Matthew Gardner COVID-19 Housing & Economic Update: November 2020


We’re back with another episode of “Mondays with Matthew,” with our chief economist, Matthew Gardner. This week he’s diving deep into the dark corners of the latest US home sales data.

Hello there and welcome to the latest episode of Mondays with Matthew. I’m Windermere Real Estate’s Chief Economist, Matthew Gardner.

Today we are going to focus on last Thursday’s data release for US existing home sales activity in October, so let’s get straight to it.


Line graph showing U.S. home sales over the past two years


Well, if anyone out there was still thinking that the market was set to slow, they will have to wait a little longer. Existing home sales rose for the 5th consecutive month to an annual rate of 6.85 million units – and that’s up 4.3% from September and sales were 26.6% higher than we saw a year ago.

And it’s not just the annual rate that rose, as monthly sales came in at 573 thousand – and that’s the highest monthly figure since the market “snapped back’ in July following the initial COVID-19 shutdown.


Bar graph showing the U.S. media sale price of existing homes


And with sales rising, so did prices, with the median price in October measured at $313,000 and that’s up by a massive 15.5% from a year ago and we haven’t seen that pace of price growth since 2006 and it was also the 104th straight month of year-over-year price gains.


Line graph showing U.S. inventory of homes for sale


And we are seeing these significant increases in prices not just because mortgage rates are low – although that certainly isn’t hurting – but the bigger reason is that there’s far more demand than there is supply and, if you remember your college economics classes, what happens to prices when you have limited supply but net new demand? That’s right, they rise.

And as you can see here, there were fewer than 1.4 million homes for sale in October – now, I must add that I seasonally adjust my numbers and NAR doesn’t, but even if you use their figures there were just over 1.4 million homes for sale last month so it’s not much better.

And with tight supply and new demand, their is only 2.7 months of inventory at the current sales pace – and that’s an all-time low.

A balanced market – depending on where in the country you are, is between 4 and 6 months so we are a long way from balance.


Bar graph showing number of offers per home for sale in the U.S.


And to give you a different way to see how competitive the market is, there were an average of almost three and a half offers for every deal that was written last month. Additionally, 7 out of 10 homes sold within four weeks and the median market time coming in at just 21 days – it was 36 days a year ago.


U.S. map showing the annual rate change of home sales


Regionally, sales rose the fastest in the small Northeast region, but all areas saw sales up by over 20 percent.


U.S. map showing the rate change of median home sale prices


And when we look at sale prices, again, very significant increases across the board. I would note that the Northeast saw the greatest price increases for single-family homes – up 21.7% and condo prices rose the most in the Southern states where prices were up by 13.9% year over year.

Well, that’s the big picture, but you know me, I do love to dig into the dark corners of these data releases and, when I did, I found some pretty interesting nuggets there too.


Bar graph showing the yearly change in inventory for single-family homes


I mentioned single-family and multifamily price growth a moment ago, and when we break out the data, the supply numbers were interesting. Here is the year over year change in available inventory and its not surprising to see the number of single-family homes for sale way down but look at condos. Inventory is higher than it was a year ago.

Now, I think it’s too early to suggest that this is wholly due to COVID-19 and families flocking way from our urban centers, but I will be watching to see if this is an anomaly, or the start of a trend.


Line graph showing U.S. single-family home sales


And my first reason for not being overly concerned about the condo market is this. Sales are still rising – up by 5.8% versus September and up by 25.9% year over year – even in the face of increasing inventory.

And single-family sales were up by just a little more – 26.7% year over year, but the month over month pace of single-family sales was actually lower than condos and came in 4.1% higher than in September.


Bar graph showing the yearly change in median sale price of single-family homes


And finally, condo prices are still trending higher after turning negative at the outset of COVID-19 – up 10.3% year over year to $273,600.  Not quite the pace of price growth seen in the single-family world where the median sale prices were up by 16% to $317,700, but not bad at all.

So, there you have it and I think you’ll agree, these were pretty impressive numbers across the board. Certainly, no sign of a slowdown but, as I suggested earlier, I will be watching the multifamily market to see if inventory levels continue to rise and, if they do, we may see price growth starting to slow even if the single family market continues its upward trajectory.

But, again, I must reinforce my view that this pace of price growth is absolutely not sustainable. Of course, very favorable mortgage rates are still in place. In fact, the 30-year hit another all-time record low last week at 2.72%, but I still believe that we are close to the lows that will be seen in this cycle –we’re just not there yet.

Housing continues to outperform with first time buyers still out in force (32% of all sales went to them) and demand for second homes appears solid too – they accounted for 14% of all sales – a figure that matches October 2019 so no visible signs of COVID-19 stress there either.

The bottom line is that something has to give. I am not saying that prices will retreat, rather the pace of growth has to slow even with very significant demand, and it will happen because of one of two reasons or maybe a combination of both.

Either we will hit an affordability ceiling, which will slow the price increases that we are experiencing OR we will see additional supply which will temper prices.

You see, although I find it highly unlikely we will see a significant increase in the number of resale homes coming to market, I do see builders stepping up and developing more homes.

You see, builders are getting bullish – and we know this from the National Association of Homebuilders Market Index which hit another all-time high earlier this month and I believe that this optimism will lead single-family starts to stay well above 1 million units next year and rising even more after that, which will be a relief to some buyers who remain very frustrated by the limited inventory available.

But I am getting ahead of myself.

You see, in 2 weeks’ time I will be sharing my 2021 US housing forecast with you all so I really shouldn’t give too much away right now.

The housing market is still performing – COVID or no COVID – and this will continue as we close out the year even if we see some States slowing their economies as new coronavirus rates spike.

As always, if you’ve got any questions about my comments today, I’d love to hear from you but in the meantime, take care out there, and I hope that you will join me again in 2 weeks when I will be revealing my US housing market forecast for 2021.

Bye now.

Posted on November 23, 2020 at 6:50 pm
Sheri Butler | Posted in Blog |

Local Market Update: November 2020

The number of people who can work remotely may be changing the way we view our homes, but one trend has not changed. The local housing market in October remained unseasonably hot. And that doesn’t show signs of changing any time soon.

October saw continued low inventory and record-level sales, with the number of sales exceeding that of 2019 year-to-date.

While new listings are on the rise, they are being snapped up quickly and many homes are selling in a matter of days. In King County there were 38% fewer single-family homes on the market as compared to a year ago. Snohomish County had 59% fewer listings.  A four-month supply of homes for sale is considered a balanced market, but King and Snohomish counties currently have less than one month of supply.

With supply unable to keep up with demand, home prices are escalating at double-digit rates. The median single-family home price in King County rose 14% over a year ago to $745,000. Prices in Snohomish County jumped 17% year-over-year to a record high of $579,972. About half the homes that closed in October sold for over the asking price as compared to about a quarter of the homes the same time last year.

The real estate market here is uncommonly resilient. Growing employment in major tech industries and an enviable quality of life have made our region one of the fastest growing areas in the country. With interest rates remaining at record lows, we may well skip the traditional slowing in the winter market altogether.

The charts below provide a brief overview of market activity. If you are interested in more information, every Monday Windermere Chief Economist Matthew Gardner provides an update regarding the impact of COVID-19 on the US economy and housing market. You can get Matthew’s latest update here.

Posted on November 16, 2020 at 9:08 pm
Sheri Butler | Posted in Blog |

Happening on the Eastside: November 2020

Each month, we bring you the up-to-date list of community and special events happening across the Eastside in cities like Kirkland, Bellevue, and Redmond, and despite our current state of affairs we’re feeling the importance of connection, now more than ever. So, during these strange quarantimes, we’ve put together an online/virtual events calendar that offers a little something for everyone:


November 07-08: Northwest Chocolate Festival

November 01-08: Earshot Jazz Festival

November 13-15: Gobble Up 2020

November 01-21: Canlis Community College

November 13-30: WildLanterns

November 01-15: Tacoma Museum Dia de los Muertos

November 01-21: Seattle Restaurant Week

November 26: Issaquah Turkey Trot

November 27: A Christmas Carol Radio Play

November 01-31: Redmond Virtual Holiday Market


Posted on November 11, 2020 at 6:51 pm
Sheri Butler | Posted in Blog |

The Gardner Report – Third Quarter 2020

The following analysis of the Western Washington real estate market is provided by Windermere Real Estate Chief Economist Matthew Gardner. We hope that this information may assist you with making better-informed real estate decisions. For further information about the housing market in your area, please don’t hesitate to contact your Windermere agent.


Employment numbers in Western Washington continue to improve following the massive decline caused by COVID-19. For perspective, the area shed more than 373,000 jobs between February and April. However, the recovery has been fairly robust: almost 210,000 of those jobs have returned. Unemployment levels remain elevated; the current rate is 8.2%. That said, it is down from 16.6% in April. The rate, of course, varies across Western Washington counties, with a current low of 7.2% in King County and a high of 11.2% in Grays Harbor County. The economy is healing, but the pace of improvement has slowed somewhat, which is to be expected. That said, I anticipate that jobs will continue to return as long as we do not see another spike in new infections.


  • Sales continued to improve following the COVID-19-related drop in the first quarter of the year. There were 25,477 transactions in the quarter, an increase of 11.6% from the same period in 2019, and 45.9% higher than in the second quarter of this year.
  • Listing activity remains woefully inadequate, with total available inventory 41.7% lower than a year ago, but 1.6% higher than in the second quarter of this year.
  • Sales rose in all but two counties, though the declines were minimal. The greatest increase in sales was in San Juan County, which leads one to wonder if buyers are actively looking in more isolated markets given ongoing COVID-19-related concerns.
  • Pending sales—a good gauge of future closings—rose 29% compared to the second quarter of the year, suggesting that fourth quarter closings will be positive.


  • Home-price growth in Western Washington rose a remarkable 17.1% compared to a year ago. The average sale price was $611,793.
  • When compared to the same period a year ago, price growth was strongest in Mason, Island, and San Juan counties. Only one county saw prices rise by less than ten percent.
  • It was even more impressive to see the region’s home prices up by a very significant 9.4% compared to the second quarter of 2020. It is clear that low mortgage rates, combined with limited inventory, are pushing prices up.
  • As long as mortgage rates stay low, and there isn’t an excessive spike in supply (which is highly unlikely), prices will continue to rise at above-average rates. That said, if this continues for too long, we will start to face affordability issues in many markets.


  • The average number of days it took to sell a home in the third quarter of this year dropped two days compared to a year ago.
  • Snohomish County was the tightest market in Western Washington, with homes taking an average of only 16 days to sell. All but two counties—Lewis and San Juan—saw the length of time it took to sell a home rise compared to the same period a year ago.
  • Across the region, it took an average of 36 days to sell a home in the quarter. It is also worth noting that it took an average of 4 fewer days to sell a home than in the second quarter of this year.
  • The takeaway here is that significant increases in demand, in concert with remarkably low levels of inventory, continue to drive market time lower.


This speedometer reflects the state of the region’s real estate market using housing inventory, price gains, home sales, interest rates, and larger economic factors.

High demand, favorable interest rates, and low supply clearly point to a seller’s market in Western Washington. As such, I am moving the needle even more in favor of sellers.

As I suggested earlier in this report, although the market is remarkably buoyant, I am starting to see affordability issues increase in many areas—not just in the central Puget Sound region—and this is concerning. Perhaps the winter will act to cool the market, but something is telling me we shouldn’t count on it.

As Chief Economist for Windermere Real Estate, Matthew Gardner is responsible for analyzing and interpreting economic data and its impact on the real estate market on both a local and national level. Matthew has over 30 years of professional experience both in the U.S. and U.K.

In addition to his day-to-day responsibilities, Matthew sits on the Washington State Governors Council of Economic Advisors; chairs the Board of Trustees at the Washington Center for Real Estate Research at the University of Washington; and is an Advisory Board Member at the Runstad Center for Real Estate Studies at the University of Washington where he also lectures in real estate economics.

Posted on November 4, 2020 at 8:59 pm
Sheri Butler | Posted in Blog |

Home Values Projected to Keep Rising

Home Values Projected to Keep Rising | MyKCM

As we enter the final months of 2020 and continue to work through the challenges this year has brought, some of us wonder what impact continued economic uncertainty could have on home prices. Looking at the big picture, the rules of supply and demand will give us the clearest idea of what is to come.

Due to the undersupply of homes on the market today, there’s upward pressure on prices. Consider simple economics: when there is high demand for an item and a low supply of it, consumers are willing to pay more for that item. That’s what’s happening in today’s real estate market. The housing supply shortage is also resulting in bidding wars, which will also drive price points higher in the home sale process.

There’s no evidence that buyer demand will wane. As a result, experts project price appreciation will continue over the next twelve months. Here’s a graph of the major forecasts released in the last 60 days:Home Values Projected to Keep Rising | MyKCM

I hear many foreclosures might be coming to the market soon. Won’t that drive prices down?

Some are concerned that homeowners who entered a mortgage forbearance plan might face foreclosure once their plan ends. However, when you analyze the data on those in forbearance, it’s clear the actual level of risk is quite low.

Ivy Zelman, CEO of Zelman & Associates and a highly-regarded expert in housing and housing-related industries, was very firm in a podcast last week:

“The likelihood of us having a foreclosure crisis again is about zero percent.”

With demand high, supply low, and little risk of a foreclosure crisis, home prices will continue to appreciate.

Bottom Line

Originally, many thought home prices would depreciate in 2020 due to the economic slowdown from the coronavirus. Instead, prices appreciated substantially. Over the next year, we will likely see home values rise even higher given the continued lack of inventory of homes for sale.

Posted on October 27, 2020 at 8:52 pm
Sheri Butler | Posted in Blog |

Real Estate Continues to Show Unprecedented Strength This Year


The 2020 housing market has surpassed all expectations and continues to drive the nation’s economic recovery. The question is, will this positive trend continue throughout the rest of the year, especially given the uncertainty around the current health crisis, the upcoming election, and more?

Here’s a look at what several industry-leading experts have to say.

Lawrence Yun, Chief Economist, National Association of Realtors

“Home sales continue to amaze, and there are plenty of buyers in the pipeline ready to enter the market…Further gains in sales are likely for the remainder of the year, with mortgage rates hovering around 3% and with continued job recovery.”

Frank Martell, President and CEOCoreLogic

“Homeowners’ balance sheets continue to be bolstered by home price appreciation, which in turn mitigated foreclosure pressures…Although the exact contours of the economic recovery remain uncertain, we expect current equity gains, fueled by strong demand for available homes, will continue to support homeowners in the near term.”


Zillow’s predictions for seasonally adjusted home prices and pending sales are more optimistic than previous forecasts because sales and prices have stayed strong through the summer months amid increasingly short inventory and high demand.

The pandemic also pushed the buying season further back in the year, adding to recent sales. Future sources of uncertainty including lapsed fiscal relief, the long-term fate of policies supporting the rental and mortgage market, and virus-specific factors, were incorporated into this outlook.”

Bottom Line

Many economists are in unison, indicating the housing market will continue to fuel the economy through the end of the year, maintaining this unprecedented strength.

Posted on October 20, 2020 at 6:53 pm
Sheri Butler | Posted in Blog |

Local Market Update: October 2020

While daily life may seem unpredictable, the local real estate market remains extremely stable. Activity in September acted more like the traditional peak spring market with home sales soaring and prices hitting record highs. Inventory remains very tight and new listings are selling quickly in every price range.

There just aren’t enough homes on the market to meet demand. King County had about half the inventory of a year ago. Snohomish County had 63% fewer available homes. On the other hand, the number of condos on the market in King County jumped by 24% over last September. Brokers attribute the flood of new inventory to COVID remote workers looking to trade their in-city condo for more living space. Despite the increase in inventory, condo prices rose 8% in September and pending sales — the best indicator of current demand — shot up 36% over the same period last year.

The slim supply of single-family homes means bidding wars and all-cash offers were the norm, driving prices to record highs. King County saw the third consecutive month of record-setting values. The median home price hit $753,600 in September, a 14% jump over last year. Prices in Snohomish County soared 16% from a year ago to $569,997, just shy of its all-time high of $575,000. For both counties, half the homes sold for over list price in September as compared with just a quarter of the homes a year ago.

The market doesn’t show signs of cooling off any time soon. In September the greater Northwest area saw the highest number of transactions since June 2018. Pending sales were up 32% in King County and 29% in Snohomish County. Interest rates continue to be at historic lows. With the area posting some of the fastest population growth in the country, expect the market to stay unseasonably hot.

The charts below provide a brief overview of market activity. If you are interested in more information, every Monday Windermere Chief Economist Matthew Gardner provides an update regarding the impact of COVID-19 on the US economy and housing market. You can get Matthew’s latest update here.

Posted on October 13, 2020 at 7:31 pm
Sheri Butler | Posted in Blog |

Where Are Home Values Headed Over the Next 12 Months?

Where Are Home Values Headed Over the Next 12 Months? | MyKCM

As shelter-in-place orders were implemented earlier this year, many questioned what the shutdown would mean to the real estate market. Specifically, there was concern about home values. After years of rising home prices, would 2020 be the year this appreciation trend would come to a screeching halt? Even worse, would home values begin to depreciate?

Original forecasts modeled this uncertainty, and they ranged anywhere from home values gaining 3% (Zelman & Associates) to home values depreciating by more than 6% (CoreLogic).

However, as the year unfolded, it became clear that there would be little negative impact on the housing market. As Mark Fleming, Chief Economist at First American, recently revealed:

“The only major industry to display immunity to the economic impacts of the coronavirus is the housing market.”

Have prices continued to appreciate so far this year?

Last week, the Federal Housing Finance Agency (FHFA) released its latest Home Price Index. The report showed home prices actually rose 6.5% from the same time last year. FHFA also noted that price appreciation accelerated to record levels over the summer months:

“Between May & July 2020, national prices increased by over 2%, which represents the largest two-month price increase observed since the start of the index in 1991.”

What are the experts forecasting for home prices going forward?

Below is a graph of home price projections for the next year. Since the market has changed dramatically over the last few months, this graph shows forecasts that have been published since September 1st.Where Are Home Values Headed Over the Next 12 Months? | MyKCM

Bottom Line

The numbers show that home values have weathered the storm of the pandemic. Let’s connect if you want to know what your home is currently worth and how that may enable you to make a move this year.

Posted on October 7, 2020 at 9:08 pm
Sheri Butler | Posted in Blog |

Happening on the Eastside: October 2020

Each month, we bring you the up-to-date list of community and special events happening across the Eastside in cities like Kirkland, Bellevue, and Redmond, and despite our current state of affairs we’re feeling the importance of connection, now more than ever. So, during these strange quarantimes, we’ve put together an online/virtual events calendar that offers a little something for everyone:


October 02: Andrew Lloyd Weekend (The Show Must Go On)

October 01-08: Bellevue Farmer’s Market

October 05-09: Bellevue Blues & Jazz Music Series

October 09-10: UW Parent & Family Day

October 18: Pumpkin Patch Sunday at RTC

October 24-25: Children’s Festival

October 01-30: Online Cooking Classes

October 01-31: Bellevue Virtual Summer Concert Series

October 01-31: Campfire Ghost Stories

Posted on October 1, 2020 at 3:23 am
Sheri Butler | Posted in Blog |

Is the Economic Recovery Beating All Projections?

Is the Economic Recovery Beating All Projections? | MyKCM

Earlier this year, many economists and market analysts were predicting an apocalyptic financial downturn that would potentially rattle the U.S. economy for years to come. They immediately started to compare it to the Great Depression of a century ago. Six months later, the economy is still trying to stabilize, but it is evident that the country will not face the total devastation projected by some. As we continue to battle the pandemic, forecasts are now being revised upward. The Wall Street Journal (WSJ) just reported:

“The U.S. economy and labor market are recovering from the coronavirus-related downturn more quickly than previously expected, economists said in a monthly survey.

Business and academic economists polled by The Wall Street Journal expect gross domestic product to increase at an annualized rate of 23.9% in the third quarter. That is up sharply from an expectation of an 18.3% growth rate in the previous survey.”

What Shape Will the Recovery Take?

Economists have historically cast economic recoveries in the form of one of four letters – V, U, W, or L.

V-shaped recovery is all about the speed of the recovery. This quick recovery is treated as the best-case scenario for any economy that enters a recession. NOTE: Economists are now also using a new term for this type of recovery called the “Nike Swoosh.” It is a form of the V-shape that may take several months to recover, thus resembling the Nike Swoosh logo.

U-shaped recovery is when the economy experiences a sharp fall into a recession, like the V-shaped scenario. In this case, however, the economy remains depressed for a longer period of time, possibly several years, before growth starts to pick back up again.

W-shaped recovery can look like an economy is undergoing a V-shaped recovery until it plunges into a second, often smaller, contraction before fully recovering to pre-recession levels.

An L-shaped recovery is seen as the worst-case scenario. Although the economy returns to growth, it is at a much lower base than pre-recession levels, which means it takes significantly longer to fully recover.

Many experts predicted that this would be a dreaded L-shaped recovery, like the 2008 recession that followed the housing market collapse. Fortunately, that does not seem to be the case.

The same WSJ survey mentioned above asked the economists which letter this recovery will most resemble. Here are the results:Is the Economic Recovery Beating All Projections? | MyKCM

What About the Unemployment Numbers?

It’s difficult to speak positively about a jobs report that shows millions of Americans are still out of work. However, when we compare it to many forecasts from earlier this year, the numbers are much better than most experts expected. There was talk of numbers that would rival the Great Depression when the nation suffered through four consecutive years of unemployment over 20%.

The first report after the 2020 shutdown did show a 14.7% unemployment rate, but much to the surprise of many analysts, the rate has decreased each of the last three months and is now in the single digits (8.4%).

Economist Jason Furman, Professor at Harvard University‘s John F. Kennedy School of Government and the Chair of the Council of Economic Advisers during the previous administration, recently put it into context:

“An unemployment rate of 8.4% is much lower than most anyone would have thought it a few months ago. It is still a bad recession but not a historically unprecedented event or one we need to go back to the Great Depression for comparison.”

The economists surveyed by the WSJ also forecasted unemployment rates going forward:

  • 2021: 6.3%
  • 2022: 5.2%
  • 2023: 4.9%

The following table shows how the current employment situation compares to other major disruptions in our economy:Is the Economic Recovery Beating All Projections? | MyKCM

Bottom Line

The economic recovery still has a long way to go. So far, we are doing much better than most thought would be possible.

Posted on September 21, 2020 at 6:59 pm
Sheri Butler | Posted in Blog |