(The Center Square) – A new report put out by the state Economic Revenue Forecast Council, or ERFC, revealed that Washington’s housing construction and regional home prices have declined in recent months after a boom in early 2022 at the beginning of the year.
ERFC uses building permits as a gauge to track housing construction activity. According to the new report, the number of housing units authorized in 2022 was strong in the first quarter “due to booming multi-family activity” but declined until early 2023.
Seattle area home prices rose “rapidly” at the time of ERFC’s June 2022 economic forecast, increasing by 3.4% in March and up 27.6% compared to the same time in 2021 – and up 202% since December 2011.
In its new report, ERFC found that recent home sales also remain “weak,” with existing home sales in April decreasing by 3.4% compared to March 23.2% below sales in April 2022. Consequently, Seattle area home prices have fallen 12.5% since the same time last year.
A similar situation has occurred for the housing market in nearby Snohomish County, where according to the Snohomish County Assessor’s Office the average home value has fallen by 6%.
In a statement, Building Industry Association of Washington Managing Director of External Affairs Jan Himebaugh wrote that “while the home building industry had incredible success during the 2023 session, the state’s work is far from over, as this latest economic report makes clear. The state still faces a massive housing shortage and the only way we’re going to get out of it is to continue clear roadblocks to new home construction.”
Despite the drop in home prices, housing in the state still remains expensive. According to a BIAW “affordability index” released earlier this year, “roughly 81% of Washington is priced out of buying a new home.”
Himebaugh wrote in her email that “increasing new home supply will free up more existing home supply so more people can enjoy the benefits of home ownership. Approving more permits, more quickly, will help our builders can build more of the homes our state desperately needs.”
