near record-low inventory & record-high prices in March
Housing demand in King County is strong, but the real story is that low inventory is contributing to prices that are, in some cases, at all-time highs. Current conditions are likely to persist for months.
in October 2020. This has been driven by the detached segment of the County’s market— with houses commanding a premium from buyers who are attaching significant value to surplus indoor and outdoor space—where the average sold price topped $1 million for the first time ever in March (reaching $1.04 million). Notably, this was the second straight month that the average detached sold price set a new all-time record, with March’s value jumping more than $100,000 from February’s $935,671. With 25% of King County’s population having been vaccinated from Covid-19 (versus 23% nationally), and with the economy continuing to recover (King County’s unemployment rate is down to 6.6% from a pandemic-high of 16.2%), the status quo supply-demand dynamic in the regional housing market is likely to persist over the coming months.
The pandemic has proven to be a boon for housing markets across North America over the past nine months, with elevated sales counts in the face of constrained supply yielding predictable increases in prices. This has certainly been true in King County, with each of the final six months of 2020 surpassing 3,000 MLS sales, the first time that has occurred in this market since the middle of 2017. After a modest two months to begin 2021, sales surged past the 3,000- mark again in March, with the County tallying 3,181 residential transactions. This was 24% higher than in March 2020, and 26% higher than the past-decade March average. In looking at home types, sales were led by the residential (detached) segment, registering 2,311 transactions—up 25% on a year-over-year basis (condo sales were higher compared to last year by 17%).
Arguably, though, the bigger story in King County relates not to the demand side of the market, but rather the supply side, with the total number of homes for sale in March 2021 (2,485) down 42% versus last year, and 61% below the past-decade March average. In fact, inventory is so low across King County that at the current pace of sales there is now less than one month (0.78) of housing inventory available for purchase. This is only the third month in the past 15 years that there has been less than one month of inventory, with the current ratio sitting 14% below the previous low of 0.90 (from December 2017). At the intersection of these forces of supply and demand are prices that are setting records. For example, the overall average sold price in March 2021 of $921,879 was 9% higher than the previous high of $847,174 set a few months earlier,
Copyright © 2020 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 April 13, 2021. 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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