Western Washington home prices were down year-over-year from April 2022 to April 2023, according to new data released by the Northwest Multiple Listing Service (MLS).
From April 2022 to April 2023, the average home price statewide decreased by $56,700, falling from $659,950 to $603,250 and representing a 8.59% decline. While home prices were down year-over-year, they saw a monthly increase of $13,250 from March to April, rising from $590,000 to $603,250.
According to the report released by Northwest MLS, pending sales are down nearly 27% from April 2022 while pending sales are up over 23% from January. The year-over-year decline in pending sales comes amid a decline in the supply of homes on the market.
“The supply of housing remains limited due to a persistent shortage of available homes as fewer homeowners are putting their homes on the market after locking in low home mortgage interest rates during the pandemic,” said J. Lennox Scott, the company executive officer at John L. Scott Real Estate.
In Lewis County, the average home price was unchanged from a year ago and up $9,000 month-over-month, rising from $380,000 in March to $389,000 in April. Lewis County home prices remain slightly under their January high for 2023, when the average home price was $390,000. The county’s average home price declined to $382,500 in February before falling to $380,000 in March.
Among Lewis County’s neighbors, only Pacific County saw an increase in home prices year-over-year while Thurston, Grays Harbor and Cowlitz counties all saw declines in average home prices. Like Lewis County, both Pacific and Grays Harbor counties saw increases in their average home prices from March to April, while Thurston and Cowlitz saw declines.
According to Eren Millam, a Lewis County real estate agent, the “big jump” in home prices from March to April was driven by a longer term decline in the number of homes on the market. Millam told The Chronicle that while the number of homes on the market has declined, the demand for homes has not, resulting in a large drop in the average number of days a home is on sale, which has seen a decline of three weeks in the last two months, and an increase in the number of showings per listing. He also said homes are now selling for a price closer to their original listing.
“The market is heating up,” Millam said. “And now we’re heading into the peak season.”
Millam said the increase in home prices is partly due to a normal annual increase in real estate activity in the warmer months, but also because of a decrease in housing inventory. Millam pointed to data from the Northwest MLS showing the number of homes for sale in Lewis County had declined by about 200 from last year’s peak, falling from 375 to 160 homes for sale.
Millam said a tightening supply of homes means this year’s housing market will be “crazier” than last year, particularly for lower-priced homes. Millam said the housing market for homes under $400,000 is hotter than the market for homes above $400,000.
“It’s going to be a return to crazy,” Millam said.
Millam warned against expecting a decline in home prices during a potential future recession. “For the most part, the housing market is not affected by recessions,” Millam said.
Millam argued housing inventory is so low, even during a recession there would still be potential buyers for homes listed for sale. He also said the Federal Reserve lowering interest rates during a recession would increase demand for homes, which would hold real estate prices up or increase them.
“The market’s never going back to the prices people enjoyed prior to 2016,” Millam said.
According to Millam, after the peak of the housing bubble in 2007, home prices declined by 27%. If current home prices were to decline 27%, the average home price in Lewis County would still remain above $300,000, compared to $137,000 when Millam began working as a real estate agent in 2013.
Millam said if home prices were to decline back to their levels before 2016, it would mean there were serious issues with the broader economy.
“If that were to happen, the economy would be broken. … You’d be worried about feeding your family,” Millam said. “You won’t have to worry about money anymore, it’ll be an agrarian society.”
More information on the real estate market from Eren Millam can be found on his YouTube page at https://www.youtube.com/@erenmillamrealtor9648/videos.