From hot to not. Tacoma home-sales market leads Redfin list of declining sales, listings
For the second year in a row, Tacoma has topped Redfin’s list of housing markets that are far lower than the previous year’s results.
In September 2022, Redfin put Tacoma in the top 10 for fastest-cooling metro housing markets.
This week, Tacoma is again making Redfin headlines, now topping the list in declines both in closed sales and new listings among 91 U.S. metro areas.
According to Redfin’s report published Oct. 23, Tacoma was No. 1 among the metros surveyed in declining closed sales, down 40.2 percent from 2022, “more than any other metro Redfin analyzed,” it noted. Rounding out the top 3 in year-over-year declines was Oxnard, California (down 28.6 percent) and Fresno, California (down 28.5 percent).
Tacoma also was No. 1 in the decline of new listings, dropping 31.5 percent, followed by Atlanta (down 30.8 percent) and Houston (down 29.9 percent).
Three Florida metros, conversely, were doing the best in those same two categories: Closed sales rose the most in North Port (42.8 percent), Cape Coral (17.6 percent) and Tampa (15 percent). For new listings, the same three cities also outperformed all of the other metros: North Port (up 33.6 percent), Cape Coral (up 30.6 percent) and Tampa (up 17.8 percent).
Redfin noted that coastal Florida sites, including North Port and Cape Coral, “in part” benefited in their rankings from Hurricane Ian slowing housing market activity in September 2022.
From hot to not
For Tacoma, it’s been a journey.
In January 2020 and January 2021, Tacoma topped Redfin’s list for fastest-selling market, with lack of inventory driving speedy sales.
May 2019 saw the real estate company declare Tacoma the hottest market in the nation.
Northwest Multiple Listing Service this month recorded September new listings for existing single-family homes in its 26-county area down nearly 23 percent, and in Pierce County down 28.5 percent. For new listings including condominiums as well as existing single-family homes in Pierce County, it was down 27.4 percent.
In closed sales, NWMLS showed in September a year-over-year decline of 23.8 percent for existing homes systemwide, and in Pierce County down nearly 32 percent. For closed sales including condominiums as well as existing single-family homes in Pierce County, it was down 32.2 percent from the same period in 2022.
Realtor Jon Bye is the team leader at Jon Bye & Associates with John L. Scott Real Estate in Kent and participated in The News Tribune’s online real estate forum in July.
On Tuesday, he offered his assessment of where the local market stands now.
He said that for sellers, realistic pricing remains “vital.”
“You cannot go back 6 months and think that data will help you today,” he said via email. “You need to look at the active inventory and what the details are with the homes that are pending so you can price your home accurately.”
He reminds buyers that “sellers are motivated if they are on market. Look into options like buying down the rate or asking for credits towards your closing costs to help subsidize your monthly mortgage until rates improve,” he wrote.
Janeth Pannen is a mortgage consultant for Penrith Home Loans in University Place who also participated in The News Tribune’s July forum. Pannen also encouraged rate buydowns when possible, “whether permanent or temporary.”
She said the appeal of finding a path toward making a deal in these conditions was that “buyers benefit from a lower monthly payment while sellers offering concessions can boost interest in their property.”
She added that assumable loans were seeing “a surge in demand.”
An assumable mortgage requires a government-backed loan (FHA, VA, USDA) that can transfer from original borrower to the next homeowner along with lender approval. It also means paying off the difference between the existing balance and the property’s current value, usually with a second mortgage.
The financing strategy came into its own in the early 1980s in an era of double-digit interest rates, another time when people were leery of putting their home on the market for fear of losing a lower rate obtained when originally purchased.
“While not all loans are assumable, those that are create a unique opportunity for buyers to take advantage of pandemic-era interest rates,” Pannen told The News Tribune.
For buyers, a 30-year fixed mortgage rate is now hovering around 8 percent. Redfin’s Chief Economist Daryl Fairweather said Monday that “We expect rates to remain high for the foreseeable future.”
And, don’t expect this interest rate drama to bring prices down much, as Fairweather added that “we also expect prices to stay high into next year.”
Inventory remains tight, as has been the story in the Puget Sound region for years, both in lower interest times and now again, in the higher interest era.
“Housing supply is so strained that even a small uptick in listings lures buyers off the sidelines, bolstering sales,” Fairweather said in Redfin’s release.
