Market Update - 10.04.23
Our April market update suggested a year of falling demand and softening prices. This has been the case. The number of closed residential sales year-to-date is down by nearly 40% compared to 2022 sales. Correspondingly, the dollar volume has dropped as well. 2022 saw nearly $140M in residential sales in Lake Chelan. This year, that number is $80M.
This news is significant for Sellers, who for once in a long while, need to be patient and strategic in finding a Buyer for their home. It is significant for those in the real estate industry. Time to tighten the belts. And it even extends to municipalities who have grown fond of the Real Estate Excise Tax (REET) revenue. This tax money drops off proportionally with total sales dollar volumes.
Looking ahead, the prospects for 2024 look uncertain. In the face of variables in both political and economic arenas, our sense is Lake Chelan can expect more of the same – a quiet market. The rising cost of home loans will reduce the number and decisiveness of Buyers. In such an environment, Sellers will need to price lower than they desire to find a deal.
Affordable Housing
The median residential home price has dropped 13% YTD from 2022. But this has not been the case in the sub $500,000 price range. The median price actually ticked up 1% from $416,000 to $420,000. (See graph below)
This makes sense given sub-500K buyers typically are primary home owners who need housing, not a second home buyer who just wants a vacation place in Chelan. Those needing homes will continue to buy and keep price pressure strong in the sub-500K market.
The graph below shows the availability of homes priced at less than $500,000. The volume of homes has steadily declined from 2015 and further plummeted during COVID. Recently, just five to six homes have been for sale at any one time in this price range.
Additional Graphs
The graph below shows the year-to-date activity of sold residential homes. As of October 1, the number of sold homes has dropped by nearly 40% from 2022.
