The low inventory of listed homes, the increasing prices of those that are available, and rising interest rates all could be factors in the slower housing sales reported last month in Yakima County.
Statistics released this week by local real estate analyst Kristi Wilbert through her newsletter, “Headwaters: The Source,” show 873 residential properties were sold between January and April of this year, compared to 896 during the first four months of 2021.
That is a decrease of 23 homes, or 2.6%, and it marks the first timeframe with fewer residential homes sold in Yakima County compared to the previous year since December 2019, according to Wilbert’s statistics.
“It’s been quite a while,” Wilbert said of the decrease in home sales. “We started to see a decline in March 2022. … One or two months is not necessarily a trend, though. It will take three to four months to see if this is a trend or just an abnormality.”
Wilbert’s statistics showed the rate of home-sale increase slowed to 1.1% between January and March of this year and the same three-month span in 2021.
In comparison, month-to-month figures for much of last year and January and February 2022 showed double-digit percentage increases in both residential sales numbers and average home prices.
Moriet Miketa, owner and broker at Heritage Real Estate Group of Yakima, said this year’s sales decline is due to a lack of supply, not a lack of demand for homes.
“The only thing behind it is we don’t have homes to sell,” Miketa said. “In the first few months of this year, our inventory has been down. But in the past few weeks, we’ve seen quite a few new homes coming on the market — at all price levels and all areas of the Valley.”
Miketa believes the continued increase in home sale prices shows demand remains strong, and Wilbert’s statistics reflect this. The average sale price for Yakima County homes was $334,033 for January through April of this year, a 9.7% increase over the $304,578 average price for the same timeframe in 2021.
While those rising prices reflect the lack of available homes on the market, Wilbert said the higher listing prices, combined with relatively high interest rates, may keep some potential buyers from making offers.
“I think affordability is going to trump availability,” she said. “The inventory of houses on the market is problematic, for sure. There are numerous factors involved in this.”
The Multiple Listing Service for Yakima County residential properties on Tuesday morning, May 17, showed about 500 homes listed for sale, but only 187 active listings. There were 211 homes listed as “contingent,” with accepted offers that were waiting on home inspections, financing or other factors; and 101 homes listed as “pending,” or waiting on closing dates to be set.
In March, several real estate agents in Yakima County said they were concerned about the lack of inventory for single-family homes in the region. At that time, there were roughly 350 residential Yakima County listings, but 200 of those were pending sales, meaning only about 40% were considered “active” or available for purchase.
Another difference real estate professionals noted compared to 2021 is the rise in interest rates, which hit historically low levels last year.
The Associated Press reported on May 12 that the average interest rate on a 30-year fixed-rate mortgage, the most popular home loan, rose to 5.3%. By contrast, the average rate stood at 2.94% one year ago.
Miketa said higher interest rates could affect buyers of homes priced below $325,000, as it could mean an increase of $200 or more to their monthly mortgage payments.
She also believes the high inflation rate and supply chain problems are affecting the availability and cost of new construction, which is a significant portion of Yakima Valley home sales.
“Sometimes when you look at a statistic, you don’t see all the factors behind it,” Miketa added. “This (decline in sales) is really a matter of timing more than anything else. The demand is as intense as it ever was, and we’ve been very busy.”