The following analysis of the Central Washington real estate market is provided by Matthew Gardner, chief economist at Windermere Real Estate. We hope this information can help you make more informed real estate decisions. For more information about the housing market in your area, please contact your Windermere real estate agent.

Regional economic overview

Central Washington has restored all the jobs lost to COVID-19 and continues to expand its employment base. In the five provinces included in this report, total employment rose to 233,699 in August. The number of jobs is now more than 15,000 jobs higher than the pre-pandemic peak of just over 218,000. With more jobs returning, the unemployment rate has fallen to 5.6% — a level last seen in the summer of 2018. The lowest unemployment rate was in Chelan County at 4.2%. The highest rate was in Yakima County, where 5.6% of the workforce was unemployed.

Central Washington Home Sales

❱ Year-over-year home sales in Central Washington were down 5.2%, but this is almost irrelevant as the country experienced a massive housing market rebound a year ago following the COVID-19 outbreak. More conveniently, sales are up 10.9% compared to the second quarter of 2021, with a total of 1,634 homes sold.

❱ Pending sales were 0.8% lower than in the second quarter, suggesting that the closings in the last quarter of the year will not be much better.

❱ Compared to a year ago, sales increased in Yakima County, but declined in all other markets covered in this report. Compared to the second quarter of this year, sales increased in all counties except Okanogan, with Yakima County again showing a substantial increase (+22.3%).

❱ Inventory levels were up 3.4% from a year ago and were 32.7% higher than in the second quarter of this year. Additional choice in the market is a good thing for buyers, which is probably why sales increased significantly in the quarter.

Central Washington Home Prices

A map showing the percentage changes in the real estate market in several Central Washington counties during the third quarter of 2021.

❱ Even with rising inventory levels, demand remained strong, driving the average house price in Central Washington up. Prices were up 16.7% year over year to $487,326. House prices were also 3.3% higher in the third quarter than in the previous quarter.

❱ Mortgage rates remained below 3% in the third quarter, which also contributed to an above-average rise in prices. While I expect mortgage rates to start rising this winter, they are unlikely to rise to levels that will have a material impact on prices.

❱ All counties covered in this report saw significant price increases again last year from this time, with double digits across the board. I note that Kittitas County home sales prices were lower compared to the second quarter, but that’s not a cause for concern, as small markets can experience extreme price swings.

❱ Douglas and Kittitas counties remain technically unaffordable for middle-income households, but my bigger concern is that none of the counties in the report are affordable for first-time buyers. New construction activity has not improved significantly and with fewer homes being built, affordability issues remain.

A bar chart showing the annual change in home sales prices for several Central Washington counties in the third quarter of 2021.

Days at the market

❱ The average time to sell for a home in Central Washington in Q3 2021 was 31 days.

❱ During the quarter, it took 26 days less to sell a home in Central Washington than it did a year ago.

❱ All counties saw how long it took to sell a home compared to a year ago, with noticeable improvement across the board. Compared to the second quarter of 2021, market time increased in Chelan and Douglas counties, but the increase was only three days in each market.

❱ It took five days less to sell a home in the third quarter than it did in the second quarter of this year.

A bar chart showing the average days on the market for homes in several counties in Central Washington in the third quarter of 2021.

conclusions

A chart of a speedometer indicating a seller's market in Central Washington in the third quarter of 2021.

This speedometer displays the state of the real estate market in the region using housing stock, price increases, home sales, interest rates and larger economic factors.

The positive for buyers in Central Washington is that listing activity has picked up again and average list prices have started to fall slightly lower in many market areas. This now causes sellers to compete somewhat for buyers. That said, it remains a seller’s market given lower market days and strong buyer demand. I expect house prices to continue to rise, but the growth rate is starting to slow down. As such, I’m moving the needle a bit more towards buyers, but the market will remain active, and owners looking to sell a well-positioned and appropriately priced home will likely have no trouble finding a buyer.

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 at both the local and national levels. Matthew has over 30 years of professional experience in both the US and UK

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

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