As 2026 approaches, Seattle condo owners are looking at a market that is neither booming nor collapsing. Prices have retreated from their 2023 highs but remain significantly above the pandemic-era lows of 2020. Sales activity remains steady, inventory levels are elevated, and buyers have more leverage than they did a few years ago.
What this means for you as an owner is simple but not easy: the decision to sell, hold, or rent is no longer obvious. Instead of reacting to headlines, the smarter move is to evaluate your specific position in light of today’s data and tomorrow’s uncertainties. That’s where careful analysis and expert guidance come in. This article will walk through the latest Seattle condo market trends and key considerations to help you determine the right move for your situation.
Where the Seattle Condo Market Stands Now
Seattle’s condo market today looks very different than it did just three years ago:
· Median price: $525,000 in September 2025, down from $575,000 a year prior.
· Sales volume: 189 condos sold in September 2025 – up from the 2024 trough (when monthly sales dipped as low as ~140 units) but still far below historic peaks of 300+ sales per month.
· Time on market: 50 days on average for September 2025, compared to just 32 days on average during the hotter market of 2022–2023. Homes are taking longer to sell as buyers become more selective.
· Inventory: Around 5.4 months of supply (as of September 2025), the highest level in more than a decade. A six-month supply is generally considered a balanced market, so today’s inventory tilts the advantage toward buyers more than at any time since the early 2010s.
Zooming out, condos are still worth approximately 23% more than they were five years ago. The market has cooled, but it has not collapsed. Prices are off their peak, yet they remain well above the lows seen in 2019 and 2020. In short, the Seattle condo market has shifted to a plateau: neither a frenzy nor a free-fall.
Lessons from Past Seattle Condo Market Cycles
Seattle condo prices have fluctuated in cycles over the past 15+ years. The run-up to a peak in 2018, the dip through 2019, and the surge again by 2022–2023 (followed by the recent cooling) illustrate the market’s cyclical nature. Despite these fluctuations, long-term condo values have generally trended upward.
Seattle condos have always moved in cycles, and those cycles are helpful guides for perspective:
· 2007–2015 (Great Recession and Recovery): After the 2007 peak, condo values fell nearly 40% and didn’t fully recover until around 2015. Owners who sold at the bottom took heavy losses, while those who held eventually saw values bounce back to pre-recession levels and beyond.
· 2018–2022 (Tech Slowdown to Pandemic Boom): The 2018–2019 downturn shaved 15–20% off prices, and the recovery stretched until 2023. By late 2023, median condo prices finally exceeded their 2018 highs. This cycle shows that rebounds can take several years, but patient owners were eventually rewarded as the market hit new highs.
· 2023 Temporary Highs: Despite interest rate headwinds, limited supply pushed median prices to a short-lived peak in spring 2023, but this was more of a “spike” than a sustainable recovery.
· 2023–2025 (Current Slowdown): The current slowdown has lasted over two years, with values down about 10–15% from the 2022 peak. After a frenzied run-up in 2021–early 2022, higher interest rates and cooling demand led to a gradual slide. The takeaway is that waiting for another significant surge in appreciation could mean holding for years to come. On the other hand, owners who weather downturns often see significant long-term gains when the next upcycle comes.
The lesson from these past cycles is that timing the market is difficult. If you have a long enough horizon, Seattle real estate tends to reward those who are patient. However, your personal timeline and finances may not align with waiting out a multi-year slump, which is why it’s crucial to consider other factors beyond simply hoping for another boom.
Questions Every Seattle Condo Owner Should Weigh
Before you decide 2026, consider these key questions:
- Equity and Financial Goals: Do you want to lock in your 20–23% appreciation since 2020, or are you comfortable leaving that equity in the market for the chance of future gains? Selling captures certainty and cash in hand. Holding leaves room for upside (and downside) as the market evolves. Consider whether realizing your gains now would further your financial goals or if this property is part of a longer-term wealth strategy.
- Mortgage Position: What is your current mortgage rate and balance? If you bought or refinanced in 2020–2021, you may have an interest rate near 3%, which is a hidden asset in today’s environment. Replacing that loan with a new one at 6–7% (the prevailing rates in 2025) would significantly increase your monthly costs on a new purchase. If you sell now and plan to buy another home, factor in the value of your existing low-rate mortgage — holding onto your condo (and that cheap financing) could make sense if you’d need to borrow at a much higher rate to buy your next place.
- Rental Viability: Could your condo generate positive cash flow as a rental property? Seattle’s median rent for a condo or one-bedroom apartment is roughly $2,026 per month as of late 2025. Washington’s new rent cap law allows annual increases up to about 9.7% in 2026. Run the numbers: what rent could you reasonably charge, and would that cover your mortgage, HOA dues, property taxes, insurance, and maintenance? In some cases, renting out the condo (even at break-even cash flow) might be attractive if you expect property values to rise in the future and want to hold onto the asset.
- Tax Implications: If the condo is your primary residence, remember that you can exclude up to $250,000 of capital gains from federal taxes if single (or $500,000 if married) when you sell, provided you’ve lived there 2 out of the last 5 years. That tax break could make selling more appealing if you have significant untaxed gains. On the other hand, if the unit has been an investment property, you might consider a 1031 exchange to defer capital gains by swapping into another investment property. Also factor in Washington’s real estate excise tax (~1.7–1.8% of the sale price for most condos in Seattle). Always consult a CPA or tax advisor for guidance on your specific situation, but don’t neglect the tax angle in your decision.
- Lifestyle and Personal Needs: Your life plans are often the deciding factor. Are you relocating or do you need a larger space? Are you downsizing or moving out of the city for a job or family reasons? If you anticipate you might need the condo again in a couple of years (say, you’re temporarily moving and could return to Seattle), holding or renting it out might be wiser than selling and potentially having to re-buy in a few years. On the other hand, if this chapter of your life in the condo is over, selling could simplify your life (one less property to manage) and free up cash for your next steps. Practical life considerations often matter as much as the market data.
By reflecting on these questions, you’ll get a clearer picture of whether selling, holding, or renting aligns best with your personal and financial situation.
Signals to Watch for Seattle Condos in 2026
A few market indicators in 2026 could tip the balance in one direction or the other:
- Mortgage rates: After climbing in 2022–2023, interest rates have shown signs of dipping. The average 30-year fixed mortgage rate is expected to be around the mid-6% range by late 2025. Many forecasts (from sources like Fannie Mae and the MBA) suggest rates might fall toward 5% by late 2026[1][2] if inflation continues to ease. If rates indeed trend down, buyer demand for condos could strengthen (since lower rates improve affordability), which would be a positive signal for those considering selling. Conversely, if rates remain high or spike again, the condo market could remain sluggish for longer. Keep an eye on Fed policy and economic reports that influence mortgage rates.
- Inventory levels: Monitor the months of supply of Seattle condos in 2026. If inventory starts to shrink (for example, dropping from 5+ months of supply back toward 4 months or less), that’s a sign the market is tightening up and moving back toward a seller’s favor. Lower inventory means less competition for sellers and often leads to stabilizing or rising prices. On the other hand, if inventory remains high or continues to grow (with consistently 6+ months of supply), buyers will have plenty of choices, and prices may remain soft. Seasonal trends also matter — inventory typically drops in winter and rises in spring — so compare year-over-year, not just month-to-month.
- Local economy and jobs: Seattle’s economy, especially the tech sector, has a strong influence on the condo market. Job growth (or losses) among major employers, such as Amazon, Microsoft, Google, and the startup ecosystem, can directly impact housing demand. If 2026 brings a resurgence of tech hiring or another industry boom, you could see a new wave of buyers (or renters) entering the market, which would support condo prices. Alternatively, if layoffs or a recession hit, demand could falter. Pay attention to economic forecasts for the Seattle area and company announcements. The condo market often lags economic shifts by a few months, but the connection is real — a vibrant job market tends to fuel housing demand, while a weak one cools it.
- New condo development and policies: Although less volatile than the single-family home market, condos are also affected by the pipeline of new buildings and any changes in housing policy. If a lot of new condo units are set to hit the market in 2026, that added supply could soften prices for existing units (more competition). Conversely, if construction is slowing due to high costs or lending issues, the limited future supply could make existing condos more valuable. Also, keep an eye on any new Seattle housing regulations or taxes that could affect condo owners (for example, changes to rental rules, HOA regulations, or property taxes).
No single indicator will give a definitive answer, but watching these signals through 2026 will help you update your strategy. Real estate is dynamic, and being informed lets you adjust your plan rather than just reacting to the news.
Sell, Hold, or Rent? Framing Your Seattle Condo Decision
How do all these data points and questions come together? Ultimately, you have three broad paths: sell now, hold the condo (do nothing), or rent it out. Let’s frame what each option could mean for you:
Sell – Choose to sell if you want to capture your current equity and reduce exposure to condo-specific risks. By selling, you lock in the gains you’ve built up in recent years (despite the slight downturn from the peak) and convert that equity to cash or other investments. This can be smart if you’re planning a lifestyle change that requires liquidity (buying a house elsewhere, funding a business or retirement, etc.), or if you don’t want to worry about the condo market’s future ups and downs. Selling now also frees you from ongoing obligations like HOA dues, potential special assessments, maintenance, and the uncertainties of urban condo markets (which can be more volatile than suburban home markets). Keep in mind the transaction costs — agent commissions, excise tax, etc. — but if your equity gains are substantial, cashing out can provide certainty and peace of mind. In short, sell if you value certainty and have other uses for the money tied up in your condo.
Hold – Stay put (or keep the condo vacant/for personal use) if you’re positioned with a firm financial footing and a long-term view. For many, this means you have a low mortgage rate that you don’t want to give up, you can comfortably afford the payments (even if the condo sits empty or as a second home), and you believe in Seattle’s long-term growth. Holding makes sense if you suspect that today’s prices don’t reflect the condo’s actual long-term value — perhaps you expect a rebound in a few years as the cycle turns. It also makes sense if the condo meets your lifestyle needs (you still enjoy living there, or plan to return to Seattle later). By holding, you avoid selling in a cooler market and potentially benefit from the next upswing. The risk, of course, is opportunity cost: your equity is “sleeping” in the condo, and the market could stay flat for a while. But if you’re not in a rush and have a low carrying cost, holding can be a prudent choice. In short, hold if you don’t need to sell, have advantageous financing, and are comfortable riding out a slow market for future gains.
Rent – Convert the condo into a rental if you want to generate income while retaining ownership. This path is a bit of a hybrid: you’re not selling, so you keep the long-term upside, but you’re putting the property to work in the meantime. Renting is attractive if the numbers pencil out — that is, if the rent covers most or all of your expenses, and you’re okay with becoming a landlord. In Seattle, rents have been strong, and with the new rent increase cap (~9.7% allowed in 2026), you have some predictable framework for income growth. Make sure to account for HOA dues (which can be high for condos), as well as maintenance, vacancies, and property management if you don’t want to handle tenant issues personally. Some condo associations also have rental caps or requirements, so verify you’re allowed to rent out your unit. The upside of renting is that someone else helps pay down your mortgage while you wait for a better market to sell (or keep it indefinitely as an investment). You also retain flexibility — you could move back in later or sell in a year or two if conditions improve. The downsides include being a landlord (which isn’t for everyone) and the possibility that property values or rents don’t rise much, meaning you’re holding an asset with modest returns. In short, rent if you want to keep the condo long-term, can handle the responsibilities (or hire someone who can), and the rental income makes financial sense for you.
There is no one-size-fits-all answer. Some owners will prioritize cashing out, others will prioritize long-term wealth building, and others might find a middle ground in renting. The key is to align the decision with your personal financial situation, risk tolerance, and life plans.
The Bottom Line for Seattle Condo Owners
Seattle condos in 2026 are not a one-size-fits-all story. The market data shows resilience but also some headwinds. Prices are down from the peak, yet far above where they were a few years ago. Buyers have gained power, but that could shift again if conditions tighten. In this kind of balanced-but-cool market, the right move for you depends on how the numbers intersect with your goals.
The most important thing is that you make an informed decision rather than a reactive one. Don’t let scary headlines or rosy forecasts dictate your move. Instead, consider your equity, mortgage, life plans, and market indicators. Run the scenarios: What does your net proceeds look like if you sell now (after all fees)? What would your cash flow be if you rent it out? What’s the upside if you hold for another 5 years versus the downside if values slip further? By examining these, the best path—be it selling, holding, or renting—usually becomes clearer.
My role as your real estate advisor is not to push you into selling at a “perfect” time, but to help you analyze your options with clarity. The decision to sell, hold, or rent should feel right for you after weighing the data and your personal priorities. If you own a Seattle condo and are unsure of your best move for 2026, reach out to me, Zac Lee. Let’s sit down, review your equity position, crunch the numbers, and craft a plan that aligns with your next chapter. With careful analysis and the right guidance, you can move forward in 2026 with confidence that you made the best choice for your situation.
