We have now been in the COVID market for over two and a half months. What began as a fast paced and vibrant market has evolved into a unique market with surprising resiliency. After being shut down briefly in late March by the Governor’s “Stay at Home” order, the real estate industry re-opened under tight restrictions and with all, but a few activities handled remotely.
What we have seen is a surprising number of home buyers, still in the market and while initially it appeared that mortgage financing might not be readily available we now see historically low interest rates and somewhat normalized loan processes. The main difference is in loan amounts over 1.5 million where jumbo financing is harder to come by but still available for well qualified buyers. Transaction closings, appraisals and inspections are all functioning as in a normal market.
We now have some more relevant data, as the most recent reporting periods represent activity that occurred after the partial shutdown of the Washington economy. Not surprisingly, available listings in both Seattle and the Eastside are down 32% and 39% respectively from the same period last year. The number of homes that closed recently are only down around 25% in the Seattle and Eastside markets. Given the seriousness of the COVID outbreak, the fact that we are selling nearly 75% as many homes as in last year’s normal market is amazing. Many markets nationwide are following this trend.
We have seen inventory contractions many times over the past 8 years and this current lowering of inventory again is creating a supply and demand difference that has kept prices stable in a time when many predicted that prices might fall. Median prices for both Seattle and the Eastside were both up slightly for the latest reporting period.
Phase Two of the Governor’s plan to re-open the economy could occur in the next few weeks. Interactions with clients will still mainly happen remotely, but up to three people at a time will be able to enter a home for showings, appraisals and inspections as long as everyone follows CDC protocols (masks and distancing). We expect business to continue to grow as the restrictions ease.