Lack of Supply and Massive Demand
Updated: Feb 11, 2021
As with most winters, we are experiencing a slight seasonal slowdown in the Puget Sound’s real estate market to accompany the unexpected record activity that we saw over the rest of the hot market in 2020. As we all waited for some sort of housing collapse due to last year’s COVID-19 quarantine and the associated job loss, we were instead greeted with an ensuing property buying frenzy. In turn, the typical winter variation has started out looking a little different from that of previous years. The “slowdown” in our PNW market can be seen month-to-month, but does not seem to be down for any reason other than a lack of homes available for the hordes of buyers with pre-approvals in hand.
Below are some graphs highlighting data December 2018 through December 2020 displaying Washington State’s three most prominent counties; Pierce, King and Snohomish. Notice that the sales in December closer reflect a PNW spring market instead of a typical winter one.
King County
December 2020 had a 22.3% increase in closed sales compared to that of December 2019.
31.3% increase in pending sales during that same time period.
Available housing inventory is down 36%.
Pierce County
December 2020 had a 22.8% increase in closed sales compared to that of December 2019.
23.3% increase in pending sales during that same time period.
Available housing inventory is down 56%.
Snohomish County
December 2020 had a 15.5% increase in closed sales compared to that of December 2019.
18.4% increase in pending sales over the December in 2019.
Available housing inventory is down 66.2% this December compared to last.
Available housing inventory is at an all-time low (see charts below), and with interest rates to match, buyers have continued to be more than willing to bid up and escalate the scant housing inventory that is available to take advantage of the quickly appreciating assets we all know as real estate. This is both good and bad news for buyers, but should be nothing to deter a qualified buyer from making an educated move. Interest rates in the twos and threes are resulting in more buying power for serious buyers. Simultaneously, competition is fierce for the homes that are available and often escalating well above asking price. This is also leading to quick appreciation on homes for those who end up closing on them.
(Graphs represent a 12-year overview of the sales statistics in King County: From 2008 onward, you can see in the months of inventory chart that we are currently at the lowest inventory we have been since then.)
My advice for buyers is to know what you are getting into and work with an agent that can navigate the buying process with confidence and proficiency. Furthermore, this is decidedly a seller’s market, so if you are considering selling a property, there is no better time than right now to do so. Like, RIGHT NOW!
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