By DON FENLEY

A key Tri-Cities regional housing metric to watch as we head into 2025 is a hold-over from this year – 2018 annualized residential home sales. In fact, it has gained extra significance as a key to how prices will behave.

TCI Group’s Annualized Residential Sales Tracker has monitored the slow long-term sales decline that began in April. All but two reports show the retreat toward what will probably be the new regional norm.

So far, existing home sales have sustained a comfortable pad to the 2018 pre-pandemic housing level.  The street talk is all about how slow the market is, but the long-view is a market that is better than what was before the 51-month sales frenzy that distorted public perception.

TCI’s Months of Inventory chart shows it’s nowhere near a balanced or the pre-pandemic level yet, but several sub-markets have a toehold on balanced conditions of five to six months inventory in specific price ranges.

Active inventory (months of inventory) is also a must watch metric because it’s the housing market’s equilibrium of supply and demand.

Markets that have regained pre-pandemic inventory levels are getting a lot of media attention because they are seeing prices soften. Local market watchers should ignore them. It’s not the case here. The current local active inventory is the best since 2020, but it would take a 70% increase to be on par with what it was in 2018.

Overall inventory will remain tight until existing owners get over the low mortgage rate induced locked-in effect, return to the market and revive existing home inventory with their existing homes.

The locked-in effect has kept inventory tight and afforded the regional market with a nine-month price trend that’s 4.3% better than last year and pushed the median sales price closer and closer to the $300,000 level.

Annualized home sales posted their first gain in three months in October. There were 6,738 sales during the 12 months ending in mid-Oct., up 0.9% from the previous month and the first positive number since the July sales mini-spike. Upcoming November and December reports will tell if the sales trend has reached an inflection point.

Slower sales may dominate public discussion but the long view shows a pad that is still above the pre-pandemic level. That has helped the market sustain a slow price appreciation.

Categories: CORE DATA