Clark County’s housing market showed a slight year-over-year decline in sales and new listings for March, offering the first hint of how the coronavirus pandemic will impact residential real estate. The data comes from the latest Market Action report from the Regional Multiple Listing Service.
“It was better than I expected given we only had about 15 days of regular sales activity,” Terry Wollam, managing broker at ReMax Equity Group in Vancouver, wrote in an email.
Gov. Jay Inslee imposed a statewide stay-at-home order on March 23, so the impact is only partially reflected in the month’s real estate numbers. The order does not prohibit real estate sales, but it does apply restrictions such as allowing home tours only by appointment and involving only one real estate agent and one potential buyer.
“The COVID-19 shutdown dramatically changed this market in the third week of March,” Mike Lamb, a broker at Windermere Stellar in Vancouver, wrote in his own monthly report. “So this is really a tale of two very different markets.”
The industry already routinely used digital options such as Zoom video calling, virtual tours and e-signing tools, Lamb wrote in an email, so it’s been easy to step up the use of those features. But that doesn’t work in all cases, he added, because some buyers won’t want to buy a house that they haven’t physically toured, and there are concerns about in-person meetings even if they comply with the stay-at-home order.
“There are all kinds of real world issues, like sellers who say they don’t want their house shown,” he wrote. “Or agents who don’t want to risk being exposed to the virus.”
Sales activity
Despite the year-over-year decline, the numbers all improved from February, according to the RMLS report. The market added 1,022 new listings in March, a 31 percent jump from the 780 listings the month before but a 0.6 percent decrease from the 1,028 in March 2019.
However, Lamb noted in his report that the listing activity was stronger in the first half of the month, with a decline in the final two weeks.
Pending sales were reported at 750, a 4.5 percent increase over the 718 reported in February, but an 11.3 percent drop from the 846 in March of the prior year. Closed sales, at 620, saw a 20.6 percent spike from February’s 514, but a 3 percent year-over-year decline from March 2019’s 639. Overall sales activity declined in the second half of the month, Wollam wrote.
Lamb attributed the relatively small year-over-year drop in closed sales to strong market demand in December, January and February.
“While total sales for the first quarter looked pretty good, and while April’s closings may not be too bad, going forward closings and total sales are going to lag until after we have started to recover,” he wrote.
The region’s inventory in months, an estimate of the time needed to sell through the remaining inventory on the market, held steady from March to February at 2.1.
Sale prices increased, with the average rising from $417,500 in February to $426,300 in March. The median sale price rose from $386,700 in February to $391,700 in March. The numbers also show a year-over-year gain, with the average price rising 7.4 percent and the median rising 6.7 percent compared with March 2019.
Like closed sales, home prices are a lagging indicator, Lamb wrote, so the shutdown didn’t have much of a visible impact on March’s numbers. Wollam predicted that ongoing low inventory levels will help real estate values stay relatively steady during the pandemic.
The local office of John L. Scott real estate released a monthly report based on its own sales data, with a breakdown of Clark County sales and inventory by price range.
Consistent with recent months, the breakdown showed the largest inventory shortages among homes priced below $500,000 — although unlike in some prior months, the number of new listings did exceed the number of pending sales across all price ranges.
Still, the breakdown estimated only 1.1 months of remaining supply for homes priced below $250,000, half a month for homes priced between $250,000 and $350,000, and one month for homes priced from $350,000 to $500,000.
Ongoing impacts
The COVID-19 situation will have additional unprecedented effects on the real estate market, Lamb wrote, but he added that there are a few consistent features of the Clark County housing market that he expects will continue even during the pandemic.
The market has been characterized by historically low inventory for the past five years, he wrote, and demand has outstripped supply since the end of the Great Recession. Some people may no longer be in a position to buy after the current crisis, he said, but inventory will likely remain low and demand will likely continue to exceed it.
Interest rates have also been at or near record lows in recent years, he wrote, and lenders expect that to continue during the recovery from the pandemic’s economic fallout.
“The question is, how long it will be until the worst is over and the stay at home orders loosen?” he wrote. “The sooner that happens, the quicker the recovery.”
Wollam noted that the governor’s order is going to dampen new listing inventory because it prohibits residential construction except in emergency situations. New construction currently makes up 29 percent of the market’s active listing inventory, Wollam wrote, and that 29 percent is split nearly equally between homes that have been proposed and homes that are at various stages of construction.
“Almost a third of the inventory in SW WA has been put on hold from completion,” he wrote.
Washington’s stay-at-home order was originally scheduled to run for two weeks, but Inslee announced on April 2 that he would extend it. It is currently scheduled to remain in effect through May 4, although Inslee has stated that he may need to extend restrictions further based on how the pandemic is progressing.
