North Central Washington’s Changing Real Estate Market

Adam Rynd
Owner and Designated Broker of Coldwell Banker Cascade Real Estate

This year’s residential real estate season began with optimism, improving inventory as sellers grew more comfortable with current pricing. Buyers also re-entered the market after slow demand since 2022’s rapid rise in interest rates.  Summer 2024 formally ends in late September, and now is a great time to assess current residential real estate market dynamics.

The housing market in North Central Washington, and across most of Washington State, is in a transition period, with continued inventory growth, gradually decreasing interest rates, and a slow improvement in the number of active buyers shopping for homes.

Shifting Market Dynamics

The real estate market in North Central Washington has experienced notable shifts in 2024, reflecting broader trends in the housing sector. This year has seen a significant increase in residential inventory, a fluctuating pace of market sales, and evolving interest rates, all of which are shaping the region’s real estate dynamics.

For the past five years, since the summer of 2019, North Central Washington’s availability of homes on the market has been limited. A strong 2019 market kept transactions flowing, and homes sold fairly quickly, preventing any significant buildup of homes for sale. The COVID pandemic shutdowns starting in March 2020 stopped nearly all listing and selling activity across the United States, and the NCW market was no exception. When selling activity resumed, we saw a surge in activity that fueled a brisk market from mid-2020 through early 2022. Rapid increases in borrowing costs starting in spring 2022 quickly suppressed the market, and we’ve essentially been working through a real estate recession for nearly 2.5 years.

Increasing Housing Inventory

Life doesn’t stop, and markets continue to adapt. Buyers who put off shopping and sellers who put off listing seemed to reconsider their plans starting in Spring 2024 when we saw more active home buyers and a substantial increase in real estate inventory. The number of homes for sale in Washington state rose 19.8% year-over-year, creating a surge in inventory that offers buyers more options and supports a more balanced market. In North Central Washington, new listings have created more opportunities for prospective homeowners.

Most inventory added to the market in 2024 simply came from homeowners choosing to list their properties, encouraged by improving market conditions. This influx of homes is helping to alleviate some of the pressure from the previously tight market, offering buyers a wider selection and reducing the intensity of bidding wars. For example, the sales of homes in Wenatchee and East Wenatchee priced from $400K - $800K have been very active this year.

Unfortunately, very little new housing inventory has been added to this market in recent years, largely because the regulatory cost of building in Chelan County is among the highest in Washington State. Many of our firm’s developer and builder clients simply don’t see favorable conditions for construction. Regulators apparently don’t understand that increasing regulatory hurdles and hookup fees mean fewer homes can be built, which means all housing becomes less affordable.  We simply need more types of all housing. City and county administrations in NCW can help with that by lowering the barriers to build new homes. 

Pace of Market Sales

Despite the increase in inventory, the real estate market has been slow to recover, except for pace of market sales remains brisk. In North Central Washington, the market is similarly active, with well-priced homes often receiving multiple offers shortly after listing.

This rapid pace is driven by several factors. The region’s natural beauty, combined with its appeal as a desirable place to live and work, continues to attract buyers. Additionally, the influx of remote workers seeking more spacious and scenic living environments has bolstered demand. As a result, sellers are benefiting from a competitive market, while buyers need to act quickly to secure their desired properties.

Shifting Interest Rates

Interest rates have been a critical factor influencing the real estate market in 2024. The Federal Reserve’s actions starting in 2022 to combat inflation pushed mortgage rates higher and they have only recently begun to fall, now at an average around 6.5% for a 30-year fixed mortgage. While that is higher than in recent years, it’s still lower than the average mortgage rate over the past 50 years, which was close to 7.0%. Mortgage rates are expected to fall more with the Fed indicating a rate cut in September. The question remains how quickly and how far rates will fall.

Higher rates have suppressed the pace of price appreciation, making homes more affordable for some buyers. On the other hand, increased borrowing costs led many potential buyers to reassess their purchasing power and budget constraints.

Conclusion

The real estate market in North Central Washington to date in 2024 has seen a significant increase in residential inventory, an improving pace of sales, and falling interest rates. As the year progresses, staying informed about these trends will be crucial for buyers and sellers alike. For those interested in exploring the opportunities in North Central Washington, now is a great time to work with local real estate professionals who have the expertise to provide valuable insights and guidance in this ever-changing market.

Adam Rynd, a licensed real estate Managing Broker, is the Owner and Designated Broker of Coldwell Banker Cascade Real Estate.