I feel bad for Buyers.
Why? Because they believe all the hype about the "Buyer's Market".
They expect to find the deal of the century, with all their closing costs paid, there will be absolutely no deferred maintenance, it is painted & has all the appliances and they will have plenty of time to choose from the huge number of homes available.
The reality in my recent experience is quite different:
First time buyers have a LOT of competition right now. Homes under $200,000 are getting multiple offers (I know of one bank owned ficer that had 20 offers!). Pretty homes are getting offers in the first few days on the market.
And Seller's whose homes are getting this kind of response are resistant to making huge concessions.
I think the problem really comes from Language: the term Buyer's Market, or even worse, The Market.
"The Market" may be considered as a whole for averaging and trending. But it give s a very non-specific picture to buyers who have specific needs- beds, baths, square footage and PRICE. "The Market" for waterfront homes with over 3,000 square feet on acreage is incredibly different from "The Market" for entry level 3 bed, 1 bath homes near I-5.
Here is what I mean:
For all of Thurston County (as of June 5, 2009)
Active Homes: 1,638
Pending Homes: 680
6 months of Sold Homes: 1,097
Expireds/Cancelleds Homes (6 months): 1237
Days on Market Average: 104
This translates to about 9 months of inventory; square in the Buyer's Market territory as far as the statistics go. (A 6 month inventory level is considered a Balanced Market, with even Supply/Demand) But this covers the entire range of availability- which is way too broad for a clear picture of what is happening.
Sold Price Range: $57,000 to $850,000
Average Sold Price: $264,223
Days on Market Range: 0 to 981
See? That kind of range tells me nothing for the specific client I am helping.
In order to get a sense of what is going on for actual buyers who have really specific needs (like price) we have to narrow in.
Anecdotally, we know that the homes at the lowest price range sell faster with higher demand. But what part of the county? And what is entry level?
Let's imagine a pretty typical first time buyer for the Olympia/Lacey/Tumwater area.
They want to look for a home under $200,000 but are willing to consider up to $225,000 since that is an affordable monthly payment for a 2-income family.
They also need to be close in to the city to be able to get to schools and job, plus easy access to the freeway to get to Fort Lewis.
This puts them in the north half of Thurston County.
That is a pretty vague picture.
But take a look at the results:
Sold (6 months): 259
Expired/Cancelled (6months): 214
Average Days on Market: 80
Inventory Level: 4 MONTHS
This is no longer a picture of a Super Buyer's Market. This is heading firmly into Seller's Market territory. And look at the difference in the time it takes for the houses to sell! Almost a whole month shorter.
Compare the number of Active to Pending: There are more pendings than actives in this niche.
And look at the number of Solds in this segment of the market compared to the whole of Thurston County: 1,097 vs 259.
Nearly 25% of all sold homes were in this part of Thurston County, in this price range!
This certainly casts a different light on the First Time Buyer portion of "The Market".
Let's flesh out this Buyer's needs list. We will add the following criteria to Price & Area:
At least 3 bedrooms
At least 1 1/2 bathrooms
At least 1200 square feet
Sold (6 months): 156
Expired/Cancelled (6 months): 104
Average Days on Market: 88
Inventory Level: 3.75 months
So you can see why I feel bad for Buyers. Because I work with a lot of first time buyers and that is where a huge amount of all the activity is right now.
Yes, I know not everyone loves numbers. And statistics can be a bit overwhelming.
But Buyers need to know about these kinds of trends. Because the Sellers do.
And if you are looking for the kind of deals I know you want, you need to know about the competition.
If you would like help finding your first home, give me a call! You are welcome to take a look at everything that is available for sale in Olympia, Lacey, Tumwater and nearby on my website. I would love to sit down together and get you started!