Spring is usually one of the busiest times of the year for the real estate industry. It makes sense, if you want to be moving in the early summer time when school is out then there is no better time to be house shopping than the present. Last month I wrote about how the impacts of COVID-19 on the real estate market is a bit of a lagging indicator here because as lock-downs were happening across the country, most folks closing on their sales had entered those agreements a month prior. So last month was too early to tell what social distancing orders could have on market inventory and price. At a gut level you think a lot of buyers or sellers may be on the sidelines in a wait-and-see mode but now we have some data and more coming in a couple weeks that helps show us what’s going on. According to the Northwest Multiple Listing Service the biggest impact we’re seeing due to the current situation is inventory being far below levels you’d expect during this time of the year. With most of the world all but coming to a halt we’re currently seeing inventory levels down 21.5% comparing March 2020 to 2019. This has created an even stronger seller’s market with months of inventory (how long it would take to sell the currently supply of homes) dropping to 1.4 months compared to 1.78 for the same time last year. A “balanced” real estate market is considered to be one with 4 to 6 months of inventory and that is not something we’ve really seen in the Puget Sound area for years now.
Real estate agents in Washington State are considered essential workers so business is being conducted but with social distancing guidelines in place and rules for how many individuals may be present on a property. My post last month covers all the rules in detail and other Seattle real estate guidelines during the pandemic. One thing you may notice in your neighborhood is a lack of yard arm signs. The sign companies were not considered essential businesses so you won’t see them out and installing the traditional ‘for sale’ yard arm signs.
With inventory low and individuals still buying as seen in the months of inventory data, prices have remained up in most areas. Across all NWMLS counties in March of 2020, home prices were up compared to March of 2019 with the median closed price being $458,900. That is a 10.3% increase in the median closed price from this time last year. It is interesting to see that even though inventory and number of new listings are down, the total closed sales dollar amount for our region is still increasing due to the 10% median price increase. The NWMLS reported $3.78 billion in closed sales for March 2020 which was up 7.6% from March 2019.
Where are we seeing positive year-over-year trends in light of the pandemic situation? The answer might surprise you but it is new construction. In March of 2020 agents sold 1,263 new construction residences which was a 5.2% sales increase compared to March 2019.
Things definitely feel different out there but I am confident that agents are trying their hardest to safely accommodate buyers and sellers during this time. I have to say personally I have become very busy lately with both buyer and seller clients but feel comfortable and confident working with distancing being observed, PPEs, and lots of sanitizer. Otherwise things are pretty business as usual with the exception of more electronic document signing and more phone or video meetings. The closing process is going smoothly and I personally haven’t run into delays with things like recording at the county, etc. I’d say the lenders have a higher workload currently. On top of home purchases they have been seeing a deluge of refinance requests due to the record low interest rates.
I imagine that in the next few weeks as social distancing restrictions are slowly peeled back we may see a delayed spring inventory surge as our world finds a new normal. In the meantime stay safe, practice social distancing, and always feel free to contact me with any of your real estate questions.