The rains may have come, but the extended sales drought isn’t yet done Sales counts in King County failed to reach the 3,000 threshold for the fourth consecutive month in October. And with the typically slower months of November and December still ahead of us, the current slowdown may become more pronounced than anything we’ve seen over the past two years.
Given the four months—and counting—of suppressed sales counts, one might expect that inventory would be on the rise and that market conditions would favor buyers. In such a case, one would be wrong: once again in October, total listings were restrained, having actually fallen to 5,219. This may be 90% higher than the record-low October inventory of 2021, but it remains 21% below the long-run average for the month. This lack of supply in the face of almost- absent demand has not yielded balanced conditions in the market, with the overall months-of-inventory ratio increasing to just 2.5 in October (fewer than four months is considered a sellers’ market; 4-6 months a balanced market; and and 6+ months a buyers’ market). Having noted what we expect to be the typical slowdown of buying and selling in the winter and what will be another Federal Reserve interest rate increase on December 14th, we feel certain that our current market dynamics will prevail into early 2023, at the very least.
If it seems like we’ve been highlighting muted MLS sales counts throughout King County for a few months now, well, it’s because we have. The economic dynamics governing our market conditions in the second half of 2022 remain present to this day: persistently high inflation and rising interest rates continue to sideline demand while our robust labor market has served to keep supply in check. As a result, market activity was relatively stagnant in October, setting us up for a slowdown like we haven’t seen in a few years. The typical pattern of change in MLS sales counts in King County between September and October is one of increase. This year, however, total sales were 14% lower last month than in the previous, whereas we normally see an 11% increase at this time of year. Further, the actual number of sales we saw in October fell far short of the norm:
the 2,107 transactions were 30% below the past 10-year October average and 40% below those of October 2021. The overall County- wide MLS sales count failed to surpass the 3,000-mark for the fourth consecutive month—something that hasn’t happened since early in 2020. Based on typical seasonal patterns for November, we’re likely to finish with fewer than 3,000 sales again this month, with a similar outcome all but certain in December, too. Notably, then, if our market does in fact fail to deliver 3,000 sales in either of the final two months of 2022, we will begin 2023 having registered six consecutive months of sub-3,000 sales, the most protracted period of slow sales in years (our market failed to reach 3,000-sales mark over a ten-month period beginning in the fall of 2019 and extending into the summer of 2020).
Copyright © 2022 rennie group of companies. All rights reserved. This material may not be reproduced or distributed, in whole or in part, without the prior written permission of the rennie group of companies. Current as of November 9, 2022. All data from Real Estate Board of Greater Vancouver and Fraser Valley & Rennie. While the information and data contained herein has been obtained from sources deemed reliable, accuracy cannot be guaranteed. rennie group of companies does not assume responsibility or liability for any inaccuracies. The recipient of the information should take steps as the recipient may deem necessary to verify the information prior to placing any reliance upon the information. The information contained within this report should not be used as an opinion of value, such opinions should and can be obtained from a rennie and associates advisor. All information is subject to change and any property may be withdrawn from the market at any time without notice or obligation to the recipient from rennie group of companies. E.&O.E. 3
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