Summary
- Inventory has increased… a little. The months-of-supply has improved slightly, rising from the March figure of 1.4 months to 1.75 months of inventory at the end of April. Good news for buyers!
- Lending standards temporarily tightened up in the early stages of COVID-19. However, low interest rates continue to be available for qualifying buyers.
- Some areas of the Puget Sound are still experiencing multiple offers and even escalations while other areas are a bit more balanced. You will need an experienced real estate broker to help navigate the noise.
- Throughout the Puget Sound region, prices were up about 6.4%, rising from the year-ago figure of $424,950 to last month’s figure of $452,030. Year-to-date prices are up nearly 9.3% compared to twelve months ago.
- In King County, prices rose 4% from a year ago, from $625,000 to $650,000.
- Pierce County joined Kitsap with double-digit price gains from a year ago.
- We continue to follow safe practices when both listing and showing homes. To ensure safety throughout the process, we are following more strict showing guidelines in accordance with state-wide government orders; limiting physical showings to only two people at one time, following CDC social distancing guidelines, holding virtual open houses, and offering alternative virtual options for private showings.
The Details
It is still too early to present hard data on the true impact of COVID-19 on the Real Estate market. While transactions have slowed down a bit during the pandemic, they have definitely not come to a halt. In fact, we’re seeing more and more homes come on the market each day. Throughout the past few weeks, our team has helped many families achieve their housing goals and are seeing increased activity from both buyers and sellers as they slowly re-emerge from Washington’s “Stay Home” orders.
Residential real estate activity around Western Washington reflected expected declines during April with the impact of the coronavirus pandemic taking its toll. A new report from Northwest Multiple Listing Service shows year-over-year (YOY) drops system-wide in new listings, pending sales and closed sales, but prices increased nearly 6.4%.
Some industry veterans expected more severe declines. The Northwest MLS report for April shows area-wide inventory fell nearly 21% from a year ago, dropping from 12,955 listings to 10,282. A comparison of the 23 counties in the report shows only four counties with YOY increases (Jefferson at 0.9%, Whatcom at nearly 6%, Douglas at 13.8% and Lewis at 17.7%), while three counties had shrinkages of around 30% or more (King at -29.6%, Clallam at -32.9% and Island at -39.2%). The volume of new listings added during April was off 34.7% compared to the same month a year ago. Brokers added 7,641 new listings last month, down from both March when 10,291 new listings were added, and April 2019 when brokers added 11,697 new listings. Despite the slower activity, the months of supply improved only slightly, rising from the March figure of 1.4 months to 1.75 months of inventory at the end of April.
With historically low interest rates, the local market needs additional listings to meet existing demand from buyers. Comparing April to March in King, Pierce and Snohomish counties, we see that the total number of active listings increased (up 14,8%), with new listings dropped (down 25.5%). Sellers continue to be patient with pricing. Those buyers looking for opportunities to submit lower offers on listings are not having much luck. There are still areas of the Puget Sound where we continue to experience multiple offers.
Northwest MLS figures show the median price for homes and condos that sold last month in Kitsap County rose more than 13% from a year ago, from $349,500 to $395,178. Eight other counties, like Kitsap, reported double-digit jumps in median sales prices compared to a year ago, while four counties had declines. In King County, prices rose 4% from a year ago, from $625,000 to $650,000. Snohomish County prices were up nearly 6% and Pierce County joined Kitsap with a double-digit gain; prices there increased from $355,000 to $397,750 for a 12% gain. System-wide, prices were up about 6.4%, rising from the year-ago figure of $424,950 to last month’s figure of $452,030. Year-to-date prices are up nearly 9.3% compared to twelve months ago.
April’s figures continue to highlight the trend of buyers moving to outer suburban areas. James Young, director at the Washington Center for Real Estate Research (WCRER), believes the figures illustrate “a continued preference for lower density areas given the likely persistence of distancing measures in the future. The virus has refocused many potential buyers, especially for those owning high density properties in Seattle and elsewhere, on more space and less density. It makes social distancing easier!”
Regarding home loans, one of the biggest factors in the mortgage markets are first-time buyers, who may not qualify under new lending criteria (definitely talk to your lender as lending criteria is changing daily). In addition, Jumbo loans, those above $741,750 in Pierce and King County, became much harder to obtain, as did home equity loans and refinances.
Buyers are relying more and more on technology and tools to allow for virtual open houses and viewings. The Governor’s office has provided clear social distancing guidelines for real estate including face masks, showings by appointment only and only two people in a home at a time with one of them being the broker. As we move forward, this may be the new normal.
Virtual tours are increasing and getting a lot of attention. Both Buyers and Sellers are benefiting from the utilization of virtual technology, electronic signatures, and remote online notary processes for closing. We expect a continued move toward more flexible options for our clients to conduct real estate transactions smoothly and safely.
The overall housing market continues to move forward despite the challenges of COVID. With spring in full bloom (and summer right around the corner), we expect to see more buyers becoming active as more homes come on the market.
And that’s our April Housing Update…Stay safe, stay healthy, and let us know how we can help you!
