In Q4 of any given year, we’d expect to see a slowdown and price drops in both the home sales and rental markets. For the home sale market, that was not the case. Notably, the home sales markets in Snohomish County finished on a high note with a 5% increase in single-family residential home prices from November 2021 to December 2021. King County has maintained an average of over $1M for the average sales price of a single-family residential home.
The rental market did not fall in line with the sales market in Q4 of 2021. Comparing Q4 2021 to Q4, we saw a more traditional slowdown and, in some cases, drops in the average and median rental prices. This performance is more typical of how housing markets behave during the last quarter of the year.
We’d expect rental prices to increase in Q1 of 2022 and continue to increase throughout the year. The home sales market is in a bind now as the inventory is at historic lows. Compared to Dec 2020, King, Snohomish, and Island County home inventory is down, 67%, 46%, and 48%, respectively. Fewer homes for sale means more renters and more pressure on the rental market that likely will lead to increased rents.
As an investor, you have the opportunity to get a higher return on investment for your properties in the rental market. As a renter, you may want to consider a new lease sooner than later to take advantage of the lower prices carrying over from Q4 2021.