In short, probably not, and here’s why.
Supply and Demand
Olympia WA and Thurston County have the lowest standing inventory in its history. At the end of February, Thurston County had just 242 homes listed for sale. In contrast, a balanced market is about 1,200 listings. Our market would need to add 1,000 listings in a month to just get to a balanced market, and even more listings would have to be added to get to a buyer’s market.
Along with this is the absorption rate in Thurston County. Never have we been below a 1-month supply of homes for sale.
This chart below shows the number of homes listed for sale, the number of sales and whether it was a buyer’s market or a seller’s market. Thurston County has entered uncharted territory where for the first time, sales have outnumbered listing. We have about 2.5 buyers for every listing.
Low Interest Rates Cancel Rising Home Prices
From my post last month for buyers navigating this market, I included this chart showing how the low interest rates are absorbing the rising sales prices.
This is keeping buyers in the marketplace.
With the Coronavirus causing, what I hope is temporary, economic havoc right now, the Feds are looking to lower the cost of borrowing, which would help home buyers.
Consumer Confidence
February unemployment numbers are currently at a 50-year low, however, the full impact of the virus has yet to be seen on these numbers. Job growth numbers also beat expectations. Consumers who are confident and who are able to take advantage of the low interest rates will continue to drive the real estate market.
For buyers navigating this market, this last slide shows the sales-to-list price ratio.
For listings that did not require a price reduction (mostly new listings), just about every price range sold the home for more than the asking price. For sellers who had to do at least one price reduction, they ended up getting less.
What this can tell you is that trying to negotiate with a seller who is brand new on the market is going to be very challenging. If you are interested in trying to negotiate on price with a seller in this market, you may want to look at a home that has been on the market for a few weeks. If a home has been on the market for a few weeks, then the seller may decide they need to do a price reduction. Your strategy would be to get to that seller before they do a price reduction (before they make that price reduction public).
My hope is to arm you and all of my buyer- and seller-clients the facts, not fiction so you can make the best decisions for you. As always, I’m here to help you navigate the real estate market. Feel free to call, text or email me.
Statistics compiled by Coldwell Banker Evergreen Olympic Realty, Inc. from information and statistics derived from the Northwest Multiple Listing Service.
*Rates from www.freddiemac.com/pmms and rates quoted here do not include average fees, points or costs of obtaining the mortgage, and are 30-year fixed rate mortgages. The February 14, 2020 rate has an average 0.7% fees/points.
**Statistics compiled by Francine Viola from NWMLS data. Statistics not compiled or published by the NWMLS.
***Dollar amounts shown are for principal and interest only. They do not include taxes or insurance costs.