The median sale price for an equestrian property in the Puget Sound region jumped by about 30% during the past 12 months - the largest year over year increase in decades. Clients and friends that I show horses with have been asking me two questions. What’s caused this dramatic increase in value, and is it sustainable?
For the most part, equestrian home price increases are being driven by increased demand. In the past, a lot of folks lived in Seattle, Bellevue, Tacoma and Olympia to be close to work. Now, having worked successfully from home during the pandemic, many have decided to work from home in part or in full after the pandemic is over. That shift has created a strong demand for suburban and rural equestrian properties located close enough to a major job center or the airport for the few days a month they’ll need to commute.
I recently listed a ten acre equestrian property in an outlying part of Enumclaw, and I was shocked by the market response we got. 43 showings, 8 offers and an eventual sale price that was 15% above list. That level of activity in that location would have been unheard of before the pandemic.
I’m also seeing increased interest from out of state horse property buyers, primarily from California. With wild-fires and drought conditions on the rise down there, the stress of operating an equestrian property is becoming more and more intolerable.
Despite the frenzied pace of the equestrian home market, it’s important to note that the underlying fundamentals of the broader housing market remain solid. Housing demand continues to outpace supply nationwide with just two months of available inventory (compared to 11 months of inventory in 2007). Strict lending guidelines have helped keep mortgage default risk low, and home equity levels are extremely high. 41% of Washington State homeowners have at least 50% equity in their homes. Taken altogether, these factors make a 2008-style market correction unlikely.
If you have a significant amount of equity in your horse property, you may be wondering if the time is right to cash out. Before you move too quickly, keep in mind that identifying and purchasing a replacement property can be challenging in this market and that coordinating a concurrent sale and purchase takes planning and skill. That’s why developing a strategy now for a market sale next year is often the wisest approach. I’m always available to discuss your particular situation and happy to develop a strategy that makes sense for you both from a timing and a financial perspective.