Our ‘new normal’: What you should know from Pierce County’s October real estate report

Months of cooling demand in the residential home market in Pierce County continued in October amid higher interest rates and the seasonal slowdown accompanying a nationwide slowdown.

In its October home sales report, the Northwest Multiple Listing Service showed that in Pierce County pending sales for existing single-family homes was down 42.87 percent, while listings were up more than 107 percent from a year ago.

Closed sales for homes were down more than 34 percent, with the median closed sale price for the county at $535,000, up 2.88 percent from a year ago but down from September’s $538,000.

Other median closed sale prices for existing homes and comparisons with a year ago:

▪ King County: $903,000, up 9.55 percent, closed sales down 41.08 percent.

▪ Snohomish County: $730,000, up 5.04 percent, closed sales down 37.85 percent.

▪ Kitsap County: $513,250, up 0.98 percent, closed sales down 33.04 percent.

▪ Mason County: $370,000, down 2.63 percent, closed sales down 26.21 percent.

▪ Thurston County: $500,000, up 5.32 percent, closed sales down 37.79 percent.

“Even with more choice on the market than we’ve seen in several years, pending sales fell last month,” remarked Matthew Gardner, chief economist at Windermere Real Estate, in Monday’s release. “The cause is almost certainly rising mortgage rates, which rose from 6.65 percent early in the month and ended above 7.1 percent.

“This is clearly having an impact on buyers,” he added.

He also cautioned that any dramatic price relief for buyers probably wasn’t in the cards, noting he had “bad news for those buyers who are sitting on the fence waiting for home prices to implode.”

Gardner expects regional home values will turn modestly negative in 2023, but added, “Those who hope to pick up a home on the cheap are likely in for a long wait.”

The news follows Redfin’s recent report also showing a steep decline in pending sales in October compared with 2021, with pending sales in the Tacoma metro down nearly 50 percent from same time last year.

The real estate company’s Nov. 4 update said its seasonally adjusted Homebuyer Demand Index, which measures home tour requests and other services from Redfin agents, was down 33 percent year over year.

For the condo market, listings in Pierce County were up more than 105 percent from a year ago, but pending sales were down 55.74 percent from 2021 and closed sales were down more than 15 percent. The median price was $369,000, up 4.69 percent from a year ago but down from $410,000 in September.

Dick Beeson, managing broker at RE/MAX Northwest in Tacoma/Gig Harbor, described the market now in its “new normal.”

“We are now experiencing a balanced market. I said the new normal was 2-to-4 months of supply back two or three years ago. We’ve finally reached that point. This is the new normal until interest rates go down.”