by George Pilant, RE/MAX Professionals February 26, 2017
To help you understand what has happened in our local real estate market since the economic recovery began, I prepared this report for you. You may be surprised at the extent of the recovery and what the near term market will bring. For your specific situation, I would be happy to prepare an analysis for your home or investment property.
After 25 plus years working in real estate, one thing I can say is that real estate markets are always changing. There has never been a “static” market in my career. There have always been ups and downs, challenges and opportunities. Interpreting the data and understanding how to implement strategy is the key to making the most of any given market and finding the optimal opportunities for you.
Residential Sales have doubled from 8,200 in 2011 to over 16,400 in 2016.Hindsight can be so accurate. Today, I can look back and tell you that the real estate market hit bottom in December 2011, and the recovery began in the first half of 2012.
From 2011 forward, we have been on a steady climb in real estate values and sales volume to what is now a far different market than when the real estate market crashed in 2008. Over the past 5 years, the Pierce County real estate market has recovered all of the equity lost in the market crash and has recovered to pre-crash values.
The Average Sales Price for Pierce County has increased from $205,000 in 2012 to just over $300,000 in December 2016. And prices are still rising with no end in sight.Seattle is the hottest market in the US. In King County, the median sale price for a home is $525,000: 40% higher than Pierce County. As prices up north continue to appreciate, buyers are leaving King County for our more affordable Pierce County homes.
Are we in a new bubble? No. Lending practices are strict. Buyers must have great credit and verifiable income. Our regional economy is booming. If there is a market disruption, it will come from outside our local real estate market.
The number of homes for sale has dropped from 7,200 in 2011 to less than 3,000 now.Why is inventory dropping and prices rising? High buyer demand. During the recession, many buyers who could afford to purchase a home did not. Buyers were afraid to purchase a home when prices were dropping every month. Buyers were waiting for the market to hit bottom.
Once the real estate market sold off most of the foreclosures and distressed properties, buyers who had been on the sidelines decided it was time to buy. Since 2012, the number of homes for sale has steadily dropped and prices have been rapidly rising as our market shifted from a Buyer’s Market to a Seller’s Market.
What is “Months Supply of Homes for Sale?”
The Months Supply of Homes for Sale is the time it takes to sell existing inventory at the current rate of monthly sales. The answer indicates a Buyer’s Market, Seller’s Market or an even market.
In 2011, the average months to sell ranged from 8-10 months: a buyer’s market with declining prices.
In December 2016, we dropped to 2 months of inventory! In January, we fell below 2 months of inventory as pending sales outpaced new listings.
CONCLUSION: 2017 will be a hot Seller’s Market with high buyer demand, multiple offers and rising property values.
What does this mean for you?
If you are buying, you can expect stiff competition for good homes in most neighborhoods in Pierce County. If you are selling, you can do very well. If you want to move and need to buy and sell at the same time, it gets complicated. Knowing the market is key to making the best decisions. I can help you identify options and help you make the right decisions for you. If you want more information about your home or investment properties, please call.
One thing is certain…. We need homes to sell! If you or anyone you know has a home, condo, or rental property to sell, let’s talk. It is a Seller’s Market and opportunities for making a substantial profit are excellent.
Graphs copyrighted by the Northwest Multiple Listing Service and used with permission.