3 things to know about the Thurston County housing market
Thurston County home sales and median price fell in February, but the surprise of the month was lower inventory, suggesting that higher mortgage interest rates not only affect buyers but also potential sellers.
That’s according to new data released this month by Northwest Multiple Listing Service.
Sales and median price
County home sales continued on a downward trend, dropping 25 percent to 215 units last month from 287 in February 2022, the data show.
Median price also fell 2 percent on a year-over-year basis, but was higher when comparing January to February. The median price in January was $475,000, but it rose to $489,000 last month, the data show.
Thurston median price hit a high of $525,000 over the summer of 2022.
Although median price fell over the year, it is not going to collapse, said Dick Beeson, Re/Max Northwest managing broker.
“Prices adjusted last month, depending on locale,” he said. “But there’s no slippery slope into the recession of 2008-2011 when there was a 30 percent price reduction. The lack of inventory guards against that situation occurring again. We’re perking along finding the new normal of a post-coronavirus market.”
Mortgage interest rates
Higher interest rates have played a role in slowing the housing market, and now they are rising again, according to Freddie Mac, the government-sponsored enterprise that provides capital to mortgage lenders and tracks interest rates.
Freddie Mac’s most recent survey found the average 30-year fixed-rate mortgage has climbed to 6.7 percent.
“Mortgage rates continue their upward trajectory as the Federal Reserve signals a more aggressive stance on monetary policy,” said Sam Khater, Freddie Mac’s Chief Economist, in a statement.
“Overall, consumers are spending in sectors that are not interest rate sensitive, such as travel and dining out. However, rate-sensitive sectors, such as housing, continue to be adversely affected. As a result, would-be homebuyers continue to face the compounding challenges of affordability and low inventory.”
A year ago those 30-year rates were under 4 percent, according to Freddie Mac
Months of inventory
The inventory of homes has grown in the county as sales have slowed. In fact, months of inventory in January rose above two months for the first time in a long time. A market that doesn’t favor either buyers or sellers is thought to have inventory in the range of four to six months.
However, in February inventory fell under two months, the data show. The month generated 221 new listings, compared to 408 in February 2022.
Matthew Gardner, chief economist at Windermere Real Estate, thinks higher interest rates are to blame.
“There are homeowners who are choosing not to sell so they don’t lose the historically low interest rate they have on their current mortgage,” he said.
A closer look at the Thurston County housing data
▪ Single-family residence sales fell 25 percent to 215 units in February 2023 from 287 units in February 2022.
▪ Single-family median price fell 2.19 percent to $489,000 from $499,950 over the same period.
▪ Pending sales fell 16.79 percent to 337 units from 405 units over the same period.
▪ Condo sales rose to 10 units from three over the same period.
▪ Condo median price fell to $302,500 from $375,000 over the same period.
▪ Condo pending sales fell to eight from 11 over the same period.
Source: Northwest MLS.
