July 2022 Real Estate Market Update for Olympia WA

Here are the quick stats of what happened in July 2022 in the Olympia, Washington real estate market:

• Interest rates – interest rates are moderating; down from the highest at 5.81% in June to 5.22%.
• Double the listings – the number of homes for sale doubled from last July to 645 listings.
• Seller’s market – the market is still in a seller’s market with about 1.5 months supply versus the lowest a few months ago at just 2 weeks supply.
• Home prices are up 16% from the previous 12 months showing that prices are still going up but not as steeply.
• # of home sales down – the number of home sales is down from last July of 622 sales to 457 sales this July.

The Pace of the Market – Demand is Changing

The market has shifted from the intense seller’s market to this less intense seller’s market that we have today. This is all due to the demand has changed. And demand has changed because of the higher interest rates and the increase in supply. 

Interest Rates

Buyers in the spring market felt the shock when interest rates were about 3.76% in March and then dramatically rose and peaked to 5.81% in June. For some buyers, this put them financially out of the market, and for others, they chose to pause their home search to see if rates would settle down. Freddie Mac says interest rates will most likely not settle down and will continue to be volatile and fluctuate this year.

However the recent dip in interest rates gave buyers the optimism and confidence to ramp up their home search. Buyers do not want to chance that rates will spike up again so they are not wasting time in finding a home. 

Increase in Supply – the number of homes for sale

The increase in the number of homes for sale also has affected the pace of the market. With more homes to choose from, the intense competition amongst buyers has dissipated for many listings. The competition was driving up home prices to historically high levels. Now the market is moderating and this is the shift buyers and sellers are seeing.

Although demand has lessened because of higher interest rates and more supply, this does not mean the market has shifted away from a seller’s market. In fact, Thurston County is still very much rooted in a seller’s market with 1.42 months of supply.

Buyer and Seller Expectations

Buyers may view this shift in the market as their opportunity to successfully win sellers over with offers drastically below market value. This is not a realistic approach for buyers, but sellers also need to be mindful. The current market is not yielding 15 offers from cash buyers, waiving their contingencies and coming in 20 percent over the asking price. The market is moderating, not coming to a complete collapse nor a frenzy like earlier this year.

In looking at the sales for July, about 24 percent of the sales were less than the asking price. The balance of the sales were at or above the list price.

The median negotiated prices were also very modest. For the sales less than the list price, the median negotiation was $10,000 off the list price. For sales over the list price, the median negotiated price was $13,725 over the list price. These negotiations were modest and reasonable – the same direction the market is currently heading: modest and reasonable.

Bottom Line for Buyers this Summer

• This summer is a great window of opportunity for buyers because of the increase in inventory and the moderation of interest rates. As the year progresses, the market will seasonally have fewer homes come to the market so right now is the prime time for home choices.
• Because of the increase in listings and less buyer demand, the buyers who are shopping now most likely will not find themselves in a bidding war, which is keeping sales prices in check.
• Have your financing in place or your cash ready. Having a strong financial lender and/or providing proof of funds will never go out of style and will help you work with the seller.
• Negotiate smartly. Submitting an offer that is well below market value, a.k.a. the lowball offer, is probably not accomplishing what you are hoping it to accomplish. A savvy negotiator understands the market, understands value, and understands the seller.

Bottom Line for Sellers this Summer

• Showings will be slower than they were in the frenzy of the spring. In the spring, we would advise sellers to take an overnight trip because their home would be shown constantly. Now the showing activity has moderated to a more “normal” showing count. This doesn’t mean you’ve missed the market; it means the pace of the market has changed.
• Continue to price right for the market, clean and declutter, and take care of deferred maintenance issues. Buyers are looking for a move-in ready home. They do not want a home with a list of needed repairs.
• You can certainly call on the blessings from St. Joseph but if you price right, clean and repair, and have a professionally presented home, you’ll be fine! Not sure who St. Joseph is? Be sure to check out my July video update!

VIDEO: July 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. Information and statistics derived from NWMLS.