Housing market cools after volatile year

A rapidly cooling housing market on Whidbey became a reality in 2022, echoing a nationwide trend.

By Kira Erickson • January 20, 2023 1:30 am

A rapidly cooling housing market on Whidbey Island became a reality in 2022, echoing a nationwide trend as interest rates soared.

Data from the Northwest Multiple Listing Service showed a notable decrease in homes and condos sold in Island County last year, even with more available inventory. Compared to 2021, which had 1,872 closed sales, 2022 had just 1,524 sales. That’s a 18.59% decrease. Active listings of homes and condos reached a total of 2,373 in 2022, more than double that in 2021.

Still, the median home sales price in 2022 was higher than the previous year, at $570,000. In 2021, that price was $527,500.

Joe Mosolino, a designated broker for Windermere Real Estate in Freeland and Langley, said that for much of 2021, low interest rates created motivation for buyers to act fast. That changed in 2022, when they rose from around 3% to 6% over the course of the year.

These days, the condition of the property, he said, is what seems to determine how quickly homes will sell on South Whidbey.

“Buyers have the freedom to be more discerning right now,” he said.

South Whidbey homes spent an average of 23 days on the market in 2022, compared to just 17 days in 2021.

While they are still seeing people moving to Whidbey Island, Mosolino said the “COVID flee,” as he put it, is over. During the early days of the pandemic, people working from home moved from the mainland to the island in droves. But as a result of more and more companies requiring employees to come back into the office, Mosolino said, there are fewer home buyers from Snohomish and King counties.

However, South Whidbey’s market for luxury properties remains strong. Mosolino acknowledged that there is a shortage of homes within the $400,000 to $800,000 range, which is what is currently needed on the South End.

“We’ve always been a strong second home market on South Whidbey, and we don’t see that changing,” he said.

While it’s difficult to predict the trajectory of the housing market in 2023, a visiting expert will offer some insight. Windermere’s Chief Economist, Matthew Gardner, will present his predictions during two upcoming events on Whidbey. The first takes place at 4:30 p.m. on Thursday, Feb. 23 at the Oak Harbor Yacht Club. The second is at 6 p.m. on Tuesday, Feb. 28 at Useless Bay Golf and Country Club.

Kristen Stavros, a branch manager for Windermere’s Oak Harbor and Coupeville offices, said Whidbey is still going to have a “relatively active” real estate market because of its naval presence and also because it’s a desirable place for retirees to live.

“We are already starting to see activity pick up rather quickly as interest rates stabilize, fear subsides and people come back to normal schedules after the holidays,” she said.