Spring 2023 Tri-Cities Market Overview

Hey Friends!

We hope your are off to an amazing Spring!  As we move through April, we wanted to provide you with an update on the current state of the real estate market in the Tri-Cities area.

Tri-Cities Market Overview

The Tri-Cities real estate market continues to be fairly strong, with lower inventory levels and a strong demand from buyers. The average home sold price increased by $10,000 from February and the average days on the market is hovering around 52 days. This trend is expected to continue as we head into the summer months, as long as interest rates don’t jump above 7% again and the economy continues to recover.

As some of us who have been watching know, the market is not going as crazy as it was last year at this time.  Even though it has cooled from then, the market is still considered a “Sellers market” due to the months of inventory available.  Last year at this time there were 529 active homes on the market with 326 pending to close, which equals a 1.6 month inventory.  Right now there are 513 active homes on the market with 195 pending to close, which equals 2.6 months of inventory.  In many cases in the real estate world, months of inventory are categorized as,  < 6 = Sellers Market, 6 - 9 Neutral Market, > 9 Buyers Market.  According to inventory levels right now in Tri-cities, we are technically in a Sellers Market, but the experience with our clients is showing buyers do have quite a bit more leverage than they did one year ago.  

Another way to tell buyers are experiencing more leverage is to see the final numbers of the List to Sales Price Ratio.  One year ago, homes were selling at 100.9% of the final list price and today they are selling at 99.5%.  To do a quick calculated example of this for you, let’s use a house listed at $500,000 to see what the difference in waiting the year looks like. $500,000 x 1.009 = $504,500 (April 2022) vs. $500,000 x 0.995 = $497,500.  Not a huge difference but we are not seeing the trend increasing for sellers which is what is important to note here.  

None of this is an exact science since Sellers might have been trying to list at the top of the market like last year and buyers are bringing them back down to earth.  We’re pointing this out since many buyers are wanting to “time” the market (which is fine), but waiting for prices to fall drastically to save more than you would by buying and gaining through appreciation is something to consider.  Houses aren’t necessarily decreasing in value, the newer listings being sold are being brought to the price they should have been listed for in the first place.  We have seen where Kennewick is specifically forecasted to see a rise in home prices by 2.2% by March 2024.  Seems we are headed to a more neutral market which can create a positive buying and selling experience for both sides of the transaction. As we head into the next month, we will be expecting a good amount of new listings in the Tri-Cities area.  At this moment in time, we’re seeing 96 new listings coming to the market in the last 7 days.

(Sources: https://www.noradarealestate.com/blog/washington-state-housing-market/
& PACMLS searchable data)

Tips for Buyers and Sellers

If you are considering buying or selling a home in the Tri-Cities area, there are a few things to keep in mind. For buyers, be prepared to act quickly when you find a home you like, as the competition for homes can be fierce even though it has cooled down some.  We spoke to an agent the other day who had 8 offers on a home that was under $320k in 48 hours. We also know of a home that was listed similarly and only ended up with 2 offers over a week.  Being prepared and ready to act is one of the most powerful things you can bring in getting your offer accepted at the terms that make sense for you.  If you want a “deal” keep an eye on homes that have been on the market for over 25 days.  If the seller is needing to make something happen, then odds are more in your favor to get them to accept more buyer favorable terms.  Usually there are reasons the home might be sitting for that time.  Those reasons might have deterred other buyers, but maybe they aren’t as much of a concern for you.  These are the things we can really dive into and look at, but you won’t be able to have these discussions or opportunities if you aren’t prepared to make an offer.

Buyers, it's important to have a pre-approval letter from a lender and work with a real estate agent who can help you navigate the market. For sellers, make sure your home is priced appropriately and in good condition to attract top dollar. Working with an experienced real estate agent can help ensure your home stands out when buyers have more choices.

In conclusion, the Tri-Cities real estate market remains strong and is expected to continue in the coming months. If you have any questions or would like to discuss your specific real estate needs, please don't hesitate to reach out to me or my partner Lindsay anytime!

Best regards,

Andy & Lindsay Webster
Pure Life Realty