If you’ve been keeping an eye on the housing market in the Puget Sound region, you’ve likely seen how prices have fluctuated dramatically over the past few years. While national economic trends play a role, the local market’s trajectory often comes down to one simple concept: supply and demand.
Understanding how this fundamental economic principle affects home prices in areas like Seattle, Everett, Kirkland, Lynnwood, and Mukilteo is key to making smart decisions whether you’re buying or selling.
The Basics of Supply and Demand
In real estate, supply refers to the number of homes available for sale, while demand is the number of people actively looking to purchase a home.
- When demand exceeds supply, prices tend to rise. Buyers compete for fewer homes, often resulting in bidding wars and above-list-price offers.
- When supply exceeds demand, prices tend to level out or decline, and homes take longer to sell.
This dynamic plays out constantly in local housing markets, but in the Puget Sound region, a combination of economic factors, limited land, and regional growth have kept inventory low and demand high.
Recent Market Trends in the Puget Sound Region
1. A Persistent Inventory Shortage One of the most notable challenges in King and Snohomish counties is the limited housing inventory. Despite some seasonal fluctuations, the number of available homes for sale remains historically low. According to the Northwest Multiple Listing Service (NWMLS), the first quarter of 2025 showed a slight increase in new listings compared to 2024, but the overall inventory is still not meeting buyer demand.
This shortage is particularly evident in high-demand areas like Seattle and Kirkland, where zoning regulations and limited developable land make it difficult to add new housing at scale. Even in more suburban and growing areas like Lynnwood and Mukilteo, new construction is slow to catch up.
2. Buyer Demand Remains Strong Even as mortgage rates have remained higher than pandemic-era lows, buyer demand has not vanished. Strong job growth in tech, aerospace, and healthcare continues to draw people to the region. Younger buyers, many of whom have returned to the market after sitting out during interest rate hikes, are also fueling demand.
In Q1 2025, Snohomish County saw an increase in buyer activity compared to the same period last year, particularly in towns like Everett and Lynnwood where buyers are seeking more affordability while staying close to job centers.
3. Price Stabilization in Some Areas While the frenzied price growth of 2021 and early 2022 has cooled, prices remain high in many areas due to ongoing demand. In Seattle, for example, median home prices held steady year-over-year in Q1 2025, while in outlying cities like Mukilteo and Bothell, modest appreciation of 2-3% was reported.
That said, the days of 10-15% annual price increases appear to be over—at least for now. Instead, the market is adjusting to a new equilibrium where prices are largely dictated by local conditions, buyer budgets, and the pace of new listings.
What This Means for Sellers
If you’re considering selling a home in the next year or two, these dynamics should guide your timing and strategy.
- Low inventory continues to benefit sellers. With fewer homes to compete with, well-presented properties are still attracting strong offers.
- Strategic pricing is crucial. Today’s buyers are savvy and less likely to participate in heated bidding wars. Pricing at a competitive value can attract more interest and still drive stronger offers.
- Pre-listing preparation matters. Homes that show well and are move-in ready typically sell faster and for more money, even in a stabilizing market.
What This Means for Buyers
Buyers entering the market in 2025 may find a more balanced playing field than in years past, but that doesn’t mean deep discounts are likely.
- Act quickly on desirable properties. Even in a cooler market, well-priced homes in desirable neighborhoods still move fast.
- Be realistic about your budget. With mortgage rates still higher than they were in 2020-21, it’s important to factor monthly payments and long-term costs into your decision.
- Partner with an experienced agent. Navigating a market with tight supply and nuanced price trends requires local expertise.
The Long-Term Outlook
Looking ahead, the fundamentals of the Puget Sound housing market suggest continued upward pressure on prices over time. Even with fluctuations in interest rates or short-term dips in demand, the region’s desirability, strong economy, and geographic constraints will keep supply limited.
Efforts to increase density in cities like Seattle and Lynnwood may help, but large-scale relief for inventory issues is likely years away.
Final Thoughts: Let Grant Team Properties Be Your Guide
The bottom line is that supply and demand will continue to shape your real estate experience in the Puget Sound region. Whether you’re thinking about listing your home in Seattle, buying your first home in Mukilteo, or making a move in Snohomish or King County, your timing and preparation are key to success.
That’s where we come in. At Grant Team Properties at RE/MAX Elite, our local experience and deep market knowledge help you navigate the complexities of supply, demand, and everything in between.
Planning to buy or sell a home in the next year or two? Call us today at 425.483.4200 and let our team help you make the most of your next move.