How Did COVID-19 Impact the WA State Real Estate Market?

Published:
June 4, 2020
Last updated:
March 30, 2022
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The coronavirus wreaked havoc on many aspects of society in Washington and the US as a whole. But how did it impact Washington’s real estate market?

COVID-10 pandemic has certainly been a trial for real estate markets across the nation. As Americans were being asked to practice physical distancing in an effort to curb the spread of the virus, many industries have been affected, putting many aspects of day-to-day life on hold.

Interestingly, Washington State was among the first in the country to be heavily impacted by COVID-19. In late January 2020, the first case of infection was reported in the Evergreen State. Certain parts of the state were thought to be early “hot spots” in the US, but that didn’t necessarily pan out. Instead, other states in the country ended up becoming hotbeds of the virus.

While most industries suffered during the health crisis, the real estate market didn’t. Although the first couple of months were a bit shaky, the housing market in Washington and across the country fared quite well.

The Effect of COVID-19 on the Washington Real Estate Market

As mentioned, the Washington State real estate market remained rather healthy.

According to Redfin, “Home prices statewide were up 16.5% year-over-year in February. At the same time, the number of homes sold fell 10.6% and the number of homes for sale fell 35.1%.” Almost 58% of homes sold went for more than the asking price. It’s a seller’s market currently.

COVID-19 Has Resulted in Changes in the Housing Market

There have been some changes in the market in response to the coronaviru, which may be here to stay. For instance, open houses have gone virtual in many cases. Many buyers are choosing to visit homes virtually rather than in person.

Technology is being heavily relied upon as virtual tours are still being used. This may be a good thing, as it gives buyers a chance to scope out what’s out there and narrow down their searches before physically visiting a home. This saves everyone a lot of time and hassle.

The for sale market may continue to broaden

After years of homebuyers looking to move closer to big cities and experience and urban lifestylec. We have seen an increase in homebuyers including millennials looking for more space.

Will this be a long-term trend with an uptick in buyers moving to the suburbs and further away from cities? With the expectation that many temporary remote working situations will become permanent, it will open up opportunities for individuals and families to move to areas where you can get a lot more bang for your buck.

Low Mortgage Interest Rates May Incentivize Buyers

Considering this, it’s nearly impossible to forecast exactly what will happen in the near future in terms of the real estate market in Washington and other states across the country. But with interest rates as low as they are right now, buyers may have plenty of incentive to get into the market today to take advantage of these lower rates.

According to Freddie Mac, as of March 30, 2022, “The 30-year fixed-rate mortgage increased by more than a quarter of a percent as mortgage rates across all loan types continued to move up. Rising inflation, escalating geopolitical uncertainty and the Federal Reserve’s actions are driving rates higher and weakening consumers’ purchasing power. In short, the rise in mortgage rates, combined with continued house price appreciation, is increasing monthly mortgage payments and quickly affecting homebuyers’ ability to keep up with the market.”

The mortgage rate for a 30-year fixed-rate mortgage is currently 4.42%.

While that may be higher than it was last year, it’s still relatively low. Given this, buyers stand to save a great deal of money on their mortgages. The opportunity to lock in at a low rate may encourage buyers to get into the Washington State housing market todayg.

Today’s Mortgage Rates

Home Purchase Applications Down From Last Week

According to the Weekly Mortgage Applications Survey put out by Mortgage Bankers Association (MBA), “The Market Composite Index, a measure of mortgage loan application volume, decreased 6.8 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 6 percent compared with the previous week. The Refinance Index decreased 15 percent from the previous week and was 60 percent lower than the same week one year ago.”

Home Prices in Washington are Booming

The real estate market in Washington has been very hot up to now. According to Zillow, home prices have increased 24.1% over the past 12 months. Right now, the average home price in Washington State is about $593,897. This price growth for single-family homes is most marked in big cities like Seattle. New construction is also up, adding more new listings to the existing homes, but higher demand is still outstripping supply.

That said, it’s difficult to predict with great certainty and accuracy where the vast majority of home prices will be over the coming months. The National Association of REALTORS® expects higher price growth in Washington than in the U.S. in the next 12 months.

Over the past month, we have seen a surge in demand from new homebuyers and a lack of homes on the market. This has resulted in house prices actually moving higher.

Why Choose Sammamish Mortgage?

At Sammamish Mortgage, our loan officers are committed to transparency during the loan application and approval process, meaning you’ll have a good idea of your closing costs from start to finish.

Sammamish Mortgage has been in business since 1992, and has assisted many homebuyers in the Pacific Northwest. If you are looking for mortgage financing in Washington State, we can help you get preapproved. Sammamish Mortgage offers mortgage programs in Colorado, Idaho, Oregon, and Washington.

Contact a loan officer if you have any mortgage-related questions or concerns. If you are ready to move forward, you can view rates, obtain a customized instant rate quote, or apply instantly directly from our website.

Get an Instant Mortgage Rate Quote Today

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