Housing markets are localized. This article focuses on the Western Washington housing market in 2025, particularly the Eastside housing market. There was notable activity and a competitive environment for buyers and sellers during 2024. Even though the mortgage lending rates were significantly higher throughout 2024 than at the start of 2023, there was a slow but steady increase in home prices. Over half the new listings went under contract in less than 30 days throughout 2024, indicating a competitive market. Spurts of increased buying activity followed the short-lived drops in mortgage lending rates. But overall, there was minimal improvement in the lending rates. I referred to this seesaw of lending rates in a few previous articles. What would the housing market in 2025 bring us?

 

What can we expect in 2025 for the Washington housing market

Numerous interesting and unusual factors mark the arrival of 2025. Making predictions about any economic aspect is tricky business. This time, even more so. Those who claim to be in the know say that at least in the first half of 2025, the housing market in Western Washington is likely to experience increased inventory, slightly rising but steady home prices, and a gradual rise in sales activity. The Eastside is one of the most diverse, robust and stable housing markets. Thorough planning by various cities and strict implementation of zoning and other building laws will keep it that way. If you purchase your home after careful evaluation and continue to take good care of it, its value will be stable and keep growing steadily.

 

Mortgage lending rates and our housing market

Regarding mortgage lending rates, I disagree that the overall outlook suggests a more balanced market, offering opportunities for both buyers and sellers, as some experts predict. The sweet spot for a 30-year fixed mortgage rate, a crucial factor that impacts housing markets, is around 5.5% or lower. Throughout 2024, this rate fluctuated between 6.5 to just above 7. At the time of writing this article, this rate is at 7%. There is nothing on the horizon that can occur to bring these rates 1.5% lower. If anything, geopolitical issues and internal conflict can push the rates even higher. Based on this alone, I expect the 2025 housing market to mirror the 2024 conditions closely.

 

Tips for homebuyers

In early 2023, the mortgage lending rates increased rapidly and substantially. This rapid increase in mortgage rates squeezed several potential homebuyers out of the housing market, some perhaps permanently. Almost two years later, the buyers have become more accepting of the realities of the lending rates in the current range. This has helped the homebuying activity to remain robust. Every homebuyer’s ultimate objective is finding the right home at the right price in the desired neighborhood. To accomplish this, a streamlined approach is best. It is also critical to equip yourself with accurate and current information and remain in control throughout the home-buying process. When you find the right home, act decisively and promptly.

At BN Real Estate, we put every property on the market at your fingertips and give you complete control. This process starts with BN Real Estate setting you up with the NWMLS App, which provides you full access to every single home on the market. Here, you can keep all your home searches at your fingertips and ask us questions about any homes from within this NWMLS app. You can Download the NWMLS App here. We will also help you sort out the financial matters related to your purchase. Please click here to get specifics and learn more about what makes our homebuying service attractive to first-time and seasoned homebuyers.

 

Tips for home sellers

When selling your home, pricing it just right remains crucial. You may find this article helpful on this vital and complex subject. Preparing your home to be listed is the next critical step. BN Real Estate’s concierge service can help you with that phase. Then comes the most vital stage: knowing how to choose the best offer and handle complex negotiations during the offer and acceptance phase. The buyer’s home inspection phase follows this and frequently involves even more renegotiations. Then come the appraisal issues and other escrow-related matters.

Very few brokers will admit that the house is often not priced right at the time of initial listing. There are two reasons for that. First, the only time you can know for sure what amount someone might be willing to pay for your house is when you put that house for sale on the open market. Second, the homeowner and listing broker may equally be responsible for not getting the price right when it is listed. Understandably, homeowners estimate the market value of their home to be higher than what it is. Most of us tend to think that our stuff is more valuable than it is. Home sellers may have lived there for a while, made several improvements, and placed a high value on all that. All home improvements do not add to your home’s value. For example, if you were to add a new bathroom, that would add value––if you were to repair or improve your current bathroom, not so much. 

Most listing brokers, especially those who may be hungry for business for various reasons, shy away from candidly stating their position. They may be eager to get the listing and then deal with the price adjustment, but this approach doesn’t help either party. Below are some examples of recent price reductions in list prices. You will note that these reductions are substantial amounts reasonably soon after the property is listed. Nothing happened in the Washington housing market to cause that. These properties were over-priced for the reasons I just mentioned above.

 

 

 

 

 

 

 

 

 

No reasonable home seller would want to be in the position of these folks. The best way to avoid it is to be practical and price your home right, from the start. Overpriced homes can sit on the market for a long time, even if it is a great house that shows well. The longer it takes, the worse it will get. Potential buyers wonder why it is still on the market. It becomes stale. Savvy buyers closely watch the ‘days on the market’ number and wonder why it isn’t selling. When the price is eventually reduced, potential buyers either move on to another property or ignore it. Pricing a home right is most crucial when you list it for sale. This phenomenon has not changed in any market. You can read more about this subject in this article. Home sellers greatly benefit from being realistic and trusting the data. Listing brokers are better off being upfront and straightforward with their potential clients than fudging the number to get a listing.

I am committed to being straightforward with my clients, who attest to that here. This approach has served us well over the years. Please contact me if you have any questions or want to discuss your situation. 

 

Changes in rules, compensation and disclosures

In 2024, there were three key developments within the real estate industry.

1. On March 15, 2024, the National Association of Realtors and the Department of Justice agreed to a proposed settlement. I wrote an article about it; you can find the specifics here.
2. NWMLS chose to stay outside of the NAR settlement. I wrote an article about it. You can get the specifics here.
3. In August 2024, NWMLS implemented specific changes to its policies, rules and guidelines and modified several forms used in real estate transactions. I wrote an article about this; you can find the specifics here.

We have a long-standing track record of and commitment to full disclosure and complete transparency. Please take a look at two important points.

1. Broker Nadir and BN Real Estate never belonged to the National Association of Realtors.
2. BN Real Estate adopted a fixed-fee arrangement in 2018 and stopped charging a commission as a percentage of the transaction amount. Consistent with our policy of full transparency, our fixed fees for sellers and buyers are displayed on our website.

For the clients of brokers who have integrated best practices into their sales process and provide complete transparency and disclosures to their clients, the above-referenced changes were mostly immaterial. For example, one of the new requirements is that a broker spell out the compensation arrangement to a new buyer client, who must sign a buyer-broker agreement. At BN Real Estate, it has been our standard practice to sit down with new clients, give them the required disclosures and discuss the entire process, including the compensation aspect.

In closing, I look forward to the Washington housing market of 2025. It promises to be competitive yet robust. I prefer to do business with informed consumers. When our potential clients are not fully informed, we ensure they become so. Please reach out to us with any questions, even if you are not a client.