DAVE ROSS

Housing inventory on the rise in the Pacific Northwest, most available units since 2019

Aug 5, 2022, 1:34 PM

Seattle homebuyers...

Redfin says Seattle ranks 6th among metro areas being abandoned by homebuyers. (Photo by Stephen Brashear/Getty Images for Redfin)

(Photo by Stephen Brashear/Getty Images for Redfin)

Western Washington’s housing market continues to balance itself out over the summer, with Northwest Multiple Listing Service (NMLS) brokers reporting more housing availability throughout the region.

NMLS confirmed inventory of single-family homes and condominiums across 26 counties served in the Pacific Northwest has exceeded two months for the first time since January 2019 — when there was 2.3 months of supply.

Most recent statistics confirmed the area has 2.01 months of housing inventory.

“The big thing right now is there’s a lot more inventory in the marketplace,” said Matthew Gardner, Chief Economist for Windermere Real Estate. “So, if you look at the number of listings available, it’s up significantly across the board.”

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Months’ supply refers to the number of months it would take for the current inventory of homes on the market to sell given the current sales pace. Historically, six months of supply is associated with moderate price appreciation, and a lower level of months’ supply tends to push prices up more rapidly.

Alongside increased inflation, mortgage rates have spiked nationally, with July’s 5.41% mark the highest since June 2009 (5.42%). The year’s high, 5.52% in June, is the highest since 2008’s seven-month stretch from May to November during the Great Recession, when it surpassed 6.0%.

“We’re down to about 5.2%, so certainly better than we’ve seen,” Gardner said. “And that might be encouraging more buyers to go there. But more importantly, now there’s more choice for them. So it doesn’t mean they have to look at the first house and say, ‘I’ve got to make an offer on it.’ So I wouldn’t say that buyers are in the driver’s seat yet, but more choice means it’s coming down a bit.”

Active listings have nearly doubled from a year ago, jumping from 7,948 single-family homes and condos to 15,381 (up 93.5%). The addition of 11,805 new listings during the month contributed to the boost. Compared to June, the selection expanded by 1,976 listings (up 14.7%).

“America has had 19 significant recessions in its history. There are always going to be ups and downs. That’s just by the very nature of it. You hear recession, it scares everyone. But again, mainly because of the housing factor,” Gardner said. “We had a recession back in 2020, by definition, two negative quarters, but it was driven by one thing, COVID-19. We actually saw a 32% drop, the biggest drop in history in the second quarter of 2020, followed by a 36% increase the following quarter, as we were starting to think we could come out of it. So even if it is, in all respects, a recession, we’ll know that down the road at some point. It’s something which I think is really nothing to be overly concerned about.”

Industry experts consider less than four months of inventory to be a “seller’s market.” NMLS noted every county in the report — except San Juan and Columbia — had less than four months. All four counties in the Puget Sound region had less than 1.9 months of supply.

“70% of the U.S. economy is consumption, the U.S. buying stuff. We make it more expensive, which slows the economy down. But the [Federal Reserve] has a really bad track record at soft landings as they tend to do too much, too late or too little, too early,” Gardner said. “So I think for most analysts, including myself, when the Fed starts getting involved again, we get a little bit cautious because it is very hard for them to do, but we are seeing some softening in inflation.”

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Housing inventory on the rise in the Pacific Northwest, most available units since 2019