All things considered, Andrew Magallanez says 2025 was a good year for the Tri-Cities housing market, and this year’s is shaping up to be more of the same.

Despite a government shutdown, hundreds being laid off at the region’s largest employer and growing costs for everything from fuel to food, homes still moved and prices continued to inch upward, albeit at a slower rate than in recent years.

That’s led to a more balanced market for buyers and sellers alike, said the CEO of Eastern Washington Realtor Association Alliance, which includes the Tri-City Association of Realtors.

“We still have the best prices in the state” for a metro area, Magallanez said.

That hasn’t been the case nationwide, which has seen sellers increasingly outnumbering buyers and home sales falling through as buyers face unaffordable mortgage costs. And even the Tri-Cities real estate industry is still facing pressures – properties are spending their longest time on the market in years, and there are still challenges with the mix of housing types and affordability.

But Tri-City real estate experts say they think 2026 will be an even better year for homebuyers and sellers, but it’s up to individuals to decide whether to get off the sidelines.

“The strategic choice is clear: You can sell now in a market that is still near its peak, or you can risk selling later in a more normalized environment,” according to a blog post from Kenmore Team, a Kennewick real estate office. “Deciding on the right time to sell is about seizing the advantage you currently hold.”

2025 in review

More than 3,600 homes were sold in the Tri-Cities in 2025, according to data from the Tri-City Association of Realtors, a 3% increase over 2024. Those figures cover sales in the Tri-Cities proper, as well as in outlying communities such as Prosser, Benton City, Finley, Burbank and Connell.

Median and average prices hit all-time peaks early in the year but dropped and leveled off shortly after.

In June, Tri-City homes saw an average sold price of $477,400, up from the same month for the past two years but a drop from the record high of $487,300 seen in February, according to the association’s data. The median sold price in June was $429,000, above the median in June 2024 but slightly below what was reported in 2023.

The average number of days on market for a property came in at 46 days, nearly a week longer than the month prior and even longer compared to the same period in 2023 and 2024. Median days on market was 17 days, a shorter time frame than the month prior and June 2024, but also almost a week longer compared to June 2023.

In the first six months of 2025, sales grew by just under 1% to 1,685. Real estate agents reported 1,670 homes sold in the area in the first six months of 2024, a nearly 9% increase compared to the same period in 2023. The latter half of 2025 saw home sales recover and prices inch upward.

Inventory was one of the biggest changes compared to past years. The Tri-Cities reached a peak of 1,138 active listings in September, a number not seen in a decade. That dropped with the approach of winter but sat at 938 listings at the end of December, still higher than any month in 2024 or 2023.

Surprisingly, despite concerns locally and nationwide about housing affordability, the luxury home market skyrocketed to a new high for sales. Eighty-five homes worth $1 million or more sold in the Tri-Cities in 2025, according to data from Cari McGee Real Estate Team. Just a decade ago, only one home sold in the area for that price tag.

“There are probably three things driving the growth of luxury sales,” said broker/Realtor Cari McGee in a statement. “First, Tri-Cities area home prices went up substantially before and during the pandemic and have remained at those levels since. Number two, the cost of building a home has gone up significantly in that same time frame. And third, a lot of new Tri-Citians have relocated here from much larger cities where home prices are significantly higher, then bought or built homes on the upper end of our price range.”

Looking ahead

Magallanez said those in the local real estate industry are optimistic for the coming year. The recent passage of the federal budget for the Hanford site as well as Pacific Northwest National Laboratory will help many families plan for any upcoming home purchases.

Interest rates, while still above the record lows prior to the Covid-19 pandemic, have largely stabilized. U.S. Bank shows an average rate of 5.9% for a 30-year mortgage in Washington state as of Feb. 2. Magallanez said he anticipates them to settle around 6% on average for the coming year.

“Even if that just saves you a couple hundred dollars a month, that could be what makes it affordable,” he said.

But affordability remains a challenge. A third of homes sold in the Tri-Cities went for between $401,000 and $500,000 in 2025, according to Kennewick-based Everstar Realty. That’s outside the range of affordability as defined by the U.S. Department of Housing and Urban Development, which states that a home is affordable when a family is paying no more than one-third of its monthly income toward a mortgage.

The average annual median income for a family of four in Benton and Franklin counties in 2024 was roughly $88,000, meaning a price of $350,000 would be at the edge of affordability.

“Whether next year will see further increases or a market correction remains to be seen,” Everstar said in its assessment of the 2025 housing market.

And the trend toward buyers having the most leverage they’ve had in years is likely to continue. Magallanez said builders are offering more incentives and concessions on new homes, as are existing home sellers. And there are more home developments targeting those entering the market, such as Hayden Homes’ Merlot Meadows project near Prosser and various townhome and multifamily developments around the Tri-Cities.

Tips for buyers and sellers

With prices and interest rates unlikely to decline, regional real estate experts said those looking to buy or sell a home need to determine whether it’s worth the risk waiting any longer to jump in.

For home sellers, prices are unlikely to drop but they also will not continue the meteoric rise of past years. While existing homeowners may be reluctant to let go of an old mortgage with an interest rate far below current ones, that could make it harder for them to find their next home if they hesitate listing their current one.

“The market will transition from the current super-heated seller’s market to a more balanced, but still fundamentally strong, market. For homeowners, this forecast creates a clear sense of calculated urgency,” according to the Kenmore Team.

From Magallanez, he is seeing more homebuyers resigning themselves to the likelihood that the historically low interest rates aren’t coming back anytime soon. Continuing to wait and see if they do runs the risk of prices climbing too high to put someone’s dream home within reach.

“It’s easier to get in and make adjustments,” Magallanez said regarding expectations for how much home someone can afford.