uncertainty sidelines seasonality and hoses down the housing market In July, King County’s sales count failed to reach the 3,000 mark for the 13th straight month. Despite a swelling listings count, both sales and inventory remain below their respective past- decade averages, with elevated inflation and rising interest rates affecting market activity.
late, though a continuation of decreased sales and/or increased listings will be required to achieve real balance. In July, the Federal Reserve increased its policy rate again (the 11th rate hike since March 2021), into the range of 5.25%- 5.50%. This has implications for many aspects of economic activity, including the housing market here in King County. Though a rate pause from the Fed seems likely at their next meeting, Jerome Powell has made it clear that the inflation fight is not yet fait accompli, meaning we should expect the inflation/interest rate dynamic to continue to influence housing market dynamics as we transition into the final four months of 2023.
As is often the case for the month of July, housing sales in King County slowed last month while inventory—as a result of decreased demand (and more listings)— continued to expand. Directionally, these changes are mostly in line with the typical seasonal trend; the magnitude of the market adjustments, however, reflect a greater level of economic uncertainty—specifically, the outsized influence that inflation (indirectly) and interest rates (more directly) are imposing on the market. Total sales in King County fell by 12% in July (to 2,186), after two consecutive monthly increases. What’s more, sales declined much more than the typical seasonal sag of 3% between June and July. Last month’s sluggish sales were 34% below the past-decade average of 3,493 and were the lowest of any July since 2012.
Inventory, on the other hand, continued to expand, growing by 4% (to 4,110)— the fifth consecutive monthly increase— though this was by less than the typical seasonal expansion (of 6%). That said, July’s total homes for sale was 37% below the past 10-year July average and was the second-lowest July inventory count on record (going back to 2006). Given the backdrop of decreasing sales counts and growing listings, the overall months of inventory metric (MOI) increased to 1.9 in July. And while that’s up from the 1.6 months of inventory recorded in June, it represents a market that deeply favors sellers (a sellers’ market is characterized by a MOI ratio that’s less than 4). The residential and condo markets each favored sellers in July, with MOI’s of 1.5 and 2.0, respectively. The MOI ratios for both market segments have been increasing of
Copyright © 2023 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 August22, 2023. 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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