What Happened in Pierce County’s Real Estate Market During Summer 2021?
While Summer 2021 doesn’t technically end until September 22, here in the Pacific Northwest, it starts to really feel like autumn once the beginning of September arrives and kids head back to school!
With that being said, we wanted to provide you with an overview of Pierce County’s Summer 2021 real estate market. What do hopeful home buyers need to know right now? What should sellers be aware of as we end summer? We’re breaking it all down in this blog post—keep reading for important takeaways about our local real estate market!
This summer, Pierce County experienced a shift in the real estate market: Inventory was up 32.3% from June 4 to August 4, 2021.
More homes for sale has translated to a less frenzied market. There are now slower market times (homes take a bit longer to sell), and while there are still plenty of offers being made on homes for sale, there are fewer offers overall. That being said, it is STILL a seller’s market—it’s just not as aggressive as we saw previously.
To expand on this point, the volume of sales is dropping (as it normally does during this time of the year). As a result, the amount of inventory is growing. This has resulted in some good news for buyers (more on that in a moment!). 2021 has returned to the normal cycle of business for the real estate industry, and it mirrors 2018 and 2019 very closely. (We are not counting 2020 for obvious reasons!)
For home buyers who gave up a month or so ago, now is a GREAT time to take another look!
More housing inventory has meant that buyers finally have some breathing room. Things are better for buyers right now than they have been in a year! Inventory has been increasing, and it is having the predicted effect on the market. Multiple offers are still there, but there aren’t as many. Inspections AND closing costs are now part of the conversation. Market times have slowed, and interest rates are still low. All of these things are causing prices to flatten (the key word here is “flatten”; prices are still not going down).
Everything stated here is good news for buyers. Appreciation may not be as aggressive, but if you are going to stay in your house for at least 5 years, it is most likely going to make sense to own rather than rent a home. We think that buyers who begin searching for a home right now or re-engage with their home search will be pleasantly surprised.
Sellers got a cold splash of water in the face this past month—pricing strategy, condition of your home, and how your home is marketed all matter more than ever.
Chances of selling your home are STILL over 200%, and Pierce County’s real estate market is still in the sellers’ favor. However, instead of a market that travels at, say, 150 MPH, the market is now at 65 MPH. It’s still fast, it just feels slow compared to what we’ve gotten used to.
Pricing strategy is incredibly important when listing your home right now—if you price too aggressively, buyers WILL ignore your home and you may end up getting less money than if you had priced it correctly the first time. We cannot stress enough how important it is to have a real estate professional guide you through this process.
During Summer 2021, Eastern Pierce County and South Tacoma had the highest volume of sales.
These areas also happen to be right around the median sales price for Pierce County.
Suburbia is alive and well, and many people are still seeking out larger homes with more land.
Our Windermere Professional Partners real estate agents have been helping many people move from Seattle to Pierce County. There is still a 35% price differential between the two areas, and people are able to get more square footage, more land, or a phenomenal view for a significantly lower price tag in Pierce County.
The WFH (work from home) phenomena is also real, and many people need more room in their homes for a home office. People are also seeking out more space for kids (who may need to have more space for schoolwork at home) and for new pets! These needs are the foundation of what is moving our market here in Pierce County.
Real estate economic professionals still maintain that we are not in a bubble right now.
The media loves to talk about real estate “bubbles”; this type of speculation gets click-throughs, and it gets eyes and ears to listen. However, speculation that we are in a housing bubble are not coming from real estate economic professionals. Economists have been consistent with their message that prices will flatten or soften as inventory grows, but will most likely NOT decrease, because there is not going to be enough inventory to do so.
This is all based on basic supply and demand economic principles. To put it in perspective:
- Using today’s pending home numbers, Pierce County would need an additional 2,829 listings to reach a balanced market.
- Using today’s active home listing numbers, we would need 1,703 fewer pendings to read a balanced market.
- Not including April 2020 (this was the month the COVID-19 pandemic sent the housing market into “shock”), the last time the Chance of Selling was below 100% was in December 2019 when it was at 75%. (For added context, the last time Chance of Selling was around 50% was Winter 2018, and it hit 33% in January 2015.)
As we head into Fall 2021, buyers will continue to experience a less frenzied market. However, seller’s still have the advantage, but cannot afford to be reckless when listing their home for sale.
Historically, housing inventory will begin to decline going into the Fall and Winter months. This means that buyers have a good window of opportunity right now, with low interest rates and the most inventory we have had in over a year. To put it into perspective, on January 1, 2021 we had 485 houses for sale in all of Pierce County, and now we have over 1,100!
So, if you’re a buyer, our market heading into fall is likely to bring a smile to your face—the winds are finally blowing to your back! There is still competition out there in all price points, however. Sellers need to make sure that they hire an experienced real estate processional to make sure they’re getting the best guidance possible and not becoming “stale” in this adjusting market.
There are still some solid opportunities in Pierce County for real estate investors right now.
You can definitely find properties available in today’s real estate market that make good sense for the real estate investor. Our REALTORS® have access to a proprietary spreadsheet that will illustrate whether the property “pencils” or not. Investors should also make sure to check the Landlord-Tenant laws and regulations in the city or county they are looking to invest in. There have been significant changes over the past year, and it is critical to your research that you become aware of those prior to making the investment.