Home prices are still climbing in University Place and Fircrest but not quite as dramatically as they were in 2021.
First Quarter Market Update
for University Place
The median home price in University Place and Fircrest was up 19% year over year in the first quarter of 2022 (compared to 24% in the fourth quarter of 2021). Our hope is that year over year price gains will continue to taper gently until they reach a healthier range of 4-6%, but rapidly rising mortgage interest rates could trigger a more abrupt market rebalance.
We’ve seen some early signs of a market shift in the past few weeks – a drop off in showing activity, fewer offers on listings and an uptick in price reductions. It’s not clear yet if this shift is temporary or a sign of things to come.
We thought rising interest rates would dampen buyer demand, resulting in an increase in available inventory, but that hasn’t happened yet. Housing inventory levels in University Place and Fircrest remain extremely low.
Only 83 single family homes were sold in zip codes 98466 and 98467 in the first quarter of 2022 – a 19% decrease in sales activity when compared to the first quarter of 2021. This drop was likely due to low inventory.
Homes continue sell quickly in University Place and Fircrest – moving from active to pending in just 2-3 weeks on average.
Current Market Conditions
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- Mortgage interest rates have risen by a percent and a half since the middle of last year, with the better part of that increase occurring in just the past 3-4 months. Current rates are hovering in the mid to high 4% range and will likely crest 5% by summer.
- Home prices have continued to rise in spite of rising interest rates, fueled by limited inventory and strong demand from buyers eager to get homes purchased before interest rates rise higher.
- With interest rates and home prices rising simultaneously, affordability is becoming increasingly problematic. According to a senior economist for the National Association of Realtors, nearly 6.3 million households have now been priced out of the market.
- Though the market still feels hot, a decline in online searches, home tours and mortgage applications suggest that things could finally be cooling off.
In the current real estate marketplace, it remains critical for buyers and sellers to seek expert advice. If you’re thinking about buying or selling a home in the area, please contact us to discuss how we can put our knowledge and experience to work for you.
Mark Pinto is a top-producing Realtor with Windermere Chambers Bay, specializing in residential real estate in Tacoma, Gig Harbor, University Place and Lakewood.
Mark Pinto: (253) 318-0923
MarkPinto@windermere.com
