Amid a crippling pandemic killing one American per minute and causing layoffs, bankruptcies, and fear of continued economic troubles in the year ahead, the Puget Sound real estate market has continued on its seemingly unstoppable path of rising prices since bottoming out in 2012 after the Great Recession.
The high demand for housing in the pandemic is not unique to the Puget Sound, however, as other markets, such as California and Colorado, also face a shortage of housing.
A relatively high demand can result if the supply drops, which has indeed happened as shown in the below two graphs. The figure on the left shows a snapshot of home inventory for October 2018, 2019, and 2020, while the figure on the right shows monthly inventory for the past three years (each month being a three-month total to reduce jaggedness in the lines).
Despite the lower inventory, the number of new listings in King County went up between October 2019 (3,099) and October 2020 (4,224) as shown in the figure below on the left, a 36% rise. A drop in supply despite more new listings must mean more homes are being snapped up, a conclusion confirmed in the figure below on the right, which shows that 2,927 King County homes closed in October 2019 and 3,944 closed in October 2020.
Despite this continued activity in the local real estate market, because Congress has not yet passed a second stimulus package to counter the pandemic, the economy may be in for a serious fall. Should Congress not act soon, the economy may undergo further difficulties that could affect the Puget Sound housing market. With promising COVID-19 vaccinations in the offing, however, the housing market here may have adequate resilience to last until the general economy picks back up regardless of economic stimulus from the federal government.
For 2021 forecasts of the Puget Sound housing market, see:
- Seattle Real Estate Market: Trends & Investment Outlook by Marco Santarelli, and
- Seattle Housing Market Forecast for 2021 by Sylvia Shalhout
At RJRE, factors we will be watching include whether telecommuting remains strong, which could lead to an urban exodus; whether Californians fleeing fires and high housing prices set their sights on Puget Sound; and how coronavirus vaccines are rolled out once approved.