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Western Washington Real Estate Market Update
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.
HOME SALES
- 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 PRICES
- 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.
CONCLUSIONS
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.
This post originally appeared on the Windermere.com Blog
Local Market Update – April 2020
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.
EASTSIDE
KING COUNTY
SEATTLE
SNOHOMISH COUNTY
VIEW FULL SNOHOMISH COUNTY REPORT
This post originally appeared on GetTheWReport.com
Local Market Update – March 2020
The novel coronavirus (COVID-19) has not yet dampened demand in the housing market. Traffic at open houses remains heavy. Buyers who had waited last year for a drop in prices have now seen several months of home prices increases. With demand far outstripping supply and record low interest rates, the market heading into spring looks hotter than ever.
EASTSIDE
Buyers that may have been in wait-and-see mode at the end of 2019 jumped off the fence in February. Pending sales (offers accepted but not yet closed) jumped 27%, snapping up already-tight inventory. 55% of homes on the market sold in 15 days or less. The median home price jumped 9% over a year ago to $985,000, an increase of $58,000 from the prior month. Development on the Eastside continues to surge and includes the recent groundbreaking for a 600-foot tower in Bellevue and a proposed 11-acre mixed-use project.
KING COUNTY
The tight housing market here got even tighter. There were 40% fewer homes on the market in King County in February than there were in January. The median home price rose 3% over the prior year to $675,000, up from $630,525 in January. With mortgage rates and the local unemployment rate both hitting record lows, demand isn’t likely to drop any time soon.
SEATTLE
With just six weeks of available inventory, competition for homes in Seattle remains fierce. Multiple offers were the norm, and 34% of homes purchased in February sold for over the listing price. The median price for a single-family home in February was $730,500, unchanged from a year ago and up from $719,950 in January.
SNOHOMISH COUNTY
The numbers in Snohomish County tell the story. There were 42% fewer listings in February than a year ago, and 42% more pending sales. With inventory at under a month of supply, there just aren’t enough homes to meet demand. That scarcity translated into higher prices, with the median price of a single-family home rising 8% over a year ago to $515,000.
VIEW FULL SNOHOMISH COUNTY REPORT
This post originally appeared on GetTheWReport.com
Local Market Update – February 2020
New jobs and low interest rates continue to fuel the housing market boom. While January is traditionally a slower month for activity, the new year saw steady buyer demand. With the number of sales exceeding new listings, all indicators point to a strong spring market.
EASTSIDE
The tech industry on the Eastside continues to grow rapidly. Microsoft and Alibaba both have significant expansions underway. Amazon expects to increase its workforce in Bellevue to 15,000 in the next few years, a sevenfold increase from today. As the economy continues to grow, inventory keeps being squeezed. There were 47% fewer single-family homes on the market in January than the year prior. Home prices have been stabilizing for some time, fluctuating slightly from month to month. In January the median home price slipped 2% over a year ago to $892,000.
KING COUNTY
The number of single-family homes on the market in King County was down nearly 44% from a year ago. That lack of inventory has resulted in more multiple offers and the return of review dates, where sellers identify a date to review all offers. Strong competition for a small supply of homes boosted the median home price 3% over the prior year to $630,525.
SEATTLE
The jobs outlook in Seattle for 2020 remains robust, and demand for homes continues to outstrip supply. Traffic at open houses in January reflected that demand, with one central Seattle homes priced in the $1.2 million range drawing more than 300 visitors. Home prices in the city have been relatively stable for the past 12 months. That remained the case in January where the median price for a single-family home inched up 1% over last year to $719,950.
SNOHOMISH COUNTY
With 35% less inventory than last January, competition among buyers in Snohomish County is fierce and multiple offers have become the norm. The median price of a single-family home soared 12% over a year ago to $509,950. Home prices have been playing catch up, increasing at a much faster pace over the past year than King County. While the prices gap has closed, the median price here is still nearly 20% less than King County.
VIEW FULL SNOHOMISH COUNTY REPORT
This post originally appeared on GetTheWReport.com
Matthew Gardner – Will There Be A Recession in 2020?
Windermere Chief Economist, Matthew Gardner, answers the most pressing question on everyone’s minds: Will there be a recession in 2020? Here’s what he expects to see.
This post originally appeared on the Windermere.com Blog
The Gardner Report – Q4 2019 Western Washington
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 me.
ECONOMIC OVERVIEW
Employment in Washington State continues to soften; it is currently at an annual growth rate of 1.7%. I believe that is a temporary slowdown and we will see the pace of employment growth improve as we move further into the new year. It’s clear that businesses are continuing to feel the effects of the trade war with China and this is impacting hiring practices. This is, of course, in addition to the issues that Boeing currently faces regarding the 737 MAX.
In the fourth quarter of 2019 the state unemployment rate was 4.4%, marginally lower than the 4.5% level of a year ago. My most recent economic forecast suggests that statewide job growth in 2020 will rise 2.2%, with a total of 76,300 new jobs created.
HOME SALES
- There were 18,322 home sales registered during the final quarter of 2019, representing an impressive increase of 4.7% from the same period in 2018.
- Readers may remember that listing activity spiked in the summer of 2018 but could not be sustained, with the average number of listings continuing to fall. Year-over-year, the number of homes for sale in Western Washington dropped 31.7%.
- Compared to the fourth quarter of 2018, sales rose in nine counties and dropped in six. The greatest growth was in Whatcom County. San Juan County had significant declines, but this is a very small market which makes it prone to extreme swings.
- Pending home sales — a barometer for future closings — dropped 31% between the third and fourth quarters of 2019, suggesting that we may well see a dip in the number of closed sales in the first quarter of 2020.
HOME PRICES
- Home price growth in Western Washington spiked during fourth quarter, with average prices 8.3% higher than a year ago. The average sale price in Western Washington was $526,564, 0.7% higher than in the third quarter of 2019.
- It’s worth noting that above-average price growth is happening in markets some distance from the primary job centers. I strongly feel this is due to affordability issues, which are forcing buyers farther out.
- Compared to the same period a year ago, price growth was strongest in San Juan County, where home prices were up 41.7%. Six additional counties also saw double-digit price increases.
- Home prices were higher in every county contained in this report. I expect this trend to continue in 2020, but we may see a softening in the pace of growth in some of the more expensive urban areas.
DAYS ON MARKET
- The average number of days it took to sell a home dropped four days compared to the third quarter of 2019.
- For the second quarter in a row, Thurston County was the tightest market in Western Washington, with homes taking an average of 29 days to sell. In nine counties, the length of time it took to sell a home dropped compared to the same period a year ago. Market time rose in four counties and two were unchanged.
- Across the entire region, it took an average of 47 days to sell a home in the fourth quarter. This was up nine days over the third quarter of this year.
- Market time remains below the long-term average across the region, a trend that will likely continue until we see more inventory come to market — possibly as we move through the spring.
CONCLUSIONS
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.
The housing market ended the year on a high note, with transactions and prices picking up steam. I believe the uncertainty of 2018 (when we saw significant inventory enter the market) has passed and home buyers are back in the market. Unfortunately, buyers’ desire for more inventory is not being met and I do not see any significant increase in listing activity on the horizon. As such, I have moved the needle more in favor of home sellers.
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.
This post originally appeared on the Windermere.com Blog.
2020 Luxury Market Forecast
By the end of last year, many homeowners found themselves with more equity than they realized, and at the same time their wages were increasing. When those two factors unite, it can spark homeowners to think about making a move to a larger or more expensive home in the luxury space. That said, now is a perfect opportunity to take a look at the forecast for the 2020 luxury market.
Three Things to Think About in the 2020 Luxury Housing Market
1. Prices
The U.S. economy is strong today, with buying opportunities throughout the luxury end of the market. Thomas Veraguth, Strategist at UBS Global Wealth Management, says in Barrons.com,
“There’s a good link between luxury real estate prices and [economic] growth.”
Available inventory is a key element that can impact home prices. At the upper range, the inventory is greater in comparison to the entry-level market, making moving up to a luxury home a growing reality for many buyers right now.
2. Activity in the Market
With more buying opportunities at the higher end, we should start to see an increase in activity. The same article states,
“Affluent homebuyers will start to come out of the woodwork as they find rising luxury rents less appealing and sellers get even more negotiable on price.”
Buyers looking in the luxury market are taking the opportunity to negotiate on price in a segment where there are more choices, too. According to the Luxury Market Report, homes sold for an average of 96.94% of the list price in December.
Buyers are also getting more for their money with greater purchasing power due to the current low interest rates.
3. Buyers Are Coming Back
Keep in mind, buyers are often sellers too, especially those looking to move up. Homeowners with an entry-level home can take advantage of the inventory shortage at the lower end of the market, thus driving higher sales prices for their current homes. Combined with growing equity in the homes they’re listing, it’s a great time for those who are ready to make a luxury move.
The extra equity and greater purchasing power are bringing many buyers back to the market. The same article mentioned that,
“We’ve already seen buyers who’ve been on the sidelines for two years tread back into the market.”
Bottom Line
If you’re considering entering the luxury market, 2020 is shaping up to be a great year for those who are ready to make that move. Let’s get together to set your real estate plan for the year.
Local Market Update – January 2020
2019 ended with too many buyers chasing too few homes. December marked the sixth straight month of declining supply. The severe shortage of homes, historically low interest rates, and strong job growth are predicted to keep the local housing market strong in 2020. In a region starved for inventory, sellers can expect significant interest in new listings.
EASTSIDE
Homes sold briskly on the Eastside in December in all categories, including the luxury market. The number of listings were down nearly 50% from a year ago and the area had under a month of available inventory. That lack of inventory helped bump the median price of a single-family home up 4% from a year ago to $949,000, which is a $49,000 increase from November. New large scale developments and a strong economic forecast indicate that the housing market will remain healthy.
KING COUNTY
King County continues to be a seller’s market. Inventory in December was down nearly 40% compared to a year ago and ended the month with below one month supply. The median price of a single-family home rose 6% over the prior year to $675,000, up slightly from November. More affordable areas saw much higher increases. Southeast King County – which includes Auburn, Kent and Renton – saw home prices jump 16% over the previous year.
SEATTLE
Numbers tell the story in Seattle. Inventory was down 25%, while the number of closed sales increased 19%. Strong demand here has kept the housing market solid, with prices fluctuating slightly month-to-month for much of 2019. The median price of a single-family home sold in December increased 2% from a year ago to $727,000. That was slightly down from $735,000 in November.
SNOHOMISH COUNTY
While the median home price in Snohomish County is less than that in King County, the gap continues to close. Buyers willing to trade a longer commute for a lower mortgage have kept demand and prices strong. Inventory here was off 36% in December as compared to a year ago. The median price of a single-family home rose 9% over a year ago to $510,000, an increase of $15,000 from November.
VIEW FULL SNOHOMISH COUNTY REPORT
This post originally appeared on GetTheWReport.com
Local Market Update – December 2019
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Favorable interest rates and soaring rents boosted activity in the housing market in November. More buyers competing for less inventory kept home prices strong. With the supply of homes far short of demand, sellers can expect well-priced properties to sell quickly this winter.
EASTSIDE
With just over a month of available inventory, demand on Eastside remains very strong. Sales are brisk, with 45% of single-family homes selling in 15 days or less and 20% of homes selling for over list price. The median single-family home price in November rose 2% from a year ago to $900,000 and was unchanged from October.
KING COUNTY
With more buyers vying for fewer homes, King County remains a solid seller’s market. While inventory traditionally shrinks in the winter, this November saw the number of new listings at historic lows. Demand was strong, with the number of closed sales up 12% over the same time last year. The median home price ticked up 3% over the prior year to $661,000 and was unchanged from October. The strong market sent prices higher in the more affordable price ranges, with some areas in South King County seeing double-digit increases.
SEATTLE
Activity in Seattle was very strong in November. The number of closed sales was up 29% over the same time last year. With just over one month of homes available for sale, the city is starved for inventory. Seattle homes prices have ebbed and flowed slightly from month to month for much of this year. The median price of a single-family home sold in November was off 3% from a year ago to $735,000.
SNOHOMISH COUNTY
With an increasing number of buyers driving to affordability, the Snohomish County housing market remains robust. Inventory is very tight and continues to fall. The county finished November with just over one month of supply. The median price of a single-family home rose 5% over a year ago to $495,000. That figure is unchanged from October.
VIEW FULL SNOHOMISH COUNTY REPORT
This post originally appeared on GetTheWReport.com
Local Market Update – November 2019
A steady influx of buyers continued to strain already tight inventory throughout the area in October. Home sales were up, as were prices in much of the region. With our thriving economy and highly desirable quality of life drawing ever more people here, the supply of homes isn’t close to meeting demand. Homeowners thinking about putting their property on the market can expect strong buyer interest.
EASTSIDE
As the Eastside continues to rack up “best places” awards, it’s no surprise that the area is booming. Development is on the rise, fueled primarily by the tech sector. The appeal of the Eastside has kept home prices here the highest of any segment of King County. The median single-family home price in October was stable as compared to the same time last year, rising 1% to $900,000.
KING COUNTY
King County’s 1.74 months of available inventory is far below the national average of four months. Despite the slim selection, demand in October was strong. The number of closed sales was up 5% and the number of pending sales (offers accepted but not yet closed) was up 11%. The median price of a single-family home was down 2% over a year ago to $660,000. However, some areas around the more reasonably-priced south end of the county saw double-digit price increases.
SEATTLE
Seattle home prices took their largest year-over-year jump in 12 months. The median price of a single-family home sold in October was up 3% from a year ago to $775,000, a $25,000 increase from September of this year. Seattle was recently named the third fastest-growing city in America. Real estate investment is surging. A growing population and booming economy continue to keep demand for housing –and home prices—strong.
SNOHOMISH COUNTY
Both the number of home sales and home prices were on the rise in Snohomish County in October. Overall homes sales increased 7%, and the median price of a single-family home rose 5% over a year ago to $495,000. Supply remains very low, with just six weeks of available inventory.
VIEW FULL SNOHOMISH COUNTY REPORT
This post originally appeared on GetTheWReport.com
