Over the past four years, the real estate market, locally and nationally, has defied all norms and expectations. The pandemic, the rise of remote work, and fluctuations in the interest rate all affected where we are now. In 2025, the data indicates a return to normalcy.
Last year was anything but normal. By the middle of December, we’d seen 1,124 residential sales in our neighborhoods in 2024. That was up 6.64 percent from 2023’s 1,054. Seems like a solid year. However, we had 1,524 transactions in 2022, so the overall market is down a whopping 26.25 percent.
That steep drop is tied directly to the rise in interest rates in 2022. The average 30-year fixed mortgage rates that year jumped up about three points. In January of 2022, the rate was 3.4 percent. By May, they’d climbed to around five percent and kept going, peaking at seven percent that October and settling at about 6.4 percent by the end of that year. There were hopes that mortgage rates would follow when the Federal Reserve cut interest rates in 2024, but that didn’t happen.
That’s a lot of numbers, and here’s one more. The absorption rate – or the average time homes for sale stay on the market – was 5.1% in the middle of December 2024. That means there were five months of available inventory. Real estate analysts define a neutral market as four to six months of active supply, putting us directly in the middle.
A neutral market levels the playing field for buyers and sellers, creating more normal conditions for both. You won’t see the crazy bidding wars, price escalations, and contingencies waived. We saw low inventory as well in 2024. Fewer homes were on the market, but fewer buyers were ready to buy.
What’s next
In 2025, the market is heading in the right direction. The election is over, so that uncertainty is gone. However you feel about the result, there’s heavy speculation that the new administration will chip away at the higher mortgage rates. Creating momentum in the real estate market creates movement in other areas of the economy.
With uncertainty gone, consumer confidence rebounds. People have also gotten used to the idea that they won’t see two to three percent rates any time soon, making them more comfortable with a home purchase.
Analysts are predicting a robust 2025 in real estate. So do I. Going past the speculation and the data, my team and I spent the end of last year meeting with prospective sellers and buyers who are ready to go. We’ve been busy with home evaluations for sellers and planning meetings with buyers, with more scheduled. These are great signs heading into the year.
The traditional strong spring market kicks off in March. This year, though, we may see a busy January and February. That, of course, could get tamped down by snow or other unforeseen events. But all indications are that people are ready to re-enter the market.
What to do now
If you haven’t already, now’s the time to get your plan together. You’ll have an advantage when it comes time to act.
If you’re selling, you have to put the work in to sell it. Look at your home from a buyer’s perspective, inside and out. Look carefully at your landscaping, the condition of the home exterior, and even your roof. Inside, there may be things you’ve overlooked while living there but now see – the sagging cabinet door under the kitchen sink, the worn carpet in a spare room.
Get your house in the best possible condition well before it’s on the market. Good photos can make or break whether you get showings — it’s the first impression for buyers. According to the data, the more showings your property gets, the better your offer will be.
While prices are still at historical highs, don’t get greedy. You also have to price it right, for the market we’re in now. In a neutral market, you likely won’t see the frenzy of escalating offers and waived contingencies. Appraisals and inspections are back on the table.
The best way to be prepared is to have an experienced broker come in with fresh eyes to do an evaluation and create a plan to go to market. Choose someone with experience and a broad network of professionals who can get your home in turnkey condition. I have valued, longtime partnerships with contractors, stagers, and photographers who can polish and present your home in top condition. My team and I know how to market a home for the best results, so your return on that investment will come.
Buyers also need a solid, actionable plan. Get your financing and approvals in place. With a neutral market, you’re in a good position. You’ll have time. When you’re making this kind of decision and investment in your future, time is an advantage. With the right plan and a broker with experience and established relationships, you’ll be ready to hit the ground running when the market takes off.
The past four years have been a rollercoaster ride in real estate. You may have questions about how it affects you, your investment in your home, and your and your family’s future. My team is one of the top real estate teams in the state. We’re experienced with all the changing market conditions, and base decisions on the data. Madison Park is my neighborhood — my home, office, and team are right here. If you have any questions or concerns, my door is always open to you.
Wishing you all a happy new year!
Chris Sudore is a Madison Park resident and Managing Broker at Coldwell Banker Bain | Global Luxury.Reach him at KingCountyEstates.com or a t Chris@KingCountyEstates.com