Western Washington home prices declined from October to November as “holidays, inclement weather and various economic factors” prompted a reduction in real estate activity, according to the Northwest Multiple Listing Service (Northwest MLS).
However, while prices were down month-to-month, home prices rose from November 2021 to November 2022.
“Our traditional seasonal slowdown around the holidays is happening earlier this year, with the alignment of climbing interest rates, economic news, local weather and a volatile stock market,” said John Deely, executive vice president of operations at Coldwell Banker Bain. “These conditions make it easier for consumers to place large purchases on hold.”
According to Northwest MLS, the median home price statewide rose 0.88% from November 2021 to November 2022, increasing from $570,000 to $575,000. While home prices rose year-over-year, from October to November home prices statewide fell slightly from $595,000 to $575,000, a decline of 3.36%. During that time, the number of active listings in Washington more than doubled, rising 165% from 4,621 listings in November 2021 to 12,245 in November 2022.
In Lewis County, the number of active listings for November stood at 274, up 107.58% from 132 listings in November 2021.
That year-to-year increase in active listings surpassed Grays Harbor County, which saw a 72.08% increase in active listings from November 2021 to November 2022, but trailed annual increases in Pacific (108.45%), Cowlitz (143.3%) and Thurston (189.8%) counties.
While inventory is up from a year ago, statewide listings are down 13.85% from October while listings in Lewis County are down 17.47%.
From October to November, home prices fell 10.54% in Lewis County, dropping from $427,000 in October to $382,000 in November, compared to a monthly decrease of 3.63% in Pacific County, 5.62% in Cowlitz County and 6.99% in Thurston County. Home prices rose 1.8% in Grays Harbor County during the same period.
Eren Millam, a Lewis County-based realtor, said he expects the number of Lewis County listings to continue dropping in December.
“There were 63 new listings (in Lewis County) last month, and there’s only been six times since 2006 fewer homes have come on the market,” Millam said.
According to Millam, the drop in listings has been accompanied by a broader slowdown in the real estate market, pointing out the number of closed sales has declined 39% year-over-year.
“My big takeaway is I expect listings to go down through December into January. … I expect to see buyer activity pick up mid-January into February,” Millam said.
But Millam cautioned a reduction in market activity won’t necessarily mean an increase in affordability for homebuyers.
“For everyone who thinks there’s a price crash coming, these numbers are showing everything is down 30% to 40%, but price is the one thing that’s still up,” Millam said. “Over the last eight months, the average price has been around $430,000. I do believe that is our new baseline (in Lewis County). We’re not going back to our average of $140,000 like it was when I first got into real estate.”
While a significant reduction in home prices isn’t likely, there is some good news for buyers. Millam said homes in Lewis County have recently been selling for 92.1% of the last original price, meaning homes have been selling for less than was asked when they were first placed on the market.
“That’s good news for buyers,” Millam said. “The last time it was lower was January of 2016.”
Home prices have also stabilized, with the average Lewis County home price for November coming in about $7,000 less than in January.
“So basically all the gains for the year have been wiped out but we’re still higher than the average we were at last year by about $13,000,” Millam said.
He added interest rates could also affect the market, with a stabilization or reduction of interest rates likely to lead to an increase in market activity.
“It looks like interest rates are starting to creep down,” Millam said.
Moreover, the broader market trends are positive for prospective homebuyers.
“Inventory is still down but it’s not as bad as it’s been the past couple of years,” Millam said.
