How has Covid-19 impacted the Pierce County Real Estate Market?
This month, we are looking at the Pierce County and Tacoma real estate markets, and how they have been impacted by COVID-19, and the resulting Stay at Home order. The graphs below represent a week-by-week tally from early March, to present time (first week of May, 2020).
PIERCE COUNTY - BUYER OR SELLER’S MARKET?
Since the beginning of March, Pierce County is in what we would consider a “Seller’s market,” meaning the number of homes pending sale exceed the number of active listings available to purchase (we also use this formula to calculate the “absorption rate,” or “likelihood of selling.”) Anything below three months worth of inventory is typically going to present itself as a Seller’s market. The impact of a Seller’s market is usually less days on market for new listings, and oftentimes, if a home is in well prepared and well priced, we will see multiple offers -- even with a pandemic happening! Once a home is under contract, Buyer’s may have less leverage in inspection negotiations during a Seller’s market.
Take a look at the graph below:
The blue bar represents the number of pending properties, while the green represents the number of active. Each week is independent of each other. You can see in Week 1, as we discussed in earlier “How’s the Market” blogs, we were experiencing record lows in inventory.
In the middle of April, you can see the market almost balancing, with nearly equal amounts of Pending and Active listings. We have seen a dramatic shift in trends during the past couple of weeks, with Pending sales outpacing Active listings again by as much as 200%, signaling the return of a strong Seller’s market.
Does this mean we are gearing up for a typical Summer in our market? Not sure there will be anything typical about 2020, but we do expect there will be a release of inventory once Sellers feel more comfortable showing their homes. This could result in a more active late Summer market than we usually see.
Is the seller’s market trend applicable to all markets? Let’s take a look at homes listed over $500,000:
Currently, we’re in what we would consider a ‘Dual Market.’ This means at different price points, we are seeing different trends. Before Governer’s ‘Stay At Home’ order was enacted, we were in a sellers market in the $500,000+ segment of the market.
In the four weeks after the order, the market (unsurprisingly) shifted to a Buyer’s market, with Week 6 showing the most significant imbalance. During Week 9, you can see things shifted again, reflecting a shift back to a Seller’s market for the first time since early March.
Is this a sign of things to come? Contact one of our brokers to find out more about what these statistics mean for your home purchase or sale.
Let’s take a look at Tacoma’s Pending and Active properties week-by-week, from the beginning of March 2020:
Similar to the trend in Pierce County, Tacoma saw the closest thing to a balanced market between pendings and active properties during in Week 7. The next two weeks were back to a strong sellers market, however note the disparity between the beginning of March and late April/early May.
Let’s take a look at the above $500,000 market to see how it compares with Pierce County:
In middle to late March, the above $500,000 price range showed a strong Seller’s market. The next six weeks however, things shifted to a Buyer’s market. What will early May tell us? We’ll be watching closely and sharing our insights as we move out of the Stay at Home order and into Phase II.
HAS THE PIERCE COUNTY MARKET BEEN IMPACTED BY COVID-19?
Absolutely. We have strict guidelines in place around how we sell real estate, including new measures for showings, and our physical offices are still closed. The market, as you can see, has been adjusting to these changes for the last two months. The good news for Sellers is that it’s still a Seller’s market… for now, and with the caveat that there are variations within each neighborhood and price range.
Real estate is always local, and we’ve been in uncharted waters these last two months. It’s never been more important to seek the counsel of a trusted REALTOR; they will be able to help you navigate the nuances of these different markets, and interpret what the trends mean for your home sale or search.