It is no secret that over the past two years we have seen pandemic restrictions trigger a competitive seller’s market. By the summer of 2020, historically low mortgage rates brought a flood of buyers into the market while many potential sellers bunkered down rather than attempt a move during the height of COVID. We quickly saw inventory dry up, and by the spring of 2021, housing inventory was down 32% from pre-pandemic levels in the Southwest Washington and Oregon markets. With buyers significantly outnumbering homes for sale, buyers were pushed into increasingly competitive tactics to have a chance at closing on a home. Across the country in 2021, US home prices soared by a dramatic 18.8% with over 70% of homes on the market receiving multiple offers over asking price. During this time, the Go With Ro team saw our listings sell for an average of nearly $30,000 over asking, consistently spending less than a week on the market.

Today, we are no longer experiencing the same degree of strain from pandemic restrictions, and experts have been divided on whether our current spring market would bring a continuation of our seller’s market or if conditions would begin to taper off.

As of this year, mortgage rates have begun steadily increasing which has had a two-fold effect. In the short term, these increases have caused more buyers to enter the market nationwide. With the looming threat of higher mortgage rates and prices in the future, many have entered the market now in hopes of locking in lower rates. In the long term, rising mortgage rates are anticipated to deter some buyers and soften home price growth to a more sustainable pace.

As of the end of the first quarter in the Oregon and Southwest Washington market, we started to see hints of this softening. The pace of home-price growth began to taper, yet prices still rose by 13.2% year over year, which is well above the state’s long-term average. Average home prices also rose 2.5% compared to quarter four of 2021, despite rising financing costs. 

Now well into the much-anticipated spring market of 2022, the combination of swift home price growth and the fastest mortgage rate increase in over forty years is finally beginning to affect national purchasing demand. In the US, new home sales fell for a third month in March, dipping 8.6%, nearly 13% below March 2021 new home sales.

In Southwest Washington, local data from March and April has not painted a clear picture either way. March brought the first inventory increase in months, with an uptick of 7.4% in new listings and a modest increase in average time spent on the market. In April, however, listings dipped right back down 6.1% with homes spending an average of only 18 days on the market. We’re interested to see the data from May of this year which will likely hint at what is in store as we head into the summer market. Will buyers continue bearing the heat of a red-hot seller’s market, or will conditions follow national averages and start to taper off. 

We always recommend having an experienced agent at your back during any home sale or purchase, but no time is this more important than during a shifting market. You can rest easy with the Go With Ro team knowing that you will have round-the-clock support and expert guidance from a leading agent in the Southwestern Washington market. Our advice to sellers during this time is to apply a more conservative approach to your pricing. Ensure all repairs are complete before hitting the market and give buyers every reason to say yes to your home. For buyers, we’re not quite out of the woods yet. Set up your absolute best offer by getting pre-approved for your mortgage, making a larger down payment, or including earnest money terms. For more advice on navigating a seller’s market as a buyer, read our recent blog post. 

Contact Rowena Lusby today to talk through your upcoming home sale or purchase to see how we can best assist you. 360-909-6399

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