While many in Seattle may have spent April picking apart their homes’ flaws during quarantine—suddenly that living room felt more cramped than cozy, didn’t it?—few actually put their digs on the market.
According to numbers released yesterday by the Northwest Multiple Listing Service, last month saw 38.6 percent fewer listings for Seattle homes and condos compared to April of 2019. And you couldn't find too many fading front-lawn signs around the city, either: Overall active listings were down 30.8 percent.
This shouldn’t come as a surprise to anyone who’s been holed up this spring. April was the first full month of governor Jay Inslee’s “Stay Home, Stay Healthy” social distancing order. The mandate didn’t bar real estate activity but did limit viewings in response to the local outbreak of the novel coronavirus.
Beyond these physical restrictions, psychological hurdles loomed too. As Windermere chief economist Matthew Gardner told me, prospective sellers weren't jazzed about letting potentially contagious strangers stroll through their homes at showings. Add historically high unemployment numbers to the mix, and you get staggeringly few new home sales to report. “Quite remarkable,” Gardner says.
Yet, it’s too early to declare the traditionally fruitful spring home-buying season a total dud. Seattle property is still valued highly. Median prices for the city’s homes and condos actually rose this April from a year ago—from $707,000 to $751,503, a 6.3 percent jump. Single-family home prices across the city climbed at an even higher rate (8.1 percent), with Southeast Seattle and SODO/Beacon Hill experiencing the greatest hikes in that category (20 and 18 percent). Basically, if you thought a pandemic was the time to go discount shopping, you thought wrong. “People are saying, ‘I'm not prepared to accept a lower price.’ Economists define that as being ‘sticky on the downside,’” says Gardner. “People [who] don't have to sell for a lower price, they're choosing not to.”
That stickiness won’t necessarily be rewarded. Even once social distancing measures are lifted, tepid consumer behavior may still hurt the housing market for a while. And in the short term, job losses will continue to sting. ("We are in a very, very unique situation with some horrible economic numbers that you're going to be hearing over the next couple of months," Gardner says.) National real estate projections vary, but Zillow expects home prices to fall 2–3 percent and sales volumes to get slashed in half through 2020. A return to normalcy wouldn't arrive until the end of 2021, per the Seattle-based real estate company's model.
Gardner leans toward a slight year-over-year price increase, similar to a prediction made by the National Association of Realtors. One reason why? “I do expect mortgage rates to be lower by the end of the year than they are today,” he says.
But ultimately, Gardner stresses that Covid-19's effect on housing ownership is tied up in the nation's broader economic recovery, which depends on its ability to relax social distancing measures. “We're going to need to see the light at the end of the tunnel before I think we'll start seeing any significant improvement.”
With gradually declining case and fatality numbers, Seattle may glimpse that glimmer of hope before much of the country, and there are signs a swift real estate resurgence could follow. Before the coronavirus pandemic, Seattle was one of the hottest housing markets in the country. More recently, the city's new listings have also risen a bit after an early April nosedive.
So, it might be smart to be a bit sticky, Seattle homeowners. That is, as long as everyone keeps washing their hands.