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Seattle’s cooling real estate market widens budget shortfall

Published on November 29, 2022

Three new construction craftsman revival style homes in Seattle
Image Credit: Joe Mabel (CC BY-SA 3.0)

City officials had to rework the budget this month after new forecasts showed Seattle will likely bring in tens of millions of dollars less than previously expected over the next two years, including a significant drop in real estate-related tax revenue.

As inflation persists, interest rates remain high and many people find themselves locked out of buying a home, forecasters expect “a dramatic decline in the number of homes sold and a modest decline in prices,” Ben Noble, director of the Seattle Office of Economic and Revenue Forecasts, told council members in early November.

That matters to the city budget because of a tax charged on each sale, called the real estate excise tax, or REET. The city now expects REET revenue to be $64 million lower than once expected between now and 2024.

Home prices “don’t go down as quickly as they go up, usually. What happens is people just don’t sell,” said Steven Bourassa, chair of the University of Washington’s Runstad Department of Real Estate.

Continue reading at The Seattle Times.

Originally written by Heidi Groover for The Seattle Times.
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