Improved buyer demand in the first quarter of 2015 pushed pending home sales in Kennewick, Washington to their highest level in over three years. During that time, the local market has seen increased equity appreciation and steady growth in home prices. The market appears to have bottomed out and there are solid fundamentals in place indicating that this growth may be sustainable. The high unemployment rate is a concern, but that can be evened out by the strong gains in job growth. Overall, the Kennewick real estate market appears to be growing at a moderate pace, and shows no signs of slowing down any time soon.
The current median home price for the Kennewick area is $181,000. The national average, however, is slightly more at $203,867. The Kennewick housing market appreciated by an average of 1.2 percent over the last 12 months against a national number of 6.7 percent. Over the past three years, Kennewick real estate appreciated by as much as 1.9 percent, where the national average exceeded 28 percent. Prices appear to have bottomed out in the Kennewick housing market, and are on the upswing. Since the recession hit, the local market has seen an increase in price gains and equity appreciation. Locally, home prices did not fall as far as the rest of the country, so the price gains would not be as dramatic as national numbers. The fact that it is growing at a slow, sustainable pace is a great sign for the future.
With rising home prices comes rising value. A testament to the Kennewick real estate market is that it did not fall off a cliff during the recession. Prices and equity were reduced, but not near the level of most other markets in the region. Kennewick real estate has seen positive equity growth in each of the past eight years. The following highlights how much equity has been gained relative to the year of purchase:
- Homes purchased in the Kennewick housing market one year ago have appreciated by an average of $4,902; whereas the national average was $15,753 over the same period.
- Homes purchased in the Kennewick housing market three years ago have appreciated by an average of $12,314; whereas the national average was $53,565 over the same period.
- Homes purchased in the Kennewick housing market five years ago have appreciated by an average of $17,718; whereas the national average was $47,444 over the same period.
- Homes purchased in the Kennewick housing market seven years ago have appreciated by an average of $33,210; whereas the national average was $17,200 over the same period.
- Homes purchased in the Kennewick housing market nine years ago have appreciated by an average of $48,250; whereas the national average decreased by a modest $100 over the same period.
As you can see, when the rest of the housing market collapsed and even declined in equity, Kennewick real estate pushed on.
Like most of the rest of the country, unemployment pushed the local economy and job market down. Strides have been made, but it is still concerning for the city of Kennewick. The area added 3,300 new jobs to the market over the past twelve months. This is a slight decrease from the previous month, and down from a 36 month high of 4,600. The current unemployment rate for Kennewick sits at 7.5 percent, which exceeds the national average of 5.5 percent. Unemployment in Kennewick is down considerably from the year before, marking great improvements. A glimmer of hope exists with the rate of local job growth too. Jobs are growing at a 3.2 percent clip, which far exceeds the national average of 2.1 percent. With job growth this strong, it won’t take too long for unemployment to correct itself and align itself with national numbers.
One of the reasons that the Kennewick real estate market is so appealing is that it does not have the backlog of foreclosure inventory like most other markets. According to RealtyTrac, there are currently 83 properties on the market in some stage of foreclosure (default, auction or bank-owned). This figure is slightly higher than it was a year ago, but still below the national average. The majority of distressed properties in the Kennewick housing market are up for auction, meaning savvy investors have access to to potential deals with great spreads. Kennewick real estate investing should continue to benefit from the distressed property market.
One of the measures of affordability is the monthly mortgage payment to income ratio. The current national average sits at 14.3 percent, meaning the average homeowner across the country spends that much of their monthly earnings on mortgage obligations. The local number for Kennewick last quarter was 9.9 percent. Historically, this has been a strength of the market and doesn’t appear to be changing any time soon.
Four out of the five most popular zip codes have all seen declines in average listing prices. The average listing price for homes for sale in Kennewick WA was $315,717 for the week ending June 17, which represents a decrease of 0.6 percent, or $1,860, compared to the prior week.
Kennewick real estate has a very good chance of realizing equity and price gains over the next twelve months. Although unemployment is an issue, it is balanced out by the level of local job growth to the area. Foreclosures are a minimal concern, and there is ample supply to meet market demand. Kennewick shows great signs of taking off in the very near future.
Kennewick Real Estate Market Summary:
- Current Median Home Price: $181,000
- 1-Year Appreciation Rate: 1.2%
- Unemployment Rate: 7.5%
- 1-Year Job Growth Rate: 3.2 %
- Population: 76,762
- Median Household Income: $58,542