The market is moving. Are you?
No time to sit on the couch! If you are considering selling or buying a home in the greater Olympia, WA area, here is the latest real estate report from your local REALTOR expert! Click below for the 1-minute video recap.
Overview
The real estate market is not softening. In short, the low inventory is pushing the market deeper into a seller’s market and is raising sales prices.
Selling real estate in a COVID-19 market has been challenging however the Olympia, WA real estate market was very healthy when we entered into the stay-at-home order and is proving to be very resilient.
Since March, the market has been driven more deeply into a seller’s market as sellers have been slow to enter the market. Sellers were slow to enter the market as it was, but the pandemic created other challenges for sellers:
- their moves were delayed or canceled (by employer/military)
- sellers needed contractors to help prepare their home for sale and some contractors were deemed non-essential
- sellers had health concerns with potential buyers entering their homes
New construction was also put on hold as residential construction was considered non-essential. It has yet to come back with any force.
Inventory
All of this created even a sharper lack of inventory, which created more buyer competition and rising sales prices. As of today, there are only 228 single-family homes listed for sale in all of Thurston County. Just to get to a balanced market (not a buyer’s market), we would need 1,200 to 1,500 listings, so you can see how sharply we are in a seller’s market.
New listings fell 38% from last year at this time and median home prices increased over seven percent. In May, pending sales were down showing a decrease in buyer activity, however, buyers are coming back to the market. As we progress to improved phases with fewer COVID-19 restrictions, this is re-activating buyers.
SELLERS – What today’s market means for you
The Olympia, WA market brings challenges for sellers that they were not expecting in this seller’s market. Many sellers have been grateful for multiple offers but have also found themselves with buyers who couldn’t complete the sale. Some buyers backed out once the bidding war dust settled and re-thought their decision; other buyers became financially unqualified; and some buyers poorly navigated their home inspection response and ended up with a terminated offer.
This is where I come in to help determine the best offer for that seller and their interests. Here are a few of the challenges sellers are seeing today. (Wanting to learn more about selling your home? Click here for my comprehensive Seller’s Guide.)
Multiple offers
This can be very exciting for a seller but how do you sort through to find the “best” offer? The best offer may not be the highest priced offer. Many times, the terms carry more weight than the offer price. For example, is the buyer waiving their inspection contingency? Or are they offering fewer days to complete their home inspection? This can be attractive to a seller.
Financing
As always, the financing the buyer is using is paramount. If the buyer is obtaining a loan, how do you determine who is most financially solid? As your REALTOR, I have the experience to spot the red flags for financing. Here is what I look for when reviewing offers:
- Is the buyer’s lender reputable?
- Is the buyer pre-approved or pre-qualified?
- What is the loan type (e.g. VA, Conventional, FHA, etc.) and how does that affect the seller?
- Does the buyer need to sell a home in order to purchase?
- Asking the right questions to determine if the buyer can and will complete the sale.
With furloughs and lay-offs, a buyer who may have been financially qualified last month, may not be qualified this month. Vetting out buyers is crucial for a successful home sale.
Pricing and Appraisals
Even in this steep seller’s market, we still see some homes that are overpriced and sit on the market. Most sellers have been quick to adjust their list price but we are seeing price-reduced listings.
Appraisals have also been a concern, so having the market data to support the sales price is critical. Along with the supporting market data, having an understanding of the report and how to read it is key. When I see an appraisal report, I look to see if the appraiser made time adjustments for the sold comparables they used. I look to see how much the appraiser used to adjust for square footage, lot size, amenities, etc. Did the appraiser in their conclusion recognize our market as an increasing market? These are just a few things I look for, and as a past appraiser myself, I help sellers with questioning low appraisals in the effort to have the appraiser reconsider.
BUYERS – What today’s market means for you
Competition
Buyers today need to be aggressive on most properties. The reason why I say “most” is because there are over-priced properties that are being ignored by buyers. Buyers, if you do not want to compete, look for these over-priced properties and properties that have been on the market for 2-3 weeks or more. You’ll want to submit an offer before the seller does a price reduction.
How to craft a winning offer when competing? It’s more than just the price.
As I mentioned above, the terms you offer to a seller are just as or even more important than the price. Consider reducing contingencies or shorten the timeframes for your contingencies. As your buyer’s agent, I’ll ask what terms would be favorable to the seller.
Financing
–Submit an updated letter of preapproval from a local, reputable lender. As an experienced REALTOR working with both buyers and sellers, I have seen on both sides how a lender can make or break a deal and I know who they are (!). A buyer’s choice in a lender is an opportunity for buyers to win in a competing market. Choose the wrong lender can take you out of contention, too. Ask me for a list of well-known, reputable lenders.
–Offer proof of funds for your down payment upfront. Don’t wait to provide proof of your down payment or your cash offer. Sellers need to feel confident in their choice when they accept your offer. Make it easy and provide this and any other financial information up front.
Don’t wait to submit an offer
Many sellers will indicate they will review offers on a specific date but they can review offers sooner. Don’t delay in submitting the offer.
The magic bullet to get your offer accepted? Add this one form to your offer.
Increased Dow Payment for Low Appraisal is THE form successful buyers are using to win the property. In this hot market, we have seen some appraisals come in below the agreed-upon price. Sellers know appraisals can be an issue. As a buyer, you can provide assurances to the seller by adding this form. It states you can bring in more funds at closing to bridge the gap between a potentially low appraisal and the agreed-upon sales price.
In the end, the seller wants assurances you will complete the sale. You can convey that through the terms and conditions of your offer. As your broker, I can guide you to a successful outcome. For my ultimate Buyer’s Guide, click here.
Conclusion
In this hot market where it seems easy to sell, there are more challenges both buyers and sellers are facing today. Between COVID-19, the state of the economy, current events, and add to this all of the real estate contingencies of financing, inspections, appraisal, etc., it takes a lot of know-how and experience to get buyers and sellers to the finish line successfully.
As your REALTOR, I work to prepare my clients so they have a smooth transaction. I am constantly problem-solving and seeking solutions to give my clients peace of mind during their real estate sale. If you are looking for an experienced and educated REALTOR to guide you through the 2020 Olympia WA real estate market, contact me today.
The market is moving. Are you?