7 things to know about the Thurston County housing market
The Thurston County housing market is moving along at a very different pace than it was even six months ago. In December, the number of sales fell, inventory rose, median price appreciation softened and interest rates remained higher than a year ago, according to new data released Friday by Northwest Multiple Listing Service.
What was the housing market like before?
Up until late last summer, the housing market was roaring along. There was little inventory, mortgage interest rates were low and there was plenty of demand, which meant the median price of a home steadily escalated. The median price of a Thurston County home hit an all-time high of $525,000 last June.
How has the market changed?
The biggest change to the housing market has been higher mortgage interest rates, which has cooled demand and put the brakes on price increases. The average interest rate on a 30-year fixed-rate mortgage — the most common kind of mortgage — was 6.48 percent this week, according to Freddie Mac, a government-sponsored enterprise that provides capital to mortgage lenders and tracks interest rates. A year ago, the average rate on a 30-year mortgage was 3.22 percent, according to Freddie Mac.
Is a Thurston County home more affordable than it used to be?
Yes and no. Higher mortgage interest rates, which drive up payments, have encouraged sellers to keep their asking price within means. The median price of a Thurston County home last month was $497,500, up 3.2 percent from December 2021, but down from the June high of $525,000, the data show.
Still, if you’re a buyer in this market, you have to contend with higher rates.
Inventory used to be very low. Has it changed?
Yes. There are more homes for sale in Thurston County. In fact, inventory is higher than it has been in a long time. For years, there was less than a one month’s supply of homes on the market, and now it is closer to two months, the December data show.
There is still a ways to go, however. A market that doesn’t favor either buyer or seller is said to have four to six months of inventory.
How do I compete with a cash buyer?
The good new is you probably don’t have to, said Steve Garrett, owner of Windermere Olympia. Higher mortgage interest rates means housing markets have slowed throughout the country, including in places such as Seattle, Portland and California, where the median price of a home is much higher than in Thurston County.
“There are not as many cash buyers as we saw six, eight months ago,” Garrett said.
I want to own a home but I can’t afford it here. What are my options?
If you can’t afford a home in Thurston County and don’t mind a short commute, there are more affordable options in the region, according to the Northwest MLS data.
The December median prices in Grays Harbor, Lewis and Mason counties were $325,000, $375,000 and $365,000, respectively.
What’s the outlook for the housing market?
More hopeful than you might expect because the job market remains strong. However, that will tend to favor sellers over buyers.
“While mortgage market activity has significantly shrunk over the last year, inflationary pressures are easing and should lead to lower mortgage rates in 2023,” said Freddie Mac economist Sam Khater.
“Home buyers are waiting for rates to decrease more significantly, and when they do, a strong job market and a large demographic tailwind of millennial renters will provide support to the purchase market. Moreover, if rates continue to decline, borrowers who purchased in the last year will have opportunities to refinance into lower rates.”
Thurston County data for December
▪ Single-family residence sales fell 48 percent to 243 units last month from 467 units in December 2021.
▪ Single-family median price rose 3.2 percent to $497,500 from $482,000 over the same period.
▪ Single-family pending sales fell 38 percent to 206 units from 336 units over the same period.
▪ Condo sales fell to two units from 10 units over the same period.
▪ Condo median price rose slightly to $317,500 from $312,500 over the same period.
▪ Condo pending sales fell to eight units from 10 units over the same period.
Source: Northwest MLS.
This story was originally published January 8, 2023 at 5:00 AM.
