Fall 2018 Olympia WA Real Estate Market Update – is the market finally softening?
Have you read the headlines that the market is correcting and we are heading towards a downturn? That might be a little premature but anytime there are fewer closed sales or an increase in inventory, the media is quick to sound the “market correction” alarms. But in looking at the broader context, the market is still firmly set in a seller’s market despite the media reports.
Here are the facts for the Olympia WA area real estate market.
FACT:
Closed sales were down 14.9% from September last year.
MEDIA’S RESPONSE:
The real estate marketing is coming to a halt!
CONTEXT:
- September 2017 broke all records, coming in 20% higher than any other September in our market’s history. It would be difficult to replicate that month under any market conditions.
- September 2018 was a day shorter than a year ago (for closings and reporting of sales purposes 2018 ended on Friday the 28th, where last year ended on Friday the 29th). That might not seem consequential, but the extra day typically amounts to about 30-40 fewer sales being reported in the month they actually occurred.
- September 2018 was still the second-best September on record.
FACT:
Active Inventory is up 13.3% from September last year.
MEDIA’S RESPONSE:
It’s a buyer’s market!
CONTEXT:
Yes, inventory is up but this is the first time in FOUR YEARS that the Olympia area has seen a year-over-year gain in active inventory. In looking at the absorption rate (measuring supply and demand), at our lowest in December 2017, the absorption rate was 1.04 months. Right now, it is at 1.76 months, which is still squarely in a seller’s market. (A seller’s market is an absorption rate under 4 months.)
The bigger selection for buyers is good timing with interest rates on the rise. Buyers are eager to get into homes this fall and now have a few more choices than they did in the spring and summer.
FACT:
Listings are staying on the market longer.
MEDIA’S RESPONSE:
The recession is coming!
CONTEXT:
The average days on market for a listing in September 2017 in Thurston County was 27 days. For September 2018, it is 28 days. So yes, technically, listings are staying on the market longer (by 1 day)! But the perception is that homes were selling in a day. Yes, some sellers received multiple offers within hours and accepted an offer at that time. Other sellers found that the first offer may not have been the best offer, so they let their homes get the most exposure on the market and allow for the most buyers to see their home in order to get the best offer.
The psychology of buyers and sellers is causing some to pause, while the media continues to speculate another housing crisis is on the horizon but that is just not the case. As long as the local economy remains strong, there is little concern for this shift. Thurston County has a strong federal and state employment base, unemployment rates are exceptionally low, and Thurston County is still the most affordable county along the I-5 corridor, which is attracting a lot of in-bound migration.
Are you thinking of selling and worried about the market and the timing? Call me to discuss how your home fits into the current landscape. Get a free market analysis by calling me today!