Market Update - 12.16.22
2022 - A Pause
We end 2022 with change in the air. The frenzied “Zoom-town” days of real estate in the Lake Chelan valley are over. Rising interest rates and uncertain economic forecasts have introduced spaciousness into the market. Homes no longer flip from Active to Pending within days. Bidding wars are no longer the norm.
In the past, such a pause would allow inventory to catch up with demand. Such a pause would trigger a reset, allowing prices to moderate downward.
2012-2022 - Rocket Ship Growth
While this reset still could occur in the future, the current dearth of inventory indicates high demand / low inventory conditions will persist.
COVID aside, these conditions have been building for years due to three long-term trends:
The growth of the vacation-rental industry.
The growth of the Seattle tech economy.
The growth of hospitality offerings in the Lake Chelan valley.
Taken together, these trends super-charged Lake Chelan real estate. They brought new visitors to the valley who became enthralled with the lake and wanted a Chelan place of their own.
This an age-old story. It began generations ago with developments like Lake Chelan Hills and Wapato Point.
But these past ten years feel a bit different. Not only has the valley bumped up against its natural limits of buildable land, the quantity of dollars competing for this land has increased. The result has been a median sales price that skyrocketed from $300,000 in 2012 to $800,000 today.
What should I do as a buyer?
In the face of such demand, what should you do as a buyer? Do your homework to get educated on the market. Understand the type of property you desire and then find a trusted agent. You will need as many eyes and ears on the ground as possible to find your property. And as always, do your financial homework. Get pre-approved so you understand your purchasing power and comfort level.
What should I do as a seller?
Sellers who are leaving the valley will enjoy a one-time windfall as they say goodbye to a place they have enjoyed for years. You have the easiest path.
Sellers who want to trade up will need to work out creative financing. Even with the pause of 2022, local Sellers are rarely entertaining contingent transactions. Consider some bridge financing to allow you to purchase your new home while still owning your current home.
The Data
The graphs below show various statistics over this ten year period (with 12 month averaging employed to smooth out seasonal highs and lows). The graphs show the rocket ship growth described above.
Closed Sales:
The volume of sales increased yearly since 2012 with a final spike during COVID. 2022 has dropped to pre-COVID levels.
Homes for Sale over last 10 years:
The flurry of sales activity in 2020 and 2021 depleted an already falling inventory of homes.
New Listings:
Sellers increasingly are staying-put in the valley given the lack of other local alternatives. New listings have plummeted to 2013 levels.
Median Days on Market:
Even with the moderation of 2022, buyers still quickly made purchase decisions as shown by the low median Days on Market.
Median % of Original Listing Price:
This continued Buyer demand is shown in the sustained ability for Sellers to enjoy sales prices at or near listing prices.
Median Sales Price over last 10 years:
Finally, the median sales price shows a continued increase over the ten year with a marked increase during COVID. The moderation of 2022 is shown in a leveling of median sales price near $800,000.
