In most parts of the United States, inventory is too low to keep up with demand. In the Pacific Northwest, that problem is starting to shift. Northwest MLS, an association that serves 26 counties across Washington state, reports that its markets now have two months worth of inventory, a figure not seen since January 2019. While this still qualifies as a “seller’s market” per industry standards (a market with less than four months of inventory), Northwest MLS also reports a drop of 30% in year-over-year sales.
Even as sales dropped, prices rose. The median price on closed sales of single-family homes and condos in June 2022 was $625,000, up from $589,000 in 2021. For single-family homes, prices went up 6.6%; for condos, 8.6%. In the four-county Puget Sound region, price changes ranged from a gain of about 2.7% in King County (from $789,000 to $810,000) to a jump of nearly 12.7% in Pierce County (from $501,500 to $565,000). The only counties of the 26 that saw a year-over-year drop in prices were Ferry and Island.
Seattle, Washington REALTORⓇ Karen Eddinger of RE/MAX Northwest has experienced a market shift:
“I just sold a home for over $3 million on Mercer Island and it’s a home that would have gone immediately five, six months ago,” she says.”Ever since May, I didn’t get as many offers as I would’ve gotten. I see people getting more price reductions. The property I sold had two price reductions before it came off the market and it’s a gorgeous home with a beautiful lake view so it was surprising that they still had to wait for the right buyer to come along.”
Stephen FitzMaurice, an eXp Realty agent who serves the Portland, Oregon metro area, confirms a similar state of affairs in Washington’s southern neighbor state.
“The big story right now is we’re down 30% in ending transactions compared to the same time in 2021,” he says.”There’s high inventory, about the same from 2021, but there’s a third fewer transactions, so buyers aren’t buying on the heavy amount of inventory we have. That typically leads to price drops but not yet, so we’re seeing prices flatline or even increase. A lot of homes aren’t selling or aren’t going to sell, so we’ll see listings canceled or not as many sales as last year.”
“The bigger story is all the Portland suburbs—metro areas within 70, 50 miles of Portland—are doing better than the city of Portland itself, so the drop in sales isn’t as significant; the prices are stable,” adds FitzMaurice. “That’s been true since the start of the pandemic— suburbs have been outperforming the city proper.”
Listed by Jackie Ashley of RE/MAX Northwest, this single-family, 3-bedroom home is located on a corner lot and features a built-in home garage. The property is currently listed for $449,000 but is expected to see a price adjustment.
Jackie Ashley, an Olympia, Washington REALTORⓇwith RE/MAX Northwest, has witnessed a shift in prices, “I’ve been seeing offers in at asking price and not much over, so that is a little bit of a change,” she reports.
Ashley attributes this change in buyer offers to interest rate increases, but Eddinger believes that the uptick in inventory has a role to play as well.
“I don’t think people are settling so much as they used to settle when there was a frenzy going on,” he says.
However, Ashley believes that these sales figures are not driven solely by shifting economic factors, but also by the fundamentals of real estate: desirable properties and locations. Speaking of the Olympia market, she says, “In Olympia, we have quite a diversity of what folks are looking for—condos, larger apartment units, planned unit development—so we have quite a lot to offer in our area, plus, you’re an hour from the mountains and an hour from the beaches.”
