The following analysis of the Western Washington real estate market is provided by Windermere Real Estate Chief Economist, Matthew Gardner. We hope that this information may assist you with making better-informed real estate decisions. For further information about the housing market in your area, please don’t hesitate to contact your Windermere agent.
A MESSAGE FROM MATTHEW GARDNER
Needless to say, any discussion about the U.S. economy, state economy, or housing markets in the first quarter of this year is almost meaningless given events surrounding the COVID-19 virus.
Although you will see below data regarding housing activity in the region, many markets came close to halting transactions in March and many remain in some level of paralysis. As such, drawing conclusions from the data is almost a futile effort. I would say, though, it is my belief that the national and state housing markets were in good shape before the virus hit and will be in good shape again, once we come out on the other side. In a similar fashion, I anticipate the national and regional economies will start to thaw, and that many of the jobs lost will return with relative speed. Of course, all of these statements are wholly dependent on the country seeing a peak in new infections in the relatively near future. I stand by my contention that the housing market will survive the current economic crisis and it is likely we will resume a more normalized pattern of home sales in the second half of the year.
- There were 13,378 home sales during the first quarter of 2020, a drop of only 0.2% from the same period in 2019, but 27% lower than in the final quarter of 2019.
- The number of homes for sale was 32% lower than a year ago and was also 32% lower than in the fourth quarter of 2019.
- When compared to the first quarter of 2019 sales rose in eight counties and dropped in seven. The greatest growth was in Cowlitz and Lewis counties. The largest declines were in Island and Snohomish counties.
- Pending sales — a good gauge of future closings — rose 0.7% compared to the final quarter of 2019. We can be assured that closed sales in the second quarter of this year will be lower due to COVID-19.
- Home-price growth in Western Washington rose compared to a year ago, with average prices up 8.7%. The average sale price in Western Washington was $524,392, and prices were 0.4% higher than in the fourth quarter of 2019.
- Home prices were higher in every county except San Juan, which is prone to significant swings in average sale prices because of its size.
- When compared to the same period a year ago, price growth was strongest in Clallam County, where home prices were up 21.7%. Double-digit price increases were also seen in Kitsap, Skagit, Mason, Thurston, and Snohomish counties.
- Affordability issues remain and, even given the current uncertain environment, I believe it is highly unlikely we will see any form of downward price pressures once the region reopens.
DAYS ON MARKET
- The average number of days it took to sell a home in the first quarter of this year dropped seven days compared to the first quarter of 2019.
- Pierce County was the tightest market in Western Washington, with homes taking an average of only 29 days to sell. All but two counties — San Juan and Clallam — saw the length of time it took to sell a home drop compared to the same period a year ago.
- Across the entire region, it took an average of 54 days to sell a home in the first quarter of the year — up 8 days compared to the fourth quarter of 2019.
- Market time remains below the long-term average across the region. This is likely to change, albeit temporarily, in the second quarter due to COVID-19.
This speedometer reflects the state of the region’s real estate market using housing inventory, price gains, home sales, interest rates, and larger economic factors.
Given the current economic environment, I have decided to freeze the needle in place until we see a restart in the economy. Once we have resumed “normal” economic activity, there will be a period of adjustment with regard to housing. Therefore, it is appropriate to wait until later in the year to offer my opinions about any quantitative impact the pandemic will have on the housing market.
ABOUT MATTHEW GARDNER
As Chief Economist for Windermere Real Estate, Matthew Gardner is responsible for analyzing and interpreting economic data and its impact on the real estate market on both a local and national level. Matthew has over 30 years of professional experience both in the U.S. and U.K.
In addition to his day-to-day responsibilities, Matthew sits on the Washington State Governors Council of Economic Advisors; chairs the Board of Trustees at the Washington Center for Real Estate Research at the University of Washington; and is an Advisory Board Member at the Runstad Center for Real Estate Studies at the University of Washington where he also lectures in real estate economics.
Original post appeared at www.windermere.com.
Windermere is focused on keeping our clients and our community safe and connected. We’re all in this together. Since the early days of COVID-19, our philosophy has been “Go slow and do no harm.” While real estate has been deemed an “essential” business, we have adopted guidelines that prioritize everyone’s safety and wellness.
Like everything else in our world, real estate is not business as usual. While market statistics certainly aren’t our focus at this time, we’ve opted to include our usual monthly report for those who may be interested. A few key points:
- The monthly statistics are based on closed sales. Since closing generally takes 30 days, the statistics for March are mostly reflective of contracts signed in February, a time period largely untouched by COVID-19. The market is different today.
- We expect that inventory and sales will decline in April and May as a result of the governor’s Stay Home order.
- Despite the effects of COVID-19, the market in March was hot through mid-month. It remains to be seen if that indicates the strong market will return once the Stay Home order is lifted, or if economic changes will soften demand.
Every Monday Windermere Chief Economist Matthew Gardner provides an update regarding the impact of COVID-19 on the US economy and housing market. You can get Matthew’s latest update here.
Stay healthy and be safe. We’ll get through this together.
This post originally appeared on GetTheWReport.com
Windermere Chief Economist Matthew Gardner has been following the situation closely, watch this video for his thoughts on how COVID-19 will impact the national housing market and economy.
We’re in the final week of our winter drive. Please help keep families warm during the cold winter months by dropping off your donations at our office: 110 116th Avenue SE in Bellevue. The Windermere Foundation’s “We’ve Got You Covered” winter drive, part of the #tacklehomelessness campaign ends this Friday, November 8th. Our office is still collecting new hats, scarves, gloves/mittens, and warm socks for all genders and sizes. We are donating to our non-profit partner, Mary’s Place, an organization that provides safe, inclusive shelter and services to women, children and families on their journey out of homelessness.
The real estate market continued to moderate in July. Inventory rose and home values softened, providing buyers with increased selection and more favorable pricing. With strong job growth and interest rates holding at below 4 percent, brokers expect the market to remain solid through fall.
The market remains strong on the Eastside. The current tech boom continues to fuel demand, buoyed by Google’s recent plans to build out another office in Kirkland. An increase in inventory gives buyers more time to find the right home for their budget. The median price of a single-family home on the Eastside was $925,000 in July, down 2 percent from the same time last year.
Home prices in King County continued to ease. Buyers took advantage of lower prices and new inventory to boost home sales in July. The median price of a single-family home was $680,000, a 3 percent decline from the same time last year. More moderately-priced areas in the south end of the county saw continued price growth.
It’s no surprise that Seattle is the top city in the country where millennials are moving. Apple plans to add 2,000 jobs in Seattle. The first of 4,500 Expedia employees will start moving into Interbay soon. While demand here is expected to stay strong, prices continue to cool. The median price of a single-family home was $755,000, down 6 percent from a year ago and a decrease of 3 percent from June. Southeast Seattle, which generally has more affordable homes, saw the median home price rise 9 percent over the same time last year.
Inventory remains very tight in Snohomish County. The number of listings on the market were up 6 percent over last year, and the county has only six weeks of available supply – far short of the four to six months that is considered balanced. The median price of a single-family home in July was $502,000 – up slightly from the median of $495,000 a year ago.
This post originally appeared on windermere-bellevue.com