Thurston County housing market slows as sales drop 25%
The Thurston County housing market isn’t what it used to be.
A year ago, sellers were firmly in control and buyers found themselves skipping each other, trying to find a home in the face of low inventory and soaring prices. But July 2022 looks so different, according to new housing data released this week by the Northwest Multiple Listing Service.
“Our market is slowing down and prices have stabilized,” said Steve Pust, head broker at Van Dorm Realty in Olympia.
His statement is supported by the July results. Sales fell 25% from the same period a year ago, median price appreciation did not rise as rapidly at 8.6% in the same period, and month to month the other, the median price of a single-family home fell, the data show.
The county’s median price in July was $505,000, down from $525,000 in June.
So how did this happen? Higher gasoline prices, higher inflation – inflation rose 9.1% in the year-over-year period ending in June – and higher mortgage interest rates high, which have actually fallen slightly in recent weeks, remain higher than they were a year ago. All have contributed to a change in the housing market.
Data from the government-sponsored firm known as Freddie Mac, which provides capital to mortgage lenders, shows average rates for a 30-year mortgage are around 5%, down from 5.3%.
“Mortgage rates have remained volatile due to the tug of war between inflationary pressures and a sharp slowdown in economic growth,” Sam Khater, chief economist at Freddie Mac, said in a statement. “The high uncertainty surrounding inflation and other factors will likely cause rates to remain variable, especially as the Federal Reserve attempts to navigate the current economic environment.”
Although the county’s housing market has slowed, Pust said it’s back to normal. Sellers are more cautious about the price of their home and buyers can negotiate again. During a more frenetic time in the market, some buyers waived home inspections to make their offer more competitive, he said.
Of the roughly 600 home listings active on the market in July, about 100 of them have reduced their list price, Pust said.
And inventory months continue to grow, which are now at 1.5 months, according to July data. A market that favors neither sellers nor buyers is believed to have inventory in the range of four to six months. Inventory was previously less than a month in the county.
Still, there are still cash home buyers in the market, and while the economy is facing inflationary pressures, the underlying economy is still quite strong, Pust said. Inflation outpaced wage growth, but wages still rose 5.5% in June on an annualized basis, according to federal labor data.
“The consumer is much more discerning and much more aware of their budget,” Pust said.
A closer look at county housing data for July
▪ Sales of single-family homes fell 24.8% to 455 units in July 2022 from 605 units in July 2021.
▪ The median price of single-family homes rose 8.6% to $505,000 from $465,000 during the same period.
▪ Single-family pending sales fell 26% to 496 units from 673 units in the same period.
▪ Condominium sales fell to nine units from 21 units during the same period.
▪ The median condominium price rose from $269,000 to $334,950 over the same period.
▪ Pending condo sales fell to six from 23 units over the same period.
Source: Northwest MLS.