Magnolia is close in to downtown, has great parks and is a tight knit community. It has so many things going for it, and yet is a bit separate, that's why it's known as the Mayberry of Seattle. Currently homes are selling quickly here. One would imagine as the Seattle Market goes, so will Magnolia.
Perhaps the bigger question (assuming you're seeking financing) is what will mortgage interest rates look like a year from now? We've seen a large jump within the past 2 months and that, perhaps more so than home prices, might be the reason buyers are left on the sidelines.
I am pending on a Magnolia listing. We received multiple offers and my sellers are thrilled with the results. It remains an excellent time to list your home. I would be delighted to consult with you at no obligation to give you an opinion on what you could expect to receive if you were to list your townhouse now.
Magnolia is a great neighborhood which has always been popular. As long as the general market does well, I suspect Magnolia will as well. No one can foresee the future, but we can make reasonable projections. I would say, if you like Magnolia and plan to live in your next house for 3-5 years or more, you will do as well as anyone.