As we step into 2025, the Seattle housing market is full of questions. What will happen with home prices, interest rates, and inventory? Here are the five key predictions from the Seattle Times about what to expect this year.

1. Home Prices Will Continue to Climb

• Expected Growth: Seattle Times predicts home prices in the Seattle area will increase by 4–5% in 2025, which aligns with typical market growth slightly above inflation.

• Why Prices Are Rising:

  • High demand from new residents.

  • Limited housing inventory in the Seattle metro area.

• Affordability Challenges:

  • The average single-family home price in Seattle hovers near $900,000, making condos a more accessible entry point for many first-time buyers.

• Suburban Opportunities:
  Suburbs like Tacoma, Renton, Burien, and Kent are becoming popular due to slightly lower home prices.

2. Mortgage Rates Will Hover Around 6%

• 2024 Recap: Mortgage rates peaked at 7.2% and settled around 6.6% by December.

• 2025 Outlook: Experts predict rates will average between 6% and 6.5%, impacting affordability for buyers and monthly payments significantly.

• What to Watch:

  • Rates are influenced by the economy and 10-year treasury yields.

  • Lower rates often spark buyer activity, as seen in 2024 when rate drops led to increased home sales.

3. Rents Will Stay High but Rise Slowly

• 2024 Trends: Rents in Seattle remained flat, increasing less than 0.5%.

• 2025 Projections:

  • Rents will remain steady due to 13,000 new apartments set to hit the market.

  • The Eastside saw larger rent increases (3–5%) than Seattle, making suburban areas less affordable for renters.

• Future Impact:
  With fewer permits pulled for apartment construction, rent prices could increase again starting in 2026 as supply diminishes.

4. The Office Market Remains Strained

• Current Trends:

  • Downtown office usage is at just 56% of pre-pandemic levels.

  • Corporate leasing remains slow, particularly among tech companies.

• What This Means:

  • Continued remote work policies may influence where people choose to live, with some relocating closer to offices if companies mandate a return.

5. Debates Over Housing Density Will Intensify

• Seattle’s One Plan: The city aims to increase housing density by allowing more units on single-family lots.

• Community Opposition:

  • Some residents resist higher-density developments in their neighborhoods.

  • Developers may find more opportunities under potential deregulation and tax cuts.

• Why It Matters:

  • Increasing housing density is critical to meeting demand, but balancing growth and preserving community character remains a challenge.

What Do You Predict for 2025?

What do you think will happen with Seattle’s housing market this year? Will prices rise as predicted? How will interest rates and rents shape the market?