Western Washington Real Estate Market Trends

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Q4

2020

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Our Western WA real estate market data is updated quarterly to aid in your real estate forecasts. Historical Western WA real estate data and trends are included below the latest update. We break down our data by county, but we cover major cities in this region including Seattle, Tacoma, and Everett.

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Q4 2020 Gardner Report

Western Washington
Real Estate Market Update

by Matthew Gardner

Below is the latest Western WA housing market trends analysis. Additional links:

Historical Western WA Data
Eastern WA Data
Central WA Data
Other Regional Data

 

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.

 

Regional Economic Overview

After the COVID-19-induced declines, employment levels in Western Washington continue to rebuild. Interestingly, the state re-benchmarked employment numbers, which showed that the region lost fewer jobs than originally reported. That said, regional employment is still 133,000 jobs lower than during the 2020 peak in February. The return of jobs will continue, but much depends on new COVID-19 infection rates and when the Governor can reopen sections of the economy that are still shut down. Unemployment levels also continue to improve. At the end of the quarter, the unemployment rate was a very respectable 5.5%, down from the peak rate of 16.6% in April. The rate varies across Western Washington, with a low of 4.3% in King County and a high of 9.6% in Grays Harbor County. My current forecast calls for employment levels to continue to improve as we move through the spring. More robust growth won’t happen until a vaccine becomes widely distributed, which is unlikely to happen before the summer.

western washington Home Sales

❱ Sales continued to impress, with 23,357 transactions in the quarter. This was an increase of 26.6% from the same period in 2019, but 8.3% lower than in the third quarter of last year, likely due to seasonality.

❱ Listing activity remained very low, even given seasonality. Total available inventory was 37.3% lower than a year ago and 31.2% lower than in the third quarter of 2020.

❱ Sales rose in all counties, with San Juan County seeing the greatest increase. This makes me wonder if buyers are actively looking in more remote markets given ongoing COVID-19 related concerns.

❱ Pending sales—a good gauge of future closings—were 25% higher than a year ago but down 31% compared to the third quarter of 2020. This is unsurprising, given limited inventory and seasonal factors.

A bar graph showing the annual change in home sales for various counties in Western Washington.

western washington Home Prices

A map showing the real estate market percentage changes in various counties in Western Washington.

❱ Home price growth in Western Washington continued the trend of above-average appreciation. Prices were up 17.4% compared to a year ago, with an average sale price of $617,475.

❱ Year-over year price growth was strongest in Lewis and Grays Harbor counties. Home prices declined in San Juan County which is notoriously volatile because of its small size.

❱ It is interesting to note that home prices were only 1% higher than third quarter of 2020. Even as mortgage rates continued to drop during the quarter, price growth slowed, and we may well be hitting an affordability ceiling in some markets.

❱ Mortgage rates will stay competitive as we move through 2021, but I expect to see price growth moderate as we run into affordability issues, especially in the more expensive counties.

A bar graph showing the annual change in home sale prices for various counties in Western Washington.

Days on Market

❱ 2020 ended with a flourish as the average number of days it took to sell a home in the final quarter dropped by a very significant 16 days compared to a year ago.

❱ Snohomish County was again the tightest market in Western Washington, with homes taking an average of only 15 days to sell. The only county that saw the length of time it took to sell a home rise compared to the same period a year ago was small Jefferson County, but it was only an increase of four days.

❱ Across the region, it took an average of 31 days to sell a home in the quarter. It is also worth noting that, even as we entered the winter months, it took an average of five fewer days to sell a home than in the third quarter of last year.

❱ The takeaway here is that demand clearly remains strong, and competition for the few homes available to buy continues to push days on market lower.

A bar graph showing the average days on market for homes in various Western Washington counties.

Conclusions

A speedometer graph indicating a seller's market in Western Washington.

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.

Demand has clearly not been impacted by COVID-19, mortgage rates are still very favorable, and limited supply is causing the region’s housing market to remain incredibly active. Because of these conditions, I am moving the needle even further in favor of sellers.

2021 is likely to lead more homeowners to choose to move if they can work from home, which will continue to drive sales growth and should also lead to more inventory. That said, affordability concerns in markets close to Western Washington’s job centers, in combination with modestly rising mortgage rates, should slow the rapid home price appreciation we have seen for several years. I, for one, think that is a good thing.

 

About Matthew Gardner

Matthew Gardner, Chief Economist for Windermere Real Estate

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.

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Major Western WA cities covered in this report:

Seattle

Tacoma

Everett

Bellevue

Kirkland

Kent

Renton

Federal Way

Auburn

Vancouver

Bellingham

Marysville

Redmond

Sammamish

Lakewood

Olympia

>

Western WA counties covered in this report:

King

Peirce

Snohomish

Clark

Thurston

Kitsap

Whatcom

Skagit

Island

Grays Harbor

San Juan

Lewis

Jefferson

Mason

Cowlitz

Callam

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Gardner Report Archive

Western Washington
Historical Reports

2020
                    Western Washington Real Estate Market Update

Q1 2020
POST | (PDF)

                    Western Washington Real Estate Market Update

Q2 2020
POST | (PDF)

Market Trends Report Western Washington Q3 2020. Click to view full report.

Q3 2020
POST | (PDF)

Q4 2020 Western Washington Market Trends

Q4 2020
POST | (PDF)

2019
                    Western Washington Real Estate Market Update

Q1 2019
POST | (PDF)

                    Western Washington Real Estate Market Update

Q2 2019
POST | (PDF)

                    Western Washington Real Estate Market Update

Q3 2019
POST | (PDF)

                    Western Washington Real Estate Market Update

Q4 2019
POST | (PDF)

2018
                    Western Washington Real Estate Market Update

Q1 2018
POST | (PDF)

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Q2 2018
POST | (PDF)

18310_WWAGardnerReportQ3_Masthead

Q3 2018
POST | (PDF)

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Q4 2018
POST | (PDF)

2017
                    Western Washington Real Estate Market Update

Q1 2017
POST | (PDF)

                    Western Washington Real Estate Market Update

Q2 2017
POST | (PDF)

                    Western Washington Real Estate Market Update

Q3 2017
POST | (PDF)

                    Western Washington Real Estate Market Update

Q4 2017
POST | (PDF)

2016
                    Western Washington Real Estate Market Update

Q1 2016
POST | (PDF)

                    Western Washington Real Estate Market Update

Q2 2016
POST | (PDF)

                    Western Washington Real Estate Market Update

Q3 2016
POST | (PDF)

                    Western Washington Real Estate Market Update

Q4 2016
POST | (PDF)

These Western Washington real estate reports, data, forecasts, and market trends are provided for informational use. If you find it useful, please properly attribute this resource with a link. This region of Washington State is also referred to as the Puget Sound, the Seattle Metro Area, Seattle-Tacoma-Bellevue, and the Greater Seattle Area.