The January 2021 real estate market in Olympia, Washington started how 2020 ended – many more active buyers than sellers, which continued to push up prices.
Inventory
The STANDING inventory is 53% lower than what it was in January 2020. The demand for housing is simply outpacing the supply and buyers are snapping up new listings. In January 2020, there were 241 homes listed for sale; in 2021, only 113 homes were listed for sale.
The Olympia area market added just two more NEW LISTINGS compared to last January. As you can see, these 320 new listings in January aren’t too bad compared to other years. The difference this year is buyers are snapping up most of these listings, which pushes the standing inventory to record lows.
How Long Has the Olympia Real Estate Market Been in a Seller’s Market?
The Olympia market has been in a seller’s market since September 2014. During these last 76 months, the average number of homes for sale was 662 listings a month. Buyers have really felt the squeeze these last six months where inventory levels were consistently below 250 homes listed for sale.
Will the Olympia Real Estate Market Crash?
The real estate market in Olympia isn’t going to crash anytime soon. What constitutes a real estate crash is when there are more homes for sale than buyers. In order for the market to return to BALANCE (not to a Buyer’s Market or to a Crashing Market), our county would need to add at least 1,500 listings overnight and continue to do so for every month. Again that is just to get to a BALANCED market.
OR if monthly sales dropped below 35 sales per month, that could get the market to a balanced market. (By the way, sales have never been that low in Thurston County over the past 21+ years.)
Olympia Area Home Prices
Low supply and high demand continue to push prices upward. While historic gains for Olympia averages 5.5% per year, this year, home prices are up 11.3% from last January.
Should Buyers Even Try to Buy a House this Year?
Many buyers are buying a home because they now have the option to work-from-home and can work from anywhere. These buyers are choosing to improve their quality of life by buying the home and the property they want, not the home that is closest to the office. This is a big driving factor for people wanting to make a move.
Buyers are able to take advantage of extremely low interest rates. Although they may be paying more for a home, this higher sales price is not showing up in their monthly payment. For example, the difference between a home sales price of $400,000 and $425,000 is only $103 difference per month using today’s average interest rate.
Will home prices rise in the next five years? Ten years? I think so. Even though some buyers are having sticker-shock with today’s home prices, I think five and ten years from now, home prices will be higher.
Buyers who are persistent and can submit compelling offers will win. It may take a little bit more time to get that house, but buyers are and will continue to be successful even in this market.
Buyers in the Olympia market also shouldn’t be deterred if they need to get a loan in order to buy a home. The media headlines certainly would make it sound like all buyers are cash buyers, but that isn’t the case here. In January 2021, only 13% of the sales were cash. And of the sales between September to December 2020, only 10% were cash buyers.
What if I have a House to Sell before I can Buy?
If you have a home to sell in order to buy, you may be in very good standing because you probably have tremendous equity. In fact, homeowners who purchased in 2011 and sold in December 2020 sold for an average of over $200,000 more than their original purchase price. These sellers who become buyers now have this huge equity to use as a down payment, and this financial strength can beat out other buyers in the bidding war. Sellers who become buyers may have a big advantage.
For more on how to buy a house if you need to sell one first, check out my recent post:
Conclusion
This market can be very successful for you whether you are planning to buy, sell or do both. Don’t let the market intimidate you! As your Realtor, I’ll help you stop feeling overwhelmed and uncertain by the demands of your home purchase or home sale and start feeling excited, confident, and smart about your next move!
Buying and/or selling a home can be stressful simply because you may feel you don’t have all the answers or the RIGHT answers. I educate my clients, offer choices and resolve problems by offering fact-based solutions.
My years of experience also comes into play but that doesn’t mean I rely on what has worked in the past will work today. You are unique as each house and each market are unique – I am always learning and evolving so I can best serve you.
If I can help you, contact me today – call, text or email me anytime!