What Would Snohomish County Home Values be if They Dropped by 20%? Now this title isn't intended to be click-bait and have a shock-and-awe post to follow yet it's an example of where the area could be while bringing some perspective to home buyers and home sellers.
If you were either buying or selling a home between 2020 and 2021 then you are highly aware of market conditions during that time. If not, here is quick overview.
There was a lot of money in the market place and housing inventory was at its lowest levels, ever. These buyers also had access to loan programs that allowed them to borrower against 401k's, stock portfolios, and retirement accounts which facilitated in making "cash" offers with little to no contingencies so they could "win". Sellers on the other hand entered the market expecting, and most of the time achieving, multiple offer situations, aka .. "bidding wars", were buyers dumped money by the truck loads at the sellers door hoping their offer was accepted.
Now, the real estate market has shifted with properties staying on the market longer, sellers are reducing their prices, interest rates are continuing to climb, buyers are writing offers containing traditional contingencies, and industry gurus talk of another recession all the while policy makers are try to curb inflation. Yet, what would happen if property values across Snohomish County dropped by 20%?
In the interactive graph below, Snohomish County had a median home price of $700,000 as of September 2022. If 20%, or $140,000, was removed it would equal a median home price of $560,000.
Speaking with many people and hearing their reaction is something to the fact that a 20% market correction would be the worst thing ever to happen to home values.
I say it wouldn't.
Moving the graph's needle to a $565,000 median home price places the time frame in the recent past - June 2021. That's only 15 months ago. In addition, the graph shows the sharp incline in median home prices started in May 2020 where it was $475,000. Said another way: Snohomish County's median home price increased by 47% since May 2020.
A 20% market correction doesn't seem as bad when comparing price to time. In my opinion, the decrease in median homes prices would put us back to something that resembled "normal". If you're thinking about selling a home in 2022 or early 2023 then you net more money by selling sooner then waiting to see if a recession happens in late 2023.
Am I stupid? Missing the mark? Need to find another career choice? Please share your thoughts with us in the comments below.