- Increasing demand for houses has reduced available inventory, resulting in a bidding war among buyers that has pushed prices up
- Sales are down 12.27% year-over-year, but jumped more than 39% month-over-month
- Median prices have increased in suburban areas more than urban ones due to buyers now being able to work from home or take an early retirement
- Virtual transactions are becoming more common, with a few cases of buyers making purchases without ever setting foot in the home
Seattle’s real estate market, like nearly every market across the US, was dramatically impacted by social and economic impacts related to Covid-19. As social and commercial restrictions imposed in Mid-March begin to ease, buyers and sellers are gradually returning to the market. Covid’s impact can still be felt, however, and will persist for the foreseeable future.
Dean Rebhuhn, president of Village Homes and Properties in Woodinville, is quoted in the Northwest MLS member-brokers’ June report attributing a renewed fueling of housing activity in Washington State to historically low interest rates and Covid-related lifestyle changes.
The report also assesses that the market is experiencing a bidding-war, which brokers in the 23 counties that are part of Northwest MLS say is a result of a shortage in available homes. At the end of June, there was only 1.16 month’s-worth of supply system-wide. That number represented the second-lowest level in the past decade, above only the December 2017 mark of 1.12. Unsurprisingly, the supply/demand imbalance has caused prices to increase.
The data analytics team at ROOMVU delved into the Northwest MLS data to further illustrate trends and findings in the monthly report.
Figure 1. Shows available months of inventory across different counties for June 2019 and June 2020. Inventory has remained low even after a 3.5% increase in new listings from May to June 2020, suggesting strong demand for housing.
Matthew Gardner, chief economist at Windermere Real Estate, called the number of homes for sale “perilously low,” but added, “The month-over-month jump in new listings was encouraging but it did not help overall inventory levels as they all sold too quickly!”
Figure 1. Months of inventory for June 2019 vs June 2020
Snohomish County experienced the most severe decrease in inventory at 46% year-over-year. A notable drop also occurred in Thurston county, where inventory was lower by 37% YoY. Moreover, Thurston was the county with the least available inventory overall.
Figure 2. shows median prices of sold properties across different counties for June 2019 and June 2020. The median prices of single-family homes and condos increased by nearly 5.7% compared to a year ago, rising from $440,000 to $465,000. Counties in the suburbs are showing increasing appeal among buyers, which has resulted in comparatively higher price appreciations than in urban counties.
Figure 2. Median Prices for properties in different counties for June 2019 vs June 2020
Thurston County was where the highest growth in median prices of properties occurred, with an increase of 8.82% YoY. Conversely, King County experienced the lowest growth at 5.85%.
Mike Grady, president, and COO of Coldwell Banker Bain said agents are reporting a lot of interest in outlying areas such as Bellingham, Bainbridge Island, Eastern Washington, Bend, Oregon, and other destinations with recreational amenities that appeal to buyers who are able to work from home or take early retirement.
Figure 3. shows median prices across single-family homes and condos in King County for June 2019 and June 2020. Median prices of all properties increased by 5.85% overall.
Figure 3. Median Prices across all properties in different areas of King County for
June 2019 vs June 2020
The highest gains in the median sold price of properties occurred in Vashon and SE King, at 7% respectively. The most modest increase in median prices was in Seattle, where they increased 2.62% YoY.
With respect to single-family homes only, Figure 4. shows median prices in King County for June 2019 and June 2020, where the median price of a single-family home increased by 4.32% YoY.
Figure 4. Median Prices of single-family homes in different areas of King County for
June 2019 vs June 2020
Here, again, Vashon featured the biggest gains in median prices, with growth of 7.1% YoY. Seattle is where the lowest increase in median prices occurred, at 2.4% YoY.
Figure 5. illustrates median condo prices in King County for June 2019 and June 2020, which saw an overall decrease of 0.24% YoY.
Figure 5. Median Prices of condos in different areas of King County for
June 2019 vs June 2020
Despite the slight decline in prices overall, some areas of King County experienced notable increases. South-West and South-East King both posted increases in the median condo prices, at 5.62% and 3.77% respectively.
Figure 6. shows the percentage change in closed sales of singles homes and condos across different counties from June 2019 to June 2020. Even though the percentage of sales dropped by 12.27% YoY, they have jumped more than 39% from May 2020 . The low number of closed sales is due to there being fewer available options, in other words, lower inventory on the market.
Commenting on the impact lower inventory is having on the market, Dick Beeson, managing broker at RE/MAX Northwest in Tacoma-Gig Harbor said, “No wonder the number of closed sales is down – there’s hardly anything to buy.”
Figure 6. Percentage change in sales of single-family homes and condos from
June 2019 to June 2020
Closed sales were lowest in terms of percentage change in Thurston County, where they dropped 23.29% YoY, and King County at a decrease of 17.10%.
Northwest MLS member-brokers’ June report also made mention of the increasing prevalence of technology as a result of “stay-at-home” directives coming from state and local authorities. “Virtual transactions are becoming more common,” said president and COO of Coldwell Banker Bain Mike Grady, citing the experience of a broker at their Issaquah office. The broker in question recently handled two transactions that took place 100% through online channels, with the buyers purchasing their homes without ever stepping foot inside, according to Grady.
The fallout from Covid-19’s impacts on Seattle’s real estate market is continuing to be felt. When it comes to adopting virtual means of buying and selling a home, those who are active appear to be more and more comfortable with online options, avoiding in-person contact as much as possible.
June also highlighted a dearth of inventory, which, fuelled by bidding-wars over available properties, has increased prices across most counties. Despite concerns regarding a lack of inventory, the outlook for the Seattle market overall is positive thanks to strong sales numbers posted in June. After the Covid-related slowdown that impacted most of March and bled into April and May, more buyers appear to be returning to the market. These promising month-to-month indicators are expected to continue into July and August.
As the public-health paradigm begins to stabilize, a return to more normal market conditions is to be expected. But what that normal will look like, and how similar it will be compared to the pre-Covid reality, is still to be determined.