Favorable tax laws, high quality of life, and diversified economies are helping to protect certain markets from economic uncertainty in 2023.
A continued shortage of housing stock, persistent supply-chain issues, and the rising cost of materials are also helping to sustain home prices, even in markets where sales volume is returning to pre-pandemic levels.
Like many U.S. markets, Seattle saw a redistribution of people as the pandemic pushed buyers from the city center. “That ended up having an effect on pricing upward in just about all markets, except for our downtown condo market,” says Jay Kipp, global real estate advisor, Realogics Sotheby’s International Realty in Washington.
Prices remain stable, but the volume of sales in the Seattle area began to slow in the second half of 2022 after robust numbers. “Our absorption rate is back to 2017 to 2019 levels, but we’re pretty consistent,” he says. Shortage of stock remains a challenge, he says.
Housing market stability is in part due to Seattle’s diversified economy and “very strong net positive immigration driven by employment,” he says. “We’re corporate headquarters for Amazon, Costco, Microsoft, T-Mobile, Boeing, Nordstrom—we’ve got some real leaders.” The lack of state income tax and a generally high quality of life are enduring draws for buyers from California and further afield.
Going into 2023, buyers’ perceptions are crucial, Kipp says. For high-net-worth cash buyers, the primary obstacle is “a perceived lack of wealth,” in light of stock-market volatility.
Buyers in the US$5 million–and–up range “are looking for something between a deal and a steal in order to make some moves.” Sellers and buyers should expect prices to level off in 2023, he says, but “Seattle as a market has typically been one of the last to decline and one of the first to recover.”
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