What is going on with the real estate market? Is it slowing down? Speeding up? Crashing? Here are the latest numbers and what to expect if you are buying or selling in the Olympia market.
Here are the quick stats on the market:
April’s median home prices are up 20.4% from last April to $477,278. So far, the market is not seeing a tempering of sales prices.
Buyers will see some competition relief as we get into the seasonal rush of more listings coming to the market in the early summer months. April’s inventory is up 27% from last April. Although 268 listings are not a lot of homes for sale (a balanced market is 1,500 to 1,800 listings), this increase bumps up the market from a 2-week supply to a 3-week supply of homes.
With more listings come more sales. 586 new listings were added in April and the month saw 403 closed sales.
This April was Thurston County’s fourth-best April for closed sales.
What does this mean for Buyers and Sellers?
Competition
The good news for buyers is the increase in listings coming to the market will slightly ease the competition. Some people will view this seasonal shift as THE shift that the market is turning to a balanced or buyer’s market. That couldn’t be further from the truth. Historically, this is a normal trend where the market will add more listings in May, June and July.
Buyers can still expect to have other buyer competition with most listings, but there may be fewer buyers (instead of 20 other buyers, there may be only five other buyers). You can see the differences in the activity between March and April this year.
Sellers are still achieving record gains and have not “missed their window” of opportunity. For now, the bidding frenzy has cooled slightly to a bidding kerfuffle.
In April, the showing activity and the number of multiple offers dropped off and some thought this was the beginning of a trend.
The third week of April was the lowest week of the year with 23% of contracts having multiple offers. Because the showing activity bounced back and multiple offers increased the next week weeks, we are citing the Easter and Spring Break holidays for the lull.
Interest Rates
Despite rising interest rates, buyer demand still remains strong. The rates have not deterred too many buyers. Currently, the national average for a 30-year fixed-rate loan is 5.3% (with 0.9 fees/points). Although this still is considered a very good rate, buyers have been spoiled with rates in the threes for years and this rise in interest rates happened very quickly in the last two months so buyers definitely felt it.
Here is the national average of interest rates from FreddieMacPMMS.com:
Buyers are still buying homes due to lifestyle changes (family, career, finances), not because interest rates are low or high. Yes, some buyers will be priced out of the market and a higher interest rate can mean a higher monthly payment. At this point, an interest rate in the fives is not enough to halt sales.
Will Rising Interest Rates Temper Sales Prices?
As of now, it hasn’t affected demand or sales prices much. Economy 101 says that higher interest rates will weaken buyer demand and therefore will decelerate and decrease home prices. As of now, that hasn’t happened.
What Will Temper Sales Prices?
The seller’s market in Thurston County is driven mainly by low supply and high demand. In order to shift from a seller’s market to a balanced market, the market would need to see a 50% drop in sales and a 450% increase in active listings. A change like this is not going to happen overnight. A shift of this magnitude easily could take a good 12 months and probably more.
Thurston County is Affordable
Thurston County is very affordable when comparing the median Thurston County income to the median Thurston County home price. Any number above 100 is considered affordable so Thurston County is very attractive to a lot of out-of-area buyers.
Conclusion
Although these stats are interesting and can show trends, every house, every seller, and every buyer are unique and therefore, you may not be able to apply the county average to your particular purchase or sale.
I’m here to help you achieve your real estate goals. If you are planning on buying or selling in the Olympia area, contact me today. I look forward to hearing from you!
VIDEO: April 2022 Real Estate Market Update for the Olympia, WA area
Unless otherwise noted, statistics compiled by Coldwell Banker Evergreen Olympic Realty from NWMLS data. Statistics not published or compiled by NWMLS. Unless otherwise noted, statistics based on our own proprietary market study. Information and statistics derived from NWMLS.