March Madness isn’t just happening on the basketball court. The Olympia, WA real estate market has had some incredible highs and lows. Wondering how the market affects you? Here are the stats and tips to succeed whether you are a buyer, seller or both in this market.
Low Supply and High Demand Plus Another Wildcard
As you know, we have a shortage of listings here in the Olympia area. In March, all of Thurston County had only 120 listings.
The buyer demand is outpacing the listing supply and this is pushing up home prices. But we have a third part to this equation and it is a total wildcard: buyer competition.
Buyers can deal with an increasing market and I and my colleagues can predict future pricing but what we all cannot predict are the other offers competing buyers are submitting. Daily I am surprised by some of the aggressive offers I am up against when I’m representing a buyer and all the offers I see as a listing agent.
This double-punch of low inventory plus wild buyer bidding is pushing up home prices more than double historic averages.
Home prices are up a whopping 13.4% from last year to a median home price of $391,360 for Thurston County.
Is is a good time to sell?
YES! Most sellers are seeing multiple offers and bidding wars for their homes. Most sellers are accepting offers within just a few days of listing.
In looking at just the March sales, homes priced between $300,000 to $700,000 were accepting offers 3% to 7% over the asking price. In our office for March, 62% of the contracts had multiple offers with an average 6.7 offers.
Homes priced $800,000 to over $1 million dollars even experienced high sales to list price ratios from a half percent to two percent in March.
Equity Home Sellers are Achieving
Sellers are achieving great gains in this market. Remember back in the day when Realtors would say you need to be in your home for five to seven years in order to see a decent profit? This year, that advice is old news. Sellers who have sold in less than two years are seeing 18.6% gains or over $84,000 on average!
What Hurdles do Sellers have in this Market?
Believe it or not, there are still overpriced listings that are being rejected by the market. When I tell sellers this in a listing appointment, they never believe me! But it is true. Buyers will ignore overpriced listings even in this market.
In March, 22 sellers did a price reduction. Instead of getting under contract in six days, it took them 88 days to secure a buyer. That is way too long in this type of market. It’s okay to test the market but be prepared to quickly reassess and adjust the list price within one to two weeks.
The other hurdle sellers are facing is keeping the winning buyer under contract. In my own book of business, I’m seeing too many buyers who win back out in a day or two. I recommend to my sellers and to my second-place buyers to get into a backup position because that first buyer may just back out when the bidding war dust settles.
How can Buyers Win in this Market?
Buyers still should have the basics down when house-hunting:
- Have your financing in order and get approved with a reputable, local lender. Ask me – I have a great selection of lenders that will be the right fit for you.
- Have a great Realtor on your side representing you.
- Submit no-nonsense offers with only the essential contingencies.
Add to this list:
- Have the cash to bridge the gap of a potential low appraisal. This is key in this market and is usually the defining factor in which offer the seller selects. An example of how this works is if the house is listed for $400,000 and to be competitive, you offer $450,000. The seller will want you to “guarantee” you can purchase the home at that price but may be worried that the appraisal will come in lower than $450,000. A buyer can guarantee this price by having the cash to cover a low appraisal. In this example, let’s say the buyer offers to bring in $20,000 to cover a potential low appraisal. If the home appraises anywhere between $430,000 to $449,999, the buyer agrees to bring in the difference and buy the home at $450,000.
- Look for listings that have lingered on the market and that may be overpriced. Buyers can be successful with these listings because there won’t be other buyers competing.
- Accept the opportunity, if given, to be in a backup position. If the first, winning buyer backs out, your offer will already be in place.
New Listing Coming to the Market
New listings are coming to the market but not at the pace buyers want. This March was slightly lower than last year (at the start of the pandemic shutdowns).
Buyers should be ready to tour and make an offer quickly when new listings come up. Most sellers are trying to stay on the market for a few days before accepting an offer but they do have the option to select an offer sooner.
If you are planning on making a move this year, call me today! I’d love to have a conversation with you!
Video of the March 2021 Olympia, Washington Real Estate Market Update
Note: Statistics compiled by Coldwell Banker Evergreen Olympic Realty from NWMLS data. Statistics not published or compiled by NWMLS.