January 2022 in the Olympia area started off with a blanket of snow, a surge in COVID cases, and folks getting over the holidays. This January started off less than what I had predicted, but that doesn’t mean the market softened or buyers will find much relief.
Here are the highlights of the Olympia real estate market for January 2022:
- Record Closed Sales for any January (335 sales)
- Low Months of Supply (11 days)
- Prices up 21% ($460,679 median sales price)
January Closed Sales – a Record January
January 2022 had the most number of closed sales, ever, with 335 closed sales. This also shows the strong pending activity from December spilling into closed sales for January.
On the other side, January had the second-lowest number of new listings come to the market with just 298 listings in all of Thurston County. The lowest was back in 2012 with just 251 new listings. This was lower than what I had predicted. I thought many sellers who were considering selling in November or December would wait until after the holidays and then list within the first two weeks of January, but we did not see that bump.
Why are Seller’s Reluctant to List?
Uncertainty is a driving factor for many sellers to just stay put. There is uncertainty as to where they are going to move to next, the overall economy and its direction, interest rates, inflation worries, and the future of their job. Some workers fear their employer will ask them to come back to the office and take away their virtual, work-from-home option. Others are concerned about their income and job stability.
Low Inventory
Low inventory continues to be the headline (as it has been for the last 7 years). January ended with just 126 homes listed for sale in the entire Thurston County.
We have been very short on inventory and have been less than 2-months supply of homes for sale for the last 63 months (5 years, 3 months and counting).
Low Inventory Pushing up Homes Prices
The market’s condition with fewer homes available to meet the buyer demand continues to push prices upward. There is a strong correlation between low inventory and average sales prices.
Current Home Prices
Home prices are going up and the average increase has been 20 percent from 2020 to 2021; and January’s 2022 homes are up 20.8 percent from last year. Remember 2020? The median home price then was just over $380,000!
What does this kind of market mean for buyers and sellers?
Each property, seller, and buyer have circumstances that make each transaction unique but there are some overall trends in the Olympia real estate market:
Multiple Offer Situations – buyers should expect that new listings will have a lot of interest and will have multiple offers. Discuss with your agent what you can do to entice the seller to choose your offer.
How much over the Asking Price? – Some properties have offers 1-5% over the asking price while other listings are receiving offers 10-15% over the asking price. Most listing agents will not reveal the terms of the other offers so offer your best price.
Most Sellers will not Counter – they will choose the best offer – don’t expect the seller to counter your offer. Most sellers will just pick the best offer. Be prepared to submit your highest and best offer because you may not get a second chance.
Tour the Property Quickly – be prepared to tour the property as quickly as you can. Many sellers will list and then will accommodate 3-4 days of showings before reviewing offers.
Options for Home Inspections – depending upon the property, seller, and the risk tolerance of the buyer, some buyers are choosing to:
- Waive their home inspection contingency
- Conduction a pre-inspection before submitting an offer
- Keep the home inspection contingency but making is a “pass/fail” contingency. This option tells the seller the buyer will not be negotiating repairs; the buyer will either accept the property in as-is condition or will terminate.
- Keep the home inspection contingency with the option of negotiating with the seller.
- Shorten timeframes of the inspection contingency.
Make Decisions Quickly – this can be very challenging for buyers AND sellers to make good decisions in a short amount of time. Buyers don’t want to make the wrong choice in a home and sellers don’t want to choose the wrong offer. Working with your experienced Realtor can help you through the decision-making process.
Have Your Finances Ready – if you are a cash buyer, make sure your cash is actual cash – not funds you have to sell like stocks or funds you have to convert like foreign funds or cryptocurrencies into US Dollars. If you are getting a loan, make sure you have a strong approval letter from a local, reputable lender.
Prepare the Home for Sale – for a smoother transaction, sellers should still prepare their home for sale like repair known issues, clean and declutter the home, spruce up the yard, and have their home looking its best.
Some sellers may choose to have a home inspection before they list the property. This can be very valuable as it can 1) give you the time to repair issues, 2) offer the report to potential buyers and this can a) weed out buyers if they discover inspection deal-breakers and/or b) can attract buyers who may be satisfied with that report and then waive their inspection contingency.
Professional Marketing – your home’s online presence is still extremely important now more than ever. For me, most of my buyers are from out of the area and they rely heavily on the visual portion of a listing. Having lots of photos, aerials, video walk-throughs are very important for buyers. Make sure your property is being professionally marketed and represented.
Have a List Price Strategy – this is where you’ll chat with your Realtor about the best strategy by looking at comparable sales and the market activity. Is it better to price just below market value to drive up a heated bidding war? Or is it better to price right at market value? Or list just above market value? There are different outcomes and your experienced, local agent can discuss which option may be the best way for you.
In Summary
Work with Local, Experienced, Professionals – whether you are a buyer or a seller, this market poses unique challenges for both. This market requires the experience and knowledge of a local, experienced Realtor to help you achieve your real estate goals. This means getting the most this market can give to sellers and getting buyers into homes with minimal risk.
If you are considering making a move, contact me today and let’s map out a plan so you can be successful in this Olympia market.
VIDEO: January 2022 Real Estate Market Update for Olympia, Washington
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.