home buyers remain active, but for how long?
The demand for detached homes and condos in King County persisted at an elevated level in February; against the backdrop of limited listings, prices—especially for houses—have been driven up. It may be some months before conditions change.
18% in Bellevue versus last year. Median condo prices, in contrast, have risen much more modestly, at 1%, in both cities. As we look to the months ahead, there are questions about the ability for the housing market in King County to maintain its course insofar as elevated demand and limited supply are concerned. Our view is that housing inventory will, overall, remain somewhat subdued as the national and metro area economies continue to recover from the pandemic (Seattle’s regional unemployment is now 6.6%, down from a peak of 16.6% in April 2020), while the demand side of the market will benefit from said jobs recovery, continued low (if not slightly rising) mortgage rates, and the recently-passed $1.9T stimulus bill.
King County’s housing market has seen a flurry of buying activity since the middle of 2020, with each of the final 6 months of last year surpassing 3,000 MLS transactions (and a seventh, June, recording 2,987). This was the first time King County had seen this consistent level of buying since the middle of an exuberant 2016. The trend continued into 2021 (at least somewhat), with each of January’s and February’s closed sale counts exceeding the previous 10-year same-month average by 23%. The 2,293 MLS sales in February were also the most in any February in 14 years (with buyers having snatched up 2,398 homes in February 2007). Both detached home sales and condo sales were elevated in February, with the former up 18% versus last year and 11% versus the long-run February average; for the latter, sales were up 37% and 14%, respectively.
At the County level, there remains a clear “many buyers chasing relatively few homes” narrative: in contrast to last month’s total sales being up by 12% on a year-over-year basis, the total number of homes available for purchase was down 29%. At the city level, however, the narratives carry more nuance. For example, while Seattle’s detached home sales were up 38% year-over-year in the face of inventory that had contracted by 18%, its condo sales were only 3% higher as inventory expanded by 65%. In Bellevue, condo demand and supply have been surging— compared to last year sales were up 49% and inventory was up 165%—while detached sales and listings have been sagging, down 3% and 63%, respectively. Price appreciation continues to characterize the detached segments of the market in both Seattle and Bellevue, with median house prices having risen by 8% in Seattle and by
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