It’s beginning to look like, at least for June-to-June comparisons, that the Spring Market has fully resumed. After seeing written transactions plunge in Puget Sound and Western Washington in late March and in April we have seen what economists are calling a V-recovery. The upside of the V occurred in early May through mid-June and appears to be continuing. After dropping over 50% in March and April, transactions are up about the same in May and June.
The major key for June-September is what happens with listing inventories. The low inventory in Western Washington and Puget Sound which has been a hallmark of the real estate markets of recent years plunged further early in the COVID crisis. Similar to transactions, listing inventories fell between 40% and 60% in various areas in March and April. While inventory in May in the Northwest Multiple Listing Service was higher than April, as we move through June we still see supply and demand unbalanced in favor of sellers. One question of significance is when those with large equities built up over the last 6 or 7 years of seller’s markets will sell and cash out those equities as we move into more uncertain economic times. So far no great surge in that area has occurred.
In real estate, as well in all other areas of life, we are hearing sounds of COVID fatigue. Too many weeks being confined to our homes, restricted in our movements, and little in-person interaction outside of our households. The additional stress of managing our lives through this pandemic has made buyer and seller patterns very hard to predict. In fact, no one guessed that the recovery in transaction numbers would happen as quickly and as strongly as we have seen.
In Washington as the economy in general has slowly opened up many counties are in different phases, with those counties with smaller populations allowed more freedom of movement . The general easing of restrictions should bode well for the real estate market. Buyer demand has steadily increased since the beginning of May and should continue strong for the next quarter at least. However, social distancing and the other standard precautions will remain in place for the foreseeable future.