Western Washington home prices were down year-over-year from March 2022 to March 2023, according to new data released by the Northwest Multiple Listing Service (MLS).
From March 2022 to March 2023, home prices decreased by an average of $48,000, falling from $638,000 to $590,000. While home prices were down year-over-year, they have increased each month since the start of 2023.
“Despite the year-over-year comparisons showing declines, the year-to-date trends indicate the market is moving in a positive direction, towards a healthy market, albeit at a lower velocity than last year,” said John Deely, an executive vice president at Coldwell Banker Bain.
“We are experiencing a frenzied spring housing market,” said J. Lennox Scott, chairman and CEO of John L. Scott Real Estate. “Although fewer new listings are coming on the market and fewer overall transactions, the market is following a typical seasonal pattern.”
In Lewis County, the real estate market has gone against broader statewide trends and has seen a decline in home prices since the beginning of the year. In January, the average price of a Lewis County home was $390,000, which declined $382,500 in February. In March, Lewis County home prices further declined to an average of $380,000.
Among Lewis County’s neighbors, only Cowlitz County saw an increase in home prices year-over-year while Thurston, Grays Harbor and Pacific counties all saw declines in average home prices. Lewis County’s neighbors have also seen month-over-month increases in average home prices since the start of the year, further contrasting with Lewis County’s continued monthly declines.
According to Eren Millam, a Lewis County real estate agent, it’s not entirely clear why the local real estate market has cooled down since the start of the year while the rest of Western Washington has seen a rise in prices.
“All the indicators were pointing to a stronger price,” Millam said.
Millam told The Chronicle average home prices have gone up and down in the past several months, pointing to an unstable market.
Millam said the decline in real estate prices appears to make Lewis County a regional outlier, adding he expects the county’s real estate market to begin heating up and join the broader regional trend of higher real estate prices.
“Overall I still expect it to be a strong market,” Millam said. “All the factors are still there.”
Millam specifically mentioned inventory levels as a reason why he expects prices to continue their long-term trend upwards. Millam added he doesn’t like to look at individual monthly averages because they don’t show the broader trend in the market.
“Inventory is still incredibly low and that’s what’s holding prices up,” he said. “What’s the trend doing? That’s what I’m focused on.”
According to Millam, the Lewis County real estate market is “trying to go” but is struggling due to outside economic conditions causing uncertainty. Millam provided recent bank collapses as an example of the types of economic conditions that are contributing to uncertainty.
“The surrounding economic conditions are what’s causing it to bounce around a little bit,” Millam said.
Looking forward, Millam compared the current Lewis County real estate market to where it was in the 2010s.
“The current pattern we are in is very similar to where we were in 2010, and following 2010 prices stayed relatively consistent for about three years,” Millam said.
He added that around 2014 and 2015 home prices “started going crazy.”
“The difference between then and now is we had a ton of inventory and not a lot of demand and our current situation is the exact opposite,” Millam said.
Millam added the Lewis County real estate market is usually a couple of years behind where the Seattle market is. But according to Millam, Lewis County hasn’t seen a recent increase in housing supply from a construction boom like Seattle has. According to Millam, while Seattle’s construction boom has helped mitigate issues related to low supply of homes on the real estate market, Lewis County is poised to continue facing a shortage of homes for sale.
For Millam, a continued housing supply shortage in Lewis County means the area can expect home prices to continue increasing in the long term.
“Short term, this market is going up this year,” Millam said. “Long term, I think we’re going to be talking about the good old days of 2023 when prices were low.”
