Tacoma Housing Market Trends and Forecast for 2024

The Tacoma housing market is leaning towards being a seller’s market. With prices on the rise, homes selling swiftly, and a significant percentage of properties selling above the list price, sellers hold a favorable position. However, buyers should be prepared for a competitive environment, where quick decision-making and strategic offers are crucial.

Nestled in the scenic beauty of the Pacific Northwest, Tacoma, WA has captured the hearts of both residents and potential homebuyers alike. With its stunning natural landscapes, vibrant cultural scene, and booming economy, it’s no wonder that the Tacoma housing market has been a topic of interest for many.

Tacoma Housing Market Trends in 2024

How is the Housing Market Doing Currently?

In January 2024, the Tacoma housing market showcased robust growth, with home prices experiencing a notable surge of 7.0% compared to the previous year. According to Redfin, the median home price in Tacoma reached $460,000, painting a picture of a thriving real estate landscape. This positive trend is further emphasized by the decreased time homes spend on the market, dropping from 38 days to 24 days on average.

How Competitive is the Tacoma Housing Market?

The Tacoma housing market is highly competitive, with a median sale price that is 14% higher than the national average. Homes in Tacoma sell at a remarkable pace, spending only 20 days on the market on average. The competitive nature is evident in the multiple offers received, some with waived contingencies. Additionally, homes sell for approximately 1% below the list price and go pending in around 20 days. Exceptionally desirable properties can even fetch 2% above the list price and go pending in a mere 6 days.

Are There Enough Homes for Sale in Tacoma to Meet Buyer Demand?

The Tacoma housing market faces the challenge of balancing supply and demand. While the number of homes sold in January was slightly lower than the previous year, with 150 homes sold compared to 152, the market remains active. The average sale-to-list price ratio stands at 99.3%, reflecting a 0.5% increase year-over-year. Homes sold above list price account for 29.3%, a 1.7% increase compared to the previous year. However, there is a positive sign in the decreased percentage of homes with price drops, showing a 14.9% decrease year-over-year, currently standing at 29.5%.

What is the Future Market Outlook for Tacoma?

Considering the current trends, the future outlook for the Tacoma housing market appears optimistic. The steady increase in home prices, coupled with the high demand and competitive nature of the market, suggests a resilient real estate landscape. However, continuous monitoring is essential to gauge any potential shifts in market dynamics.

Between Nov ’23 and Jan ’24, 21% of Tacoma homebuyers considered moving out of Tacoma, while 79% preferred to stay within the metropolitan area. Interestingly, across the nation, 3% of homebuyers expressed interest in moving into Tacoma from outside metros. The top three metros contributing to this influx were San Francisco, New York, and Washington.

Tacoma Apartment Rent Prices 

As of February 2024, the median rent for all bedroom counts and property types in Tacoma, WA is $1,695. This is -11% lower than the national average. Rent prices for all bedroom counts and property types in Tacoma, WA have decreased by 17% in the last month and have decreased by 3% in the last year.

Tacoma Housing Market Forecast for 2024 and 2025

According to Zillow, the average home value in Tacoma stands at $460,851, reflecting a 2.5% increase over the past year. This growth is indicative of a thriving real estate market in the region. Homes are also known to go pending in a relatively swift 17 days.

Inventory Metrics (as of January 31, 2024):

• For Sale Inventory: 418
• New Listings: 137

Examining the inventory metrics provides insights into the current availability of homes in Tacoma, with 418 properties listed for sale and 137 new listings as of January 31, 2024.

Sale and List Prices (December 31, 2023, and January 31, 2024):

• Median Sale to List Ratio (December 31, 2023): 1.000
• Median Sale Price (December 31, 2023): $427,500
• Median List Price (January 31, 2024): $478,991

The median sale to list ratio of 1.000 indicates a balanced market where properties are typically sold at their listed prices. The median sale price as of December 31, 2023, is $427,500, while the median list price as of January 31, 2024, stands at $478,991.

Percent of Sales Metrics (December 31, 2023):

• Percent of Sales Over List Price: 33.7%
• Percent of Sales Under List Price: 40.3%

Understanding the percentage of sales above and below list price provides valuable insights into market competitiveness. As of December 31, 2023, 33.7% of sales were over list price, while 40.3% were under list price.

Are Home Prices Dropping in Tacoma?

Contrary to a drop in home prices, the data indicates a 2.5% increase in the average home value over the past year. This suggests a stable and appreciating market rather than a decline. Prospective buyers should consider this upward trend when assessing the investment potential in Tacoma real estate.

Will the Tacoma Housing Market Crash?

Based on the current housing metrics and the observed growth in average home values, there is no immediate indication of a housing market crash in Tacoma. The balanced median sale to list ratio of 1.000 and the competitive nature reflected in the percent of sales metrics do not signal an imminent crash. However, market dynamics can change, and regular monitoring is advised for a comprehensive understanding.

Is Now a Good Time to Buy a House in Tacoma?

For potential buyers, the question of whether now is a good time to purchase a house depends on individual circumstances and goals. With the market leaning towards a seller’s advantage, buyers may face competition. However, the steady increase in home values suggests a potentially favorable investment. Consulting with real estate professionals and considering personal financial situations can aid in making an informed decision on whether to buy a house in the current Tacoma market.

Tacoma Real Estate Investment Overview

Tacoma, Washington, has emerged as a favorable destination for real estate investors due to its strong housing demand and sustained growth. As the state’s third-largest city, Tacoma has a population of around 220,000, and it’s growing at a rate of 0.78% annually. Furthermore, it is a satellite city located at the southern end of the Seattle metropolitan area, which is home to approximately a million people. The Tacoma housing market has remained resilient in recent years, and real estate investors have found favorable returns in the short term.

Top Reasons to Invest in Tacoma Real Estate:

• Strong Demand: The demand for housing in Tacoma has consistently remained strong due to its growing population and proximity to the Seattle metropolitan area. Additionally, Tacoma is home to several prominent employers, including Joint Base Lewis-McChord, MultiCare Health System, and the Port of Tacoma. This demand is expected to continue to increase, making Tacoma an excellent destination for real estate investors.
• Affordable Prices: Despite being a part of the Seattle metropolitan area, Tacoma offers more affordable housing options compared to Seattle. The median home value in Tacoma is around $460K, while the median home value in Seattle is > $800K. This affordability factor makes it an attractive destination for first-time homebuyers and real estate investors alike.
• Positive Growth Outlook: According to the Zillow Home Value Index (ZHVI), Tacoma’s average home value has steadily grown over the past year, indicating a positive growth outlook. Additionally, the Tacoma housing market is expected to continue growing in the coming years, making it a favorable destination for real estate investors.
• Low Vacancy Rates: The vacancy rates in Tacoma are relatively low, indicating a stable and active housing market. This is good news for real estate investors looking to rent out their properties as they can expect a steady stream of rental income.
• Diverse Housing Options: Tacoma offers a diverse range of housing options, from single-family homes to townhouses and condos. This diversity makes it easier for real estate investors to find a property that suits their investment goals.
• Economic Growth: The economy in Tacoma has been growing steadily, with several new businesses and industries moving to the area. This economic growth is expected to continue in the coming years, which will likely further boost the demand for housing in Tacoma.

In conclusion, the Tacoma housing market offers a favorable destination for real estate investors due to its strong demand, affordability, positive growth outlook, low vacancy rates, diverse housing options, and economic growth. With these factors in mind, it’s easy to see why Tacoma is becoming a popular destination for those looking to invest in real estate.

How Should Buyers Invest in This Market?

There is no one-size-fits-all answer to how buyers should invest in the Tacoma real estate market, as each buyer’s situation is unique. However, there are some general tips that can help buyers make informed investment decisions:

• Work with a local real estate agent: Working with a local agent who is familiar with the Tacoma market can be invaluable. They can provide insight into market trends, help buyers identify investment opportunities, and negotiate on behalf of their clients.
• Conduct thorough research: Buyers should do their due diligence and research the Tacoma market before investing. This can include analyzing historical sales data, examining current market trends, and identifying areas with potential for growth.
• Consider long-term investment goals: Real estate investing can be a long-term strategy, so buyers should consider their long-term investment goals. For example, if a buyer is interested in rental properties, they should consider factors such as rental rates, vacancy rates, and potential for future rental demand.
• Have a solid financial plan: Investing in real estate can be expensive, so buyers should have a solid financial plan in place. This can include having a pre-approval for a mortgage, a solid down payment, and a plan for ongoing maintenance and repairs.
• Diversify investments: Investing in real estate can be a great strategy, but it’s important to diversify investments to minimize risk. Buyers should consider diversifying their investments across different types of real estate, geographic locations, and asset classes.

References

• https://www.zillow.com/tacoma-wa/home-values
• https://www.nwmls.com/
• https://www.zumper.com/rent-research/tacoma-wa
• https://www.redfin.com/city/17887/WA/Tacoma/housing-market
• https://www.neighborhoodscout.com/wa/tacoma/real-estate
• https://www.realtor.com/realestateandhomes-search/Tacoma_WA/overview
• https://www.fhfa.gov/DataTools/Tools/Pages/FHFA-HPI-Top-100-Metro-Area-Rankings.aspx?