Buyers are finally calling the shots after three years of historic lows
The Pierce County real estate market took us on quite a ride in 2022. We started the year in the same chaotic, multiple-offer environment we’d learned to navigate over the last two years. In the late Spring, we saw Buyers scramble to get their offers accepted before mortgage rates rose out of historic lows (maybe forever?) Although we weren’t surprised, we didn’t know how fast the rates would climb, and how far!
By Fall, the Federal Reserve’s strategy to fight inflation was clearly having an effect in our market. Prices were not only dropping, for the first time in several years, but sales volume dipped sharply and Sellers began offering or agreeing to incentives like paying Buyers’ closing costs. As a result, inventory finally started to climb above the savagely unhealthy numbers we’d grown accustomed to (read: < 1 month of inventory in most Pierce County neighborhoods).
So now what? Well, December gave us a chance to assess the “new normal” and here’s what we know as we begin 2023: inventory is still a big, big problem. We simply don’t have enough available homes in Pierce County for all the folks who want to live here. Some economists suggest that the 30-year mortgage rates have finally stabilized, but on average that number is still double what it was a year ago. Homeowners who locked in those epic 3% interest rates aren’t in a hurry to leave their homes. The tech layoffs in Seattle are also making national headlines, but what impact they will have on the Pierce County housing market still remains to be seen.
What we do know is this: Buyers who are taking advantage of the market shift are able to view a home more than once before making their offer AND they are able to have an inspection. In many cases they are able to get their closing costs paid by the Seller (or at least wrapped into their loan amount). VA and FHA buyers are FINALLY getting their offers accepted. Experienced Realtors will tell you the current conditions resemble the pre-pandemic market -- except the cost of purchasing has risen exponentially since then (higher rates x higher prices).