Washington State Posts Nation’s Steepest Inventory Decline As Sellers Cut Prices

Washington’s housing market recorded a 13.3% inventory drop over four weeks while 31.3% of listings saw price reductions, revealing a market where tight supply coexists with persistent pricing pressure. The state’s active inventory fell to 9,233 homes for the week ending Jan. 17, down from 10,652 homes on Dec. 20, according to HW Data.

The inventory decline outpaced the national market, where active listings decreased 3.1% during the same period. Despite the sharp inventory contraction, Washington’s price reduction rate of 31.3% aligns closely with typical market conditions of 30-35%, though it remains below the national average of 33.5%.

Inventory tightens across major metros

Seattle-Tacoma-Bellevue, the state’s largest metro, maintains 2,566 active listings with 32.3% showing price cuts. The metro’s months of supply stands at 1.4, indicating seller-favorable conditions with a market action index of 46.8.

Spokane shows the tightest conditions among major metros with just 1.2 months of inventory and only 24.4% of listings reducing prices. The metro’s market action index of 48.6 signals the strongest seller’s market in the state.

Olympia presents a contrasting picture with 37.9% of its 348 active listings taking price cuts, the highest rate among Washington metros. The market maintains 2.2 months of supply with a market action index of 36.9.

Pricing dynamics reveal market complexity

Washington’s median list price sits at $599,950, down 4% from $625,000 a year ago. The price decrease rate jumped from 27.9% last January to 31.3% currently, indicating sellers face more negotiation pressure despite tighter inventory.

The state maintains 1.8 months of supply, below the national average of 2.4 months. Year-over-year inventory increased 15.2% from 8,019 homes in January 2024, showing the current correction comes from an elevated baseline.

What to watch

Track the 31.3% price reduction rate as a key indicator of seller flexibility. Monitor whether inventory continues its sharp decline or stabilizes as spring approaches. Watch months of supply, currently at 1.8, for signs of further tightening or potential balance.

Use these market metrics to guide pricing strategies and timing decisions. Track inventory levels weekly to identify emerging opportunities. Monitor price reduction rates in specific metros to gauge local market dynamics. Share this data with clients to demonstrate current market conditions and support pricing recommendations.

HousingWire used HW Data to source this story. To see what’s happening in your own local market, generate housing market reports here. For enterprise clients looking to license the same market data at a larger scale, visit HW Data.