Market Update - 2.17.26
This month’s market update offers a quick residential snapshot and then a deeper dive into 10-year vacant land trends.
Outside of typical seasonal swings, the residential market has been stable since our last report of 2025. The metrics typically reported (Inventory, Pending Sales, New Listings, Months Supply) are in line with last year’s trends.
We expect residential sales to be slightly stronger this spring than the previous year. Interest rates have declined and Buyers have grown more accustomed to the current unsettled political environment.
Buyers will continue to have more influence than Sellers given high inventory and lower predicted pending rates. But Sellers of properties with trending finishes and high curb appeal will continue to enjoy quick sales.
On the raw land front, the ten-year sales graph tells the story of a COVID spike and then a sharp fall in 2022 as inflation negatively impacted new home construction pricing. (A home that would have cost $200/sf to build in 2019 is now $300/sf or more.)
Another factor driving down sales is lower overall inventory. The entire Chelan area had just 60 raw land parcels for sale in March of 2021. Going into the pandemic, summer inventories typically ranged between 200 and 300 vacant lots. As the inventory dwindled and demand remained high during COVID, lot-prices doubled. (Each point in the graph below represents 12 months of averaged data to remove seasonal spikes.)
The increasing prices sent land developers racing to the County to approve subdivisions. These properties eventually did hit the market resulting in inventory increases beginning in 2022. But the land developers quickly found the market drying up with construction costs refusing to return to pre-COVID levels.
Since then, the market has been slowly adjusting to the higher post-COVID land prices, interest rates, and building costs. Our prediction is that these factors will continue to result in fewer new home builds in the coming years and continued sluggish land sales.
The one exception to this sluggishness is the ultra-luxury home market. According to our contacts in the building industry, high-end land owners are paying $2M-$5M in construction costs for homes that can exceed $700 /sf. This suggests higher construction costs are not a concern for this sector. Additionally, these owners are typically paying cash which removes the financing cost variable.
