Here is the September 2020 real estate market update for Olympia, Washington that not only gives you the latest numbers and statistics but is broken down into three categories – current homeowners, potential sellers and active buyers – and how uniquely this market affects you.
My video below also breaks it out into the different sections depending upon where you are in this market; feel free to skip to your section!
Current Homeowners Not Planning to Move
Your story is the equity you have!
In Thurston County, on average, homeowners who purchased their home in 2012-2013 are the biggest winners with an average $161,000 in equity. Even homeowners who purchase 3 years ago are seeing 6-digit gains. These are huge gains as historically, gains are typically five percent per year in our market. Just last year, the average gain homeowners saw was double that at ten percent.
Should you refinance?
With interest rates so low, many homeowners may be tempted to take out their equity, refinance to a lower interest rate and lower monthly payment. Everything has a risk and a cost, so just make sure it pencils out for you.
Some homeowners get fixated on the absolute lowest interest rate they can get but don’t realize it may not be saving them as much as they had hoped. Just as a quick example, let’s say it costs $7,500 to refinance your mortgage and that refi will save you $100 per month. It would take you 75 months or over 6 years before you saw those savings. You may end up moving before then and you won’t ever realize that savings.
Thurston County Median Sales Price
Our trailing 12-month median sales price is $367,259 but just for September, the median sales price was about $390,000. (We look at the trailing 12-months as there is more data which gives a more accurate view of the market. Just looking at sales each month isn’t as accurate. The numbers go up and down especially since this summer, there were many $1 million+ waterfront properties that were sold and that skews the typical market for Thurston County.
In-Bound Migration and More Buyers on the Way
Thurston County and Clark County are the only two counties along the I-5 corridor that are considered affordable. Our county is seeing high in-bound migration not only from our neighbors to the north in Seattle and Tacoma but also from out of state buyers from California and Texas. Expect more buyers to move into our area.
Potential Sellers – Thinking about Selling?
You may have heard, we have a shortage of listings!
In September 2020, the Thurston County real estate market had just 235 listings. With the amount of buyers looking for homes, this means we could sell all of these listings in just two weeks.
For the last six years, the market has been in a seller’s market but it wasn’t until 2019 when the number of listings dipped below 500 and we have been well below 500 listings since then.
Buyers will still ignore overpriced listings
Even in this steep seller’s market with multiple buyers competing for the same property, buyers will ignore over-priced properties. They will wait until you price your home “right.” Last month, 14 percent of the listings did do a price reduction before they were able to attract a buyer.
Buyers are very knowledgeable about the market and home values, more so than you sellers, and that’s because buyers are out there looking at homes and they can easily compare homes and value. Pricing right is still a critical part of a successful listing and home sale. As your Realtor, I will tour your home (unlike an online site offering “estimates”) and give you an accurate snapshot of how your home fits into the current market to meet your goals. As a previous real estate appraiser, I take a comprehensive approach to determining a listing value. Every property and seller is unique and I will show you how I arrived at my suggested list price for us to discuss.
Active Buyers – What you can do to succeed in this seller’s market
Buyers – there are a lot of you right now, and you may find yourself competing with other buyers for the same property. Here are just a few tips for success to win the house.
Your Lender Matters
If you are getting a loan, all lenders are not created equally. Your choice in lender can cause you to win or to lose out on homes. To give yourself a step above the competition, use a local, reputable lender to get preapproved.
Why is using a local lender so important?
Using a local lender will put your offer ahead of buyers using a national or out-of-state lender for a couple of reasons.
First, real estate is local and Thurston County has its own quirks and lending requirements that the local lenders are well-versed in; they can fend off any delays that might come up from these “quirks.”
Second, if the listing agent knows your lender and trusts your lender, that gives you a HUGE advantage over other buyers. This is because everyone wants to be guaranteed you can go through with the purchase. Local listing agents know the reputable lenders in Thurston County and know that if they say you are approved, you are approved.
Third, local lenders will preapprove you, not just prequalify you. Preapproval is the gold standard in this market. You want your lender to verify your tax returns, bank statements, pay stubs, and run your file through underwriting. The worst case scenario is a few days before closing, your lender tells you they cannot offer you a loan because this process wasn’t done ahead of time.
Understand the seller’s point of view – once the seller accepts your offer, they take their home off of the market waiting for you to get your loan and get through your contingencies. That is the risk they are taking, so if the seller or listing agent have any questions about your lender or your approval, and you are competing with other buyers, you might lose out on the house.
Including Contingencies in your Offer
Contingencies are important and this heading is not to suggest to NOT include any contingencies, but I am recommending 1) don’t include frivolous contingencies that clutter up the offer and 2) shorten the time frames in contingencies.
A very common contingency and is one I highly recommend for my buyers is to include the Home Inspection Contingency. This gives your the opportunity to inspect the property and understand the condition of the home you are in the process of purchasing. The boilerplate language in our home inspection contingency form is the buyer has ten days to complete this. My suggestion that will improve your offer but most likely doesn’t cause much if any harm to you is to shorten that to maybe five days. Doing these small things like this can show the seller you are serious and organized, yet has very little if any negative harm to you.
Soul Search before you Home Search
As a buyer, you’ll need to make big decisions in a short amount of time. To lessen the stress of this, I recommend really understanding the difference between your wants and needs in a property, and to understand why you want or need these things.
For example, I hear buyers all the time tell me they want acreage. Sometimes buyers will tell me they want acreage because they want to have horses, or other times they tell me they want acreage because they want privacy. Understanding the why is important because for the second buyer who is looking for privacy, we were able to find a smaller lot that was much more affordable and in an area they liked but offered total privacy in the backyard.
In Conclusion
For buyers and sellers alike, this market is not easy to navigate.
On top of the typical and normal real estate aches and pains, we are in such a skewed seller’s market AND we are fatigued from all the other stressors we weren’t anticipating this year – COVID, home-schooling, Zoom meetings, job loss, uncertainty, the election, etc, etc, etc. – I’m seeing this first hand how this is affecting buyers and sellers. Buyers and sellers are also faced with the struggle to find the truth and the facts – that is becoming harder and harder these days.
The best advice I can give you is to get the facts from the experts who do this on a daily basis. Don’t rely on all the non-experts out there who are quick to offer their advice. I’m here to help and to provide you with the best information and how it applies to your situation.
If you are considering making a move, I’d love to have a conversation with you. Call or email me any time.
Note: Statistics compiled by Coldwell Banker Evergreen Olympic Realty, Inc. from information and statistics derived from the Northwest Multiple Listing Service.