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Out with the old price, in with the new

Our city leaders keep telling us that building more market rate housing will help moderate real estate prices. More supply brings prices down. Thousands of new housing units have been built in Olympia-Lacey-Tumwater in the last year or so—including many of the sought-after single-family homes.

It won’t be long until all those new housing units (“all housing is good!”) with quarter million price tags will be snapped up by high-end buyers. The rest of us will be able to afford the old homes they didn’t want.

But no—instead of prices moderating, everyone is cashing in. That’s how the market works. Older homes in Olympia neighborhoods that sold for $350,000 two years ago are on the market for $500,000 and up. Modest homes are selling for $395,000 and being renovated in expectation of selling for 50% more in a couple of years. The real estate industry noticed.

A national real estate company, Lennar Homes, is building 56 new single family homes in Wellington Heights, abutting the Auto Mall in West Olympia. They put up the sign on the left this February: all three models priced in the $400,000 range. In May, the sign on the right replaced the “old” sign. Same houses, now for $500,000. The more houses, the higher the price. And a rising market raises all prices.

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