Sluggish spring home sales stalk Seattle

Home shopping in the Seattle area was sluggish this spring, hampered by rising prices , extremely low inventory and stubbornly high interest rates that kept purchasing out of reach for many, real estate experts tell Axios.

Why it matters: 2024 is looking like another year of lethargic home sales nationwide, according to a recent CoreLogic report.

By the numbers: Sales of existing homes in the Seattle area were down 5% as of March compared to January 2019 — from 3,267 to 3,105, per CoreLogic's data, while sales of new homes dropped 19% from 502 to 407.

Zoom in: The Seattle area is experiencing housing scarcity , including new and existing homes, that's expected to last decades, according to an Urban Institute analysis of construction trends, subsidies and zoning laws.

• The median home price is rising in all four counties in the Puget Sound region: King, Snohomish, Pierce and Kitsap, according to real estate investment company Norada's June report .
• King County saw the most dramatic increase with a 12% year-over-year jump that pushed the median home price to $980,000, according to Norada.

The big picture: While new listings from sellers went up in May, rising 8% month over month and 13% above last year's low, existing home sales fell nationally in April and again in May, according to Seattle-based Zillow .

What they're saying: "The decrease in sales is a stark reminder that affordability is still a challenge, even as month-to-month improvements in inventory and interest rates emerge," said Zillow senior economist Orphe Divounguy in an emailed statement.

• "The spring market started with great expectations for interest rate decreases which did not materialize," said Lyndal Balliet, owner and chief operations officer at Re/Max Metro Eastside. "However, the biggest culprit for slower sales in the beginning of 2024 is ... incredibly low inventory — buyer demand is there, but with so few homes on the market, finding a home to buy is tough."

Zoom out: Pending sales of existing U.S. homes plunged in April to lows not seen since the pandemic shutdowns, Axios' Courtenay Brown reports.

• As homeowners shy away from moving, some shoppers have sought more options or better deals in new construction.
• Although that juiced new home sales in 2023, sales of new houses — which represent a relatively small part of the overall market — fell 7.7% in April from a year earlier, per census data .

Yes, but: Higher interest rates aren't fazing home investors .

• CoreLogic economist Thomas Malone wrote in the report that there is no real indication of widespread price drops or a substantial decline in interest rates and noted that strong rental demand could spur more investor home purchases .

What we're watching: Nationally, Zillow says that sellers are returning to the housing market, closing the gap between supply and demand, easing competition among buyers and cooling home price appreciation.

• But that's little relief to singles or middle- and working-class people in a market where million-dollar homes are almost the norm.