Home prices in the Northwest MLS footprint dropped on an annual basis for the first time since March 2012, the service’s December data showed.

The median December price for single-family homes and condominiums was $570,000, a drop of 0.51% compared to the same month the previous year. The median price in 2022 hit a high in May at $660,000 and started to decline as interest rates increased.

Pending and closed sales dropped year over year, while active listings nearly tripled.  

“In the first half of the year, we had low interest rates, rising prices and little inventory,” Dean Rebhuhn, who owns Village Homes and Properties in Woodinville, said in a news release. “The second half of the year brought increasing interest rates, some lowering of prices and increasing inventory.

“We still have pent up buyer demand and low inventory in the major markets.”

The report showed about 2.1 months of inventory at the end of December across the 26 counties in the Northwest MLS, but King, Kitsap and Snohomish still have less than two months of supply.

“The local housing market in 2022 ended with a whimper rather than a bang,” said Matthew Gardner, chief economist at Windermere Real Estate. “Overall, the housing market is going to continue falling off the artificial ‘sugar high’ that was a function of the artificially low mortgage rates during the pandemic.”

J. Lennox Scott, chairman and CEO at John L. Scott Real Estate, predicts things will improve in the spring.

“We anticipate a strong/very strong intensity of new listings going under contract within the first 30 days,” he said, adding that he expects inventory will improve as the calendar approaches summer.