A 1900 Craftsman-style house is for sale on Wednesday, Jan. 4, 2023, on Pendleton’s lower North Hill. The average selling price for a house in Umatilla County climbed 56.6% in five years — from $194,527 in 2018 to $304,714 in 2022.

PENDLETON — The rate of growth in Umatilla County’s home prices slowed in 2022, but prices still climbed, according to statistics Seattle-based residential real estate brokerage Redfin Corporation collected.

During the coronavirus pandemic, median house sale prices grew 11.0% in 2020 to 19.3% in 2021. Last year the growth rate cooled off to 9.3%.

The Federal Reserve Bank raised interest rates in 2022, hoping to curb inflation. Thus, mortgage rates climbed as well, slowing the sales of homes. With lower demand, house prices rose at a slower pace nationally. New home construction slackened, according to U.S. Department of Commerce data.

Real estate agent Whitney Coffman of Irrigon said predicting the local housing market for 2023 is a tough act.

“The market slowed down because interest rates rose,” she said. “Customers now understand that rates may stay this way for a while. They’re starting to shop around. Rates have come down a bit.”

She also said she is optimistic. The supply side seems to be improving, Coffman said, with construction projects picking up.

The Canadian border, closed during the height of the pandemic, reopened, flooding the U.S. with cheaper lumber. The commodity crashed from almost $1,500 per 1,000 board feet early in 2021 to about $363 on Tuesday, Jan. 3.

“There are kind of mixed messages out there,” said Jef Farley, of Coldwell Banker Farley Co., Pendleton. “Tracking statistically today in the midst of change is a problem.”

Rather than looking just at average selling price per month, Farley checks multiple listing data weekly.

“I’m a numbers guy,” he said. “I look at how many houses are for sale in our little Mayberry market and how many sales are pending as well. At one point we got down to seven homes for sale. Economics 101. You add money supply and prices go up or the money is devalued.”

With less supply and more demand, prices went up during the pandemic.

“More money in the system from (Payroll Protection Program) funds and other government payments, more demand,” Farley said. “The Fed started raising interest rates around March 2022, and the number of homes for sale increased to 30 to 40.”

Farley attends national residential real estate conferences.

“The president of a big nationwide brokerage firm told me recently that this was the hardest market to predict he’d ever seen,” Farley said. “My colleague, Jim Whitney, said he’d never seen any easier market to predict. That was when the Fed started raising rates.”

Topography is a challenge in Pendleton, producing a shortage of buildable lots, Farley said. But undersupply of housing is a nationwide problem, with an estimated 5.5 million unit shortfall.

“The 2008 recession was such a deep downturn because it was caused by real estate,” Farley said. “It took builders out so hard that some didn’t get back in when things recovered. Supply hasn’t kept up even with population increase.”

Farley is optimistic about the future of affordable housing in the Pendleton market, where the housing stock is older than in Hermiston.

“For the first time in my 31-year career, lots of people want to move to Pendleton,” he said.

Umatilla County home prices actually fell from July 2021 to July 2022 and in the November of each year. They were the same in the September of each year.

In November 2022, Umatilla County home prices dropped 3.3% compared to 2021, selling for a median price of $283,399, down 3.3% year-over-year, according to Redfin. On average, homes sold after 25 days on the market compared to just 17 days in the previous year’s hot market. In November last year, 52 homes sold, down from 63 in 2021, down 17.5% year-over-year.

The average selling price climbed from $194,527 in 2018 to $304,714 in 2022, for a 56.6% increase in five years.

Umatilla County still suffers a shortage of affordable housing, despite an increase in building, county Commissioner Dan Dorran said. Five hundred apartments were under construction in the Pendleton area in 2022.

The lowest average home selling prices have occurred in the first four months of the year, while the highest prices have happened in the last quarter. The lowest average was $175,558 in January 2018, and the highest was $340,000 in October 2022. The highest priced month in 2021 also was in October, at $325,000.

Redfin rated Hermiston’s housing market “very competitive.” Median home price peaked at $413,000 in October 2022, up 14.2% from that month in 2021. But October 2021 was up 31.5% year-over-year.

In November 2022, Hermiston home prices were up 4.9% compared to 2021, selling for a median price of $330,975. On average, homes in Hermiston sold after 19 days on the market compared to 13 days in 2021. Sixteen homes sold in November last year, down from 18 in 2021.

The average sale price of a home in Morrow County was $302,000 last month, down 2.5% since 2021. The average sale price per square foot in Morrow County was $209, up 14.5% since 2021.

In November 2022, Morrow County home prices were up 27.1% compared to 2021, selling for a median price of $375,000. On average, homes in Morrow County sold after 67 days on the market compared to 21 days in 2021. Five homes sold in November last year, down from 12 that month in 2021.