Market News • July 28, 2020

Utah Real Estate Market Update

by Windermere Economics

The following analysis of select counties of the Utah 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.

ECONOMIC OVERVIEW

COVID-19 had a significant impact on employment in Utah, causing the loss of more than 144,000 jobs in March and April and raising the state’s unemployment rate to 10.4%. For comparison, peak unemployment following the Great Recession was only 8%. That said, it appears as if Utah’s massive contraction in employment is behind us (at least for now). Employment in the state rose by 40,400 jobs in May, an increase of 2.8% in just one month, allowing the unemployment rate to drop to 8.5%. Although it is certainly too early to say that we are out of the woods, we seem to be headed in a positive direction.

That said, COVID-19 infection rates in Utah started increasing in June and may slow the economic recovery if the direction is not reversed. Regardless, I do not believe that it is likely to have a significant impact on the housing market.

HOME SALES

❱ In the second quarter of 2020, 9,320 homes sold, a drop of 10.1% compared to the same period in 2019. However, sales rose by a very significant 33.2% from the first quarter of 2020.

❱ Total sales activity declined in all counties other than the very small Morgan County. Summit and Wasatch counties also experienced notable contractions. I am attributing this to low inventory levels because of COVID-19 and I expect to see a bounce back in the second half of the year.

❱ The number of homes for sale in the second quarter was 28.6% lower than during the same period a year ago but was up 12% compared to the first quarter of this year.

❱ Pending sales in the second quarter were up a significant 41.4% compared to the first quarter of the year. This gives further credence to my view that sales are not low due to a lack of demand; rather it is a function of limited supply.

HOME PRICES

❱ The average home price in the region continued to rise in the second quarter, with a year-over-year increase of 4.5% to $408,602. Home prices were also 1.1% higher than in the first quarter of 2020.

❱ All counties contained in this report saw price increases compared to the same period a year ago.

❱ Price growth was strongest in Morgan County where prices rose 26.9%. However, this is a small area that can be subject to extreme price swings.

❱ The takeaway here is that home prices continued to appreciate at significant rates during the quarter and did not appear to be greatly impacted by COVID-19.

DAYS ON MARKET

❱ The average number of days it took to sell a home in the counties covered by this report dropped five days compared to the second quarter of 2019.

❱ Homes sold fastest in Davis and Salt Lake counties, and slowest in Summit County. It took less time to sell a home in all counties other than Summit.

❱ During the second quarter, it took an average of 48 days to sell a home in the region, down 9 days from the first quarter of 2020.

❱ Lower days on market indicates that buyer demand remains strong regardless of the COVID-19 related drop in sales seen relative to the prior quarter and the same period a year ago.

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.

Demand is in place but is being hobbled by low levels of inventory. With the combination of solid demand and historically low-interest rates, I expect to see a brisk summer housing market. Assuming that the state gets new infection rates back under control, I do not see why the housing market shouldn’t perform well this summer. As such, I have moved the needle just a little more in favor of home sellers.

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.

Market News • July 27, 2020

Matthew Gardner Weekly COVID-19 Housing & Economic Update: 7/27/2020

by Windermere Economics

On this week’s episode of “Mondays with Matthew,” Windermere Real Estate Chief Economist, Matthew Gardner is updating his housing forecast for 2020 and analyzing the National Association of Realtors’ June Home Sales Report.

Market News • July 27, 2020

Montana Real Estate Market Update

by Windermere Economics

The following analysis of select Montana real estate markets 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.

ECONOMIC OVERVIEW

Along with the rest of the nation, Montana saw a sharp drop in employment due to COVID-19 but it appears as if a recovery is in place (at least for now). In April, total employment declined 13% from March, with a loss of 63,500 jobs. However, this turned around remarkably quickly with the return of 17,000 jobs in May. Job losses were seen in almost equal measure across the three metropolitan areas within Montana. The unemployment rate in the state was 9% in May, down from the COVID-19 peak of 11.9% in April. Although it is far too early to say that we are out of the woods, new infection rates in the state appear to have peaked and, if the trend of lower infection rates continues, we should see more jobs return.

HOME SALES

During the second quarter of 2020, 837 homes sold, an increase of 8% over the same period in 2019.
Total sales activity was a mixed bag. Five counties saw increases, but four saw declines. The largest annual increase was in very small Broadwater County, where sales were up more than 62%. The largest drop in sales was in the also small Jefferson County.
The number of homes for sale remains well below where I would like to see it. There was an average of 1,303 listings in the second quarter within the counties contained in this report.
Though inventory levels remain very low, demand has certainly returned. This is supported by the fact that closed sales rose by a very significant 46.1% over the first quarter of this year.

HOME PRICES

Year-over-year, home prices were essentially static (+0.2%) and averaged $355,537. However, prices were 4.3% lower than in the first quarter of 2020.
The region was split, with prices rising in five counties but dropping in four. The drop in sale price seen in Madison County is not worrisome, as it is a very small market and subject to significant swings in average prices.
While prices saw a decline between first and second quarter, I believe this is a COVID-19-influenced decline, and summer numbers should be more telling.
Year-over-year price growth stalled, and although there was a drop in prices compared to the first quarter of the year, I am not overly concerned. Hopefully the summer will bring more inventory and, when combined with historically low interest rates, the market should rebound.

DAYS ON MARKET

The average number of days it took to sell a home dropped 25 days compared to the second quarter of 2019.
Homes sold fastest in Lewis and Clark County and slowest in Lake County. Six counties saw days on market drop compared to the same period a year ago; three saw market time rise.
During the second quarter of 2020, it took an average of 92 days to sell a home in the region.
The headline here is that market time dropped by a significant 46 days compared to the first quarter of the year.

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.

Pending sales increased significantly compared to both the first quarter of this year and a year ago, which suggests demand has reappeared. When combined with historically low interest rates, the market is set to rebound and will only be limited by the number of homes for sale.

The housing market has exhibited remarkable resilience, and housing demand is solid. It remains a seller’s market and I have moved the needle a little further even though we saw a slowdown in home price growth.

ABOUT MATTHEW GARDNER

Market News • July 27, 2020

Idaho Real Estate Market Update

by Windermere Economics

The following analysis of select counties of the Idaho 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.

ECONOMIC OVERVIEW

It appears as if the significant COVID-19-induced contraction in employment Idaho experienced earlier this year is behind us (at least for now). Statewide employment declined modestly in March, but April was the real shock, with the loss of more than 78,000 jobs in the month, a decline of 10.2%. However, the economy appears to have turned around remarkably quickly, with a solid increase of 24,300 jobs in May. Idaho did see COVID-19 cases rise significantly in June, but the latest data appears to suggest that the trend has started to reverse. If this continues, I am hopeful more of the jobs lost will return.

HOME SALES

During the second quarter of 2020, 6,264 homes were sold, a drop of 10.6% when compared to the second quarter of 2019. However, I would note that sales rose 22.2% compared to the first quarter of this year.
In the southern markets, sales rose in small Valley County, but dropped in the rest of the counties covered in this report compared to the same period a year ago.
Year-over-year, sales growth was negative in all of the Northern Idaho counties contained in this report. The most substantial drop was in Bonner County, though the decline there amounted to only 37 units.
Pending sales rose a significant 18% over the first quarter of the year, suggesting that closed sales will rise in the third quarter.

HOME PRICES

The average home price in the region rose 8.2% year-over-year to $387,293. Sale prices were 1.2% higher than in the first quarter of 2020.
In Northern Idaho, Shoshone County saw prices rise significantly. In Southern Idaho, Gem County experienced substantial price growth.
Prices rose in two of three Northern Idaho counties and in six of seven Southern Idaho counties. Bonner and Valley counties saw lower sale prices, but the contractions were minimal.
Inventory levels were down 17% from a year ago, but were 14% higher than in the first quarter. The “postponed” spring market may turn into a summer one.

DAYS ON MARKET

It took an average of 104 days to sell a home in Northern Idaho and 60 days in Southern Idaho.
The average number of days it took to sell a home in the region dropped 2 days compared to the second quarter of 2019. It took an average of 24 fewer days to sell a home compared to the first quarter of this year.
In Northern Idaho, days-on-market dropped in Bonner County, but rose in the other two counties. In Southern Idaho, market time dropped in four counties, was static in one, and rose in Blaine County.
Homes sold fastest in Gem and Ada counties.

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.

I was pleased to see listings, pending sales, closed sales, and home prices all rise from the first quarter of this year. Demand appears to be relatively solid, which suggests that it remains a seller’s market, especially when combined with historically low interest rates. I do not see this changing in the foreseeable future.

The overall housing market has exhibited remarkable resilience, and housing demand has rebounded faster than most would have expected. But given ongoing uncertainty about COVID-19, I am leaving the needle above in the same position as last quarter.

ABOUT MATTHEW GARDNER

Market News • July 24, 2020

Central Washington Real Estate Market Update

by Windermere Economics

The following analysis of the Central 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.

ECONOMIC OVERVIEW

It appears as if the massive COVID-19-induced contraction in employment Washington State experienced—along with the rest of the nation—is behind us (at least for now). Employment across Washington State started to drop in March, but April was the real shock: total employment dropped almost 460,000 between March and April, a decline of 13%. However, this turned around remarkably quickly, with 52,500 jobs added in May. The Central Washington region lost over 12,500 jobs in March and April, but there has been some recovery with the return of 1,781 jobs in May. This was a reasonable start, but the unemployment rate in Central Washington was still high at 14.1% in May. Although it is certainly too early to say we are out of the woods, we seem to be headed in a positive direction and, assuming we respect the state’s mandates regarding social distancing and mask wearing, I remain hopeful that Washington will not have to re-enter any form of lockdown.

HOME SALES

Home sales in Central Washington were down 11.8% compared to the same quarter in 2019, with a total of 1,102 closed sales.
Pending home sales in the region were 4.1% higher than in the first quarter of the year, suggesting that closed sales should improve in the third quarter.
Sales activity dropped in all counties contained in this report, but the largest drop was a relatively modest 148 units. That said, sales were 21% higher than in the first quarter of 2020.
The average number of homes for sale in the quarter was 26.6% lower than a year ago, but 9.9% higher than in the first quarter of 2020. This is positive, but inventory levels are well below historic averages.

HOME PRICES

Year-over-year, the average home price in Central Washington rose a significant 9.6% to $372,394. Prices were also 8.1% higher than in the first quarter of 2020.
As mentioned in the previous section, low inventory levels are pervasive and, even with the bump in the second quarter over the first, listing activity is still very low.
While sale prices rose in every county, Chelan County experienced significant growth. It will be interesting to see how much of this growth was due to people buying vacation homes as a COVID-19 alternative to hotels.
The takeaways are that average home-price growth in Central Washington remains well above the long-term average and, so far, there have been no real price impacts from COVID-19.

DAYS ON MARKET

It took an average of 65 days to sell a home in Central Washington in the second quarter of 2020.
During the second quarter, it took four more days to sell a home in Central Washington than it did a year ago.
All counties other than Douglas saw the length of time it took to sell a home rise compared to the second quarter of 2019.
It took five fewer days to sell a home in the second quarter than it did in the first.

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 robust demand and historically low interest rates, it certainly remains a seller’s market, and I don’t expect this to change in the foreseeable future. The overall housing market has exhibited remarkable resilience, and housing demand has rebounded faster than most would have expected. I do not anticipate any drop in demand, but I am watching housing affordability. Prices cannot continue to rise at the pace the market is currently seeing without exacerbating affordability issues. The needle above remains unchanged from the first quarter due to ongoing uncertainty surrounding COVID-19.

ABOUT MATTHEW GARDNER

Market News • July 24, 2020

Eastern Washington Real Estate Market Update

by Windermere Economics

The following analysis of the Eastern 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.

ECONOMIC OVERVIEW

It appears as if the massive COVID-19-induced contraction in employment Washington State experienced—along with the rest of the nation—is behind us (at least for now). Employment across Washington State started to drop in March, but April was the real shock: total employment dropped almost 460,000 between March and April, a decline of 13%. However, this turned around remarkably quickly, with 52,500 jobs added in May. Worthy of note is that, in May alone, Eastern Washington recovered 5,200 of the 47,000 jobs that were lost in March and April. However, the unemployment rate in Eastern Washington was still a high 13.4% in May. Although it is certainly too early to say we are out of the woods, we seem to be headed in a positive direction and, assuming we respect the state’s mandates regarding social distancing and mask wearing, I remain hopeful that Washington will not have to re-enter any form of lockdown.

HOME SALES

Home sales throughout Eastern Washington were down 11% compared to the same quarter in 2019, with a total of 3,101 closed sales.
Pending home sales in the region were 36.4% higher than in the first quarter of the year, suggesting that closed sales will pick up again in the third quarter.
Sales activity dropped in all but the very small Lincoln County, though growth there was only one unit.
The average number of homes for sale in the quarter was 45.1% lower than a year ago, but 10.5% higher than in the first quarter of 2020. This is positive, but inventory levels are well below historic averages.

HOME PRICES

Year-over-year, the average home price in Eastern Washington rose a significant 8.4% to $318,275. Prices were also 7% higher than in the first quarter of 2020.
As mentioned in the previous section, low inventory levels are pervasive and, even with the bump in the second quarter over the first, listing activity is still very low.
Prices rose in every county other than Lincoln. Whitman and Spokane counties showed double-digit gains.
The takeaways are that average home-price growth in Eastern Washington remains well above the long-term average and, so far, there have been no real price impacts from COVID-19.

DAYS ON MARKET

The average time it took to sell a home in Eastern Washington in the second quarter of 2020 was 42 days.
During the second quarter, it took ten fewer days to sell a home in Eastern Washington than it did a year ago.
All markets other than Whitman saw the length of time it took to sell a home drop compared to the second quarter of 2019.
It took 21 fewer days to sell a home in the second quarter than it did in the first.

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.

ABOUT MATTHEW GARDNER

Market News • July 23, 2020

Colorado Real Estate Market Update

by Windermere Economics

The following analysis of the Metro Denver & Northern Colorado 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.

ECONOMIC OVERVIEW

COVID-19 had significant negative impacts on employment in Colorado. The pandemic caused the loss of over 342,000 jobs in March and April as unemployment rose to 12.2%. For comparison, peak unemployment following the Great Recession was 8.9%. However, it appears as if the massive contraction in employment is behind us (at least for now). Employment in Colorado rose in May by 68,800 jobs, a monthly increase of 2.8%, pushing the unemployment rate down to 10.2%. Regionally, the Denver metro area added 18,600 jobs in May and the Fort Collins metro area added 3,500 jobs. It is certainly too early to say that we are out of the woods, but we seem to be headed in a positive direction. Colorado’s COVID-19 infection rates started increasing again in June, which could slow down the economic recovery. However, I do not believe that it is likely to have any substantial impact on the housing market.

HOME SALES

In the second quarter of 2020, 9,867 homes sold. This represents a drop of 20.7% compared to the second quarter of 2019, but sales were 7.4% higher than in the first quarter of this year.
Sales dropped across all markets compared to the second quarter of 2019. I do not find this concerning as the drop can be attributed to limited supply and COVID-19.
Inventory levels remain tight, with the average number of homes for sale in the quarter down 21.3% from the same period in 2019. However, listings were up an impressive 15.6% over the first quarter of 2020.
I was pleased to see total pending sales in the quarter increase 16.3% compared to the first quarter, suggesting closing data for the third quarter will be better than we are currently experiencing.

HOME PRICES

Home prices held steady compared to the second quarter of 2019 at an average of $480,831. Prices were up 0.7% compared to the first quarter of this year.
Interest rates remain at very low levels and will stay in the low 3% range for the balance of the year, if not longer. This can allow prices to pick back up.
Price growth across the region was varied. Seven counties saw price growth and five experienced a drop in average sale price. Clear Creek County again saw prices rise substantially. However, as you are likely aware, it is a very small market and subject to wild swings. Prices dropped most in the equally small Gilpin County.
I am still watching affordability in many Colorado markets and will take this temporary “pause” as a good thing.

DAYS ON MARKET

The average number of days it took to sell a home in the markets contained in this report dropped by only one day compared to the second quarter of 2019.
The amount of time it took to sell a home dropped in eight counties, remained static in one, and rose in three compared to the second quarter of 2019.
It took an average of 29 days to sell a home in the region.
The Colorado housing market is demonstrating solid demand, and listing activity is trending higher. I expect that the summer market will be brisk.

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.

Demand appears to be returning, which—combined with historically low interest rates—should lead to a brisk summer housing market. Assuming that the state gets new infection rates under control, I do not see why the housing market wouldn’t perform well this summer. As such, I have moved the needle just a little more in favor of home sellers.

ABOUT MATTHEW GARDNER

Market News • July 23, 2020

Southern California Real Estate Market Update

by Windermere Economics

The following analysis of the Southern California 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.

ECONOMIC OVERVIEW

Employment levels across the Southern Californian counties contained in this report have been significantly impacted by the COVID-19-induced recession. Total employment in the region has dropped by a collective 1.99 million jobs between February and May of this year. With this massive contraction, it’s not surprising to see the unemployment rate rise from 4% in February to 17.6% in May. Unfortunately, as I write this, it appears as if infection rates in many California markets have increased significantly. As such, the likelihood of tangible increases in employment will be further delayed.

HOME SALES

In the second quarter of 2020, 33,614 homes sold. This was a drop of 32.6% compared to the same period in 2019. Sales were 2.5% lower than in the first quarter of the year.
If there is some solace in this report, it’s that pending home sales (an indicator of future closings) rose 6.4% over the first quarter of this year, suggesting that sales in the third quarter should pick up modestly from current levels.
Second quarter home sales activity dropped in all counties contained in this report. Of note was a significant decrease in Los Angeles County, where more than 6,600 fewer homes sold than a year ago.
There was an average of 26,957 homes for sale in the second quarter—down 32.4% from a year ago but 5.3% higher than in the first quarter of this year.

HOME PRICES

Year-over-year, the average home sale price in the region was $726,613. This was 0.6% higher than a year ago and 4.5% higher than in the first quarter of 2020.
Affordability concerns persist, which has had a negative effect on home price growth. Though prices did rise significantly between the first and second quarters, I wonder how much of this can be attributed—if even tangentially—to COVID-19.
Sale prices were higher in all counties contained in this report, with a significant increase of 6.5% in the more affordable Riverside County.
Conventional mortgage rates continue to break through historic lows and will remain that way for the foreseeable future. However, jumbo mortgage rates are still higher than we have seen in over a year. With higher rates, and tighter credit requirements, there will likely be ongoing impact on the counties with more expensive homes.

DAYS ON MARKET

It took an average of 35 days to sell a home in the second quarter, 10 fewer days than a year ago and 9 fewer days than in the first quarter of 2020.
All markets contained in this report saw the time it took to sell a house drop compared to the second quarter of 2019.
Homes in San Diego County continue to sell at a faster rate than other markets in the region. In the second quarter, it took an average of 23 days to sell a home there. This is 6 fewer days than a year ago.
Days on market shows that, although home sales are lower—a function of limited inventory levels—there still appears to be demand for homes when they do come on-line.

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.

Although there is demand for homes, the renewed round of shutdowns could dampen that demand until infection rates level out and businesses reopen their doors.

The overall housing market is resilient but will likely not see significant growth until the state gets a handle on COVID-19. For that reason, I am holding the needle in the same position it was in the first quarter. It is still a seller’s market, but uncertainty persists.

ABOUT MATTHEW GARDNER

Market News • July 22, 2020

Oregon and Southwest Washington Real Estate Market Update

by Windermere Economics

The following analysis of the Oregon and Southwest 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.

ECONOMIC OVERVIEW

The very significant COVID-19-induced contraction in employment Oregon experienced — along with the rest of the nation — looks as if it is behind us (at least for now).

Employment growth across the state turned negative in March, but April was the real shocker: total employment dropped by 252,800 jobs, a decline of 13%. However, this turned around remarkably quickly with 22,500 jobs added in May. The Southwest Washington region saw a drop in total employment of almost 30,000 jobs, but also turned around in May with 1,650 jobs returning. In May, the unemployment rate was 14.2% in Oregon and 14.4% in Southwest Washington.

As the rate of COVID-19 infections slow, we should see more jobs return.

HOME SALES

Second quarter home sales dropped 19.3% compared to the same period last year. A total of 14,342 transactions closed.
Sales dropped in every county except Klickitat, but it is a very small market and is subject to massive swings. Home sales fell most in Lincoln County.
Although significantly lower than what we saw a year ago, closings were 20% higher than in the first quarter of 2020. Housing appears to be recovering faster than the overall economy.
These numbers are not surprising given the onslaught of COVID-19. However, there are “green shoots” as pending sales have started to rise significantly. I expect to see decent growth in the third quarter.

HOME PRICES

The average home price in the region rose 5% year-over-year to $421,068. Home prices were 5.3% higher than in the first quarter of 2020.
Clatsop County led the market with the strongest annual price growth. Homes there sold for 18.4% more than a year ago. Prices were lower in Benton County, but the decline was very modest.
All but one of the counties contained in this report experienced price growth over the second quarter of 2019. Annual price growth continues to outperform historic averages.
The takeaway from this report is that home prices appear to have been somewhat immune to COVID-19 (no pun intended). This is likely a function of extremely low levels of inventory across the region.

DAYS ON MARKET

The average number of days it took to sell a home in the region dropped one day compared to the second quarter of 2019. It took 19 fewer days to sell a home than in the first quarter of 2020.
The average time it took to sell a home in the second quarter was 66 days.
Fourteen counties saw the length of time it took to sell a home drop compared to a year ago. Twelve counties saw market time rise.
Homes again sold the fastest in Washington County where it only took 23 days to sell.

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

Market News • July 21, 2020

Western Washington Real Estate Market Update

by Windermere Economics

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

It appears as if the massive COVID-19 induced contraction in employment that Washington State — along with the rest of the nation — experienced this spring is behind us (at least for now). Statewide employment started to drop in March, but April was the real shock: total employment dropped almost 460,000 between March and April, a decline of 13.1%. However, this turned around remarkably quickly, with a solid increase of 52,500 jobs in May. Worthy of note is that, in May alone, Western Washington recovered 43,500 of the 320,000 jobs that were lost in the region the prior month. Although it is certainly too early to categorically state that we are out of the woods, the direction is positive and, assuming we respect the state’s mandates regarding social distancing and mask wearing, I remain hopeful that Washington will not have to re-enter any form of lockdown.

HOME SALES

There were 17,465 home sales during the second quarter of 2020, representing a drop of 22.2% from the same period in 2019, but 30.6% higher than in the first quarter of this year.
The number of homes for sale was 37% lower than a year ago, but was up 32% compared to the first quarter of the year.
Given COVID-19’s impacts, it’s not surprising that sales declined across the board. The greatest drops were in Whatcom and King counties. The smallest declines were in Grays Harbor and Cowlitz counties.
Pending sales — a good gauge of future closings — rose 35.7% compared to the first quarter of the year, suggesting that third quarter closings will grow as well.

HOME PRICES

Home-price growth in Western Washington rose by a relatively modest 3.5% compared to a year ago. The average sale price in the second quarter was $559,194.
Compared to the same period a year ago, price growth was strongest in Grays Harbor County, where home prices were up 14.3%. Clallam County also saw a double-digit price increase.
It was interesting to note that prices were up a significant 6.6% compared to the first quarter. This suggests that any concern regarding negative impacts to home values as a function of COVID-19 may be overblown.
I will be watching for significant price growth in less urbanized areas going forward. If there is, it may be an indication that COVID-19 is affecting where buyers are choosing to live.

DAYS ON MARKET

The average number of days it took to sell a home in the second quarter of this year matched the second quarter of 2019.
Across the entire region, it took an average of 40 days to sell a home in the second quarter. I would also note that it took an average of 14 fewer days to sell a home than in the first quarter of this year.
Thurston, King, Pierce, and Snohomish counties were the tightest markets in Western Washington, with homes taking an average of only 17 days to sell. All but two counties, Grays Harbor and Cowlitz, saw the length of time it took to sell a home drop compared to the same period a year ago.
Market time remains well below the long-term average across the region. This is due to significant increases in demand along with the remarkably low level of inventory available.

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.

What a difference a quarter makes! Given that demand has reappeared remarkably quickly and interest rates remain historically low, it certainly remains a seller’s market and I don’t expect this to change in the foreseeable future.

The overall housing market has exhibited remarkable resilience and housing demand has rebounded faster than most would have expected. I anticipate demand to remain robust, but this will cause affordability issues to remain as long as the new construction housing market remains muted.

ABOUT MATTHEW GARDNER