The 2021 real estate market predictions for the Olympia area are excellent for homeowners considering selling this year. With many Thurston County homeowners having a six-figure equity gain in their homes, this year will be an incredible opportunity to sell for a profit, refinance or make home improvements.
Home Prices
Western Washington has seen a decade of price gains. In 2010 for Thurston County, the median sales prices hovered at $230,000. Now ten years later, the median home price is 65% higher at $380,000. Although Thurston County’s growth was less than our neighboring counties, the growth has been in line with historic gains and has been moderate to be sustainable.
Market-wide median home prices were us 11.8% from last year. These gains are the second highest of all-time, coming in second to 2005, which had a 23.3% gain in median price.
2021 Prediction on Home Prices
Annual median home prices in Thurston County to increase by 8% to 10%, much higher than the historic 5% to 6% average annual gains. This is good news for 2021 sellers.
Home Equity
Many sellers in the Olympia area might be surprised at the amount of equity they have gained. Even those sellers who have only owned their home for less than 2 years are seeing 16.6% gains or $70,682 but most sellers are achieving six-figure gains. This chart shows just the December 2020 sales and the gains but this is representative of the impressive profits sellers were achieving in all of 2020. I predict 2021 will be similar.
Additionally, The Federal Housing Finance Agency’s quarterly report on 248 Top Metro Markets for price appreciation showed Olympia as the 4th highest on the list. (Seattle was 109.) The top ten markets with the highest rates of house price appreciation are:
Homeowners are either refinancing to a lower interest rate, using their equity to fund home improvement projects or those who choose to sell, most are selling for a six-figure gain. Regardless of which path homeowners decide to take, 2021 will end up being a big payday for many.
What is Driving Home Prices So High?
The low inventory coupled with the high inbound migration to Thurston County is the combination that is continuing to push prices upward.
Why is inventory so low?
- Not enough new construction.
- Existing home sellers stayed out of the market in 2020 due to the pandemic.
Where are the buyers coming from?
Buyers were not sidelined by the pandemic and came to the market in force. The usual life events for buyers wanting to move remained the same (marriage, changes in family size, retirement) but there was one more life event added in 2020: work-from-home opportunities.
During the pandemic, more buyers came to the market to escape their metropolitan locations in favor of the suburbs and rural housing. With commuting no longer a consideration, buyers considered vacation locations and properties as their next full-time home. Many out-of-state and out-of-area buyers (from Seattle and Tacoma) were coming to the Olympia area to take advantage of Thurston County’s relatively affordable housing.
These factors drove the Thurston County real estate market further into a seller’s market, ending the 2020 year with a record 0.29 month supply.
2021 Prediction for Inventory
Inventory in the Olympia area and Thurston County will remain low but there will be a slight uptick. This uptick won’t be enough to flatten the market at all because the number of active buyers will quickly absorb those inventory gains, keeping the market firmly in a seller’s market.
What would it take to get to a BALANCED market?
Just to get to a balanced market, not a buyer’s market, the Thurston County real estate market would need about 14 times the number of current listings EVERY MONTH. I just don’t see that happening and therefore, this seller’s market will persist for years.
The 2020 year ended with just a 0.29 month supply of homes. A balanced market is a 4 to 6 month supply of homes for sale. With low supply and high demand, this has raised prices.
What Can Sellers Expect When They Listing Their Home in 2021?
Fasten your seat belts, sellers!
On average, Thurston County sellers achieved a sale to list price ratio of 103.1% or $12,797 over the asking price. This is an all-time high for the county.
Anecdotally, I am seeing buyers offer well over ten percent and still not winning the bid. I have been working with a buyer looking at homes between $300,000 to $350,000. This buyer has come in $30,000 over the asking price on the last eight homes and was still outbid.
Multiple Offers
Receiving multiple offers can be exciting but it also takes diligence and scrutiny to determine which really is the best offer. The highest offer may not be the best offer just as the first offer may not be the best offer.
In looking at the December 2020 sales, it was very interesting to see that sellers who waited to accept an offer for four days achieved the highest gains of 5.2% over the list price. Patience can pay off.
Other terms buyers are offering
Buyers are submitting offers over the asking price AND are agreeing to bring cash at closing if the appraisal comes in for less. This can almost guarantee to a seller this buyer can close the transaction because a low appraisal will not derail the transaction.
Many buyers are not only aggressively offering over the listing price but are equally aggressive in the terms they are offering. Some buyers are either waiving their home inspections or their home inspections are pass/fail, meaning buyers will either accept the property in as-is condition or will terminate. This pass/fail strategy removes the option to negotiate repairs or credits with the seller. At face value, this sounds great for sellers but this could lead to buyers terminating over repairs that you may have been willing to remedy.
Tips for Sellers in the 2021 Olympia Real Estate Market
The good news is this market is very favorable to sellers. There are more buyers than sellers, buyers are willing to accommodate sellers and their requests such as the seller’s preferred closing and/or move-out date, and homes are selling quickly.
For sellers to get the most this market has to offer, here are some tips for the 2021 market:
- Prep your home for sale. Continue to clean, declutter, stage and take care of known issues to prepare your home to show its best and to achieve the best price.
- Consider having a home inspection. With too many buyers waiving their home inspection or who are doing a pass/fail home inspection contingency, it is advisable for sellers to know the condition of their home. Sellers would need to share this report with buyers but this report can give buyers extra confidence, which could lead to a higher sales price.
- Prepare for back-to-back showings. For occupied homes, many sellers may choose to take a few days off and head out of town while their home is being shown because there will be showings every 15 to 30 minutes for the first few days.
- Price right for the market. Buyers know a well-priced home when they see it. Buyers today have been looking at homes online and touring homes for the last several months. They are experts at determining value. Even in this market, buyers will ignore overpriced listings.
- Evaluate the entire offer, not just the offer price. There are so many variables that make up a “good” offer including the buyer’s financing, loan type, lender, down payment, earnest money, close date, possession date, included contingencies, omitted contingencies, appraisal shortfall coverage, proof of funds, buyer’s agent, organized and complete offer are just some of the things I look for when evaluating offers.
So if the market is so hot, why do I need agent to sell my home?
So glad you asked! You might even be thinking, “I really just need to stick a sign in the yard and I’ll have a ton of offers.”
There is more to real estate than just sticking a sign in the yard. Here’s why you’ll want a listing agent representing you in the 2021 real estate market:
How to prepare your home for sale. Most sellers are interested in getting the most any real estate market can bear for their home. This market is no different. Presenting a clean, organized home with great curb appeal will garner better offers. I can share with you the key features buyers are craving and what turns buyers off.
Pricing it right. Pricing is key and we will discuss how buyers will react to the list price, look at the property with an appraiser’s eye, and position your home for success in the market. (As a former appraiser, I know what appraisers look for and how they determine value.)
Professional and effective promotion. A couple of cell phone photos just won’t cut it in today’s market. Buyers, especially during the pandemic, want walk-through videos, backyard tours, and drone footage along with high-quality photos and captivating marketing.
Selling during a pandemic. Do you know what the current pandemic protocols are for how real estate is conducted? Because real estate agents and their clients have followed the Governor’s rules, buyers and sellers are still able to conduct business, and buy and sell homes. I’ll let you know what to expect and how to prepare your home and keep yourself safe and healthy.
Negotiations. Do you know the challenges of working with multiple offers? I listed a few in the tips above but I do know the challenges because of my years of experience in working with both buyers and sellers. Experienced listing agents:
- know how to manage multiple offers and their buyer’s agents effectively
- know how to communicate and what to say to bring out the best offers from prospective buyers
- understand how to use timing to your advantage
Even if your home sells in a day (and is that really in your best interest? See above if you’re not sure!), there is still a tremendous amount of work needed before and during you list your home to successfully getting to the closing table. I can help you get the most this market has to give.
Video – 2021 Predictions for Sellers in Olympia, Washington
Conclusion
This is a very favorable market for sellers, and most sellers in Thurston County are seeing how homeownership has paid off with the huge gains in equity and profit.
If selling your Olympia area home is in your future, call me today. I’m available to work for you.
If you will also be a buyer in this market, be sure to check out my 2021 predictions for buyers.
Unless otherwise noted, statistics compiled by Coldwell Banker Evergreen Olympic Realty from NWMLS data. Statistics not published or compiled by NWMLS.
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