As we usher in the new year, a lot of real estate investors and homebuyers are looking for 2022 housing market predictions and forecasts. Will the trends from 2021 continue to dominate this year or will things change? Will these changes be a slight deviation from where the market is today or will they be significant enough to be felt across the board?
Washington State experienced unprecedented growth in demand for quality real estate property while hitting record-lows for inventory. Will it still be the same this year? Here is Mashvisor’s Washington State Housing Market Forecast 2022 to help investors and buyers manage their expectations.
5 Things Investors Should Know About the Washington State Housing Market Forecast 2022
The Washington State real estate market looks like it will be as busy as before. The housing market in the Evergreen State exploded in 2021 as sellers dealt with multiple bids from buyers, with lots of them offering tens of thousands of dollars above the asking price. As a part of the Washington State housing market forecast 2022, experts say that this momentum will keep building this year as we’re still bound to see low rates on mortgages, high demand in properties, and a recovering economy.
According to Zillow, before 2021 ended the average single-family home price in the state was $563,890. That’s already a 22.8% YOY increase. The company projects another 12.3% increase before the year ends so there are no signs of prices stalling any time soon.
Realtor.com has identified Spokane Valley as one of the top markets in the US positioned for growth this year. A lot of investors and homebuyers have become interested in the suburb because of its average home price of $352,000. The possibility of owning a property that’s well below the state’s average makes Spokane stand out.
However, there’s not enough housing to go around for all interested investors and buyers.
Washington State Housing Market Forecast 2022 Edition
Investors who are looking at making a good profit on real estate this year might have different reactions to how things are anticipated to play out this year according to the Washington state housing market forecast 2022. Washington state real estate trends show that the state will still be one of the hottest markets in the US this year, yes, but that doesn’t mean that it will align with every investor’s goals, especially where the return on investment is concerned.
Here are some of the things industry experts and real estate analysts anticipate will happen in 2022:
1. The demand for property will continue to grow
Given the way in-migration has grown this past year due to the pandemic, it comes as no surprise that this is the first thing to make it on our Washington state housing market forecast 2022.
The pandemic has caused companies to adopt work-from-home arrangements to stay afloat. Those that can afford a home decided to move out of smaller apartments and purchase bigger and more comfortable properties which caused a surge in demand in the housing market. Buyers were making multiple offers on properties with some willing to go beyond the asking prices.
According to Redfin, among all the homes listed in 2021. 50.8% of them sold above the list price, while only 7.1% of them had to drop prices to sell. Overall, the sale-to-list price was a whopping 102.5%.
2. The Washington state housing market will remain remarkably tight as demand continues to outpace inventory
As of December 2021, there were only 4,151 properties listed which was a huge decrease compared to December 2020 which had 7,066 available homes. However, before the pandemic, the number of listings was in the tens of thousands.
The unexpected demand for affordable housing (due to in-migration) has caused a huge shortage in supply in the state. For this Washington State housing market forecast 2022, we anticipate that the housing inventory will remain low due to various factors. In-migrants are not just looking for affordable housing but they’re also looking to relocate to a place where their quality of life could drastically improve.
Aside from the recovering economy, WA also fares well in infrastructure, education, and financial stability compared to other states. It is ranked as the third in the nation when it comes to infrastructure, fourth in quality education, and sixth in financial stability. All of these make Washington attractive to investors and homebuyers.
3. Property price increases will keep going but not as aggressively as they did in the previous year
Given that the Washington real estate market is one of the top markets in the country today, prices are inevitably bound to increase, especially if we were to consider supply and demand.
Home value growth has been consistently on an upward trend for the past three years in Washington State. From December 2018’s $375,000 median home price, 2021 ended with a median price of $549,500.
However, industry experts and analysts are confident that while home values will continue to go up in 2022, they won’t be as ferocious as in the past couple of years.
4. Low-interest rates and job growth will be the main drivers for the 2022 housing market
In October 2021, it was reported by the US Bureau of Labor Statistics that the state’s unemployment rate went down to 5.0% (with a preliminary 4.7% in November 2021) from a high of 16.3% in April 2020, about the same time the pandemic started to wreak havoc.
Although the Delta variant had a certain hold on the state’s economy that consequently affected its job recovery, the unemployment rate is expected to keep going down this year.
Interest rates, on the other hand, are expected to also increase by just a tad. The prolonged low-interest mortgage rates have provided homeowners some relief, especially at the height of the pandemic. When 2021 started, rates were at a low of 2.67% and gradually increased to 3.12% in mid-December 2021. Experts predict that this gradual increase will keep up until the end of the year.
As far as the Washington State housing market forecast for 2022 is concerned, these two will be the primary drivers for the Evergreen State’s real estate industry.
5. Washington State will remain a seller’s market.
This year WA will continue to be a highly competitive market taking into account all the things discussed so far in this Washington State housing market forecast 2022. The state’s real estate market has proven to be quite a boon to sellers. Sellers are expected to be a lot busier (and wealthier) this year as the high demand for property and low housing inventory have resulted in double-digit price increases.
The 10 Best Washington State Real Estate Markets for Investors in 2022
Investing in real estate takes on different forms depending on an investor’s personality, risk appetite, financial goals, and timeline. When it comes to real estate markets, each region, county, city, and neighborhood have different things to offer real estate investors. One property may seem promising to one investor but might be rejected by another due to different factors. The point is, making money in real estate is not a one-size-fits-all model.
For instance, conventional house flippers have different goals, standards, and methods compared to micro flippers. Those who are in the market for rental properties also have varying differences when scouting properties to rent out.
Based on Mashvisor’s data, the following markets on this list are ideal for investors who wish to get into the rental business game. Just a heads up, folks who wish to rent out properties as vacation homes under Airbnb and other similar platforms need to find out the local rules and regulations for short-term rentals. Each county has different limitations where short-term rentals are involved. If you’re one of those people who wish to get into the Washington real estate market for vacation home rentals, take the time to do some research first before you proceed.
Having said that, here are the top Washington State markets for rental properties:
1. Clarkston, Asotin
- Median Property Price: $362.471
- Price per Square Foot: $211.21
- Price to Rent Ratio: 25.15 (high)
- Monthly Traditional Rental Income: $1.201
- Traditional Cash on Cash Return: 2.53%
- Average Airbnb Daily Rate: $102
- Monthly Airbnb Rental Income: $2.716.38
- Airbnb Cash on Cash Return: 4.96%
- Airbnb Occupancy Rate: 72.06%
- Walk Score: 80
- Top Investment Properties for Sale in Clarkston
2. Colville, Stevens
- Median Property Price: $418,935
- Price per Square Foot: $175.51
- Price to Rent Ratio: 30.73 (high)
- Monthly Traditional Rental Income: $1,136.11
- Traditional Cash on Cash Return: 1.95%
- Average Airbnb Daily Rate: $115
- Monthly Airbnb Rental Income: $2,521.36
- Airbnb Cash on Cash Return: 4.43%
- Airbnb Occupancy Rate: 71.5%
- Walk Score: 76
- Top Investment Properties for Sale in Colville
3. Kelso, Cowlitz
- Median Property Price: $474,613
- Price per Square Foot: $210.7
- Price to Rent Ratio: 26.82 (high)
- Monthly Traditional Rental Income: $1,474.75
- Traditional Cash on Cash Return: 1.83%
- Average Airbnb Daily Rate: $125
- Monthly Airbnb Rental Income: $2,288.78
- Airbnb Cash on Cash Return: 5.69%
- Airbnb Occupancy Rate: 58.8%
- Walk Score: 77
- Top Investment Properties for Sale in Kelso
4. Newport, Pend Oreille
- Median Property Price: $642,391
- Price per Square Foot: $249.8
- Price to Rent Ratio: 43.92 (high)
- Monthly Traditional Rental Income: $1,218.82
- Traditional Cash on Cash Return: 1.21%
- Average Airbnb Daily Rate: $201
- Monthly Airbnb Rental Income: $2,783.61
- Airbnb Cash on Cash Return: 3.46%
- Airbnb Occupancy Rate: 46.57%
- Walk Score: 63
- Top Investment Properties for Sale in Newport
5. Oak Harbor, Island
- Median Property Price: $586,445
- Price per Square Foot: $386.47
- Price to Rent Ratio: 25.06 (high)
- Monthly Traditional Rental Income: $1,950
- Traditional Cash on Cash Return: 3.75%
- Average Airbnb Daily Rate: $223
- Monthly Airbnb Rental Income: $4,029.84
- Airbnb Cash on Cash Return: 4.97%
- Airbnb Occupancy Rate: 63.08%
- Walk Score: 49
- Top Investment Properties for Sale in Oak Harbor
6. Renton, King
- Median Property Price: $808,910
- Price per Square Foot: $412.18
- Price to Rent Ratio: 27.7 (high)
- Monthly Traditional Rental Income: $2,433.43
- Traditional Cash on Cash Return: 2.39%
- Average Airbnb Daily Rate: $178
- Monthly Airbnb Rental Income: $3,155.79
- Airbnb Cash on Cash Return: 2.63%
- Airbnb Occupancy Rate: 63.96%
- Walk Score: 37.63
- Top Investment Properties for Sale in Renton
7. Richland, Benton
- Median Property Price: $502,572
- Price per Square Foot: $243.53
- Price to Rent Ratio: 25.11 (high)
- Monthly Traditional Rental Income: $1,667.83
- Traditional Cash on Cash Return: 2.06%
- Average Airbnb Daily Rate: $115
- Monthly Airbnb Rental Income: $3,314.23
- Airbnb Cash on Cash Return: 4.11%
- Airbnb Occupancy Rate: 59%
- Walk Score: 70
- Top Investment Properties for Sale in Richland
8. Seattle, King
- Median Property Price: $751,897
- Price per Square Foot: $580.68
- Price to Rent Ratio: 23.54 (high)
- Monthly Traditional Rental Income: $2,661.8
- Traditional Cash on Cash Return: 2.25%
- Average Airbnb Daily Rate: $154
- Monthly Airbnb Rental Income: $4,037.53
- Airbnb Cash on Cash Return: 3.05%
- Airbnb Occupancy Rate: 67.47%
- Walk Score: 68.83
- Top Investment Properties for Sale in Seattle
9. Spokane, Spokane
- Median Property Price: $438,052
- Price per Square Foot: $241.58
- Price to Rent Ratio: 31.65 (high)
- Monthly Traditional Rental Income: $1,153.23
- Traditional Cash on Cash Return: 1.18%
- Average Airbnb Daily Rate: $117
- Monthly Airbnb Rental Income: $3,149.92
- Airbnb Cash on Cash Return: 4.81%
- Airbnb Occupancy Rate: 68.86%
- Walk Score: 41.91
- Top Investment Properties for Sale in Spokane
10. Tacoma, Pierce
- Median Property Price: $477,381
- Price per Square Foot: $340.54
- Price to Rent Ratio: 29.66 (high)
- Monthly Traditional Rental Income: $1,341.2
- Traditional Cash on Cash Return: 1.04%
- Average Airbnb Daily Rate: $133
- Monthly Airbnb Rental Income: $3,149.54
- Airbnb Cash on Cash Return: 3.41%
- Airbnb Occupancy Rate: 69.6%
- Walk Score: 33
- Top Investment Properties for Sale in Tacoma
The Bottom Line
Real estate investors and buyers should take note of not just ongoing market trends but also of Washington state housing market forecast 2022 from industry experts. These predictions allow an investor to manage expectations and come up with the right real estate investment strategy in line with his or her goals. Seller’s markets will be found in most regions all over the US so investors should prepare accordingly by factoring in the real estate market analysis from industry insiders, analysts, and experts.
Mashvisor is a website that offers real estate investors access to several tools and a wide range of updated and accurate data to help make the process of finding a suitable investment property faster and easier. Sign up now for a free 7-day trial and get 15% off on your subscription.