A new study confirms what anyone active in the local housing market suspected: Most homes in the Olympia metro area have been selling for significantly more than sellers' asking prices.
The Olympia-Tumwater-Lacey area ranked fourth among small metro areas across the country in a new report on the average ratio between sale and list prices in 2021.
About 65.3% of the homes for sale in the Olympia-Tumwater-Lacey area sold above asking price in 2021 with a sale-to-list ratio of 103.7%, according to a data report by home service company Porch. An example: A home with a list price of $418,500 was typically selling for about $500,000.
The report notes the area had a median sale price of $482,889 in 2021, which represented a 20.9% year-over-year increase in price.
The results are indicative of a strong seller's market where buying a home has become more challenging and expensive. The report attributes the results to pandemic-related trends that have affected supply and demand.
Other small Washington state metro areas made the top 10 as well. The Bremerton-Silverdale-Port Orchard area ranked second with a sale-to-list ratio of 104.3%, the Bellingham area ranked sixth with 102.8%, and the Mount Vernon-Anacortes area ranked ninth with 102.5%.
The Santa Cruz-Watsonville area in California took the top spot among small metro areas with a sale-to-list ratio of 104.6%. The median sale price there was over $1 million in 2021, according to the report.
Among midsize metro areas, the Spokane-Spokane Valley metro area was the only Washington state area that ranked in the top 15 for 2021. It had an average sale-to-list percentage of 103.2% at fifth place. The median sale price was $383,379.
The Seattle-Tacoma-Bellevue area ranked sixth among larger metro areas at 104.9%. About 61.3% of homes there sold above asking price in 2021 when the median sale price was $662,238.
The metro area with the highest average sale-to-list percentage was the San Francisco-Oakland-Berkeley area in California, the report says. That area had a sale-to-list ratio of 107.9% and a median sale price of more than $1.1 million.
Over the last three years, more people have transitioned to working from home. Meanwhile, the nationwide personal savings rate, which measures income minus regular spending and taxes, increased by 155% from January 2020 to 2021, according to the report.
Taken together, these factors led many people to relocate their families, increasing the demand for homes, the report says.
The pandemic also has resulted in labor restrictions and supply chain bottlenecks for the construction industry, according to the report. This has slowed new home construction and made it more difficult to finish construction projects.
The report notes the nation's available housing stock decreased from a 2.6-month supply in the summer of 2021 to a 1.6-month supply at the start of the 2022. This measurement indicates how long it would take for current inventory to sell.
These factors have resulted in homes selling faster and at higher prices, the report says.
In 2019, about 37% of all homes listed sold in less than two weeks, the report says. By 2021, about 52% of homes were sold in the same period.
Those living in coastal states are more likely to pay above asking price for a home, per the report.
To calculate the ratio between sale and list prices, Porch used data from real estate brokerage company Redfin. As of February, Redfin data indicates the median home in Olympia sold for $502,475, 19.4% more than February 2021.
In Lacey, the median home sale price was $485,785 in February, a 15.1% increase year over year. Meanwhile, the Tumwater area saw a 31.2% year-over-year increase to a median sale price of $515,950.
When looking at sale-to-list price, Redfin data show Olympia homes sold at an average of 103.8% of the list price in February. That same month, Lacey homes sold at 103.6% and Tumwater homes sold at 102.8%.