By Darel Ansley, Senior Mortgage Loan Officer at Peoples Bank Wenatchee Financial Center
Navigating the housing market can feel overwhelming, especially for those hoping to find affordable options in an ever-changing landscape. The good news is that you have options, and understanding why the landscape continues to evolve is the first step in making the correct decision for your specific situation. Many are eagerly waiting for lower mortgage rates, believing that this will make homeownership more accessible, however, lower rates may not lead to lower home prices.
The reality is that lower rates may not actually make buying a house more affordable. The real challenge in the Wenatchee Valley lies in housing supply. If mortgage rates drop, more buyers will be able to qualify for loans, which may mean more competition for the same limited number of homes. In that scenario, an increase in demand may do more to drive costs up than the rates themselves.
We’ve seen it happen before. After the financial crisis of 2008, the Federal Reserve invested over three trillion dollars in mortgage-backed securities to lower rates and stimulate the housing market. While this helped keep rates low, it also fueled demand without increasing the supply of homes, which pushed prices higher. The median sales price for a home in Wenatchee was $268,750 in September 2016, but in 2024, it has soared to nearly $514,000 according to Pacific Appraisal Associates’ Wenatchee Area Real Estate Snapshot. That’s a significant jump, especially considering most of our incomes haven’t doubled over that time.
Ok, well can we just build more homes?
Not exactly. About 80% of Chelan County is owned by the state or federal government, and much of the rest consists of steep hills or farmland. Given these limitations, it means our housing supply will mostly need to come from infill development. Additionally, Washington has introduced many new building code requirements that make it challenging to construct homes at prices we saw a decade ago. Builders have found that changes to energy codes in 2024 can add around $30,000 to the cost of a basic home, as reported on by the Columbia Basin Herald.
So, what should you do if you’re finding it hard to afford a home at current prices? I’ve seen some interesting approaches.
In East Wenatchee, exciting changes are already being implemented to help with the issue of affordability. New state-level rules allow homeowners to build Accessory Dwelling Units (ADUs) on their properties. The city even provides a variety of pre-approved home designs on its website, which can simplify the permitting process. This means homeowners can create smaller, more affordable homes that can be sold to new buyers.
I’ve also seen instances of family members or friends working together to buy a property they wouldn’t be able to afford on their own. A few months ago, I worked with two friends who could only afford $300,000 each and decided to team up and buy a larger house priced around $550,000. They each have their own room and rent out the main floor to a family, significantly reducing their monthly expenses while building wealth through homeownership.
Ultimately, while the Wenatchee housing market presents significant challenges, it also offers opportunities for innovation and collaboration. By exploring creative solutions, potential homeowners can not only address their housing needs but also foster a sense of community. With determination and resourcefulness, the dream of homeownership can still be within reach, even in a competitive landscape.
For those of you ready to take the next step in home ownership or are interested to determine what you can afford, contact me at darel.ansley@peoplesbank-wa.com or give me a call at 509-664-5324. For more general information, visit peoplesbank-wa.com.
Equal Housing Lender