“All Gas, No Brakes!” sums up the real estate market in Olympia, Washington.
The median home price is up 20.7% from last year, making homeowners very happy they purchased when they did. This February had 17% more listings than last February but this did not ease the competition much for buyers. Multiple offer situations for most new listings are the norm.
Current Home Prices
The trailing 12-month median home price in Thurston County is $465,468.
Why Are Prices Going Up?
The simple answer of why prices are continuing to rise is because of low supply (number of homes for sale) and high buyer demand.
Today’s market is 0.49 months or 15 days of supply putting Thurston County deep into a seller’s market. (Less than a four-month supply of homes for sale indicates a seller’s market.) As long as the market has a low supply of homes for sale, home prices will continue to rise and buyers will compete for homes.
In the peak buyer-market years of 2007-2008, the Thurston County market had an over-abundance of new construction, which added a lot of inventory to the market. The county does not have this now, and in fact, the county has been in a new construction deficit for the last 12 years. The market is relying on resale homes.
Thurston County has been in a seller’s market since October 2014
(the last six and a half years).
Inventory
To return to a balanced market, the market would need to add 1,500 listings overnight and for every consecutive month. This February saw 408 listings. Outside of the overbuilding years of 2006-2008 and the foreclosure peak in 2010, this February would have been the highest February for new listings.
New listings are up 17 percent from last year, which is great news for buyers, but buyers still feel that there is nothing to buy. The difference is our standing inventory is very low and that’s what buyers are really feeling. February ended with just 141 listings in the entire county. With most homes going pending within a few days, this makes buyers feel there isn’t much to choose from in this fast-paced market.
Homes Sales
February 2022 home sales were tied with last February’s sales, making this the fourth-highest February for closed sales.
Buyers in Today’s Olympia Market
Although every seller and every listing are different, most buyers can expect to be in a multiple offer situation and pay over the asking price.
In looking at just our own firm’s transactions for February 2022:
- 66% of the transactions had more than one offer.
- 63% of the transactions were over the asking price.
- The average percentage over the asking price was 8 percent.
Do you have to be a Cash Buyer in order to Win the Bidding War?
No, buyers who are getting financing are just as successful. This past month, 46 percent of buyers were obtaining Conventional financing. Here’s the breakdown of cash buyers and the different financing options buyers used:
How Buyers Can Succeed
There are many ways to craft a winning offer. If we are working together, my first step is to talk with the listing agent to find out the seller’s wants and needs. If you can accommodate the seller’s requests, this can help you if you are in a competitive situation.
Have your financing in order. This is a broad topic of not only getting approved with a local, reputable lender to know your budget, but it is also the time to figure out if you must sell your current home in order to buy. There are many different loan products for current homeowners like bridge loans, home equity loans, lines of credit – talk with your local mortgage expert.
There are programs for first-time homebuyers that can be helpful in getting into a home such as down payment assistance programs.
This is also the time to gather and organize the cash needed to close or for the entire purchase. This can mean cashing out stocks, retirement accounts, converting bitcoin/foreign funds into US funds, receiving the gift funds in your account, etc. to get those funds as liquid, non-contingent funds for your purchase.
Understand which contingencies you must have and those you can do without.
One of the primary and common contingencies for buyers is the home inspection contingency. There are many options available to you for your home inspection contingency like doing a pre-inspection, a pass/fail inspection, and/or shortening timeframes for inspections. This is where having an experienced Realtor on your side is invaluable. Talk with your agent to determine the best route.
Prove you can complete the sale. This can be in the form of a “clean” offer, a properly written offer by your experienced Realtor, a detailed preapproval letter, and proof of funds are just a few of the things you can do to convey you are a financially fit buyer who can complete the sale.
Sellers are not interested in buyers terminating. They want buyers to stick with the transaction and close successfully. Do everything you can to convey you can complete the sale and you’ll improve your odds of getting the house.
How Sellers Can Succeed
Most sellers want to squeeze the most they can from this market and have a smooth, hassle-free transaction. There are a few strategies sellers can employ to make this happen.
One suggestion is to hire a professional home inspector to inspect the home prior to listing.
When the seller performs a home inspection, they are required to disclose all findings and provide the inspector’s written report to potential buyers. This is a very good thing. This produces buyers who are confident to go through with the purchase and most likely they will waive their own home inspection contingency.
For homeowners who have owned their home for ten+ years, landlords, and for estates, I would highly recommend having a home inspection prior to listing.
The benefits are:
- A seller has the time to make repairs prior to listing. They can either do the repairs themselves or have the time to get bids from contractors for the best value and price.
- A seller may attract buyers who will waive their own home inspection, and this is one less contingency in the contract.
- A seller will attract confident buyers who can submit strong offers as they know what they are buying. When a seller can lessen the fear of the unknown for a buyer, the seller, in turn, will have a stronger offer.
Another suggestion is how to price the listing. Should the seller price a little below the market, at fair market value or higher than market value? There are many considerations in making this decision. This is one of the benefits of hiring an experienced Realtor to represent and guide you.
Final Thoughts
The market is continuing to go up. Although buyers today are feeling pricing pressures, they may look back at this time and wish they didn’t wait.
The market requires the expertise of an experienced Realtor on your side. Who you hire matters. Take the time to interview and select the right agent for you.
Have questions? Want more information? If I can help you, I’m available. Call, text, or email me any time.
VIDEO: February 2022 Olympia WA 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.