Market Update - May 2020

In the latest episode of Market Update, Aaron Janus sits down to give you an informational look at the current state of the Seattle real estate market. Aaron discusses median home prices in Seattle, on the Eastside, and throughout King County, as well as housing inventory, mortgage rates, and the current impact of the coronavirus on the Seattle real estate market in May 2020.

Below is a rough transcript of the video, which consists of a presentation by Seattle Realtor Aaron Janus.

Video Transcript

Aaron Janus, Seattle Realtor:

I have never been more certain than I am about these two facts. 

1: the real estate market here in Seattle seems to be chugging along quite nicely, and, 

2: my god I need a haircut. 

Welcome to your May Market Update. 

Like every Market Update, we love to start with some numbers, so let's dive right in and we'll start with our median sale prices, which in Seattle for the month of April was $751,500, which is up 6.3% year-over-year and it's up above the $725,000 it was in March. If we look at the Eastside, we're looking at a median home price of $851,000 which is up about 3.8% year-over-year. And then if we look at King County as a whole, our median price is $650,000 dollars, which is up about 4% year-over-year. 

Okay, the next set of numbers that we like to take a look at our inventory levels and if we look in Seattle, this is during the month of April, we're down 30% for active listings year-over-year. Pending sales were down 42%, so those are off a little bit more in April compared to March but it's still brings us to 1.73 months worth of inventory. Now on the Eastside, we're down about 33% the active listing inventory year over year with pending sales down 52%. That's still equating to 1.64 months worth of inventory. Now, if we look at King County as a whole we're down. Our active inventory is down about 30% year over year and our pending sales are down 43%. That's 1.57 months of inventory.

A little note about the month's worth of inventory. I think it's a great stat because it's really, Independent of a raw number of active listings of the raw pending sales and it really shows the velocity of the market and what it means is that the rate at which things are selling this is how long it would take to sell all of the active listings of no new listings came on the market. What's interesting to note about these stats that I just gave you is that we've been at or below two months of inventory in King County for five years. I mean since July of 2015 and anything less than three months of inventory is considered a seller's market. So and we've been below two months for five years running. We've really been in a seller's market since things turned and about 2013, but yeah under two months that's really incredible. So this pandemic is obviously we have enough data now we can say that it hasn't really disrupted this trend at all. 

Another piece of data that we like to look at during our market update, of course, our mortgage rates and our friends over at Freddie Mac say the 30-year fixed-rate average is 3.28% for the week ending May 14th. That's down 0.79% from the same time last year when rates were at 4.07%. What's even better is the fact that over the past few weeks mortgage rates have really stabilized before that we had a lot of volatility things have kind of smoothed out a little bit which is great news for buyers. 

Okay, so what does the real estate market look like right now, here in the middle of May here's what we know the number of homes available to purchase is certainly down when compared to the average over the last few years, but it's better than it was in April and there's certainly more activity now and now that we have a little more data since the beginning of this stay at home order and the COVID-19 pandemic.

Let's take a deeper dive into these numbers this is from the northwest multiple listing service in this accounts for all of the MLS which encompasses quite a bit of the state certainly most of Western Washington and you can look at this breakout week by week 2019 versus 2020 and you can see those first couple weeks of March we were really kind of tracking better in 2020 than we were in 2019, and if you look at the new listings which you'll see right here, you know this also, Sort of happened between week 11 and 12, right, so you know the number of new listings actually when this order started it jumped up. I mean nearly 10% you see there are 2,700 almost 2,800 homes that hit the market and that is most likely because it does take a bit of time to prep listing so people that were already committed certainly went through and did that and you could see that but you can see that we were tracking even more briskly than we were in 2019 now, you can see that following week a big drop-off that week of March 25th. You can see last year we were 2400 listings dropped to 1800, so there you can see the effect of this pandemic when it comes to homes that we're listed and you can just see year-over-year what's happened since then what's interesting to note is through the end of April things where we're down quite a bit last week the week of May 4th the first week of May you could see a nice little bump up there in listings now if we look at the pending these are listings that have sold have gone under contract, you'll see a similar you'll see. The similar thing in fact there was a little bit you could see if you look at 2019 versus 2020 that first week 10 that first week of March tracked pretty well it then it actually fell off a little bit in 2020 even before the pandemic really started but you know, there was already some stuff in the news and things were people were starting to wrap their heads around these things but you could see that it had a significant impact on the pending listings there. Also what's interesting to note though once you get through April April into the first week of May you can also see on the pending side that things have bumped up as well, but you can take a look at those raw numbers, but at the end of the day, you know, we talk about months worth of inventory that is the true metric of the velocity, the health of the market. It is a seller's market. Are there fewer listings? Absolutely. Are there fewer buyers? Most definitely. But you put the numbers that we have together and it's a pretty brisk market for those that are in it. 

So what does this mean for sellers?. Well, one-third of the homes that have come on the market since May 1st have gone under contract. Demand is high. 

So what does that mean if you're a buyer right now? Well, the market is significantly less competitive for buyers than it was. In a hot area, a hot home could receive 5, upwards of 10 offers, maybe now it receives one, two, three offers. The fact is that there are fewer buyers and it's making that less competitive. It is still a seller's market, but there are definitely some opportunities out there. 

As always we're here for you if you have any questions. Obviously your situation is going to be as unique as you are, and we would love to help you craft a solution that is unique to your particular situation. Likewise, if you have friends or family or coworkers, neighbors, whoever is looking for some guidance, we would love to be the one that you count on to refer, so please do. And, of course, subscribe to us on all the social medias. We've got some really great content coming out over the next few months and we hope you like it and of course, we're always here for feedback. Stay safe and we'll see you next time. Take care.

House Goals Realized. JanusGroup at RE/MAX Integrity. It's a tooth.