Summary: Seasons change quickly, and much like the change in temperature, so too do home prices and real estate markets change. This begs the question: Will home prices in Washington State cool down this summer, or will the market remain hot into the second half of 2020 and into 2021? This article will explore that question.
Will home prices in Washington State cool down or heat up this summer? The best way to answer these questions is to look at current supply and demand trends.
In major cities across Washington, there is a serious shortage of housing supply relative to demand. This means that home buyers are competing fiercely for limited inventory.
And with low inventory typically comes an increase in home prices. That’s happened over the past 12 months in Washington, where the average home price has increased 6.6% over the past year.
Effect of COVID-19 on Washington Housing Market
High demand and low inventory are still the driving factors within Washington’s housing markets. And has pushed prices north. The median home sales price in Washington rose to $428,800 as of June 2020.
Related: Co-borrowing on the rise in WA
As for the summer months, we could very well see a reduction in the number of home sales, mainly because of the current health crisis we are experiencing. That said, the market is starting top pick up, and buyers that may have been on the sidelines over the past few weeks because of the virus may now be coming out of the woodworks.
But the fact that many sellers have held off on putting their homes up for sale throughout the pandemic has left few homes for buyers to choose from. This could play a role in home prices in Washington, though it’s difficult to make an accurate forecast of where prices will be over the coming months due to economic uncertainty stemming from the pandemic.
Supply of Homes Still Below Average
In some ways, the real estate market in Washington is something of a special case. In the state’s major population centers like Seattle, there is currently less than a two-month supply of homes for sale. That’s well below the national average, as well as the average is seen in other states.
This, combined with steady demand from buyers, will probably keep Washington house values rising through the winter and into next year.
According to the UW report cited earlier, 20 of the 39 counties in Washington State recorded record high median home prices during the second quarter of 2017. And yet they continue to climb.
Related: Is now the time to buy a home?
Is New Construction Lagging Behind?
With all of this housing demand in Washington, you would think the home building industry would be ramping. But that’s actually not the case.
Home construction was picking up in Washington and across the nation prior to the coronavirus pandemic. But since the virus hit the US, construction has slowed down, which is having further impact on housing inventory.
In other words, we can probably expect demand to outstrip supply in most housing markets across the state, at least for the foreseeable future. And this will continue to put upward pressure on home prices in Washington, even during the summer months of 2020.
Disclaimer: This article includes forecasts, data and trends provided by third parties not associated with our company. We have compiled this information as an educational service for our readers.
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