Q1 2021 Eastern Washington Real Estate Market Update

The following analysis of the Eastern 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

Following the COVID-19-induced slowing of employment growth, Eastern Washington had a solid recovery in place. However, as infections increased between last November and this January, that recovery stalled. Employment in retail trade and transportation saw job levels drop. There was also a significant decline in Professional & Business Services in the Kennewick area. According to the most recent available data, employment experienced some improvement in February, but regional employment is still down more than 16,500 jobs from the pre-pandemic peak. With the labor market stalling, the unemployment rate ticked up from 6.8% in December to 6.9% in February, but I am hopeful this will turn around as the vaccine becomes more freely available.

eastern Washington Home Sales

❱ Home sales throughout Eastern Washington rose 1.2% compared to the same quarter in 2020, with a total of 2,467 homes sold.

❱ Tepid sales growth can be partially attributed to the lack of homes on the market. In the first quarter there was an average of only 452 homes for sale. This is 58.9% lower than a year ago and 40.7% lower than in the fourth quarter of 2020.

❱ Sales activity rose in four counties and dropped in three. Of note was the significant growth in sales in Grant and Lincoln counties, but keep in mind that these are relatively small markets. The same can be said of the counties where sales dropped the most, so there’s no need to worry at the present time.

❱ Pending home sales were 5.5% higher than a year ago; however, they were 7.5% lower than in the fourth quarter. While the the lack of homes for sale is to blame for this drop, it does suggest that the pace of sales in the second quarter may not be positive.

eastern washington Home Prices

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

❱ Year-over-year, the average home price in Eastern Washington rose a significant 20.8% to $359,474. Home prices were also 2.6% higher than in the fourth quarter of 2020.

❱ Demand remains in place, but supply remains well below the level I would like to see. With more buyers than sellers, it’s no surprise that prices increased at rates well above the long-term average.

❱ Prices rose in every county, with double-digit increases in all but one market and very significant price growth in Spokane and Grant counties.

❱ With mortgage rates slowly increasing, one might expect the market to cool somewhat. But unless there is a significant increase in inventory, I would be surprised to see this happen in the foreseeable future.

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

Days on Market

❱ The average time it took to sell a home in Eastern Washington in the final quarter of 2021 was 33 days.

❱ It took 24 fewer days to sell a home in Eastern Washington in the first quarter than it did a year ago.

❱ All markets saw days-on-market drop compared to the first quarter of 2020.

❱ It took the same number of days to sell a home in the first quarter as it did during the fourth quarter of last year.

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

Conclusions

A speedometer graph indicating a seller's market in Eastern 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 is very strong and, even in the face of rising mortgage rates, buyers are still out in force. With supply still lagging significantly, it staunchly remains a seller’s market. Furthermore, assuming that new COVID-19 infections start to trend lower, I believe even more buyers may enter the market. As such, 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 Q1 2021 Eastern Washington Real Estate Market Update appeared first on Windermere Real Estate.

Q4 2020 Eastern Washington Real Estate Market Update

The following analysis of the Eastern 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 Eastern Washington market lost more than 44,000 jobs as a result of COVID-19, but 27,500 of them have returned. The unemployment rate, which peaked at 14.7%, continues to decline and now stands at a fairly respectable 6.6%. In the third quarter Gardner Report, I suggested that the job recovery was likely to start to slow. This proved accurate, as jobs were lost in all counties contained in this report in November (the most recent month that data is available). That said, I maintain my position that the pace of jobs returning will increase, but not until a vaccine for COVID-19 is freely available.

eastern washington Home Sales

❱ Home sales throughout Eastern Washington rose by a significant 14% compared to the same quarter in 2019, with a total of 3,890 homes trading hands.

❱ The average number of homes for sale in the quarter remained well below normal levels (-52%) compared to a year ago.

❱ Sales activity rose in all counties but one, with significant increases in most markets. The one market where sales activity dropped was Franklin County, but the decrease was very minimal.

❱ Pending home sales dropped in the final quarter versus Q3, but this can be put down to seasonality. Overall, demand remains very robust.

eastern washington Home Prices

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

❱ Year-over-year, the average home price in Eastern Washington rose a significant 18.1% to $350,486. Home prices were also 2.1% higher than in the third quarter of 2020.

❱ Demand is clearly in place, as proven by the increase in sales. Limited supply is making the market very competitive, which, in turn, is pushing prices higher.

❱ Prices rose in every county other than Whitman, though I am not concerned about the declines in this market. Walla Walla, Spokane, and Lincoln counties saw very significant increases.

❱ The takeaway is that average home-price growth in Eastern Washington remains well above the long-term average due to inventory constraints and very favorable mortgage rates.

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

Days on Market

❱ The average time it took to sell a home in Eastern Washington in the final quarter of 2020 was 32 days.

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

❱ All markets, other than Walla Walla (where the length of time increased seven days), saw days-on-market drop compared to the fourth quarter of 2019.

❱ It took six fewer days to sell a home in the fourth quarter than it did during the previous quarter.

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

Conclusions

A speedometer graph indicating a seller's market in Eastern 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 Eastern Washington Real Estate Market Update appeared first on Windermere Real Estate.