On January 24, 2024, more than a hundred Realogics Sotheby’s International Realty global real estate advisors joined industry experts and keynote speaker and economist Matthew Gardner at the Kirkland Branch Office and Lake Street Lounge in anticipation of the spring sales season. Speakers and attendees took an honest look at where the market stands and where it’s headed as we rebound from a trough in 2023 and increasingly, make remarkable real estate moves in 2024. Let’s start with the good news: market pundits agree the inflection point has happened, meaning we’ve hit the bottom of the market downturn, and as we progress further into the new year, we’re projecting a more stable market with expanding sales volumes, bolstered by the desirability of the Puget Sound region coupled with lower mortgage interest rates and rising home prices.
The inspirational event kicked off with a welcome from CEO, Principal, and Owner Dean Jones and CMO Andrea Savage as they shared the exciting news that this year marks the 10th anniversary of the Kirkland Branch Office, which hosted the event. It also marked a decade-long partnership with Puget Sound Business Journal, an incredible platform and distinctive advantage for our brokers to highlight the properties in the highly visible “Home of the Day” feature, as they represent and increase their reach across the Puget Sound region. They highlighted the Kirkland branch’s “Best Real Estate Agency” win for the third year in a row. Congratulations to our amazing Kirkland brokers who continue to exemplify exceptional service. Similar acknowledgments were also earned for the Bellevue and Bainbridge Island branch offices.
Although last year’s market created challenging conditions for both buyers and sellers, our advisors proved that despite the obstacles, they’re committed to providing the best service and results for their valued clients. RSIR remains the top-producing Sotheby’s International Realty affiliate in Washington state, with accolades like the highest percentage of producing agents, the highest average listing price sold, and the highest inventory volume per agent. RSIR leads luxury representing the region’s most valuable real estate, and selling more homes, in less time, with more inventory, and with greater productivity compared to the top ten largest brands (according to Trendgraphix research based on NWMLS data in 2023).
Matthew Gardner, principal of Gardner Economics, brought over 25 years of experience analyzing economic data within the real estate market to the event as he discussed our country’s current economic state, from inflation to employment rates, and where he sees it turning in the near future. Gardner does not anticipate a recession. In fact, he puts the odds of one happening about 15 percent.
His perspective illuminated the real estate market’s position in relation to the economy, and his belief that the local economy and housing cycle has hit its bottom, and we can now expect housing values to increase. This provides hope that we’ll be dealing with a much different market landscape in the upcoming months than we did at the end of the previous year. The market is stabilizing and housing remains an excellent option to diversify portfolios. Our local market is particularly promising, as our area’s job growth is expected to outperform other booming US cities, such as San Francisco, California and Austin, Texas. Seattle’s tech industry is a huge draw for those looking to move to, or stay within, the area, and tech stock values recovered in 2023, returning 1.5 trillion dollars in equity to investors. As Dean Jones noted about one demographic and market segment, “Stocks have created an incubation for millennials—with restricted stock units (“RSUs”)—to become future buyers, and today Seattle’s market is full of pricey renters ripe for the picking.”
Regarding mortgage interest rates, Gardner reminded attendees that although buyers should not expect to see the record-low rates of January 2021 again, they are expected to continue to decline, potentially hovering just above 6 percent by the end of this year. For buyers who have been waiting for the right time to strike, attempting to time their home purchase with lower rates, now is the time to make their move, which Jones noted as “buy then refi” strategy because the temporary infliction of a higher interest rate is less concerning than the forever benefit of a sharper strike price as home prices escalate. Competition will only increase as we head closer to the spring sales season and more buyers return to their home searches, lured by greater inventory levels and lower mortgage rates (improving affordability). Gardner acknowledges that sales were down in 2023; in fact, sales were the lowest they have been since 1993 in the US (a 30-year record). It was also the lowest sales year for the four-county area since 2011. However, with inventory projected to rise and buyers now able to take advantage of lower rates, housing is certainly looking up for the region–potentially returning the volumes lost in the prior year and then some.
Changes in in-city markets specifically are expected. The hit that the city core took during the pandemic is felt less and less as businesses return to downtown Seattle and more residents stimulate the local economy by dining out, shopping, returning to their offices, and reviving the vibrant culture of the city. Buyers are particularly interested in move-in ready properties, allowing them to make their purchase and quickly settle into their new home and lifestyle and cutting down on the financial burden of purchasing a home that requires extensive updates.
A key topic of conversation was House Bill 1110, which was signed into law and requires municipalities to allow for in-fill development of dwellings inside single-family zoned properties. The zoning guidelines must be underwritten by the year end of 2024 with permits available by July 1, 2025. While deemed a step in the right direction, the new zoning will not likely have an immediate or material effect on the demand for affordable housing in the region, as it was compared by Gardner to similar legislation in other cities where only a few thousand units were delivered in as many years, in other words, about the same impact as allowing four larger apartment towers.
Gardner wrapped up his presentation and a following Q&A and left attendees with much to contemplate in the coming year. The event progressed with a panel discussion with a memorable lineup, including Porter Founder and Vice President of Sales Kathleen Selke, Singer/Songwriter and TEDx Alum Jennifer Rae Getz, and UBS Senior Vice President/Financial Advisor Kurt Owen. Owen discussed presidential elections’ impact on the real estate market, noting that typically we see the biggest period for returns in the third to fourth years if we’re looking at it from a four-year-cycle perspective.
With some intentional divergence, Jennifer Rae Getz inspired the crowd with her story as a musician, detailing how the question, “Why not believe in yourself? Why not ME?” has fueled her success and her happiness within her career. Her message was furthered by Jones who reminded the audience to believe in their art form and maintain the drive to succeed, and it will happen. She performed for the crowd during the happy hour. You can explore her music and her story further on her website.
Kathleen Selke, co-founder of the hybrid café Porter, which offers visitors a welcoming space to connect, shop, and find community, gave an insightful talk on the power of community and the importance of connecting within our cities, particularly after the pandemic led to an overwhelming increase in the feeling of loneliness in many Americans. The dynamic business venue is viewed as a catalyst for bringing vitality to buildings and neighborhoods, and it was paralleled to the unique workspaces that RSIR has built over the years and continues to invest in as a lifestyle center for agents and clients alike.
The event concluded with a wonderful culinary celebration as noted restaurateur Adrian Lopez, owner of Adrian’s, treated attendees to delectable appetizers and paella that were prepared streetside. The day was packed full of relevant data and expert analysis, illuminating projections, and the overwhelming feeling that as we navigate the ever-changing market, the robust RSIR community will continue to thrive, due to the talent and commitment that our brokers display under all conditions. RSIR is a remarkable family because of the individuals who contribute to it. As Dean Jones says, “It’s always important to bet on yourself.”
A complete presentation by Matthew Gardner can be found here. Look out for the approaching 2024 Forecast Report which will include further data and predictions about the year ahead.
