The housing market in the Walla Walla Valley may have set new records for real estate companies over the past two years, with homes selling at ever-higher prices, but several local brokers fear their buyers will continue to deal with the frustrations of few options and bidding wars. .
People used to start out with hundreds of options when consulting a realtor in Walla Walla for the monumental and life-altering decision to become a homeowner. Together they could carefully whittle the list down to a more comfortable selection and take their time to visit several offers and weigh the possibilities.
But the many potential buyers are currently starting with barely 30 homes in inventory in what David Corbett, a longtime Lloyd’s Insurance & Real Estate agent in downtown Walla Walla on South Second Avenue, has called a “dog-eat -dog”. world.”
“Buyers are the ones I really care about,” he said. “Demand greatly exceeds supply. Until this can be rectified or equalized, I think we will continue to have this kind of behavior.
His concerns follow a year of record activity. He started in Walla Walla real estate 35 years ago.
Last year may have been a banner year for Lloyd’s, but Corbett argues it’s an unfair seller’s market.
“I love it, I love it when I deal with a seller in this market,” Corbett said. “But when there’s a wonderful out-of-town buyer – and I have one right now – it’s a new transfer here. They want to buy a house, they have two kids. They qualify for any other market, when there is enough inventory to choose from, to have the option of buying a home.
“But when you have 30 houses on the market, they just can’t compete, even if they deserve it. This is the problem.”
Williams Team Homes, in downtown Walla Walla on East Alder Street, reports its January 2019 inventory at 195 homes. And that is during the slower seasons. In June 2019, the inventory reached 253.
Limited inventory, combined with buyers motivated by low interest rates, caused prices to soar.
The price of an average home in Walla Walla County had risen 26.6% in just one year during the third quarter of 2021, according to a report from the Washington Center for Real Estate Research. In other words, that’s another $80,000.
Columbia County prices rose 22.1% (about $45,000).
Both increases ranked in the top third of Washington counties, with the state average at 18.5% nearly matching that of the nation, as reported Jan. 20 by The New York Times.
As expensive as houses in rural areas have become, they still cost less than half the price of those in King County.
So homes in rural areas like Walla Walla County and Columbia County didn’t last long on the market despite rising prices.
A frustrating cycle of supply and demand ensues, with many buyers willing to shell out more and more money to make a purchase in an already limited number of available homes.
“We are at historic lows,” said Kyle Williams, co-owner of the family brokerage. “We have been breaking the low inventory record for three years every month.
“The reason the inventory is so low is because the time to market is much shorter than the historical average. We’re looking at four to five days on the market before it’s put on hold. Once she is on hold, this house is removed from inventory.
“There are more buyers than houses.”
Williams Team Homes has also had record sales over the past two years. While inventory has shrunk, the number of closing sales is about the same – and at rising prices.
But at the same time, fears of an unstable market have grown.
“Our inventory supply is driving up prices,” Kyle Williams said. “The National Association (of Realtors) cites six months as a healthy supply level of inventory. At this time, we have less than a month’s worth of inventory.
He doesn’t see this ending anytime soon, even though interest rates have recently started to rise slightly.
Brenda Williams fears the market remains difficult for buyers. A property might have four to five bidders, with some bidding money.
“The inventory is so low that some people wait months to find a home that meets their needs, and if they have to compete with other buyers, they may not have the opportunity to buy it,” she said. “A buyer, in a normal market, would be able to browse through a number of homes, choose the one that best suits their needs, and have the luxury of negotiating the purchase price.
“Now they have to pay full price or more in a competitive market, and there is always a chance that their offer will not be accepted, so we move on to the next house. They might make several attempts to buy a house.
Kyle Williams said he asked a buyer to make offers on five houses before accepting one.
It’s a battle Corbett has fought for many of his clients at Lloyd’s.
“The frustration is huge because you can write an offer four to five times for a couple trying to buy a house, and they get into a bidding war that you just can’t win,” he said. he declares. “Sometimes you just can’t win based on what kind of loan they get or what contingencies they have. This affects a lot of Agents who, although things sell out immediately, you better queue up for this opportunity for this unique inventory that matches a certain number of requests. All of a sudden you have seven to eight offers on the table.
“At that point, you’re getting record dollars for properties that have never reached those kinds of heights. Now they have a new benchmark to work on.
The outlook is bleak.
“As interest rates go up and the affordability factor for those borrowing money gets a little tighter, so maybe this multi-offer frenzy might ease a bit over time. “, said Corbett. “I think you could see maybe a bit more normalization of the market.
“I have three buyers right now who would like to buy a house, say for $350,000, more or less. There is hardly anything available for them to go and view on any given day. Once that hits the market, we’ll have so many people wanting to see it who will be in the same category, I just don’t feel like our inventory is building up fast enough to keep up with the demand.
“For the foreseeable future, I think it’s going to stay that way.”