Decreasing inventory and rising prices defined the Walla Walla real estate market in 2018.
Supply tapered toward the end of the year to about a two-month average inventory, while the median sales price with one month to go in the final quarter was 10 percent higher than the same period from 2017.
And yet it was one of the highest sales years on record.
“What you hear on the street is that inventory is low,” said Windermere Walla Walla owner/designated broker Doug Simcock. “The real story is we just had the second most-active MLS market in history.”
He said homes were listed just in time to be absorbed, meeting demand from many in the market.
Although final December numbers were not out by press time, only 48 closures were needed to surpass 2017’s total sales. That number was easily achieved over the last four Decembers.
The 752 homes that had already closed through November represented a 4 percent jump from last year’s pace at that time, according to Simcock’s monthly market report.
He said rising interest rates may slow things down slightly, but not in a way that would likely lead to major price changes or any other fluctuation.
“Things are in place for a healthy real estate market,” he said.
Lack of inventory has, indeed, been one of the biggest talking points heard by Brenda Williams, owner/principal broker at Williams Team Homes.
“It was hard for sellers who wanted to buy a home and have everything be contingent,” she said.
That was particularly true for those moving from price points — selling in one price range but ready to buy in another where inventory may not have been as available.
Simcock supported this statement, noting that finding homes under $200,000 is “a real challenge now.”
By mid-December, the Multiple Listing Service for Walla Walla and College Place had just a half-month’s supply of homes within the $200,000-$225,000 price range. Only a month’s supply existed for those within the $225,000-$250,000 range.
But homes between $325,000 and $350,000 were a bit more flush, with an almost three-month supply.
Higher-end homes above the $600,000 range are moving again, both brokers said.
By the end of the November, the average home sale price for the year was $279,609. That’s a jump of almost $30,000 from 2016, when the Walla Walla MLS had its most sales close, at 838 homes.
Meanwhile, the median price in November was $260,000, meaning half the homes sold during the month cost more than that and half cost less.
That price is consistent with the five previous months in 2018 when it fluctuated from that value within a range of $3,000 in either direction.
With another month yet to count, the fourth quarter’s median sales price was already 10 percent higher than the same period a year ago.
Industry professionals say conversations around affordability continue to be vital.
The Washington Center for Real Estate Research, which operates through the Runstand Department of Real Estate at the University of Washington, ranked the Walla Walla Valley’s affordability at 145.6 during the second quarter of the year, the most recent period for which that figure is available.
The Affordability Index measures the ability of a middle-income family to carry the mortgage payments on a median-price home. At that time in Walla Walla, the median was $215,600, according to the center’s research. The area covered by that data and the Walla Walla MLS have slightly different numbers because the UW-based research measures surrounding rural communities, while the Walla Walla MLS is carried mainly by the city of Walla Walla and the city of College Place.
For affordability, a rating of 100 is considered balanced. That means an affordability rating of higher than that indicates housing is even more affordable.
That affordability may seem out of touch for a community that’s also been submerged in conversations about “affordable housing.”
Industry professionals, however, clarify that the affordable housing definitions apply to those with good credit, down payments and roughly 25 percent of income used for principal and interest on a 30-year loan.
“Everyone’s affordability is different,” Williams said.
At the same time, Simcock pointed out, folks who had faced foreclosure four years ago are emerging again as a new potential buyer group.
Another look into real estate trends for 2019 will take place later in the month when Windermere Chief Economist Matthew Gardner makes a stop in Walla Walla, Simcock said.