I have had numerous calls in the last few days with clients asking my thoughts on the impacts that the COVID-19 virus could have on the Seattle real estate market. Given that this is a question on everyone's mind, including myself, I figured that I would give my perspective on the situation from the lens of real estate.
First off, I hope you are all staying safe and healthy in this uncertain time. Secondly, I want to preface that this situation is changing daily, so please take the comments with a grain of salt.
Before COVID-19, the 2020 market was very strong, with a lot of traits shared with the most competitive market of the last 12+ years, 2017. Each home getting multiple offers (assuming they were priced and marketed well) and numerous showings within a few hours of coming on the market. The housing inventory was very low, dancing around roughly one-month of inventory. In my blog, you can read more about my analysis of inventory at the start of this year - HERE
COVID-19 Impact So Far
So far, the real estate market has hardly felt a shift. We are on the same trajectory as we have been, and everything I have mentioned above is still the same today. I've been regularly touring and showing homes, and we are still seeing evidence that a lot of agents/buyers have been through. That said, we have to remember that real estate data and any information regarding real estate statistics is always about 30-days behind. The reason for this is because when a buyer finds a property they like and get their offer accepted, it typically takes approximately 30 days for the purchase period and data to be recorded with the county.
The Market Today with COVID-19
As A Buyer
As I mentioned earlier, things are changing daily. The governing bodies of real estate in Washington have now stopped all open houses, and with the stay at home order, private showings are also not allowed. Before the order, private showings were permitted, the only way to see a home was to see it with your agent. This immediately stopped the buyer pool that likes to tour open houses to get their feet wet before getting serious. This did not have much of an impact on the market today. Depending on how long and in what way the "stay at home" order continues, when this is all over, there will likely be pent up demand for housing coming from a large portion of the buyers who decided to hold off or were forced to.
As A Seller
The market is heavily in sellers' favor as it stands. Many sellers have decided to hold off on putting their homes on the market, particularly if they live in it, as they do not want to risk getting sick from any buyers potentially walking through the home. With the new order, most sellers are waiting out the two-weeks before considering to list their home. This will have a direct impact on inventory, a point I will make in the section below.
The Future Impact of COVID-19
The future impact of COVID-19 on the Seattle housing market has everything to do with how long this situation will last. The longer this continues, the more damage it will do to the broader markets, and eventually, the housing market will feel it. If the virus can be contained, and we get a solution sooner than later, the effects on the market will be minimal. The question here is how long is long, and how much time will need to pass for things to pick back up again.
Remember that just a month ago, we were in the middle of one of the strongest economic months the country had seen since 2008. Theoretically, the virus is the new variable added to the mix, and once it is removed, we can expect things to pick up again where they left off. This, of course, is not to discount the jobs that have already been lost, and the expectation is that people will get rehired. The broader market certainly may come out the other side of this with a different lens and view on things.
Bear in mind that the stock market and housing markets move at a much different pace than one another. The housing market is moving much slower. If inventory continues to stay as low as it is and with the potential to get even lower because sellers don't want to list their homes, I have a hunch that housing prices will likely not go down. It is quite possible sellers, and home prices will be at a standstill until things start to get back to normal.
There is a saying in the stock market, "it's an escalator on the way up and an elevator on the way down." It is hard to imagine going back to normal today, but no doubt the markets will rise again. We have to look at every historic drop in the market; the years afterward bring substantial gains. As always, I want to encourage all of you to keep the long-term in mind; while there will undoubtedly be economic challenges in the short-term, I firmly believe we will come out of this much stronger.
Stay safe, everyone!