Covid RE Market Update

In Clark County, WA

What selling today looks like

You won’t read this in the paper.

June 9, 2020

(updated from last week)

(Why weekly? Cause conditions are 

changing so quickly, unusually and unexpectedly)

 LOCKBOX (buyer) ACTIVITY CONTINUES TO GROW

As a real estate agent for the last nearly 32 years, I have grown accustomed to normal seasonal changes such as: 

Buyer activity slows down once school starts. 

Buyers slow down even more during the year-end holidays and so do sellers. 

Buyers start strong in January yet sellers do not list until after March. 

During the early and mid summer the market is as balanced as it will ever be. 

There is a confidence that comes with knowing what to expect and how I can advise clients so as to take advantage of what is coming or at least what normally comes. 

Then an event like Covid comes along and shakes everything up. No one knows what to expect and for me, that is unsettling. These conditions drive me to pay closer attention to the numbers and stats, looking for what to anticipate and how to advise. I am always doing my best to predict what is around the next turn and wanting to share my observations and predictions.

The presence of Covid has created a new climate in the world of real estate. Normally this time of year the number of listings is beginning to surge and buyers are seeing increasing choices as inventories grow. But Covid has created major changes. Improving conditions for buyers and greater choices normal for the season is not what is happening.

Let me start with an example. A few months ago my oldest son and his wife came up from San Francisco to buy a home. They felt there was no way they were ever going to afford a home in that Big City. They saw opportunity in Clark County and they were ready for a change of lifestyle. 

The second home they wrote on was priced at $375,000, was on just over 2 acres, built in the 1970s and seemed free of any updating. It was livable but needed a lot of work. The home received 9 offers in one week and finally sold for $20,000 over list price. I was surprised but the kids were not too alarmed. The market in SF was even crazier. 

The example cited above is extreme for this time of year in Clark County in normal times. But these are not normal times. Our market has been touched by the effects of Covid. Who could have predicted these results. 

Here is where we are now.

It all has to do with the old supply and demand (remember Econ 101?)

Demand:     The best gauge of current demand is lockbox activity data. Lockbox readings are accurate up to one week ago. We just got the data from the week ending June 7, 2020. We had 3885 showings, just 43 short of the high from mid March of 3928. We have had 9 steady continuous weeks of increases in buyer activity rising from the low of 1732 showings in early April. Over the last 9 weeks we have seen buyer activity rise every week from 1732 to 3885 showings per week.

We had strong buyer demand last March. We are now at the same levels of demand that we had in mid March, but supply is far from the same as last March. While demand has steadily increased, supply has remained relatively steady. 

Supply:      As the reality of Covid hit us, we saw our NEW listings decline by 38% from March to April. They went from about 1,000 new listings in March to 620 new listings in April. WOW. I doubt that has happened in the history of RMLS but perhaps I am wrong. I can say with certainty that it is highly unusual. 

It is also unusual for the TOTAL number of listings to move up such a small amount this time of year. Listings normally increase at a faster rate. We saw total listings grow from1302 in March to 1334 in April, an increase of just 32 or 2%.  In 2019 during the same period we saw total listings increase over 3 fold, or 7%, from 1532 to 1642.  

CONCLUSION

So, between these two factors, supply and demand, we have an already strong seller’s market that seems to be growing stronger every week. 

  1. These conditions present growing challenges for buyers.
  1. We are seeing values for homes growing. 
  1. These conditions are presenting sellers with the opportunity to use techniques to encourage higher bidding among buyers. 
  1. Sellers should be prepared to deal with the possibility of low appraisals. The effects of a low appraisal can be minimized through early negotiations and selecting the right buyer.

I suspect we will see inventory levels drop (suggesting a stronger seller’s market) in the monthly report due out next week for May stats.

As the Country enters phase II of Covid we are also seeing early signs the number of cases is increasing again. I suspect it will be a long while before Washington’s safety measures are relaxed further so we can move to phase IV.

Personal Survival Techniques During These Challenging Times

I do not think most of us are aware of how challenging these times are on us or how they are affecting us. In general many of us have poor introspection skills, or at least I know that is the case for me. Between lifestyle changes due to controls for Covid to the police brutality and riots nationwide, I believe that most of us, or at least me, are in a state of denial as to how these events affect us. It does not seem natural to recognize these emotions. For me this fact hit home when I stumbled upon some wonderfully warm news and information in a few podcasts. As I listened, I felt a surge of emotion that overpowered me and I realized the warmth was something I had not experienced for many years. Negativity from outside my personal life had prevailed in my life for the last few years.The void had crept up on me so gradually I did not realize it was happening. 

Has anyone else experienced something like this or am I  just weird?

Any thoughts on just what is going on?

Thank you.

Regards,

Chris Kelsey, Keller Williams PP

chris@ckelsey.com

ckelsey.com

360-921-2203

Leave a Comment

Your email address will not be published. Required fields are marked *