Buy, sell or wait? Snoqualmie Valley home prices are resilient despite interest rate increases

Marry the house, date the mortgage rate — dramatic drop in house prices not expected

We’ve never lived through a time exactly like this, but after over 30 years of providing real estate services, owner and designated real estate broker of Snoqualmie’s Engel & Völkers shop, Jonathan Pearlstein has lived through several similar ups and downs — dating all the way back to the savings and loan crisis of the 1990s. And while he’s no fortune teller, three decades of experience does give him a good sense of the market.

“The number one question I hear from clients these days is, ‘Are prices going to fall?’ It’s on everyone’s minds. I know many people are waiting to buy, but the numbers show that it may not be a good idea to wait for a plunge in prices that may never come.”

An insider’s guide to the Winter 2023 Snoqualmie Valley real estate market

1. Prices haven’t dropped much

“There’s less than a two percent difference between the ‘sold’ price per square foot at this time in 2022 relative to the current average listing price,” Pearlstein says.

  • $477 is the average sold price per square foot of the single family homes sold during the 30-day period ending Feb. 16, 2022. Average Sale Price was $987,980; average 2,148 square feet.
  • $470 is the average listing price per square foot of the single family homes currently listed in the Snoqualmie Valley as of Feb. 16, 2022. Average Listing Price is $1,330,315; average 2,909 square feet.

“During the 2008 Great Recession you could find some homes for sale at 50 percent off. That’s just not where we are right now and I don’t anticipate it,” Pearlstein says. “For potential buyers, I advise focusing on your financial plan for affording a home; don’t wait for prices to fall, because we’re not expecting a dramatic drop.”

2. Demand remains high

“It’s no longer a secret that the Snoqualmie Valley is an excellent place to live,” says Pearlstein, who has lived and worked here since 1998. “Thirty years ago, Boeing used to be the only big employer in the region, but we now have a strong and diverse jobs market, and that’s not going away. Workers continue to move here from around the world, and they all need homes.”

Supply won’t catch up to demand for many years. Throughout the Snoqualmie Valley there were only 85 single family listings as of mid-February.

“Housing inventory remains historically low while demand has barely pulled back, so prices remain relatively steady.”

3. Interest rates have affected prices

“Increased interest rates hovering around 7 percent mean that an $800,000 mortgage costs a borrower approximately $1,400 each month compared to the 4 percent rates last seen in the first quarter of 2022. This increased borrowing cost tends to exert a downward pressure on home prices. But the low inventory of homes for sale is likely to continue to prop up prices — especially where sellers are not desperate to sell and are willing to stay put,” Pearlstein says.

  • 12 days: The average days that a single family home was on the market during the 30-day period ending Feb. 16, 2022. “The low number of days on the market indicates that the market was still very hot due to the combination of lower interest rates and low inventory,” Pearlstein says.
  • 122 days: The average days that a single family home is currently on the market (as of Feb. 16, 2022). “The substantial increase in current market time indicates that sellers generally are not under pressure with their low financing rates, and are unwilling to adjust prices downward to compensate for buyers’ lower purchasing power due to the much higher interest rates.”

“I expect interest rates to continue to rise for the first two or three quarters of 2023, and hope for a pullback in rates later in the year. Buyers in our region have a tradition of being shy about making offers under 95 percent of asking prices, but I often have selling clients that wonder why they aren’t getting any offers – even low ones. If you’re considering buying a home, there are opportunities in this market to find great value, especially on homes that have been listed for more than a month.”

“There’s a saying in real estate, ‘Marry the house, date the rate.’ Commit to your home long term, but break up with your higher interest rate loan when you can refinance to a lower one,” Pearlstein says. “Don’t wait for conditions to change — start a conversation with a real estate agent and start learning about the market. We never know whether it will take days, weeks, or months, but when that special home hits the market and your stars all line up, you’ll be ready.”

Start the conversation with Jonathan Pearlstein by text or phone at 425-444-7899, or email jonathan.pearlstein@engelvoelkers.com. Learn more at jonathanpearlstein.evrealestate.com, and on Facebook and Instagram.

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