The number of Thurston County homes that sold in April was down 12% from the same month a year ago, a sign that the market is reacting to some new economic pressures, including higher mortgage interest rates, according to Northwest Multiple Listing Service data.
"The Puget Sound housing market has shifted down several levels of hotness in most areas and is more in alignment with the strong market we saw pre-pandemic," said J. Lennox Scott, chairman and CEO of John L. Scott Real Estate, in a statement.
Prospective buyers also are dealing with higher gas prices, higher inflation and higher mortgage interest rates. The average rate on a 30-year fixed mortgage ticked up to 5.27% from 2.96% a year ago, according to a recent survey by Freddie Mac, a government-sponsored enterprise that provides capital to mortgage lenders.
"While housing affordability and inflationary pressures pose challenges for potential buyers, house price growth will continue but is expected to decelerate in the coming months," said Sam Khater, Freddie Mac's chief economist, in a statement.
The median price of a single-family home in Thurston County in April was $510,000, up 18% from April 2021, but was almost flat from March 2022, when the median price was $505,000, the data show. That's an increase of about 1%.
Although the inventory of homes on the market has inched higher in Thurston County — from 0.44 months in March to 0.67 months in April — the market continues to strongly favor the seller. A market that doesn't favor either sellers or buyers has inventory in the range of four to six months.
"The reality of it is it's slowing down," said Van Dorm Realty's Torie Robinson. "It's not as chaotic as it was and inventory is growing."
But are prices likely to fall? Probably not.
National Association of Realtors Chief Economist Lawrence Yun does not expect a price decline, but he does expect "more pullback in housing demand as mortgage rates take a heavier toll on affordability."
"Declining affordability is always the most problematic to first-time buyers who have no home to leverage, and it remains challenging for moderate-income potential buyers as well," Yun said in a statement.
Still, a median price of $510,000 remains a relative bargain in the region where the median price in King County in April was $995,000, the data show.
James Young, director of the Washington Center for Real Estate Research at the University of Washington, singled out Thurston, Lewis, and Mason counties as showing some of the best values in median house prices.
"It will be interesting to see how interest rates influence these markets as the search for value among first-time buyers continues," he said.
The April median price in Mason County was $420,000 and in Lewis County it was $389,000, the Northwest MLS data show.
Thurston County data for April
— Single-family home sales fell 12 percent to 403 units last month from 458 units in April 2021.
— Single-family home median price rose 18.6 percent to $510,000 from $430,050 over the same period.
— Single-family pending sales rose 4 percent to 530 units from 508 units over the same period.
— Condo sales were unchanged at 10 units over the same period.
— Condo median price rose to $337,500 from $217,500 over the same period.
— Condo pending sales fell to 16 units from 20 units over the same period.