The Thurston County residential housing market is off to its best start in years through June, with sales ahead of last year’s pace by more than 20 percent, the result of an improving economy and still-low mortgage interest rates.
The difference from last year, though, which at times showed only a flicker of improvement in the housing market, is that this year’s gains appear to be sustained, showing steady month-over-month improvement, according to Northwest Multiple Listing Service data.
Through June, home sales have climbed 21 percent to 1,596 units from 1,317 units in 2012, the data show.
Here are the county’s monthly home sales totals since January: 189, 200, 264, 270, 332 and 341, Northwest MLS data show.
That’s good news for an industry that likely suffered the worst during the economic meltdown, shedding thousands of jobs and dragging the rest of the economy into recession.
But the improvement isn’t merely contained to a house being listed and sold: The rise in housing is once again rippling through the rest of the industry, encouraging agents to dust off that license and making other trades tied to the industry busier.
“People are talking about getting back into real estate again,” said Pat Pieroni, a longtime real estate professional with Virgil Adams Real Estate and the current president of the Thurston County Realtors Association.
Pieroni remembers the boom and the bust, he said.
In red-hot 2005, Pieroni doubled his annual sales volume to $16 million. He also remembers the not-so-ideal conditions that the boom produced, such as homes being bid well over asking price and buyers forgoing home inspections in a quick-selling environment.
After the market slowed, Pieroni recalled days when only two of 17 agents would be in the office. Now, things have changed again, saying the office is “jamming.”
Agents are busier, people are talking about real estate and people are inquiring about values, Pieroni said.
“You can really feel the difference in the area,” he said.
And the number of agents is on the rise.
After peaking at more than 900 real estate professionals during the boom, the number of Thurston County Realtors Association members fell to a low of 425 and has now climbed again to 476. Some are past members who have rejoined the association, while others are new to it, according to association data.
Other real estate groups are experiencing gains, too.
The Northwest MLS, which represents most of Western Washington, said its total list of brokers and sales agents has risen to 22,444 in May from 22,120 in January, according to Bob Gent, director of business development and member relations for the Northwest MLS.
Statewide totals, too, have stabilized and grown, state Department of Licensing data show, falling from a peak of 51,670 brokers and managing brokers in 2008 to 40,931 in March of this year. It then rose to 40,995 the following month.
Thurston County builders, such as Deering & Nelson, find themselves busier too, co-owner Ron Deering said.
The company is halfway through a 30-lot development in Tumwater called the Village at Countryside.
“It’s maybe not what it was a few years ago,” Deering said about the state of the market, but it is “picking up,” meaning they are building more homes and that homes are selling faster.
One concern Deering has, though, is whether there are enough buildable lots to meet new demand after the market slowed.
Bothell-based New Home Trends President Todd Britsch thinks there are enough lots in Thurston County, saying the county has about a 30-month supply, according to data that was included in a recent presentation to the Olympia Master Builders.
That’s in a safe range because of the time needed to get lots approved as part of the platting process, which can take two years, sometimes longer, he said.
The inventory of homes for sale has remained low in the county, dropping below 1,000 units late last year and hovering around that number ever since.
But as home prices rise and homeowners regain some equity in their property, more homes likely will be listed for sale, which would increase inventory levels, Britsch said.
The building trades also have received a boost from the improved state of the housing market, including Truss Components of Washington in Tumwater.
The company has experienced a steady increase in business this year, general manager and co-owner Chad Johnson said. He first noticed the change last fall when he was getting prepared for another winter of little to no work, but this time the spigot wasn’t completely shut off and the work kept coming in, Johnson said.
“We had a dip, but nothing like the last few years,” he said.
Although things have improved, there’s still a ways to go.
During the bust, business at Truss Components fell to 15 percent of what it was doing during the boom, and now has grown to about 35 percent of its past business, said Johnson, who was reluctant to talk about the business in great detail.
Still, he said he’s glad to be in a region that continues to grow.
“Things seem to be on the mend,” he said.
SALES LEADS HIGHER
Remodelers are busier, too, such as John Erwin Remodeling of Olympia.
The longtime remodeler managed to stay fairly busy during the downturn, owner John Erwin said, but then something changed in April, typically a slow time for him as consumers focus on their taxes rather than home projects.
This April, his sales leads on potential new business shot up dramatically, he said, from about 20 to 25 a month to more than 40.
Erwin chalked up the improvement in sales leads to new housing starts and more confidence in the economy.
Home sellers are part of the equation, too, because some are getting pre-inspections of their homes to find out what kind of things need to be fixed before it is listed for sale.
“We’re getting more and more inspections with fix-it lists,” Erwin said.
The level of business has returned to the point that Erwin can be more choosy about the types of jobs it wants to do, referring some business to other remodelers.
During the bust, it chased every possible business lead, he said.
Larry Stamp, the owner of Cameo Home Inspection Services, has returned to a typical level of activity, too, doing two to three home inspections a day or about 40 a month, up from 17 a month when the market was slower, he said.
In addition to the rise in business, Stamp, a home inspector for 14 years, said another trend he’s noticed in his industry is not necessarily a good one.
When business slowed for inspectors, many began to load up on other services to attract business, he said.
They offer so many additional services now that they are getting away from home inspection itself, which should take about three hours to complete, Stamp said.
Another concern is how long this rally in the housing market will last.
Mortgage interest rates are still low by historical standards, but they are on the rise, and increased borrowing costs could slow the market.
The average interest rate for a 30-year fixed mortgage recently rose to 4.46 percent from 3.93 percent, the biggest one-week gain in 26 years, according to Freddie Mac.Rolf Boone: 360-754-5403 firstname.lastname@example.org theolympian.com/bizblog