We’re still in a seller’s market, but the market is changing
Mortgage rates have skyrocketed to 6%, with further increases projected. As a result, the real estate market in Thurston County, WA is changing. Inventory is rising, days on the market is increasing, and we’re starting to see price reductions on some listings. However, with median days on the market at 5 days and less than one month’s worth of active inventory, the median home price is still increasing and we are still in the midst of a seller’s market. There is still a window of opportunity to sell your home for maximum value, but that window of opportunity is closing.
Let’s take a look at market statistics from last month.
Months of supply
Months of supply is a way to measure the available inventory of homes for sale in relation to the current rate of closed sales. Months of supply is the number of homes for sale, divided by the number of closed sales in the past month. For example, if there are 300 homes for sale right now, and 100 closed sales in the past month, then that would be three months of supply (300/100=3).
Three months of supply is what we would see in a balanced real estate market in Thurston County, where neither the buyer or seller have a pricing advantage. When months of supply is greater than three months, that’s a buyer’s market. When months of supply is less than three months, it’s a seller’s market.
Look at the chart below. We are nowhere near a balanced market. Months of supply in April 2022 was 0.78! This means that homes are selling almost as fast as they become available.
This indicator explains why there are still bidding wars, offers in the first couple of days, and skyrocketing prices. We have an extreme supply/demand imbalance. There are not enough homes for sale to keep up with buyer demand. We need more supply!
Days on the Market
Days on the market is another indicator that shows that we are in an extreme seller’s market. Currently, the median days on the market is only five days. A lot of houses are selling within the first week of the listing. This is much lower than during the 2006-2007 peak, when market time was between 30 days and 40 days. In a balanced real estate market in Thurston County, average market time would be around 45-55 days.
This means that homes are being sold almost as quickly as they are being listed. And looking at the green circle on the right of the chart below, we see that days on the market has flatlined since early 2021 and hasn’t come up at all. This is something I’m going to keep my eye on, days on the market is a good early indicator to watch for changes in the market.
Take Advantage of This Historic Opportunity
Who knows how long this window of opportunity will stay open? If you’re thinking about selling your home anytime soon, you should act now.
We offer a free consultation and analysis to help you determine whether selling your home is the right move for you. This is more than just a “free market analysis” that any real estate agent can provide. We take a consultative approach, and we see ourselves as trusted advisors, not salespeople. We will go deeper to help you identify and evaluate your options, and bring up things to consider that you might not have thought about already.
Our free consultation and analysis includes:
- Listen to your goals and needs (we listen more than we talk)
- Help you figure out whether selling now is right for you
- Prepare you by setting realistic expectations
- Make suggestions for property improvements, staging, and marketing
- Tell you how much your home is worth and how much cash you’ll get when you sell