As many aspects of life have readjusted and resumed amid the pandemic, the real estate market is not acting as usual heading into fall. Typically, late summer sales start to slow and housing stock rises as we head into the rainy season. But this year, the reverse has been true: the pace of home sales has been unseasonably hot and there is no sign that the number of homes for sale will rise sufficiently to meet the voracious demand of home buyers.
Windermere’s Chief Economist Matthew Gardner recently spoke with KIRO Radio’s Dave Ross about the historic low inventory the Puget Sound region is currently experiencing.
“When we look at active listings and inventory in the region right now — I went back as far as my numbers go, which is back to around 1999 — over 20 years, I have yet to find a month with this low a level of inventory in the marketplace, it is quite extraordinary,” Gardner said.
According to Gardner, in August the number of residential listings was down 38% in King County, 51% in Pierce County, and 56% in Snohomish County.
Although this has created a hyper-competitive market with limited selection for buyers, sellers are currently enjoying increased home prices as demand continues to rise. According to Gardner, part of this is due to “Economics 101.”
“When you have net new demand and you limit supply, what happens to prices? They rise,” Gardner said.
However, the rising prices have not deterred buyers from trying to take advantage of historically low interest rates. Currently, 30-year fixed rates are sitting around 2.8% and 15-year rates are at an unprecedented 2.4%. Those who are able to overcome the sticker shock might use this time to lock in a favorable mortgage.
Gardner also notes that while low mortgage rates and high prices can be beneficial to the homeowning class, renters have been hit particularly hard by the pandemic. Although the city of Seattle has an eviction moratorium in place, concerns about rent depression and mortgage payments continue to plague landlords, and the future is still looking uncertain for renters.
According to Gardner, the apartment market is one to watch as the pandemic drags on. While the real estate market for homeowners has bounced back, the rental market may remain impacted for some time yet.