(The Center Square) – Washington state experienced the eighth largest increase in home prices in the past seven years, according to a new study put out by Texas Real Estate Source. Washington building industry advocates say the increase is due to a regulations that have prevented supply from keeping up with demand.
“The law of supply and demand applies to all markets – including the housing market,” Building Industry Association of Washington Managing Director of External Affairs Jan Himebaugh told The Center Square in an email.
According to the new study, Idaho had the largest increase in average home prices between 2016-2023 at 124%, from $165,100 to $369,300. The 83650 zip code located south of Boise had an astounding home price increase of 461% during the seven year timeframe.
Washington’s average home price increased from $271,800 in 2016 to $485,000 in 2023, a 74% increase. Other states experiencing similar price increases were Florida and Montana, at 77% and 78% respectively. Of the top 10 states for home price increase, Western states made up eight of them.
A spokesman for Texas Real Estate Source wrote in a statement that “the study showcases significant increases in home prices across various regions across the United States. While factors such as demand, population growth and housing inventory have pushed prices higher across the states, some of these dramatic increases may still come as a shock.”
However, Himebaugh notes that Washington state was dead last in housing supply according to a Washington Department of Commerce study released in 2022.
DOC announced earlier this year that the state will need to build 50,000 housing units annually, 1.1 million over the next 20 years, in order to keep up with growth.
“This combination of higher demand and a severe lack of supply results in higher prices for everyone,” Himebaugh said.
Although the state Legislature took steps to address permit reform and expand housing construction options, Himebaugh wrote that “they could do more, like truly address the massive supply constraint of land because of policies like the Growth Management Act,” which BIAW claims has added $40,000 since 2009 to the cost of building a home.
The association estimates the state’s new energy code regulations taking effect in October will add another $15,000.
“Until Washington gets serious about addressing the problems behind increasing housing costs, namely land use laws like the GMA and costly energy code schemes, we will continue to see housing prices rise out of reach of Washington families,” Himebaugh said.
