How the Olympia WA real estate market changed from just a year ago
In 2012, we started seeing the Olympia WA real estate market change from a strong buyer’s market to a balanced market. In 2013, we are watching this balanced market shift into a seller’s market.
- the same seller (the builder),
- the same subdivision, and
- the same product (the house)
There has been a definite change, and as a new construction buyer’s representative, here’s what I’ve seen between 2012 and 2013 in the Olympia real estate market.
Just a year ago in 2012, a buyer purchasing new construction was able to get quite a few extras from the builder. Home prices were still difficult to negotiate but my buyers a year ago were able to get:
- All closing costs paid and you did not need to use the builder’s preferred lender to get that perk.
- All appliances were included.
- If the home was already completed, you could negotiate even more in upgrades such as fencing, landscaping, window screens, garage door openers, A/C units, etc. If the buyer didn’t like the flooring that was already installed, the builder was willing to change it out just to get the sale.
These bonuses for buyers easily amounted to 4% to 5% of the purchase price.
Mid-to end of 2012, I noticed builders pulling back on their advertising of big cash bonuses to buyers. And the bonuses were cut in half down to 2% to 3% of the purchase price.
In 2013, buyer’s bonuses have almost all but disappeared. I brought a buyer to the same builder, same subdivision, same housing type as I did just one year ago, and the only upgrade my buyer received from the builder was a refrigerator. No closing costs were paid, no landscaping, not even a garage door opener. The refrigerator was far less than 1% of the purchase price
But builders are not the only sellers who are feeling the shift in the market; buyers are experiencing a rude awakening from re-sale sellers who reject their below-market offers and balk at paying the buyer’s closing costs.
For my colleagues in how to deal with Olympia’s changing real estate market:
Buyer’s Agents will need to:
- Set realistic expectations with a buyer who wants to “low-ball.”
- Know if the buyer is able and willing to pay their own closing costs.
- Prepare the buyer for multiple offer situations and know their threshold for making decisions quickly on their home purchase.
Listing Agents will need to:
- Continue to price according to the market, and if the seller doesn’t receive an offer within the first 30 days (average time on market for Olympia if the home is priced right), re-evaluate the price, the curb appeal and the advertising.
- Get listings. Areas in Olympia are in a shortage of inventory.
- Persist in top-notch advertising. This is not the time to slack off in marketing a home.
This post was inspired by a blogging contest on ActiveRain.com, “How are you prepping for the market shift?”