Deemed “essential business” under the state’s guidelines for the Stay Home, Stay Healthy order, real estate brokerages and mortgage lenders remain operational, but many brokers and their clients have put themselves – and their transactions – on pause.
The initial disruptions caused by COVID-19 have since developed into a wider-reaching industry slowdown. “I’ve had a lot of conversations with sellers and buyers about whether we should wait or not,” Windermere broker Kenna Pearson told KOMO News. ” And most have decided they want to wait.”
A Look at the Market in March
Before the coronavirus outbreak gathered force, March home sales were gearing up to enter frenzy territory. Last month’s NWMLS sales data saw home price increases and sales activity reminiscent of early 2018’s home buying inferno.
The NWMLS data reflects price growth across the market: On the Eastside, home prices rose by 9% over last year to $1,035,000. King County home prices rose by nearly 8% in March, compared with a year earlier — the largest jump since June 2018, when the market went into 18 months of hibernation. That increase also represents nearly a 7% jump over February’s already-steamy pricing. And in more affordable Southwest King County, prices leapt by 17% year-over-year, to $500,000.
New and active listings in King County also returned to 2018 levels, and in Seattle, homes were snapped up so quickly that if there had been no new listings, everything on the market would have vanished in just a month.
But the March data doesn’t tell the whole story. Many of the sales finalized in March were likely signed the previous month, before precautions to slow the spread of the pandemic resulted in a generalized business shutdown.
As soon as the statewide mandate went into effect, the number of new home listings in Seattle plummeted by 58.6% over the same week last year, and pending sales (mutually accepted offers) slowed during March, dropping about 13.5% from a year ago.
March’s rosy numbers should not be taken to imply that the market is in for anything similar come April, Windermere Chief Economist Matthew Gardner told The Seattle Times.
“You’ve got to put a massive asterisk on the side of these figures because of the events that happened during the course of March,” he said. “We will get through this scenario. Hopefully, the state will start getting back to normal.”
Though there are fewer buyers and fewer listings right now, transactions are still taking place and most real estate agents remain optimistic about a bounce back in mid-to-late summer or early fall.
“We don’t have a crystal ball of course, but I think it is important to point out this is a health crisis and not a housing crisis,” said Pearson. “I see a bunch of sellers that are waiting to list, so there will be a little more inventory coming in. There are buyers waiting, so we will still have a huge demand for a small supply.”