Will a recession affect Seattle’s housing market?
“How’s the market?” It’s the number one question we get in any given conversation when people discover we’re in Real Estate. Here is an old question we haven’t been asked in nearly decade, “How do you think the recession will affect Seattle home prices?” The answer is a bit more detailed, so of course we have to blog about it.
While 42% of economists surveyed by the Wall Street Journal estimate that the next recession will begin in 2020, and another 28% believe it will begin in 2021, what’s top of mind for us right now is how this will affect the Seattle real estate market.
It’s important to know that of the last five recessions that occurred since 1980, only two out of five saw home price decrease. Of course, in 2008 with the Great Recession caused by the housing crash and mortgage meltdown as well as the 1991 recession caused by oil price shock.
While an economic slowdown is predicted, early projections tell us that home prices won’t be impacted to a level that they will depreciate. While appreciation rates are no longer accelerating at the same rate as previous years, we are still seeing year-over-year increases which are predicted to continue at 5.3% for the state of Washington in the next 12 months. Compared to the national average of 4.5% appreciation, home prices for Washington state should still maintain steady growth.
We anticipate that the inventory supply vs. demand ratio will remain low as Seattle continues to see a low inventory supply of 1.7 months of inventory vs. the national average of over 3 months.
Is there a recession coming? Yes.
When? Soon (or maybe not)
Will it affect Seattle home prices? Most likely not. Either way, when it does come, it may be over before we notice.
ABOUT THE AUTHORS:
Jeremey Johnson and Cassie Walker Johnson are principals and managing brokers for Johnson & Walker, based at Windermere Real Estate in Seattle, WA. They specialize in consulting with home buyers and sellers in the greater Seattle area. Thinking about buying or selling in Seattle? Reach out and let’s begin the conversation.