Zillow: 2 WA cities among most popular markets; more balanced housing market around the corner

Woodinville and Edmonds are among Zillow’s most popular markets of early 2022.

"I love the community over here and everybody is just so nice. Everybody is willing to help wherever you go," said Heidi Likin. "Everything that you need is right here in Woodinville."

Likin said she’s been looking for a home in Woodinville for the last year and a half and said it’s extremely competitive. "Big cash offers, just goes so fast, every time you put your application in, it’s taken right out from under you," said Likin.

Zillow economist Nicole Bachaud said mortgage rates have taken a steep climb in the last six months alone, but with limited inventory buyers are still driving up those bidding wars and home values.

"So inventory is going to be really key there and getting us back to bit of a normal and healthy market again. We’ll likely start to see home value growth softening a bit, that’s not to say homes are going to get any cheaper, just that they’re not going to be getting as expensive quite as fast as they have been in the last couple of months," said Bachaud. "But, it’ll take quite a bit of time for us to get back to historical norms of 3 to 5% home value growth annually."

Mortgage demand plummets as interest rates hover near 13-year high

Homebuyer demand for mortgages tumbled last week as the average interest rate on the most popular U.S. home loan hovered near a 13-year high, a sign the red-hot housing market may be starting to cool off, according to new data from the Mortgage Bankers Association. 

LaTosha Thomas of Windermere Abode said she got a client under contract on Wednesday and is happy to see conversations at the negotiating table are returning.

"I think we are starting to see a slowing of the waiving of all of the contingencies and just sort of buyers having to give everything in order to get under contract, so that’s a really good trend that I hope keeps going," said Thomas.

Thomas is a real estate agent serving communities in the South Sound and said activity has been hot in the Tacoma, North Tacoma and Puyallup home markets.

"Do your research and know who you’re working with. It’s really important that you’re working with a local realtor who has local knowledge of the neighborhoods you’re most interested in working with," said Thomas. "Just be confident and don’t lose hope. Your home is out there for sure."

Bachaud said a lot of growth and movement is also happening in the rental market. She said rents up over 16 percent in the Seattle Market and will be putting pressure on a lot of household budgets.