Area home buyers find they have new room to negotiate

Cooling market widens buying options

By Rolf Boone | The Olympian • Published December 30, 2007

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Home buyers found themselves in the driver's seat in 2007 as South Sound became a buyers' market after two years of red-hot sales.

The number of homes for sale has nearly doubled since January 2006, newly compiled data show.

That marks a significant change for home buyers, who only a year ago had fewer homes to choose from, frequently had to compete with other buyers for the same property and sometimes had to pay more than the asking price.

The boom in Thurston County's real estate market, which surged in 2005 and continued through 2006, largely was fed by historically low mortgage interest rates of 6 percent or less.

Seller's frenzy

From October 2004 to October 2005, the median price of a home increased 31.5 percent — from $185,950 to $244,590, according to the Northwest Multiple Listing Service.

"People were panicked to get into a house before they got priced out," said Ted Leland, a South Sound real estate agent for six years.

The real estate market was in such a frenzy that Leland once closed a deal in a home seller's garage at 1:30 a.m. so the buyer would not lose out to someone else.

"It was a different time," Leland said.

Since then, the market has shifted from favoring the home seller to favoring the home buyer.

From January 2005 through November 2007, listings increased to 2,087 units, up from 804, an increase of 160 percent, MLS data show.

With more homes to choose from, buyers can take their time and are in a better position to negotiate on the asking price.

"There's a lot more leverage for buyers," Leland said.

Curtis and Rebecca Michael, formerly of The Dalles, Ore., bought a South Sound home so they could return to the area.

Before they moved to The Dalles, the Michaels had owned a 2,300-square-foot house in Olympia. They bought it in June 2005, but like a lot of buyers in that red-hot market, they had to compete with another buyer before the house was theirs. The Michaels wound up paying $20,000 more than the asking price, Curtis Michael said.