Fourth Quarter Regional Real Estate Report: Housing Economics with Jeff Tucker

Fourth Quarter Regional Real Estate Report

This is a recurring series of blog posts taking a closer look at the U.S. economy and several major regional markets in Windermere’s nine-state footprint. Updates will be released on a quarterly basis.

*This Stephanie & Christine post specifically focuses on regions in Washington State.
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Economic Overview

Last year did not deliver the hoped-for breakout from the low-sales housing market that has persisted since interest rates skyrocketed in 2022. Just over four million existing homes sold in 2025 – nearly identical to the totals in 2023 and 2024.

Mortgage rates edged lower in the fourth quarter, falling from an average of 6.35% in September to 6.19% in December. That downward trend continued into early 2026, particularly following the announcement that Fannie Mae and Freddie Mac would purchase additional mortgage-backed securities.

Source: Freddie Mac via FRED.

The labor market continued to soften in the fourth quarter, with negative total payroll changes after anemic job growth in the third quarter.

Source: BLS via FRED.

The following is a detailed overview of housing trends across two regional markets within Windermere’s footprint during the fourth quarter of 2025. They include the Greater Seattle Area, and Northwest Washington State.

To see overview of Greater Portland area, Greater Sacramento Area, the Spokane, WA and Cour d-Alene, ID, and Salt Lake County, UT markets, see full post here.

Greater Seattle Area (King, Snohomish, Pierce, and Kitsap Counties)

The fourth quarter cemented the defining themes of 2025 for the Seattle-area housing market: higher inventory and more negotiating power for buyers. Active listings totaled nearly 5,200 at year-end, which was 31% higher than at the end of 2024, yet well below the more than 9,000 listings on the market as recently as September, reflecting the typical seasonal pullback in the fall.

The fourth quarter is typically the low-water mark for new listings, and 2025 was no exception: just under 1,700 new listings hit the market in December, barely 2% more than a year earlier. That modest year-over-year increase marked a major cooldown from the faster pace of new-listings growth seen earlier in the year.

Listings continued to linger on the market longer in the fourth quarter compared to the prior year. In December, homes averaged 47 days on market, up from 39 days in December 2024. January will likely mark the seasonal high-water mark before time on market plunges with the onset of the spring selling season later in the first quarter.

Closed sales in the fourth quarter generally fell short of fourth-quarter2024 levels, which were boosted by a frenzy of buyer activity following the Federal Reserve’s initial interest rate cuts in September of that year. Closed sales year over year declined 8% in October and 13% in November, before rebounding to a 2% year-over-year increase in December.

Cooler demand this quarter showed up in prices, too. October and November saw median sale price drops of 1% and 3% from 2024, before ending the year at $725,000, about 1% higher than the end of 2024. High inventory tends to depress price growth, as sellers are forced to compete for limited buyers.

The fourth quarter brought 2025 to a subdued close in the Seattle-area housing market, with no surge of activity to rival the fourth quarter of 2024 and higher inventory continuing to weigh down prices. That said, the new year is kicking off with much lower interest rates than a year ago, which may be enough to jump-start buyer demand after a quiet winter.

Northwest Washington – Skagit, Whatcom, San Juan, and Island Counties

The market conditions in the four northernmost counties of Western Washington are experiencing a major shift in favor of buyers.

At the end of December, there were 1,121 active listings, up 21% from a year earlier. That marked a slowdown in inventory growth in the fourth quarter, down from increases of 30% or more in the middle of the year.

The flow of new listings fell sharply in the fourth quarter, even by seasonal standards. Some listings may have been affected by flooding during the atmospheric rivers that slammed Washington State; others may have been withheld by sellers clued into the cooler selling conditions.

Days on market continued to climb compared to a year earlier, with homes in December taking about five days longer to sell than they did at the same time a year earlier.

Closed home sales in the fourth quarter of 2025 generally trailed fourth-quarter 2024 levels, except for a modest uptick in December. In total, the 1,210 closed sales for the quarter fell about 4% short of the 1,251 homes sold in the fourth quarter of 2024.

Compared to the same time the previous year, median home prices were virtually flat in November and December, after a brief bump in October. This marks a continuation of the cooldown of price growth that had characterized 2024 and early 2025.

Fourth quarter confirmed that higher inventory levels finally gave buyers more negotiating leverage in Northwest Washington.

Conclusion

All of the markets covered in this report shifted in buyers’ favor in 2025, though some, like Salt Lake County, show that the pendulum can—and will—begin to swing back toward more balanced conditions.

Going forward, buyers should be aware that in most markets, there are more listings than in recent years, home prices have remained roughly flat for at least a year, and mortgage rates are near three-year lows. Together, these factors create a strong opportunity to buy. That said, buyers should also be mindful of the usual spring surge in competition, which will accelerate home sales and push prices higher, as it does every year. Savvy buyers can try to get ahead by shopping earlier, but they should also be prepared to write a competitive offer if their ideal home hits the market this spring.

For sellers, the peak selling season is fast approaching. But even in a more balanced market, homes do not sell themselves. The best outcomes still depend on presenting the home well, setting the right list price, and marketing effectively to the right buyers. With the right strategy, this spring presents a great opportunity to sell for the best possible price, especially as lower mortgage rates bring more buyers off the fence.

Sources: TrendGraphix analysis of NWMLS, RMLS, Spokane MLS, MetroList MLS, and Wasatch Front MLS data.

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