Our current situation isn’t ideal, but might home values increase anyway?
To determine whether our market is going to appreciate or depreciate during this interesting year, we need to first look at some numbers.
Right now, our market is a tale of two price points. For example, inventory in the market under $800,000 is down 38.6% from May 1 to May 15, while pending sales are down 8.4%.
In the $800,000 and up (luxury) market, our inventory is down 19%, while pending sales are down 34.3%.
The lower end price point is significantly higher right now in terms of activity.
In Southwest Washington, inventory is down by 30% overall while pending sales are down 9%. In the luxury market, inventory is down 32%, and pending sales are down 21%.
“The fact that 70% of homeowners have equity is huge.”
As you can see, the luxury market is getting smacked, but the good news is that activity has been improving dramatically in the last few weeks. Listing inventory has stayed significantly low and I believe we will see a tiny bit of appreciation this year in the market under $800,000 and a tiny bit of depreciation in the luxury market.
I don’t think we’re headed for another recession for a few reasons. One is that 70% of area homeowners have equity right now. Also, 90% of the unemployment that is happening is temporary and once the shelter-in-place order is lifted, we’ll start to see things improve.
If you have any questions for me, don’t hesitate to reach out via phone or email. I look forward to hearing from you.
