Q1 2025: King & Pierce County Real Estate Market Update
The excitement continues! There is a lot to talk about as we just wrapped up Q1 for the 2025 real estate market! Interest rates and housing prices continue to dominate conversations. Let's dive in and dissect this data at a national and local level as we head into Q2.
Inventory: The upward trajectory of national housing inventory persists, indicating a steady movement towards the pre-COVID-19 levels- widely regarded as indicative of a balanced market.
This national pattern is reflected in King County, where new residential listings in March surged to 2,498, a 15% increase year-over-year. Furthermore, the total active listings in King County have jumped by a significant 49% compared to March 2024. Pierce County is experiencing a similar dynamic, with new listings up 8.5% and total available supply increasing by 27% compared to the previous year. This indicates both an influx of new sellers and a growing pool of existing, unsold homes, providing buyers with more options.
Across the nation, unsold inventory is nearly 35% higher than last year, with weekly increases continuing. Despite this positive trend in buyer options, it's important to note that national inventory still remains approximately 20% below 2018 levels.
Home Prices: Nationwide, the combination of both existing listings and newly listed homes entering the market is currently exerting downward pressure on home prices in many regions. Notably, several Sunbelt states, including Texas, Florida, Arizona, and South Carolina, are experiencing year-over-year declines in home prices.
Locally, the Puget Sound housing market is also responding to these inventory shifts, albeit with continued price appreciation, just at a slower pace. In King County, the median single-family home price rose to $977,500 in March, a 3.4% increase compared to the same month in 2024. This growth represents a significant deceleration from the 8.4% year-over-year increase observed between 2023 and 2024.
Similarly, Pierce County experienced a 2.7% year-over-year increase in its median single-family home price in March, reaching $565,000, compared to a 5.7% increase between 2023 and 2024.
The slowing of appreciation in both King and Pierce Counties shows us the impact of increased inventory. Buyers now have a wider selection of properties to consider. This expansion of supply, occurring alongside ongoing fluctuations in interest rates, is a key factor contributing to the deceleration of aggressive price appreciation.
However, a deeper look into recent sales data reveals a more nuanced picture. In March 2025, despite the increased inventory, a substantial 38% of homes sold in King and Pierce Counties still closed above the asking price, while 32% sold at asking, and 30% sold below asking. This suggests that while inventory is rising, a significant portion of the market continues to experience competitive bidding, indicating that demand, though potentially softening, remains a powerful factor. The fact that a majority (38% + 32% = 70%) of homes are still selling at or above asking price implies that despite the increased inventory, the Puget Sound region still leans towards a sellers' market.
Days on Market: King County's housing market shows a consistent pace, with the average time a home spends on the market holding steady at 31 days, mirroring 2024 data. This contrasts with the faster market of 2023, where homes sold on average 10 days quicker. Currently, while nearly a third (30%) of King County home sales take longer than 30 days to close, the majority (60%) are still finalized within that time frame. Despite a significant 49% surge in total active listings, buyer demand in King County has remained relatively stable.
In contrast, Pierce County's market has seen a more noticeable shift towards longer market times. The average days on market has increased to 48 days, up from 41 in 2024. Notably, a significant 65% of Pierce County listings are now taking longer than 30 days to sell, a trend opposite to that observed in King County.
Interest Rates: Interest rates continue to dominate the conversation in 2025 as the US economy continues to navigate turbulence that is closely tied to the newly enacted trade policies. The mortgage market has not been immune to the volatility, and interest rates remain top of mind for consumers and industry professionals alike.
Tariffs can affect mortgage rates by impacting inflation and economic growth, which in turn influences the Federal Reserve's interest rate decisions. Tariffs can increase inflation because it would increase the cost of imported goods and businesses may pass these increased costs onto consumers in the form of higher prices.
The U.S. Federal Reserve (Fed), often raises interest rates to cool things down when inflation heats up. Elevated borrowing costs typically lead to reduced consumer and business spending, thereby aiming to curb price increases.
By understanding this economic dynamic, we can understand that tariffs could create the perfect storm for housing market uncertainty by raising mortgage rates at a time when we finally have better supply in much of the country. This combined effect could continue to increase downward pressure on home prices, impact buyer affordability, and the economic prospects of homeowners who may rely on their equity.
However, it's crucial to contextualize the current situation. While interest rates are a key concern, the current 30-year fixed mortgage rate of 6.83% is actually below the approximately 7% observed at this same time last year.
Furthermore, comparisons to the housing bubble era highlight a critical distinction in new listing volumes. During the peak of the housing crisis, new listings surged to unsustainable levels of 250,000 to 400,000 per week nationally for an extended period of time.
In contrast, as we enter the peak buying and selling season, current national new listings are averaging around 75,000 per week, with recent figures emphasizing this trend:
2025: 76,270
2024: 66,776
2023: 48,556
