Tri-Cities housing prices at all-time high. Wages aren’t keeping up

The weather may be cooling off but the housing market in Tri-Cities remains hot and continues breaking records.

In September, the median sales price hit a high of $337,900, according to the Tri-City Association of Realtors.

That’s about $18,000 more than the month before and is roughly $38,000 more than the median price in January.

Tri-Cities housing prices have been increasing at such a rate that the area is ranked No. 6 in the U.S. for all metro areas where housing pricing outpacing wages, according to at least one research company. No. 1 was Las Vegas.

Housing prices in Tri-Cities increased at almost 5 times the rate of wages, said Construction Coverage, a company that does research and reviews for the construction industry. It was second among all small metros.

Tri-Cities home prices were up nearly 60 percent in five years, compared to a 12.3% increase in wages during the same period, said the company.

It said the median home price last year was just below $300,000, while the median salary was $41,450.

Five of the Top 15 small metros with wages outpacing housing were in Washington state, including Tri-Cities, Longview, Bellingham, Bremerton, and Wenatchee. Yakima came in at No. 20.

Demand and lumber

Jeff Losey, executive director of the Homebuilders Association of Tri-Cities, told the Herald earlier this month that new homebuyers are seeing a $20,000 increase in home prices than four to five months ago.

He said that the increase is from a combination of more demand for homes, a 20 percent tariff on lumber from Canada and a need for lumber to repair hurricane damage in the southern U.S.

Lumber prices have climbed 160 percent since May, he said.

But that spike hasn’t slowed down sales much in the Tri-Cities. More than 480 homes sold in September, with 494 pending at month’s end.

Only 405 homes were actively listed for sale at the end of the month, according to the Realtors association.

Last month’s median home price was more than 50 percent higher than in January 2017 when it was $221,000.

The median hourly wage in 2018 — the latest available — was $24.10 an hour in Benton County. That was up 14 percent from 2013.

In Franklin County, the median worker was earning $18.51 an hour or an increase of about 20 percent from five years earlier, according to Washington State Employment Security Department.

From 2013-17, the average price of a sold home rose $12,400 a year, from $179,400 to $234,900.

That’s 6 percent each year or a total of 30 percent, according a report released in 2018 from the U.S. Department of Housing and Urban Development.

This story was originally published October 25, 2020 at 2:15 PM.