Our local meteorologist, Abby Acone, had a great quote this morning when she reported this week’s temperatures are much colder than normal. She said, “there’s no such thing as bad weather, just bad clothing choices”, and that’s true with real estate, too.
There’s no such thing as a good or a bad real estate market. There are financial opportunities whether the market is declining or rising; it’s your choice on how you are going to capitalize. Whether you are a buyer or a seller right now, here are the stats and what they mean to you.
Home Prices
The trailing 12-month median home price for October in Thurston County was $498,548.
This is up 12% from last October. Considering the historic average gain is 5-6% per year in our area, these last few years have been phenomenal for sellers.
In looking at home prices month-per-month, home prices have dipped since the peak in June when the median sales price was $525,000. In October, prices have seasonally dropped to $499,990. For buyers, not only have prices come down but buyers have more choices in inventory, less buyer competition, and better contract terms.
Inventory
The month of October ended with 608 homes for sale. Buyers have more home choices than they did earlier this year.
Although standing inventory has increased, it has not increased nearly enough to shift the market from a seller’s market to a balanced market or a buyer’s market. The market is firmly rooted in a seller’s market.
The big news for October is only 356 new listings came to the market. This is a 35% drop and is lower than the last 9 Octobers. But what is very interesting here is this large drop in new listings is right in step with demand as the market also saw a downturn in pending sales.
Pending Sales
Pending sales are down significantly from past Octobers. This October, 332 buyers succeeded in having sellers accept their offers.
While the headlines focus on this large drop in pending sales, they don’t report the flip side of the large drop in new listings coming to market. This is important to note because the new listings (supply) and the pending sales (demand) are in lockstep with each other. This is keeping the market in seller’s market and will result in home prices continuing to rise but at a more reasonable rate than these last few years.
Interest Rates
Interest rates have been volatile. At the end of October, the national average for a 30-year fixed rate loan was 7.08% (with 0.9 fees/points) per FreddieMac.com/pmms. In the first week of November, rates dipped to 6.95% and everyone got all excited and was hoping this would be a trend, but this week, rates popped back to 7.08%.
Interest rates have put many buyers, and sellers with low interest rates on their current mortgage, on hold thinking rates will go down while others are hurrying to lock in now and buy as they predict rates will go up next year.
Interest rates did not stop 83% of buyers in October as 83% of buyers did obtain financing. I’d assume more cash buyers would come to the table but in fact, the number of cash transactions in our area has remained constant at 17%.
Days on Market
For October, listings that did not need a price reduction received an offer in 12 days on average. But sellers who priced too high initially and then did price corrections were on the market for an average of 56 days. Once they priced right for the market, they, too, received an offer in 12 days. This is still lightening fast considering the historic average is about 30 days. At the peak of our market, sellers were receiving offers within 5 days on average.
Competition
Competition in the market is receding and we are seeing a return to normal. In just my office’s transactions, 16% of the contracts had multiple offers compared to 46% last October. Just last March, 75% of my firm’s transactions had multiple offers, which created a lot of frustrated buyers who didn’t win and drove up sales prices.
VIDEO: October 2022 Real Estate Market Update for Olympia WA
Unless otherwise noted, statistics compiled by Coldwell Banker Evergreen Olympic Realty and/or Francine Viola 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.