Even with a slowdown in the number of sales, the Thurston County real estate market is still a seller’s market. However, there are many opportunities for both buyers and sellers. Here’s what the August market delivered for buyers and sellers:
Home Prices
Home prices are still going up. What has changed is the steep angle of increase, which is a good thing for the long-term health of the market.
In the past 12 months, home prices have risen 14.5%, which is the 4th highest all-time increase to $494,000. Earlier this year, the Thurston County market saw year-over-year increases of over 20%, which is well beyond the market’s historical average of 6-8 percent annual gains. Home price gains are moderating but home prices are still escalating.
Opportunities for Buyers and Sellers
Sellers are still seeing very good, double-digit returns even with gains moderating to more historic normals.
For buyers, year-over-year median prices are not increasing as steeply, creating opportunities for homeownership.
Days on Market
Homes are still selling quickly but like home prices, the steep angle has moderated. Homes priced right are selling in an average of just 8 days, which is just 3 days slower than the record. Even homes that are overpriced to begin with are selling in an average of just 29 days, which is record fast.
Opportunities for Buyers and Sellers
Sellers who are pricing right are receiving offers quickly but these extra few days on market are giving buyers some breathing room. Six months ago, buyers were pushed to waive home inspections and appraisal contingencies. Reasonable terms are coming back to contracts, which is good news for everyone.
Competitive Conditions
The competition for an individual home has decreased but when there is competition for a home, the average number of offers and the percentage over the list price is identical. Last August, for the homes with multiple offers, the average percentage over the asking price was 105.5 percent. For this August, the amount over the asking price was 105.2 percent.
Opportunities for Buyers and Sellers
Preparing the home for sale and pricing right are still very much important factors for sellers. The details matter and cleaning, pre-packing, taking care of deferred maintenance – all of this is very important as buyers will overlook homes that do not show their best and/or are overpriced.
When sellers are priced right and have a prepared home, buyers should not be surprised if they do still find themselves in a bidding war. Depending upon the property, buyers should be prepared to offer competitive terms.
Inventory Levels
Last year, there were 307 homes actively listed for sale. This August, Thurston County had 635 homes listed for sale. But this still keeps the Thurston County market very much in a seller’s market with 1.38 months of supply.
We expect the number of new listings coming to the market will decrease as we move into the fall and winter months.
Opportunities for Buyers and Sellers
More inventory gives more choices for buyers and reduces competition. Buyers who lost out in bidding wars earlier this year are finding success now.
For sellers, although the inventory is up and there are fewer bidding wars, the market does not have enough homes to meet demand, therefore the market is still very much a seller’s market.
Interest Rates
The speed at which rates shot up was shocking for both buyers and sellers. Earlier this year, rates were in the low threes; today we are seeing rates in the sixes. Plus inflation and the higher cost of goods are affecting the market. Although this puts pressure on home prices, our market still does not have enough inventory to meet the demand, and home prices will most likely be higher next year than they are today.
With all the talk about higher interest rates, you might think that buyers who are getting financing are completely going away. This is not the case. For this August, 81% of the sales in Thurston County were financed as compared to 76% of sales last August.
Opportunities
Higher interest rates are tempering sales prices and buyer competition, and that’s the point. The Feds are raising rates to moderate the market.
Buyers and sellers continue to make decisions and choices based on lifestyle changes – not because of interest rate changes. Buyers should focus on their monthly payment and budget, and sellers should focus on pricing right for the current market conditions.
In Summary
- Some are incorrectly calling this a buyer’s market. Take out the past three years, which were searing hot, and this current market would be the hottest seller’s market ever.
- Sellers are still achieving excellent, double-digit gains from when they purchased the home. This equity is allowing sellers to make that next dream move.
- Prices are still on the rise year-over-year, so it still is a great time to be looking for a home.
- Higher mortgage rates than what the market has been used to are causing some buyers to pause however if the buyer is also selling a home, the huge equity gains they are seeing are offsetting the higher interest rate.
- Inventory levels will seasonally go down as we enter into the fall and winter seasons but for now, buyers have many choices and options to them they didn’t have earlier this year.
VIDEO: August 2022 Real Estate Market Update
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.