Around the nation, real estate markets are cooling. The same is true in Southwest Washington: pending sales are down, closed sales are down, but don’t expect prices to fall substantially.
Rising interest rates have slowed the local real estate market. Realtors are now seeing the number of new listings up, while sales are down, according to the latest RMLS report.
For those looking to buy a home, there’s a month and a half of home inventory, a number which hasn’t been seen since June 2020, when home inventory was just over a month and a half. The number of pending sales decreased by 22.7 percent compared with May, while the number of closed sales decreased 1.5 percent in the same comparison.
The average market time for homes sold in Southwest Washington is 16 days, however, which is lower than it had been in May.
Interest rates have risen by 2 percent since the start of the year.
In his 25 years in real estate, Terry Wollam, a broker at Wollam and Associates, has never seen such a large swing in interest rates.
“We tend to focus very much on price,” Wollam said. “But the interest rate has a substantially greater impact on what we pay for a house than the actual price of the house.”
For those financing homes, that interest rate directly affects buyers’ monthly payments.
So for that family wanting to get into a bigger home, they’d need to give up an interest rate which could have been near 3 percent to probably get a house with an interest rate near 5 percent. This could very well mean they end up paying more for the same house.
The current interest rate is still a historically good interest rate, but it will take time for buyers to adjust to that.
“We’re in the midst of a transition period,” Wollam said.
Summer generally sees a dip with folks going on vacation. And this year, people may be getting out more to do other things after two years of the pandemic. These are also likely impacting the market.
Wollam expects the slowdown to continue into July and expects pending sales and inventory to start balancing out in September.
Compared with June 2021, the median sale price increased by 16.9 percent from $449,000 to $525,000, according to the report. The market is still active in this price range of homes, Wollman said. But for other market segments, it’s slowed.
The region’s median sales price did decline slightly compared with May. But Wollam doesn’t think trends of falling home prices seen in other areas of the nation will be seen here.
“The Southwest Washington market has been more active, with higher demand and less inventory than other markets,” Wollam said.
“We’ll be feeling similar trends but not to the extent that the national trend is because the strength of this market is quite a bit better than it has been nationally,” he added.
Vancouver has averaged the fourth lowest home inventory of midsized cities nationwide, according to a new study from Inspection Support Network. Only Tacoma, Grand Rapids, Mich., and Lakewood, Colo., have lower inventories.