Seattle Real Estate Market Resiliency

The past several weeks have, of course, been challenging and interesting and historic and scary and record-breaking… and ultimately, we’re all still waiting to see how things shake out.

However, in the meantime, the Seattle market has proven to be one heckuva resilient market! I’ve been asking around and attending webinars by folks who know a lot more than I do—and it isn’t all gloom and doom out there. (And it’s certainly NOT the dismal narrative the Seattle Times reported a couple days ago, either.) Many of my partner real estate agents have been seeing buyers getting back into the market faster than sellers—and during a time of continued low inventory, this has increased competition, and appears to have begun to drive prices upward once again.

Let’s talk numbers for Seattle:

1. Price per square foot might be down 6% since its high at the beginning of March, BUT it is back on the rise, and UP about a percent since bottoming out a couple weeks ago.
2. Also supporting the notion that things may have stabilized in NW real estate is the fact that Seattle’s Absorption Rate (which measures buyer activity relative to seller activity) is UP since hitting its recent low. That is, buyers are no longer sitting on the sidelines causing the absorption rate to fall; instead, buyers are buying faster than sellers can list, which is causing the absorption rate to rise.
3. The Puget Sound Business Journal reported that the number of new listings in King, Pierce, Snohomish, and Kitsap Counties was DOWN 34% compared to March. Which makes sense, given the new guidelines for how sellers have to sell homes (no open houses and by appointment only; which effectively means sellers practically need to move out of their house until they accept an offer). Also, many sellers want to fix up their homes a bit before listing, and it’s tough to find contractors these days to help get things done, assuming you even feel comfortable having a bunch of other people working in and on your home while you’re still quarantining there.
4. Year over year prices for Single Family Homes in King County ROSE in April by 3.6% (remember, “Stay Home, Stay Healthy” began in mid March, so year-over-year April data is fully encompassing our real estate market during the “Coronaconomy”). In Snohomish County prices are up 5%; Kitsap County prices are up 14.3%; and Pierce County prices are up 13.2%.

Long story short: The Seattle Real Estate Market took a pause for about 3 weeks after Shelter-In-Place went into effect in Mid March. Since then, buyers have been slowly returning to the market, and with so little new inventory hitting the shelves, said buyers are now starting to bid the prices of homes higher once again.

Summary

We remain in a dynamic market, and one whose end result we still don’t know. But at least in the short run, the Seattle market appears to be on pretty solid ground…which is always good to see!

Oh, and about that unbalanced article in the Seattle Times…

Really quick, I want to circle back on the Times piece this last week, which painted a narrative that the market has slowed and buyers aren’t buying—based on the experience of some sellers on the south end of Vashon Island. A couple thoughts:

1. Vashon Island’s 90-day moving average for days on market according to Altos Research on February 28th was 189. That is to say, EVEN BEFORE the “Coronaconomy” really took hold, it was ALREADY taking SIX MONTHS to sell a home on Vashon. Their trailing 7 day average on February 28th was even worse, at 197 days. In the last three years, the LOWEST days on market Vashon had was 45 days on March 9th, 2018. Their average days on market for the entirety of the last three years is about 110. The sellers in this article have been on market for 36 days…
2. How does one arrive to Vashon Island these days? Most likely by way of the Fauntleroy Ferry. How does one board the Fauntleroy Ferry? Most likely by way of Fauntleroy and the West Seattle Bridge which is…drumroll… closed. Even in the best of circumstances, Vashon has never been super easy to get to in the first place—which is part of why the average “days on market” number on Vashon Island is so much higher than for Seattle (Seattle’s current days on market is about 53.7% LOWER than the current days on market in Vashon). And now, with the West Seattle Bridge foreseeably closed for the next couple years, Vashon Island is even more difficult to get to, THUS decreasing the buyer pool even further.

In short, the case study the Times showcased to represent their narrative about a weaker real estate market is actually NOT representative of the larger PNW Real Estate Market.