For most, a home is the most important purchase in our lifetime. Via a mortgage, it will typically take 15-30 years to complete. As a result, the price of a home is usually the most important price a consumer will face.
Home prices reflect both supply of and demand for homes in a given market. Tracking prices is a way of assessing both the forces of supply and demand. The supply of homes depends on many factors, such as the cost of a lot, the cost to develop a lot, materials costs and the wages paid to all the contractors involved in construction. Demand, in turn, typically depends on population and income growth, although in markets with second homes, the wealth of residents in "feeder" markets matters, too.
Home prices that rise quickly can signal a rise in supply costs, an increase in the determinants of demand, or a combination of both. A rapidly accelerating trend in home prices brings both benefits -- to existing homeowners, local governments, and costs -- to prospective buyers, and in the extreme, to the ability of a community to attract and retain workforce members.
This indicator measures the quarterly median resale value of homes in Walla Walla County. Note that this measure does not capture the prices of new homes. Washington State is offered as a benchmark.