This year in real estate in the Thurston County, WA area, including the cities of Olympia, Lacey, and Tumwater, are bound to be a very successful year both for sellers and buyers. Here is the 2018 recap with the 2019 projections.
Record Number of Sellers
A record number of resale homes came to the market throughout 2018. That gave buyers more choices and it moved the standing inventory of homes (those available at any moment in time) from record low levels. The increase in both helped nudge our market out of a deep seller’s market and begin a trend back toward balance.
2019 Projection: Total Listings Flat to Slight Decline
With so much home equity, sellers will look to move, however, not at the frenzied pace of 2018. But also consider that breaking records year after year is just not sustainable. The media continues to be negative about the market when in fact, there is no real indication of a market correction. Instead, the pace is moderating, and this is healthy for the market with benefits to both buyers and sellers.
Pent-up demand continued to unleash in Thurston County, and that drove high levels of sales. Higher prices kept some buyers on the sidelines, however high in-bound migration from more expensive counties (like King and Pierce) offset some of the decrease.
Demand will remain strong by historical standards, but sales will moderate to third or fourth highest on record. Not too shabby!
Seller’s Market Continues
Even with moderating buyer activity and rising inventory, it is still a seller’s market. The trend is toward balance, but it will likely be two to three years before that level is reached. Buyers will appreciate leaving the frenzied pace of early 2018 behind, while sellers will still find the most favorable selling condition our market has seen.
Average Days on Market: 17 days for priced right homes
2019 Projection: Continued seller’s market, but slowly trending toward balance.
Record Home Prices
Given this record long seller’s market, it is not surprising to see home prices at record level. As the year went on, price gains began to moderate. Annual gains reached a peak of nearly 12% in the spring but moderated to 8.6% by year-end.
2019 Projection: 6% Increase
Even as sales moderate, the persistent seller’s market conditions mean
External Forces to Monitor
Real estate markets are influenced by many things—jobs and interest rates are the two biggest. The job market has the greatest impact, as demand is strongest when unemployment is low. Our area had an 11-year low unemployment rate at year-end.
The expected rise in mortgage rates came as the year progressed. However, the stock market fluctuations at year-end brought rates back down to the same low levels buyers enjoyed in the spring of 2018.
Mortgage Interest Rates—modestly rising from 4.5% to 5.1%
Time will tell but we expect to see a very strong market for the next few years. Happy 2019!