Western Washington home prices rose slightly year-over-year from January 2022 to January 2023, according to new data released by the Northwest Multiple Listing Service (MLS).
From January 2022 to January 2023, home prices increased by $2,250, rising from $555,000 to $557,250. While home prices have increased over the last year, they declined slightly between December 2022 and January 2023, though it is common for the real estate market to become less active during the winter.
However, while there has been a seasonal decline in home prices, the real estate market saw more activity in January.
“We saw a favorable spike of intensity in the market in January,” said L. Lennox Scott, chairman and CEO of John L. Scott Real Estate. “With fewer new resale homes coming onto the market, there’s a shortage/low level of unsold inventory, especially in the more affordable and mid-price ranges where approximately 80% of sales activity takes place.”
In Lewis County, the real estate market has already seen increased activity as home prices rose from December to January, increasing on average by $15,000 from $375,000 to $390,000.
Year-over-year, the change in Lewis County’s home prices matched the monthly increase, rising 4% from $375,000 to $390,000 between January 2022 and January 2023. That increase surpassed the year-over-year increase in home prices in Grays Harbor (-9.35%), Thurston (-0.11%), Pacific (0.0%) and Cowlitz (0.9%) counties. Statewide, home prices increased by 0.41% during the past year.
An increase in housing inventory may be contributing to the slow pace of home price increases across the state. Washington saw a 165.85% increase in the number of homes listed for sale, as the total rose by 5,128 homes from 3,092 homes in January 2022 to 8,220 in January 2023. During that period, the number of active listings increased by 94.68% in Lewis County, where the number of homes listed on the market increased from 94 to 183 year-over-year. Large increases in the number of homes for sale were also seen in other Southwest Washington counties, including increases of 78.44% in Grays Harbor County, 112% in Pacific County, 188.33% in Cowlitz County and 200% in Thurston County.
According to Eren Millam, a Lewis County real estate agent, like the rest of the state, the number of closed sales in Lewis County has been decreasing the past few months. But while the real estate market has cooled in the last few months as the number of closed sales has decreased, the number of pending sales has increased, signaling the market is likely to become more active soon.
“Basically this is just the seasonal buyers that leave in the fall, they’re back,” Millam said.
One reason for the recent increase in real estate activity is a decline in interest rates. According to Lawrence Yun, an economist who spoke with Northwest MLS, the “recent low point in home sales activity is likely over.”
“Mortgage rates are the dominant factor driving home sales, and recent declines in rates are clearly helping to stabilize the market,” Yun said.
Millam told The Chronicle despite what some people may think based on the recent decline in real estate activity, it’s still in a sellers’ market. According to Millam, sellers have been selling their houses for too little based on the market’s current state.
“Sellers are taking offers at about 91% of their asking prices. They’re giving up way too much equity,” Millam said. “Sellers need to not take the first offer they get or at least negotiate a better price. … This is totally not necessary. People are taking low offers and they don’t need to.”
Millam said as summer approaches and the housing market becomes more active, home sellers can expect to receive offers closer to their asking prices. He also warned not to expect home prices to see a significant decline.
“My projections for the upcoming months are more inventory, higher prices and I think people will be shocked by the amount of activity that’s about to hit the market,” Millam said. “The market’s going up, it's not going down. It's not going to crash. … I think people are going to be surprised that the market is still pushing up.”
