The Washington State economy added 104,600 new jobs over the past 12 months. This impressive growth rate of 3.1% is well above the national rate of 1.4%. Interestingly, the slowdown we experienced through most of the second half of the year reversed in the fall, and we actually saw stronger employment growth.
The counties contained in this report added 4,310 new jobs over the past 12 months, representing a respectable employment growth of 2.8%. It should be noted that the rate of growth continues to slow, but this is to be expected as the area tracks toward full employment. The local unemployment rate for the area continues to fall with a drop from 8.4% at the end of 2016 to 7.3% in December 2017.
HOME SALES ACTIVITY
- Home sales throughout Central Washington were a mixed bag in the fourth quarter. Two counties showed growth in sales, one remained static, and two had declines. In total, there were 1,293 home sales in fourth quarter—a drop of 2.3% from the same period in 2016.
- Sales rose most in Kittitas County, which had a reasonable 6% increase over the fourth quarter of 2016. Okanogan County also saw sales rise at a reasonable pace.
- The number of pending home sales—an indicator of future closings—was down in all counties other than Kittitas and Douglas, suggesting that first quarter closings will also be mixed.
- The supply of homes for sale remains an issue. Inventory was down 8% compared to the fourth quarter of 2016. The market continues to suffer from inventory constraints, which will push home prices higher and slow sales velocities.
- Year-over-year, the average home price in the region rose 4.8% to $292,691. Price growth has started to trend down but remains well above the long-term average as demand continues to exceed supply.
- Okanogan and Douglas Counties saw relatively modest price contractions, but that was offset by the other three counties that had solid price increases.
- Three of the five counties in this report saw prices rise compared to the fourth quarter of 2016. Chelan County led the way with an increase of 7.7%.
- The takeaway here is that home-price growth, although slowing, continues at above-average rates due to very limited supply. I expect that the rate of appreciation will continue to taper as we move through 2018.
DAYS ON MARKET
- The average number of days it took to sell a home dropped eight days compared to the fourth quarter of 2016.
- The average time it took to sell a home in the region was 83 days—up 10 days compared to the third quarter, but we can attribute this increase to seasonal factors.
- All the markets contained in this report saw days-on-market drop from the same quarter in 2016.
- Homes sold the fastest in Douglas County, where it took an average of 49 days to sell a home. The greatest drop in the time it took to sell a home was in Chelan County, where it took 18 fewer days than in the fourth quarter of last year.
This speedometer reflects the state of the region’s housing market using housing inventory, price gains, home sales, interest rates, and larger economic factors. For the final quarter of 2017, I held the needle at the same position as third quarter. Prices are still trending higher, but the pace of increase has started to taper. In a similar fashion to most of the state, demand for housing in Central Washington continues to exceed supply and, although price growth has slowed somewhat, it still remains a seller’s market. I fully expect the Central Washington market to continue performing well in 2018.
Matthew Gardner is the Chief Economist for Windermere Real Estate, specializing in residential market analysis, commercial/industrial market analysis, financial analysis, and land use and regional economics. He is the former Principal of Gardner Economics, and has over 25 years of professional experience both in the U.S. and U.K.