Despite higher mortgage interest rates and a double-digit decline in sales, the Thurston County median home price rose more than 7 percent in August to a new high, according to Northwest Multiple Listing Service data released Friday.
The previous high for the county was $525,000 set in June 2022, but last month the median price was $529,950 — up nearly 7.4 percent from August 2022, the data show.
How is that even possible as average mortgage rates surged past 7 percent and there's a 23 percent decline in sales?
Windermere Olympia owner Steve Garrett acknowledged the local housing market "defies logic," but there are reasons why median price continues to climb, he said.
Although median price here hit a new high, the median price for a home in King County was $900,000 in August, which means Thurston County continues to attract buyers from up north who can pay cash for their next house.
"It's still a relative bargain in relationship to those other markets," he said.
And although the number of homes that sold fell last month, there is still enough demand (353 sales) and limited inventory to generate multiple offers on homes, particularly for those homes listed between $450,000 and $480,000, he said.
Inventory, however, just can't get off the mat, the data show. Inventory in August was enough to last a little over one month, another indication the market continues to favor the seller. A market that doesn't favor either buyer or seller has four to six months of inventory.
Rents also remain high
The other oddity is that even after a wave of apartment building has increased supply in Thurston County, average rents remain high, at around $1,500 per month, according to Thurston Regional Planning Council data.
Those high rents will continue to stoke demand for a home, Garrett said. In some cases, renters are paying much more than $1,500 per month. Eventually they realize if they can pay that much for an apartment, they can get a mortgage to buy a home, he said.
Thurston County's August numbers
— Single-family home sales fell 23.3 percent to 353 units last month from 460 units in August 2022.
— Single-family home median price rose 7.4 percent to $529,950 from $493,514 over the same period.
— Single-family home pending sales fell 28.5 percent to 377 units from 527 units over the same period.
— Condo sales rose to 14 units from eight units over the same period.
— Condo median price fell 2.6 percent to $337,475 from $346,500 over the same period.
— Condo pending sales fell to 14 units from 17 units over the same period.
Source: Northwest MLS.