Is the housing market crashing in Vancouver Washington?

The real estate headlines have been all over the place lately—and if you’re asking, “Is the housing market crashing in Vancouver WA?” you’re not alone. Rising interest rates, affordability concerns, and economic uncertainty have many buyers and sellers wondering what’s really happening here in Southwest Washington.

As a full-time Realtor and local market expert, I’m breaking down what’s actually going on in our region—from home prices and inventory levels to buyer behavior and where things are likely headed next.

The Current State of the Vancouver WA Housing Market

The housing market in Vancouver, WA is navigating a complex landscape. Despite rising interest rates and affordability concerns, home prices have remained relatively stable, and the market shows resilience in key areas.

Home Prices Are Stable, Not Falling

Despite fears of a housing market crash, home prices in Vancouver, Washington are holding firm.

• Average Sales Price: $579,800 (as of June 2023)

• Median Sales Price: $521,000

• Year-over-Year Appreciation: Average prices rose 3.3%, and median prices increased 4.3%

While prices are down about 1% from earlier in the year, this minor dip reflects seasonal adjustments, not a collapse. It’s also important to understand that historically, U.S. home values appreciate around 4% annually—so we’re still in healthy territory.

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Interest Rates and Their Impact on Home Prices

Interest rates have shifted dramatically in the last year, influencing buyer behavior, affordability, and overall housing demand. Let’s take a closer look at how this is playing out in Southwest Washington.

Interest Rates Have Climbed—But the Market is Adapting

One of the biggest drivers behind real estate shifts today is rising interest rates. Over the past year:

• Rates rose from about 5.5% to between 6.5% and 7.25%

• Buyer affordability has declined, especially for first-time buyers

• Despite this, home appreciation in Vancouver WA has continued—just at a slower pace

This has led to softening demand in some price points, but it's not enough to push the market into crash territory.

Inventory Woes: Fewer Listings, Higher Competition

A major factor shaping the real estate landscape in Vancouver and Southwest Washington is the growing shortage of available homes. As interest rates remain high, homeowners with favorable mortgage terms are choosing to stay put, creating what experts call a "lock-in effect." This phenomenon is significantly reducing the number of new listings and contributing to heightened competition among buyers.

The Lock-In Effect Is Driving a Historic Inventory Shortage

Another key issue in the Southwest Washington real estate market is low housing inventory. Here’s what’s happening:

• New Listings are down 24.8% year-over-year

• Many homeowners are sitting tight with interest rates under 4%

• This creates the “lock-in effect,” discouraging people from selling and buying at higher rates

This shortage of available homes means supply remains tight, helping to keep prices stable despite lower demand.

The Bigger Picture: Why There’s a Housing Shortage

Low inventory is more than just a short-term reaction to interest rates—it's the result of a long-standing national housing supply problem. Understanding this context helps explain why buyers in Vancouver and across the U.S. are struggling to find homes, despite price moderation and slower market velocity.

It’s More Than Just Interest Rates

The current housing shortage is the result of long-term trends:

• After the 2008 crash, homebuilders cut back drastically

• Between 2008 and 2020, the U.S. was only building 800,000 to 1.2 million homes annually

• In reality, the country needed 1.5 million homes per year

This created a 5 to 6 million home deficit. Add in:

• Millennials entering peak home-buying age

• Baby Boomers choosing to age in place

• A shift toward larger homes and more space post-COVID

…and you’ve got a serious imbalance between supply and demand.

Is the Market Still Strong in Southwest Washington?

Despite high mortgage rates and stretched affordability, the housing market in Vancouver, WA is holding its ground. Local sales data suggests that activity is picking up as the market adjusts to new economic conditions.

Looking at the Numbers

Despite rising rates and lower affordability, the local market is showing resilience:

• From May to June 2023, new, pending, and sold listings all saw modest gains

• The summer market typically peaks through late October

• A slowdown often follows through the holidays before picking back up in spring

A Resilient Local Market

While affordability remains a concern, the Vancouver market continues to demonstrate resilience, thanks in part to its strong economic fundamentals, desirable neighborhoods, and continued in-migration from out-of-state buyers.

Buyers may not be rushing in like they did in 2021, but demand is steady, and homes that are priced well and presented professionally are still selling—often with multiple offers.

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Watch for Inflation and Fed Activity

The Federal Reserve’s continued effort to curb inflation by raising rates may put some pressure on housing affordability moving forward. If rates rise too high, buyer activity could slow further.

Still, this is far from a market collapse—it’s more of a controlled cooldown.

What This Means for Buyers and Sellers in 2025

🎯 Smart Strategy for Homebuyers

If you’re planning to buy, there’s good news: the market is less frenzied than it was in 2021 and early 2022. That gives buyers more negotiating power:

• More time to make decisions

• Price reductions on overpriced homes

• Potential for seller-paid closing costs

• Interest rate buy-downs (reducing your monthly mortgage)

Plus, homes are sitting on the market slightly longer, making it easier to negotiate for repairs or concessions. Just make sure you work with a skilled buyer’s agent who understands this evolving market.

💡 Key Advice for Sellers

If you’re selling a home in Vancouver WA, it’s still a great time—if you price right. The homes selling quickly tend to be:

• Turnkey

• Well-priced

• Located in high-demand neighborhoods like Felida, Fishers Landing, or Camas

Don’t overprice, and don’t skip the prep work. Presentation matters more now than it did during the peak frenzy.

What to Expect in Late 2025 and Beyond

A Balanced Market on the Horizon?

Looking ahead, most real estate experts project a balanced market:

• Prices likely to increase slowly

• Inventory to remain tight

• Interest rates to fluctuate, depending on inflation trends

As we head into fall and winter, expect fewer listings and more motivated sellers. If rates drop slightly, we may even see a mini-buying surge before year-end.

Final Thoughts: Is the Vancouver WA Housing Market Crashing?

The short answer? No.

The housing market in Vancouver WA is not crashing—it’s correcting. We’re transitioning from the overheated post-pandemic boom into a more sustainable, realistic environment.

That means more opportunities for smart buyers and strategic sellers.

Ready to Talk Strategy?

I’m Cassandra Marks, also known as Realtor Cas, and I help people like you navigate the Vancouver and Southwest Washington real estate market every day.

Let’s talk about:

• What your home is worth right now

• How to buy smart in this market

• Whether it’s the right time to make your move

Sign up for my monthly newsletter to receive expert advice, important local updates, and insider knowledge on the best ways to thrive in this unique region. Whether you're buying, selling, or simply curious about life in the Pacific Northwest, I've got you covered.

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Frequently Asked Questions

Are housing prices dropping in Vancouver?
No—median home prices have risen slightly. As of June 2025, prices increased about 2.3% year-over-year to approximately $510,700.

Is Vancouver in a housing crisis?
Yes. Low housing inventory, rising prices, and affordability challenges are creating pressure for both homebuyers and renters.

What is the future of housing in Vancouver?
The forecast for 2025 shows steady demand with modest growth as new legislation expands housing options. Expect a stable market with gradual price increases.

Is it a bad time to buy a house in Washington state?
Not necessarily. With mortgage rates stabilizing and more homes selling below asking price, buyers may find better opportunities and less competition.

Are home prices dropping in Vancouver, Washington?
Not significantly. Some sources show a minor decline, while others show modest price increases. Overall, the market remains relatively stable.

Is it a good time to buy in Vancouver?
Yes—buyers are seeing more inventory, longer time on market, and nearly half of homes selling under list price. This can mean better deals and more negotiating power.

Why are people moving out of Vancouver?
Rising home prices, increasing rent, and growing traffic congestion are prompting some residents to relocate to more affordable areas nearby.

What is the housing target in Vancouver?
Clark County has projected a need for more than 13,000 new housing units in unincorporated areas by 2035 to meet growing population demands.

Is Vancouver growing or shrinking?
Vancouver is growing. Since 2000, the city’s population has increased significantly, and both the city and county continue to expand.

Is Vancouver a good place to invest in real estate?
Yes. With long-term population growth, increasing demand, and ongoing development, Vancouver remains a solid market for real estate investment.