.
For sellers in Northeast Seattle, this may continue to be a boon for some time. In early 2022, for example, some Seattle homes sold for as much as 45% above
their listing price as buyers swooped up properties across the Pacific Northwest. For buyers in 2023, this may narrow your options. Fortunately, the choices you will have are bound to be attractive. Whether you’re searching for a modern condominium with epic views or a single-family dwelling equipped with high-end touches and luxurious features, the district offers a wide range of architectural styles.
Seattle homes will continue to appreciate
The annual appreciation percentage rate for a home in Seattle is a terrific 18.58%
, and this may only continue to skyrocket year after year as more technology companies
set up shop in Seattle, a trend that began several years ago as Silicon Valley’s top tech talent fled to the Pacific Northwest. Should you purchase a home in Northeast Seattle in 2023, you may watch it gain value year after year — all the while giving you a nearly incomparable place to live.
Whether you’re searching for Belltown Seattle homes for sale or have decided to put your PNW residence on the market, Ryan Rockwell
is the expert to guide you through the process. Native to Seattle, he has an unbreakable bond with the city and knows its neighborhoods and market like few others. Book a consultation with him today to start fulfilling your real estate goals.*Header photo courtesy of Shutterstock