When is the Best Time to Buy a House on the KP?

High interest rates and inflation shouldn’t stop you from buying a home if you can afford it. Because it’s not getting any cheaper.


Home prices on the Key Peninsula skyrocketed during the pandemic and post-pandemic interest rates continue to soar. Early last month the national average for a 30-year mortgage rose to a 23-year high of 7.49%, according to the Federal Home Loan Mortgage Corporation (Freddie Mac). That means even with a good credit score and a 20% down payment, a $550,000 home in Lakebay could come with a $3,200 monthly mortgage.

Despite that news, local realtors agree that if you have the money for it, now is the right time to buy a home on the KP.

Jo Jensen, a realtor/broker for the Jo Jensen Group, said buyers should not be afraid of an interest rate number.

“You can always refinance and drop your interest rate later, but you can’t compete with inflation,” she said, adding that home prices increased 10% between summer 2022 and summer 2023.

According to Northwest Multiple Listing Service, average home prices in the area between Minter Creek and the Purdy Spit jumped from $450,000 in 2020 to $750,000 earlier this year. Homes across the rest of the KP more than doubled in value during that same time frame: from $275,000 to $580,000 north of Key Peninsula Middle School, and from $210,000 to $460,000 south of the school. Prices dipped a little over the summer, but are slowly climbing back up this fall.

The Key Peninsula’s relative affordability, open spaces, and access to natural beauty and recreation make the area an attractive option for urban dwellers wanting to escape the hustle and bustle of city life.

“We have our share of homelessness and strangeness, but that’s everywhere,” said Rob Home, the branch manager for Windermere Real Estate/Key Realty. Home, who has lived in the area for 46 years, said the more cost-friendly neighborhoods are in Lake Minterwood, Lake Holiday, Lake of the Woods, Palmer Lake and Taylor Bay Estates.

Housing inventory across the Key Peninsula is low. Of the 69 homes available in early October, 32 of them were already pending sale by mid-month. Paige Schulte, a realtor with Team Schulte & Co., attributed low inventory to owners having little motivation to sell. “(Even with more equity in their home) they’ll likely not want to trade a lower interest rate on their current house for a higher rate on a more expensive home.”

While some sellers are hesitant to sell in the fall and winter, Schulte said seasons don’t affect the value of a home. However, homes generally sell faster in spring and summer because that’s when more people go home shopping. But Schulte said that’s also when bidding wars are more likely to happen.

“If a home is well-priced and marketed properly, it’ll sell no matter what time of year it is,” Home said.

While buying a piece of land to build a house sounds like a cheaper alternative to buying, Home urged caution before going that route. “It’s so expensive and time-consuming to build,” said Home, who said it takes about two years from the purchase of a property for the home to be ready. He blames the Pierce County government for over-regulating the construction process for the time it takes to build.

For homeowners looking to sell in the future, start thinking about home improvements now. The agents consulted agreed that the days of overbidding and waved inspections for homes not move-in ready are gone.

“Buyers today want turnkey places,” Schulte said. “If your house needs a ton of work, you’re in trouble. You’ll need to lower your price based on condition and have to convince a buyer it’s worth their time (to fix it up).”

Stephen Higgins of Higgins Custom Construction said remodeling kitchens and master bathrooms — two important features in homes — takes about six weeks, so sellers need to account for that in their plans.

If a homeowner can’t afford a big remodel project sellers should at least invest in painting, flooring and light fixtures, Schulte said. “Those will make your photos look better and that’s what drives people to come look at your home.”

But before making any big investment into a home, Jensen said to talk to a realtor. They can help suggest where to spend money to attract buyers. For buyers, local realtors can help navigate the complexities of buying in rural areas, like water rights, septic systems, and zoning regulations.

Home, Jensen, and Schulte all agreed the KP and rural areas around the state will keep growing, especially as remote work continues to be a viable option. Home said that 5,000 new homes need to be built each year for the next 20 years to support growth in the state.

But a warning for potential buyers still waiting around hoping for interest rates to drop — be careful what you wish for.

“If the interest rates go down, we’re going to go back to multiple offers and every single buyer will come out of the woodwork,” Schulte said.