There’s no doubt that we are feeling the winds of change in the Tri-Cities Real Estate Market lately. While the Federal Reserve Chairman Jerome Powell goes head-to-head with inflation and economic policy, changes can be observed in every datapoint as we enter the third quarter of 2022.
Since before the pandemic of 2022, the Local Real Estate Market (like much of the Nation) has experienced tighter than normal inventory in almost every price bracket. Along with lower than normal Mortgage Rates, we experienced aggressive bidding wars, rapid price escalation and a white-hot Real Estate Market. The pendulum was deep in Seller territory, giving sellers a hefty advantage in the market and raising the eyebrows consumers and industry veterans alike.
Like every Real Estate market before, markets change. Change is a healthy component of any market. The sky isn’t falling, the market isn’t crashing, and you’re going to be okay.
It helps to understand a few factors that we watch, these datapoints tell us the direction of the wind, when we know which way the wind is blowing, we can make educated decisions and make winning plays… no matter what the market.
Active Listings – just like it sounds, the active listing count is the amount of active listings entering the market. These are Sellers offering their property for sale. We often see inventory rise and fall with our market’s natural seasonality in the Tri-Cities market. While we’ve experienced some changes in the Tri-Cities, they have not been as abrupt as other parts of the Northwest.
Pending Ratio – Ahh! Fractions! Your math teacher was right, you WOULD use this someday. Don’t worry, I’ll show my work. The pending ratio is an easy ratio between the number of listings on the market and the number of listings with an active contract (pending). July’s Pending Ratio in the Tri-Cities is just a hair over 51%. A 51% pending ratio simply means that just over half of the homes on the market have an active contract.
Fifty-one percent is still relatively strong! The market has been decelerating from over 62% pending in May 2021… a modest decline compared to sharp drops in neighboring Spokane and Coeur d’Alene Markets.
Months of Inventory – this data point measures how fast inventory is being absorbed into the market. Tri-Cities’ Months of Inventory as of the writing of this article is 1.9 Months. Meaning if no other inventory came on everything available on the market would be sold in less than two months. Over the past two years, we’ve experienced this rate days in some markets and weeks in others. Inventory was being consumed so fast, if nothing new entered the market everything would have been sold in a matter of days.
Breaking it all down
Interest rates have been climbing steadily through 2022, and we are experiencing the effects of a decelerating market. We have been experiencing seller price drops, something we have not experienced in some time, but those of us who have been in the business understand them quite well. Moving forward there will be two markets:
- Those homes that are priced and conditioned for the market – they will experience strong demand and even some buyer urgency (multiple offers etc.) and
- Those homes that are not priced and conditioned for the market – they will experience longer time on the market (if they sell at all).
It has never been more important to work with a trusted team of Real Estate Professionals who understand the market and can help you make a solid investment in Tri-Cities Real Estate.
Questions? Call our office at (509) 619-7400