At the end of March, Tri-Cities active inventory was up 29.2% from last year. A noteworthy improvement, but 11% less than it was in its next best year (2020). That inventory increase, and lower mortgage rates have helped put some downward pressure on home prices. Demand has also increased, and homes are not selling as fast as they did last year.

There is no question that the market is resetting, and buyers have more muscle. But the downward pressure on prices has not made a big improvement on affordability.

 We’re  still in a solid sellers’ market. That downward price pressure has caused the price increase growth rate to slow, but prices are still increasing. They were up 7% from last year and the three-month trend is up 8.1%.

The good news for buyers is the percentage of homes with price reductions is at a 12-month high. The average reduction from the original listing price last month was $30,687, up from $27,300 March last year.

According to NETAR’s Home Sales Report, 63% of the homes that sold last month also saw a reduction from the final listing price before the deal was finalized. The average was $17,501. That’s not a high point. But it’s consistent with what we’ve seen for the past year.

Last month’s median list price was $319,900, a six-month high.

Slower sales plus the normal seasonal increase for the prime home buying and selling season is pushing active inventory toward a pre-pandemic level, but it has a long way to go given current local conditions. March would have had to have an additional 1,200 homes on the market to be at the 2018 pre-pandemic benchmark.

Builders are moving ahead with new projects; however, many have tapped the brakes on the pace while they wait and see what happens on the economic and political fronts that have the potential to produce unpredictable effects.

At the same time, the number of owners with basement level mortgage rates are still hanging onto them and not replenishing the existing home inventory at normal levels. A recent national survey reported that most owners say it would take a mortgage rate in the 5% to 5.5% range to nudge them into the market. Most current outlooks look for rates to average no better than 6% this year.