“So, how’s the market?” Summer 2019 edition

Since we last visited this topic, the overall trends appear to be the same, with a twist. According to Windermere’s in-house economist, Western Washington remains a strong seller’s market. The outlook for Tacoma-Pierce County still appears to be the case here, especially in comparison to King County, which has become a balanced market.

However, there are indicators of continued movement towards a balanced market for our area. The supply of available inventory is increasing in most markets, meaning greater choices for buyers.

Listings on the market have increased 18% since the last quarter. Moreover, demand has dropped somewhat, with a 5.3% decrease in home sales in Pierce County from this point in time last year.

Sales prices on average are still increasing. Unemployment is roughly in parity with where it was a year ago. However, the rate of sales price increases has softened, with Pierce County prices only 6.3% higher than they were one year ago.

One area that remains very favorable for sellers is days on market. Days on market remain tight for most Pierce County neighborhoods. On average, listings in Pierce County are on the market for 23 days before going pending. In Tacoma, it is not uncommon for an accurately-priced home to go pending after 6 days or less, and to sell for on average 1% higher than list price.

Perhaps the biggest caveat for all these trends is: price points. Homes under $600,000 tend to sell rapidly in our area, and exhibit all the signs of a standard sellers’ market. Homes priced over $600,000 – in places like Gig Harbor for example, where this is average – are on the market for significantly longer, and are effectively an entirely balanced market where sellers and buyers enjoy relative parity of strength.

The other factor to consider? All these trends are significantly offset by the decrease in mortgage rates, which are now on average one point lower than they were a year ago. Mortgage interest rates below 4% are now increasingly common. This gives buyers additional purchasing power, and therefore perpetuates demand that is fueling the continued sales activity.

In sum, our city and region still remains a seller’s market for most properties. However, buyers are beginning to catch up – which is not a bad thing. Markets are cyclical, and an increase in housing supply will stabilize prices and allow our region to catch its breath.

Anders Ibsen

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