Q1 2021 Central Washington Real Estate Market Update

The following analysis of the Central Washington real estate market is provided by Windermere Real Estate Chief Economist Matthew Gardner. We hope that this information may assist you with making better-informed real estate decisions. For further information about the housing market in your area, please don’t hesitate to contact your Windermere Real Estate agent.

 

Regional Economic Overview

Through last fall, the Central Washington region was on its way to recovering the jobs that were lost due to COVID-19, but new infections have reversed that momentum. The hardest hit sectors were retail trade and transportation; all the markets contained in this report saw employment in these sectors drop. Due to the decline in employment, I wasn’t surprised to see the unemployment rate tick back up to 8.2% from the year-end level of 7.9%.

In aggregate, total employment was measured at 211,520, down from a pre-pandemic peak of 218,624. I hope that broader vaccine distribution will lead to a reopening of the local economy, which will give a much-needed boost to the area.

central washington Home Sales

❱ Sales in Central Washington were essentially static compared to the same period in 2020, with a total of 939 homes sold.

❱ Pending sales were 9.2% lower than in the fourth quarter of last year, suggesting that closings in the second quarter may also disappoint.

❱ Home sales rose in Kittitas County but were either static or fell in the rest of the region.

❱ Although the picture may appear somewhat bleak, I believe the primary issue has been a lack of inventory. However, the number of homes coming on the market has actually started to rise and I’m hopeful this will lead to improved sales as we move toward the summer.

central washington Home Prices

A map showing the real estate market percentage changes in various Central Washington counties.

❱ Year-over-year, the average home price in Central Washington continues to trend higher, with prices up 20.8% to $414,084.

❱ With signs that there are more sellers coming to market, combined with modestly rising mortgage rates, I expect to see the rapid pace of price growth start to slow, which will be good news for home buyers.

❱ All counties covered by this report saw prices rise significantly, with double-digit increases in all but one market.

❱ The takeaway is that average home-price growth in Central Washington remains well above the long-term average, but there are signs prices may experience a modest slowdown as we move through the year.

A bar graph showing the annual change in home sale prices for various counties in Central Washington.

Days on Market

❱ The average time it took to sell a home in Central Washington in the final quarter of 2021 was 57 days.

❱ During the fourth quarter, it took 13 fewer days to sell a home in Central Washington than it did a year ago.

❱ Three counties saw the length of time it took to sell a home drop compared to a year ago, but Okanogan and Yakima saw market time rise 13 days and 1 day, respectively.

❱ It took nine more days to sell a home in the first quarter than it did in the fourth quarter of 2020.

A bar graph showing the average days on market for homes in various Central Washington counties.

Conclusions

A speedometer graph indicating a seller's market in Central Washington.

This speedometer reflects the state of the region’s real estate market using housing inventory, price gains, home sales, interest rates, and larger economic factors.

With signs of more listings coming online, the frenetic housing market may cool, but I do not see it contracting further. Though it remains a seller’s market, I have decided to leave the needle in the same position as it was at the end of 2020.

 

About Matthew Gardner

Matthew Gardner - Chief Economist for Windermere Real Estate

As Chief Economist for Windermere Real Estate, Matthew Gardner is responsible for analyzing and interpreting economic data and its impact on the real estate market on both a local and national level. Matthew has over 30 years of professional experience both in the U.S. and U.K.

In addition to his day-to-day responsibilities, Matthew sits on the Washington State Governors Council of Economic Advisors; chairs the Board of Trustees at the Washington Center for Real Estate Research at the University of Washington; and is an Advisory Board Member at the Runstad Center for Real Estate Studies at the University of Washington where he also lectures in real estate economics.

The post Q1 2021 Central Washington Real Estate Market Update appeared first on Windermere Real Estate.

Q4 2020 Central Washington Real Estate Market Update

The following analysis of the Central Washington real estate market is provided by Windermere Real Estate Chief Economist Matthew Gardner. We hope that this information may assist you with making better-informed real estate decisions. For further information about the housing market in your area, please don’t hesitate to contact your Windermere agent.

 

Regional Economic Overview

The Central Washington region lost more than 12,500 jobs due to COVID-19, but, as I reported in the third quarter Gardner Report, almost all of them had returned. Unfortunately, a resurgence in new COVID-19 cases has again led to job losses. Employment levels are more than 4,600 jobs lower than before the pandemic started. Something to note is that the state’s economist advised me that the sample used for the October numbers was inferior to prior months and is likely causing an overestimation of job losses. I expect to see better numbers, but only when re-benchmarking occurs in March. With this caveat in mind, the unemployment rate, which peaked at 14.9%, has dropped to 7.3%. Again, this may be higher than is actually the case. In general, jobs are returning but—regardless of data discrepancies—I still anticipate we will see a slowdown in the pace of job growth. This will likely not improve significantly until a vaccine for COVID-19 is freely available.

central washington Home Sales

❱ Home sales in Central Washington were up an impressive 22.5% compared to the same quarter in 2019, with a total of 1,517 transactions taking place.

❱ Pending home sales in the region were 39.2% lower than in the third quarter, but this can be attributed to seasonality and a significant lack of inventory.

❱ Sales activity rose in all counties contained in this report, with significant increases everywhere except Douglas County, though even that market saw sales rise. Compared to the third quarter of 2020, sales in Central Washington were a remarkable 37.7% higher.

❱ The average number of homes for sale in the quarter was 45.8% lower than a year ago, and 30.2% lower than in the third quarter of 2020. Inventory levels remain well below historic averages.

central washington Home Prices

A map showing the real estate market percentage changes in various Central Washington counties.

❱ Year-over-year, the average home price in Central Washington rose a substantial 26% to $443,870. Prices were also 6.4% higher than in the third quarter of 2020.

❱ Low inventory levels remain pervasive, which is clearly driving prices higher as demand far exceeds supply. I expect the number of homes for sale to rise in 2021, but the question remains whether there will be enough listings to meet demand.

❱ All but one county covered in this report saw home prices increase by double-digits. Kittitas County experienced very significant growth.

❱ The takeaway is that average home-price growth in Central Washington remains well above the long-term average and is unlikely to slow down until we see a significant increase in inventory levels.

A bar graph showing the annual change in home sale prices for various counties in Central Washington.

Days on Market

❱ The average time it took to sell a home in Central Washington in the final quarter of 2020 was 49 days.

❱ During the fourth quarter, it took 20 fewer days to sell a home in Central Washington than it did a year ago.

❱ All counties saw the length of time it took to sell a home drop compared to a year ago. Okanogan and Kittitas counties experienced significant drops.

❱ It took eight fewer days to sell a home in the fourth quarter of 2020 than it did in the third.

A bar graph showing the average days on market for homes in various Central Washington counties.

Conclusions

A speedometer graph indicating a seller's market in Central Washington.

This speedometer reflects the state of the region’s real estate market using housing inventory, price gains, home sales, interest rates, and larger economic factors.

Demand has clearly not been impacted by COVID-19, mortgage rates are still very favorable, and limited supply is causing the region’s housing market to remain incredibly active. Because of these conditions, I am moving the needle even further in favor of sellers.

 

About Matthew Gardner

Matthew Gardner - Chief Economist for Windermere Real Estate

As Chief Economist for Windermere Real Estate, Matthew Gardner is responsible for analyzing and interpreting economic data and its impact on the real estate market on both a local and national level. Matthew has over 30 years of professional experience both in the U.S. and U.K.

In addition to his day-to-day responsibilities, Matthew sits on the Washington State Governors Council of Economic Advisors; chairs the Board of Trustees at the Washington Center for Real Estate Research at the University of Washington; and is an Advisory Board Member at the Runstad Center for Real Estate Studies at the University of Washington where he also lectures in real estate economics.

The post Q4 2020 Central Washington Real Estate Market Update appeared first on Windermere Real Estate.