Economist sees mixed Seattle housing market with inventory decreasing

Feb 7, 2023, 10:06 AM | Updated: 10:45 am
Seattle housing...
Seattle economist Matthew Gardner tells Seattle's Morning News he sees a housing market that's in transition with inventory decreasing. (Flickr)

Seattle economist Matthew Gardner, the Chief Economist for Windermere Real Estate, sees a housing market that’s in transition as home prices start to drop while the number of home sales rises.

Talking to Dave Ross on Seattle’s Morning News, Gardner said, “Right now, our home prices are certainly down year over year. They’re up in King County and down modestly in Pierce and Snohomish.”

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Gardner told Dave that looking at home prices year-over-year doesn’t tell the whole story.

“To compare, literally this month to this month, rather than looking at it on an annual average, is a better way to look at it. If you just compare this coming April and May, the numbers are going to be horrible. There’s no doubt about it,” Gardner explained.

“So what am I looking at? I think we’ve certainly seen a lot more homes for sale than we’ve seen in the last several years. Up almost 200% here in Puget Sound. However, if you go back to the last pre-COVID year when [there were] homes available for sale are actually still down by more than 30%.”

Boeing’s future in the region may be brighter than many believe

Dave said he watched the 747 ceremonies last week at Boeing and was surprised at how upbeat executives were at the future of aerospace in the region. He wanted to know if Gardner saw it that way.

“I actually do. And there are a couple of reasons why,” Gardner cited. “One of which is we need to replace the global fleet of planes over the course of the next 20 to 25 years. Point 2 is that Boeing’s competition has always been Airbus, which has been, in essence, funded to a greater degree by the European Union. Their checkbooks aren’t quite as wide open as they used to be. And that can certainly put Boeing into a better position, arguably, in terms of them [being] able to compete with Europe.”

The real question, Gardner said, is where all the planes are going to be built. He explained that there are many compelling reasons they should be built here.

Latest job numbers don’t tell the whole story

Gardner said that economists’ prediction of the latest job market numbers was one of the biggest misses we’ve had in a long time.

Employers added 517,000 jobs in January as hiring unexpectedly surged despite high inflation, USA Today reported.

The unemployment rate fell from 3.5% to 3.4%, the lowest since 1969, the Labor Department said Friday.

“There’s a couple of reasons for it, one of which is January, and the numbers are seasonally adjusted in January, is notorious for being bad,” Gardner said. “But if you look at the unseasonally adjusted numbers, the country lost 2.3 million jobs. So that’s why seasonality is so important, but it is notoriously bad.”

Gardner told KIRO Newsradio that despite that, the numbers were far more robust than anyone had expected.

“The economy clearly is not slowing down at the speed the Federal Reserve would like to see it.”

Economic recovery impacts office occupancy rates in Seattle

Gardner said the economy is having a direct impact on Seattle office occupancy rates being at 50%.

“We haven’t yet seen the number of people coming back to the office that I think a lot of business owners would like to see. And I think a lot of them actually waiting for the economy to slow down a bit more, which means that can give them, ideally, the leverage or leverage to get people to come back,” he said. “It clearly hasn’t happened yet.”

Listen to Seattle’s Morning News with Dave Ross and Colleen O’Brien weekday mornings from 5 – 9 a.m. on KIRO Newsradio, 97.3 FM. Subscribe to the podcast here.

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Economist sees mixed Seattle housing market with inventory decreasing