How did the pandemic affect the real estate market?
In a typical King County peak real estate season, May is the month with the most new listings and June is second-highest after a small dip.
The 2020 curve looks very different. Not surprisingly, we saw a significant drop in April followed by a climb over May and June, then a steady increase in July that held in August. September slowed slightly.
We can reasonably conclude that homes that would likely have been listed in April and May were instead distributed over the months from April through September (and may still be hitting the market in October).
The picture gets more interesting when we look at new listings next to pending listings. A pending listing represents the situation where a seller has accepted a buyer’s offer.
This data shows why the King County market feels very competitive in the fall of 2020: we missed the May peak of new listings, but homes continue to sell.
Using pending listings as the measure of peak season, we see that May is typically the peak. In 2020, August has the most pending listings.
In other words: the pandemic shifted the peak month from May to August.
Of course, new listings don’t represent all available listings. When we look at active listings next to pending listings, it becomes crystal clear that competition is currently high in King County.
Not since April, when new listings fell due to the pandemic, have we seen a typical non-peak gap between active listings and pending listings. The year started with high competition and, even with April’s drop in activity and new listings spread out over the summer rather than concentrated in a May peak, the number of pending homes is only slightly below active listings throughout summer and into fall. This indicates a continuing shortage of inventory.
The question now is exactly how many listings were held back over the spring and summer? Are they still hitting the market?
October will be a curious month. It typically sees increased competition, a “second peak” driven by sellers who want to sell before the end of the year and buyers who want better deals than they might get during the competitive peak.
So, sellers who held back during the spring and sellers who were waiting for the fall regardless of the pandemic may combine to deliver an October that’s more competitive than usual.
Our monthly market update will reveal what happens in October 2020 and the rest of the year.
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