The Thurston County housing market is not what it was.
A year ago, sellers were firmly in control and buyers found themselves bidding against one another, trying to find a home in the face of little inventory and skyrocketing prices.
But July 2022 looked much different, according to new housing data released by the Northwest Multiple Listing Service.
"Our market is slowing down and prices have flattened out," said Steve Pust, managing broker at Van Dorm Realty in Olympia.
Sales fell 25 percent comparing July 2022 to July 2021. On a month-to-month basis, the median price of a single-family home fell, the data show.
The county median price in July was $505,000, down from $525,000 in June.
What's causing the change? Higher gas prices, higher inflation — inflation rose 9.1 percent in the year-over-year period ending in June — and higher mortgage interest rates, which remain higher than a year ago even though they have inched down in recent weeks. All have contributed to a shift in the housing market.
Data from the government-sponsored enterprise known as Freddie Mac, which provides capital to mortgage lenders, shows that average rates for a 30-year mortgage are right around 5 percent, down from 5.3 percent.
"Mortgage rates remained volatile due to the tug of war between inflationary pressures and a clear slowdown in economic growth," said Sam Khater, Freddie Mac's chief economist, in a statement. "The high uncertainty surrounding inflation and other factors will likely cause rates to remain variable, especially as the Federal Reserve attempts to navigate the current economic environment."
Although the county housing market has slowed, Pust said it is a return to normal. Sellers are being more careful about how they price their homes, and buyers are able to negotiate again. During a more frenzied period of the market, some buyers waived home inspections to make their offer more competitive, he said.
Of the 600-some active home listings on the market in July, about 100 of them reduced their list price, Pust said.
And inventory continues to grow, now hitting 1.5 months, the July data show. A market that doesn't favor either sellers or buyers is thought to have in the range of four to six months of inventory. Inventory had been below one month in the county for a long stretch.
Still, there continue to be cash home buyers in the market, and although there is some inflation, the underlying economy is still pretty strong, Pust said. Inflation outpaced wage growth, but wages still grew 5.5 percent in June on an annualized basis, federal labor data show.
"The consumer is a lot more picky and a lot more conscious of their budget," Pust said.
Thurston County housing data for July
— Single-family residence sales fell 24.8 percent to 455 units in July 2022 from 605 units in July 2021.
— Single-family home median price rose 8.6 percent to $505,000 in July compared to $465,000 in July 2021.
— Single-family home pending sales fell 26 percent to 496 units from 673 units over the same period.
— Condo sales fell to nine units from 21 units between July 2022 and July 2021.
— Condo median price rose to $334,950 from $269,000 over the same period.
— Condo pending sales fell to six from 23 units over the same period.
Source: Northwest MLS.
