Travis Davis has a term for the 2023 housing market in the Tri-Cities:

“It was a ‘life events market,’ that’s what I call it,” he said.

Davis, a real estate broker with Coldwell Banker Tomlinson and president of the Tri-Cities Association of Realtors, means that if a life event didn’t force someone to buy or sell this year, they likely stayed put.

“Mortgage rates definitely affected the temperature of the market. When you come off historic lows ... and then go to 7.5% within the year, there was some shock,” he said.

“Your ‘move-up buyer’ who says, ‘I want to buy a bigger house, we want a house with a pool’ – they look at what the new payment would be in this market and go, ‘Nope, we’re going to stay where we’re at,’” Davis said. “That part of the market was gone for 2023. So, basically if it was death, divorce, marriage or job relocation – those were factors that moved the market.”

Housing statistics for the area support his theory. 

As of the end of November, a total of 3,005 homes had been sold in the Tri-Cities area, compared to 3,785 by that date in 2022, according to data from the realtors association. 

That’s a drop of about 21%.

Homes spent more time on the market this year – an average of 42 days a month through November, compared to an average of 27 days a month for the same period in 2022. 

They also sold for about 3% less on average – $452,200 through November 2023, compared to $465,000 for the same period in 2022.

Meanwhile, building permits for new single-family homes also are down about 12% compared to 2022. The Tri-Cities area saw 868 permits from January through October, compared to 985 in 2022, according to data from the Home Builders Association of Tri-Cities.

However, the cities of Kennewick and Pasco were exceptions. 

Pasco, which has seen transformational population growth in recent decades, had 204 single-family home permits at the end of October, the same amount it had by that date in 2022.

And Kennewick was outpacing its numbers from last year, with 259 permits, compared to 172 in 2022.

“One of the reasons that Kennewick is doing extremely well right now is because they have some subdivisions that we would consider to be more moderately priced, meaning in the upper $300,000s to low $400,000s, which is hard to get to with the price of land right now. So, that’s pretty appealing to a lot of buyers,” said Jeff Losey, executive director of the home builders association.

Pointing to interest rates and housing inventory when it comes to single-family homes, things are playing out “the way we thought it would. It’s not a buyer’s market; it’s not a seller’s market,” Losey said. But in general, the Tri-Cities is still a good place for home ownership, he said.

“It seems more expensive to those of us who’ve been around for 30 years, 40 years. Realistically, the quality of life and how far your money goes in Tri-Cities, we’re still a very good deal when it comes to affordability,” Losey told the Tri-Cities Area Journal of Business.

As for 2024, it appears mortgage rates may peak near 7% or 8% and gradually fall to 5% to 6%. 

Losey the housing market may be more appealing for buyers in 2024 than this year, and indications are that in 2025 and beyond should be good for new construction in particular.

Davis said he expects “another year or two of this type of market ... it’s part of the real estate cycle.”

Like Losey, he’s still bullish on the Tri-Cities.

“You’re going to have to save a little bit more money, you’re going to have to make a little bit of a different decision when you purchase. But the Tri-Cities is still economically a very healthy place to be, and therefore the housing market will be healthy as well,” he said.