The Western Washington housing market continues to balance over the summer, with North West Multiple Listing Service (NMLS) brokers are reporting greater housing availability across the region.
NMLS-confirmed inventory of single-family homes and condominiums in 26 serviced counties in the Pacific Northwest topped two months for the first time since January 2019 — when there was 2.3 months of supply.
The most recent statistics confirmed that the region has 2.01 months of housing inventory.
“The big thing right now is there’s a lot more inventory on the market,” said Matthew Gardner, chief economist for Windermere Real Estate. “So if you look at the number of ads available, it’s increased dramatically 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 pace of sales. Historically, six months of supply is associated with moderate price appreciation, and a lower level of monthly supply tends to push prices up faster.
Along with rising inflation, mortgage rates soared nationally, with July’s 5.41% the highest since June 2009 (5.42%). The year’s high of 5.52% in June is the highest since the seven-month period of 2008, from May to November, during the Great Recession, when it exceeded 6.0%.
“We’re down to about 5.2%, so definitely better than what we’ve seen,” Gardner said. “And that might encourage more buyers to go. But more importantly, they now have more choice. So that doesn’t mean they have to look at the first house and say, ‘I have to make an offer on it.’ So I wouldn’t say shoppers are in the driver’s seat yet, but more choice means it’s going down a bit.”
Current listings have almost doubled over the past year, going 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 growth. Compared to June, the selection was enriched by 1,976 references (+14.7%).
“America has had 19 significant recessions in its history. There will always be ups and downs. It’s just by the very nature of it. You hear the recession, it scares everyone. But again, mostly because of the housing factor,” Gardner said. “We had a recession in 2020, by definition, two negative quarters, but it was driven by one thing, COVID-19. We actually saw a drop of 32%, 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 that we could manage. t is, by all accounts, a recession, we will know at some point, and that is something that I really don’t think we need to worry about too much.
Industry experts consider less than four months of inventory to be a “seller’s market.” The NMLS noted that every county in the report — except for San Juan and Columbia — was less than four months old. All four counties in the Puget Sound region had less than 1.9 months of supply.
“70% of the American economy is consumption, the United States buys things. We make it more expensive, which slows down the economy. But the [Federal Reserve] has a very bad track record when it comes to soft landings because they tend to do too much too late or too little too soon,” Gardner said. “So I think for most analysts, myself included, when the Fed starts getting involved again, we get a little bit cautious because it’s very difficult for them to do that, but we see some slowdown in inflation.”
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