Eastern Washington Real Estate Market Trends

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Q3

2022

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Our Eastern WA real estate market data is updated quarterly to aid in your real estate forecasts. Historical Eastern WA real estate data and trends are included below the latest update. We break down our data by county, but we cover major cities in this region including Spokane, Walla Walla, and the Tri-Cities.

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Q3 2022 Gardner Report

Eastern Washington
Real Estate Market Update

by Matthew Gardner

Below is the latest Eastern WA housing market trends analysis. Additional links:

Historical Eastern WA Data
Central WA Data
Western WA Data
Other Regional Data

 

The following analysis of select counties of the Eastern Washington real estate market is provided by Windermere Real Estate Chief Economist Matthew Gardner. We hope that this information may assist you with making better-informed real estate decisions. For further information about the housing market in your area, please don’t hesitate to contact your Windermere Real Estate agent.

 

Regional Economic Overview

Year over year, total employment in Eastern Washington rose by just under 10,000 jobs, which is an annual growth rate of 2.1%. Benton County had the fastest pace of job growth at 3.8%. Also notable were Spokane and Franklin counties, where job growth rose 2.9%. Annually, employment shrank in Whitman and Lincoln counties. Unadjusted for seasonality, the regional unemployment rate was 4.6%; the seasonally adjusted rate was 5%. The highest jobless rate was in Franklin County at 5.3%. The lowest rate was in Walla Walla County at 4%.

Eastern Washington Home Sales

During third quarter, 3,305 homes sold, which was 21.8% lower than a year ago. Transactions fell 4.6% compared to the second quarter of this year.

Listing activity rose 97.2% compared to a year ago and was 74.9% higher than in the second quarter.

Year over year, sales fell across the region. Additionally, sales fell in all the markets covered by this report compared to the second quarter of 2022.

Even with more choice in the market, pending sales fell more than 14%, suggesting that significantly higher mortgage rates are now having an impact on the market.

A bar graph showing the annual change in home sales for various counties in Eastern Washington from Q3 2021 to Q3 2022. All counties have a negative percentage year-over-year change. Walla Walla tops the list at -14%, followed by Whitman at -17.5%, Franklin -18.8%, Benton -19.2%, Grant -20.2%, Spokane -23.5%, and Lincoln at -56.1%.

Eastern Washington Home Prices

Year over year, the average home price in Eastern Washington rose 8.8% to $463,324, but average prices were down 2.7% compared to the second quarter.

Compared to the second quarter of 2022, prices fell in all counties except Benton, Lincoln, and Whitman.

Every county saw average sale prices increase year over year, with significant gains in Whitman, Lincoln, Walla Walla, and Benton counties.

Significantly higher mortgage rates are starting to impact the market, which has led median list prices to drop in Spokane, Franklin, Whitman, and Grant counties compared to the previous quarter.

A map showing the real estate home prices percentage changes for various counties in Eastern Washington. Different colors correspond to different tiers of percentage change. Grant, Franklin, and Spokane County have a percentage change in the 7.5% to 9.9% range. Benton is in the 10% to 12.4% change range, Walla Walla is in the 12.5% to 14.9% range, Lincoln is in the 15% to 17.4% range, and Whitman is in the 17.5%+ range.
A bar graph showing the annual change in home sale prices for various counties in Eastern Washington from Q3 2021 to Q3 2022. Whitman County tops the list at 19.7%, followed by Lincoln at 15.4%, Walla Walla at 13.4%, Benton at 10.3%, Franklin at 9.2%, and Spokane and Grant at 7.5%.

Mortgage Rates

This remains an uncertain period for mortgage rates. When the Federal Reserve slowed bond purchases in 2013, investors were accused of having a “taper tantrum,” and we are seeing a similar reaction today. The Fed appears to be content to watch the housing market go through a period of pain as they throw all their tools at reducing inflation.

As a result, mortgage rates are out of sync with treasury yields, which not only continues to push rates much higher, but also creates violent swings in both directions. My current forecast calls for rates to peak in the fourth quarter of this year before starting to slowly pull back. That said, they will remain in the 6% range until the end of 2023.

A bar graph showing the mortgage rates from 2020 to the present, as well as Matthew Gardner's forecasted mortgage rates through Q4 2023. After the 5.62% figure in Q3 2022, he forecasts mortgage rates continuing to climb to 6.7% in Q4 2022, 6.55% in Q1 2023, 6.35% in Q2 2023, 6.15% in Q3 2023, and 5.60% in Q4 2023.

Eastern Washington Days on Market

The average time it took to sell a home in Eastern Washington in the third quarter of 2022 was 24 days, which is 9 more days than during the same period a year ago.

Compared to the second quarter of this year, average days on market rose in every county. The regional average rose by 6 days to 24.

All counties saw the average number of days it took for a house to sell rise compared to the third quarter of 2021.

Longer market time can be attributed to more inventory combined with higher financing costs, which have led some buyers to wait for mortgage rates to stabilize and/or for prices to drop further.

A bar graph showing the average days on market for homes in various counties in Eastern Washington for Q3 2022. Spokane County has the lowest DOM at 17, followed by Franklin at 18, Benton at 19, Whitman at 23, Walla Walla at 24, Grant at 26, and Lincoln at 39.

Conclusions

This speedometer reflects the state of the region’s real estate market using housing inventory, price gains, home sales, interest rates, and larger economic factors.

Regionally speaking, the job market continues to expand, which should be a benefit for the housing market. However, with mortgage rates rising more than 2.7% from a year ago, many buyers are now being priced out of the market. The third quarter was an inflection point in which higher financing costs are now acting as a significant headwind. I anticipate that the market will struggle until rates stabilize. Even then, affordability will remain a factor. Ultimately, prices are expected to pull back to account for higher mortgage rates, but I don’t believe there will be any systemic price correction. Rather it will be a reversion that will allow the market to move to a more sustainable pace of price growth.

A speedometer graph indicating a balanced market, verging on a slight seller's market in Eastern Washington in Q3 2022.

As such, I have decided to move the needle more in favor of home buyers as the region heads toward a more balanced market—one we have not seen in quite some time.

About Matthew Gardner

Matthew Gardner - Chief Economist for Windermere Real Estate

As Chief Economist for Windermere Real Estate, Matthew Gardner is responsible for analyzing and interpreting economic data and its impact on the real estate market on both a local and national level. Matthew has over 30 years of professional experience both in the U.S. and U.K.

In addition to his day-to-day responsibilities, Matthew sits on the Washington State Governors Council of Economic Advisors; chairs the Board of Trustees at the Washington Center for Real Estate Research at the University of Washington; and is an Advisory Board Member at the Runstad Center for Real Estate Studies at the University of Washington where he also lectures in real estate economics.

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Major Eastern WA cities covered in this report:

Spokane

Spokane Valley

Kennewick

Pasco

Richland

Walla Walla

Pullman

Moses Lake

West Richland

Cheney

College Place

Liberty Lake

>

Eastern WA counties covered in this report:

Benton

Franklin

Whitman

Grant

Lincoln

Spokane

Walla Walla

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Gardner Report Archive

Eastern Washington
Historical Reports

2022
Q1 2022 Eastern Washington Real Estate Market Trends

Q1 2022
POST | (PDF)

Q2 2022 Eastern Washington Real Estate Market Trends

Q2 2022
POST | (PDF)

Q3 2022 Eastern Washington Real Estate Market Trends

Q3 2022
POST | (PDF)

2021
Q1 2021 Eastern Washington Market Trends

Q1 2021
POST | (PDF)

Q2 2021 Eastern Washington Market Trends

Q2 2021
POST | (PDF)

Q3 2021 Eastern Washington Market Trends

Q3 2021
POST | (PDF)

Q4 2021 Eastern Washington Market Trends

Q4 2021
POST | (PDF)

2020
                    Eastern Washington Real Estate Market Update

Q1 2020
POST | (PDF)

                    Eastern Washington Real Estate Market Update

Q2 2020
POST | (PDF)

                    Eastern Washington Real Estate Market Update

Q3 2020
POST | (PDF)

Q4 2020 Eastern Washington Market Trends

Q4 2020
POST | (PDF)

2019
                    Eastern Washington Real Estate Market Update

Q1 2019
POST | (PDF)

                    Eastern Washington Real Estate Market Update

Q2 2019
POST | (PDF)

                    Eastern Washington Real Estate Market Update

Q3 2019
POST | (PDF)

                    Eastern Washington Real Estate Market Update

Q4 2019
POST | (PDF)

2018
                    Eastern Washington Real Estate Market Update

Q1 2018
POST | (PDF)

Q2 2018
POST | (PDF)

                    Eastern Washington Real Estate Market Update

Q3 2018
POST

                    Eastern Washington Real Estate Market Update

Q4 2018
POST | (PDF)

2017
                    Eastern Washington Real Estate Market Update

Q1 2017
POST | (PDF)

                    Eastern Washington Real Estate Market Update

Q2 2017
POST | (PDF)

                    Eastern Washington Real Estate Market Update

Q3 2017
POST | (PDF)

                    Eastern Washington Real Estate Market Update

Q4 2017
POST | (PDF)

These Eastern Washington real estate reports, data, forecasts, and market trends are provided for informational use. If you find it useful, please properly attribute this resource with a link. Parts of this east region of Washington State are also referred to as the Eastside, the Columbia River Basin, the Tri-Cities, Inland Northwest, and the Palouse.