I expect our market to remain strong to close out 2020.

Way back in March, when we entered into the COVID crisis, many thought the real estate market would crash. To a certain degree, March and April were ‘down’ months in terms of units sold, but pricing stayed consistent. Ever since that time frame, pricing, appreciation, and home sales have taken off on a gallop, but will our market stay strong throughout the rest of the year and into 2021?

Those who know me know that one of my favorite sayings is, “The best day to buy real estate was yesterday.” We know what yesterday’s market was like; we don’t know what tomorrow’s market will bring. In an election year, the market typically takes a deep breath just to figure out what’s going on. It doesn’t rise or fall; it just holds steady. 

“I expect pricing to remain strong throughout the rest of the year.”

I don’t think that will happen during the latter half of this year, though. Let’s look at where we were statistically during August to get a better idea of where we’re going here in Snohomish County:

  • There were about 1,200 closed sales, which is on par with August 2019
  • There were about 7,500 closed sales year to date, which is a slight drop from the 8,000 close sales we saw during the same time last year—I think this is more the result of availability than demand
  • The average price rose 14.5% ($539,000 to $617,000) compared to August 2019, which made the year-to-date comparison jump 8%

What’s causing all of this? In July, homebuyers got a boost because interest rates dropped month over month from 3.23% to 3%. That drop gave them an additional $15,000 worth of purchasing power. If that percentage drops at the same pace to 2.7% in the fourth quarter, buyers will have an additional $32,000 worth of buying power. 

As demand goes up, inventory goes down. That being said, I expect pricing to remain strong throughout the rest of the year. The pandemic continues to impact the economy, but homebuyers continue to take advantage of historically low interest rates. Existing homeowners are still in control, though, because their equity continues to rise. 

The bottom line is, you should expect a strong finish to 2020 and a strong start to 2021 if the Federal Reserve keeps interest rates this low. If it were me, I’d take advantage of the market I know instead of the market I don’t know. 

As always, if you have questions about our market or are thinking of buying or selling soon, don’t hesitate to reach out to me. I’m happy to help.