They’re back. Cooling home market drives new demand for open houses in WA

Shannon Jones had a packed weekend in mid-April.

A Realtor with Berkshire Hathaway HomeServices, she scheduled two open houses on a Friday and two more on a Sunday.

“I would have had two on Saturday but I had to go to a funeral in Pomeroy,” said Jones, who worked in area government for decades before pivoting to real estate.

In all, she planned nine open houses for 13 listings in the span of just a few weeks.

Spring typically heralds the start of the busiest season for selling homes. But open houses were rare during the pandemic, when health fears unnerved both buyers and sellers and a hot market fueled by low interest rates guaranteed fast sales.

Welcome to 2023, when the residential real estate market is much cooler after mortgage interest rates doubled as the federal reserve raised the funds rate to combat inflation.

In the Tri-Cities, new home starts are running 30% behind 2022, according to the Home Builders Association of Tri-Cities.

In March, it took an average of 52 days to sell a home, compared to 23 days a year earlier, according to the most recent data from the Tri-City Association of Realtors.

Dave Retter, owner of Retter & Company | Sotheby’s International Realty in Kennewick, said open houses picked up dramatically by February in stark contrast to the early pandemic days.

Homes then were “flying off the shelf with 10 or 20 offers.”

“You list on a Friday and it probably sold before a Sunday open house,” he said. He called it a positive development for buyers.

Jones agreed it now takes more days and more work to sell a home. Putting out open house flags, beverages and welcoming visitors, including casual looky-loos, is good business.

“They’re necessary now,” she said.

A search of Zillow.com, the popular home listing and valuation site, indicated about 100 open houses are planned in Kennewick, Pasco, Richland and West Richland this weekend.

Real estate agents are mixed on the value of open houses.

Nancy Wagner, a Realtor with Windermere Group One, said they’re a good way to meet buyers who could become clients.

But Jones is a fan.

Meeting prospective clients is important but it’s the bonus, not the point.

“The point is to sell the house,” she said. “Open houses do sell homes.”

Two open houses

Jones’ long weekend started on a Friday morning at a tidy Richland alphabet home off Swift Boulevard.

The three bedroom, one bathroom house was clean, well-maintained and had a charming yard. The asking price was $357,000. By mid-morning the only visitors were a curious neighbor, a newspaper photographer and a reporter.

The lack of traffic is valuable too — it suggests the price might be ambitious. Jones planned a second open house for the following weekend, at the same price.

By afternoon, she had moved her open house signs to the Badger Mountain area for her second event of the day.

Wagner, of Windermere Group One, had a busy weekend too. She held an open house in mid-April at a charming , yellow tri-level in Kennewick’s Rancho Reata. The asking price was $499,000 and it went under contract within a week.

Wagner said she kept holding open houses during the pandemic if sellers requested them. Attendance was low and they could be awkward.

“During COVID, we had it set up where we’d sit outside with our masks on and people would go through with masks on,” she said.

In 2023, interest is picking up, she said.

For Wagner, open houses are a good way for “gun shy” buyers who aren’t ready to commit to an agent and a serious search.

“I know agents use it to build their business,” she said.

Mixed feelings

Dennis Gisi, owner and broker for the John L. Scott Real Estate office in Pasco, has mixed feelings about open houses.

Sellers ask about them when they’re thinking about putting houses on the market. Some agents hold them while others view them as a poor use of time, he said.

But after several years of fast-paced sales that led to multiple offers and escalating prices, he said building relationships is more important than ever. That means contacting the data base, fielding questions, seeking referrals and staying on top of social media.

“Don’t forget the open houses,” he said. “You have to pull out all the stops.”

Seller’s market, still

It may take twice as long to sell a house in the Tri-Cities now than a year ago, but it remains a seller’s market. Prices are relatively stable and the low inventory means it remains a seller’s market.

Gisi said deal hunters will be disappointed.

His office recently represented a Richland home being sold by a relocation company. It was listed at $499,000 and received several low-ball offers.

One was for $400,000 from buyers reaching beyond their range. Another was for $445,000 from a bargain hunter who mistakenly thought that after 47 days, the seller must have been panicked.

”I’m not panicked. At all,” Gisi said. The relocation company reduced the price to $480,000 and accepted a full-price offer.

“I think agents have to educate the clientele. It’s not a chaotic market. But it’s still a seller’s market,” he said, noting that the 513 active listings in March are well below the 1,200 needed for balance.

The market topped 700 last October. Before that, it last exceeded 700 in 2017.

In March, the average local home sold for $452,400, $4,600 less than a year ago, according to the most recent figures compiled by the Tri-City Association of Realtors.

The median was $410,000, down 5% from a year ago.

Gisi said prices are actually up on a per square foot basis.

“We’re not seeing deterioration in pricing at all, although days on market has increased,” he.

Retter, Gisi and the others caution against waiting for home prices to plummet. The Tri-Cities is adding jobs, which translates into demand for homes to buy or rent.

In March, the Washington Department of Commerce projected the state would need 1.1 million homes over the next 20 years to meet growth projections, or about 35,000 per year.

Open house etiquette

Attending an open house is a bit like being a house guest, except that it’s OK to open cabinets and other fixtures.

Real estate professionals say open house guests are welcome. to explore a home’s fixtures, which is anything that stays with the house. The National Association of Realtors offers common-sense rules of etiquette to follow.

▪ Wagner asks visitors to be courteous, particularly if the open house is in an occupied home. If possible, leave children at home. If not, keep them in check, she said.

“It’s not a place for kids to come in and jump on the furniture,” she said.

She asks visitors to leave comments. Good or bad, they help steer the seller and their broker on what would-be buyers think.

▪ Jones, of Berkshire Hathaway, said she encourages neighbors to drop in by sending postcards. Neighbors can be conduits to friends who like the area and they sometimes buy homes to upgrade without leaving an area they love.

She too advises leaving children and nonworking dogs at home. While most sellers pack up personal items, not every property is childproof.

She advises home hunters to take their time, even if there are other visitors there.

Be respectful and feel free to open cabinets, closets and refrigerators — anything that stays with the property. That does not include dresser drawers.

“The dresser is not staying,” she said.