On a snowy afternoon in Terrace Heights, Haley Larson was going through an inspection for a home she had just sold.
Getting the sale was a scramble for Larson, who works with Berkshire Hathaway Home Services/Central Washington Real Estate. She and her buyers were competing with 16 others for the home on Pear Butte Drive.
And that was not an isolated incident.
“There’s another house that has 14 offers on it,” Larson said.
While the coronavirus pandemic has been wreaking havoc on other industries, real estate agents in the Yakima Valley have been busy due to a combination of a short supply of houses, low mortgage rates and people looking for affordable places from which to telecommute to Seattle, industry experts say. The trend is expected to continue this year.
One Realtor said people can still find the house they’re looking for, but it is likely to take some work.
“It is important for buyers to be more proactive with their brokers,” said Russ Redfield, a managing broker with Berkshire Hathaway Home Services/Central Washington Real Estate. “Connect to the right person and be proactive.”
Data from Headwaters-The Source, a Selah firm that tracks real estate sales, shows that 3,922 homes were sold in Yakima County in 2020, compared with 3,889 the year before, a 0.8% increase. Average house prices increased 12.6 percent from $248,010 to $279,190.
Single-family homes were the big sellers, with 3,426 being bought in 2020, according to the Yakima County Assessor’s Office. That represents a 3% increase from 2019, when 3,306 homes were sold, according to the county data.
For January figures, 248 homes were sold in 2020 compared with 217 this year.
It’s a case of too many buyers chasing too few homes, said James Young, director of the Center for Real Estate Research at the University of Washington. That in turn drives prices up, and theoretically should be good for home sellers.
But Young said the reality is not that simple.
“It’s a prisoner’s dilemma,” Young said. “If you’re a seller, where are you going to buy? There’s not enough inventory out there.”
The coronavirus pandemic has been a bit of a double-edged sword in the industry. On the one hand, people who might have upgraded homes have decided they’re comfortable where they’re at and stay put, taking those homes off the market, Young said.
On the other hand, there are people who now telecommute to jobs in Seattle and look for homes in more affordable markets such as Kittitas and Yakima counties, Young said.
“People who want to trade down have the opportunity to sell in the city and move to Yakima,” Young said.
Further fueling the demand for homes are low interest rates, as low as 2.25%, that were intended to keep the market stimulated. Larson said the lower rates mean a buyer can go up in price more than they could if interest rates were higher.
As of Thursday, there were 131 homes on the market in Yakima County, Larson said. And buyers are competing for them, requiring brokers to move quickly and offer incentives, such as quicker home inspections, to get a sign-off on their deals by sellers.
Part of the reason for the scramble, Young said, is that there are not as many lower-priced starter homes being built, which makes the supply of that affordable house limited and further pushes up prices.
Young said from the home builder’s perspective, there is a better return on investment and less risk building a custom home than building a dozen starter homes. With the custom home, the builder only has to go through the regulatory process once, has lower infrastructure costs and can sell the project more quickly — and possibly make as much money as selling the dozen smaller homes.
Larson said she’s seeing home buyers who are looking for homes with better office space, better outdoor space and more square footage.
“I think tiny houses may be a thing of the past,” she said.
Redfield said buyers should not be discouraged, as there are still houses going on the market, and inventory tends to increase in the spring. A good broker, he said, understands the trends in the market and can help a buyer find a house.