Business Community
Gig Harbor Real Estate | Mortgage rates drop and buyer activity picks up
The Gig Harbor real estate market is defying seasonal trends, with buyer activity surging in September when it typically slows down. Between the Purdy and Narrows bridges, including Fox Island, pending single-family and condo sales jumped by 23.2% from August to September. This is only the second time since 2010 that we’ve seen such an increase during this period, the other being during the COVID-19 pandemic’s buyer frenzy.
Historically, pending sales drop by an average of 16.3% from August to September, as families settle into school routines. However, this year’s 23.2% rise bucks that trend. While it’s too early to label this a market shift, the recent drop in mortgage rates could be a driving factor.
In mid-September, the 30-year fixed mortgage rate fell to 6.11%, the lowest in over a year, according to Mortgage News Daily. Rates have since hovered between 6.11% and 6.2%. Some buyers I’ve worked with this month even secured pre-approval rates closer to 5.5%. This decline has prompted a wave of new buyers, tightening inventory just as the seasonal decline in new listings takes hold.
The combination of increased buyer activity and fewer new listings has tightened the market. In September, months of inventory — the time it would take to sell all available homes without new listings — dropped to 3.1 months, down from 3.5 months in August. This indicates a more competitive landscape for buyers. If the market follows its usual seasonal patterns, inventory is expected to tighten further before rebounding early next year.
A Colvos Passage and Vashon Island view home area home is listed for $950,000 by Hailee Keely, real estate broker with PropertiesNW.
Despite the increase in demand, single-family home prices were flat from August to September, though they have risen 8.8% compared to this time last year.
Looking ahead, I’ll be watching the pending sales data closely. While the recent dip in mortgage rates has brought some buyers off the sidelines, they have gone back up a bit in October, so October’s data could be very telling.
According to John Burns Research & Consulting’s quarterly survey, a significant number of buyers are waiting for mortgage rates to drop to 5.5% or below before entering the market. How soon or if that happens remains to be seen. However, many economists and banks predict that continued federal rate cuts coupled with lackluster economic data could bring those lower mortgage rates. For now, Gig Harbor’s real estate market is in a strong position, but all eyes are on the interest rate trends in the coming months.
Have a question about the data in this article or how the current real estate market impacts you? Connect with me at [email protected].
Alison Paoli is a real estate broker with Properties NW in Gig Harbor. Her longtime love of real estate includes her integral role in helping build Zillow from the ground up, to years working closely with economists and analysts investigating the real estate collapse and recovery in the U.S. As a Gig Harbor resident for a decade now, she loves sharing local insider tips with newcomers and equips all her clients with hard data that helps empower well-informed real estate decisions. Super energetic, Alison’s a mom, wife, and local community volunteer, raising three girls active in athletics and arts.