Puget Sound housing market sees some 'turbulence,' uncertainty due to COVID-19

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The housing market in the Puget Sound region experienced some "turbulence" and uncertainty in March as the novel coronavirus outbreak impacted nearly ever corner of life across the country.

Local real estate agents warn the stay-at-home order and other social distancing measures put into place in Washington toward the end of March will have impacts on the housing market in the months to come. But agents are also working to abide by social distancing guidelines through technology and virtual tours, and buyers and sellers are still taking advantage of historically low interest rates and low inventory in the region.

According to the March report from Northwest Multiple Listing Service -- which covers 23 counties across Western Washington -- the number of new listings, closed and pending sales went up month over month in March when compared to February. In King County, there were 3,787 new listings added, up from less than 3,000 added last month, but fewer than the more than 4,000 listings added in March 2019. The number of closed sales in March in King County was 2,540, up from 1,891 in February and the median price homes sold also rose, month over month.

Although these numbers reflect a strong housing market, real estate agents expect they don't yet show what's started to happen as Gov. Jay Inslee's stay-at-home order remains in place and people become more cautious.

Mike Grady, president and COO at Coldwell Banker Bain said he expects all of the numbers reported will go down in April and May due to the order, which shut down all nonessential businesses and banned all gatherings. Other agents said the outbreak has meant business is moving at a different pace.

“As our real estate industry has adapted to the evolving waves rippling from the COVID-19 pandemic, the response from the agents in my office has been to go slow,” stated NWMLS board chairman Robb Wasser, branch manager at Windermere Real Estate/East in Bellevue. “While we have been given the latitude necessary to help clients in pending transactions get to the finish line, the recent revision from the Governor’s Office allowing agents to show homes has been met with significant caution and care within my office."

As social distancing measures and guidelines evolved throughout March, so did guidelines for the housing market.

In mid-March, NWMLS announced it would temporarily suspend in-person public and broker open houses. That announcement came before the governor issued the stay-at-home order. After some initial confusion, real estate and mortgage lending activities are now considered essential activities, but strict social distancing measures must be followed. The stay-at-home order also bans open houses and emphasizes that as much activity as can be done remote, should be.

Real estate agents had already been using technology before the outbreak, but they began relying more heavily on videos and virtual tours as social distancing measures were put into place. Agents were also taking more steps to clean and disinfect areas, in attempts to do everything possible to keep people safe.

Dick Beeson, managing broker at RE/MAX Northwest Realtors in Gig Harbor, said every part of business is moving much slower during the outbreak.

“The ability to transact business at all has been facilitated and allowed with tight restrictions and major concerns,” he said. “Like Interstate 5, if there’s an accident ahead, you creep along as you pass by it. The market is not totally stopped, but around half the business is on hold. And we’re creeping along right now.”

He said the virus has put a "wrinkle" in the real estate market.

"That wrinkle has produced fewer pending sales and fewer homes coming on the market, and that means buyers are taking more time to make decisions in this new environment,” Beeson said. “It also means sellers, for the first time in a long time, don’t have instantaneous offers and must exercise patience, too.”

Still, J. Lennox Scott, chairman and CEO of John L. Scott Real Estate, said the company had actually seen some pick up since the initial confusion over what the stay-at-home order meant for the housing market.

“The local real estate market experienced a bit of turbulence in late March as the coronavirus crisis evolved,” Scott said. “Following statewide orders, the market virtually paused for a few days, but began picking up after real estate guidelines were adjusted to support social distancing."

He said with new guidelines, buyers and sellers can continue taking advantage of very low interest rates.

"With inventory shortages in many price ranges, the focus remains on each new listing," he said. "Though our business practices have adjusted, we’re seeing sales activity starting to pick back up."

Windermere Chief Economist Matthew Gardner also remained optimistic.

“The Puget Sound was in a strong position when COVID-19 hit and will be set to flourish again once this situation has passed,” he said.

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