Fourth Quarter Thoughts on the 2020 Pierce County Real Estate Market
It has been quite a year up to this point, so what can we expect for the remainder of 2020 and into the beginning of 2021? For those who are thinking about selling a home and those thinking about buying, there are several things to consider. We think our thoughts here will be helpful whether you are a buyer or seller (or both).
Let’s start with the most obvious: inventory. No matter where you are in Pierce County or what your price point is, there just aren’t enough homes to go around (see rainbow chart). This chart that illustrates what your chance of selling (COS) is related to the price of your home, and if you are a buyer, it shows the level of competition you’ll be facing:
This leads us to point out the opportunity there is for some sellers and buyers.
The closer you are to the median sales price in Pierce County (which is currently $425,000), the higher chance of selling is going to be. For those sellers, this is a great time to move up to a better home, as the higher price points have a lower chance of selling, meaning a less crowded field of buyers. This should translate to a bit more wiggle room on the value proposition of that larger home. In other words, now is the time to sell high, and buy low!
So what does the future hold?
To answer this question we look at the past two years' history of what inventory has done toward the end of the year (see last two years’ inventory graph). If we extrapolate the average percentage drop experienced the past two years and apply it to 2020, we can expect to have less than 700 homes on the market in all of Pierce County by the end of the year.
As a seller, this is a huge opportunity, and illustrates that this would not be the year “to wait for spring.”
As a buyer, economists feel we can expect upper single digit equity increases for the next 12 months, and that combined with historic low interest rates make buying a home that much more attractive.
Overall, we can expect fewer homes to be sold in the fourth quarter, but we can expect the chance of selling to continue to increase as that inventory decreases. Moral of this story as a seller? Now is the time! For buyers, there is some equity to be had, and interest rates are low.
In both cases it is critical that you have a trained professional to help you navigate through this ever changing market. Click here to view our “Buying a Home” Guide.