Puget Sound Real Estate – Turnin’ on a Dime
Just as quickly as the data can show that the Puget Sound housing market is showing some signs of resiliency with median house price rising and inventory slightly declining, it changes.
To be clear, when I write these articles, I’m generally compiling data points I find online, with what’s provided by Altos Research, and what I hear anecdotally from other Loan Officers and Real Estate partners. There is, however, one more tool I can add to the toolbox: (and giving credit where credit is due here) it’s the Alex Black Absorption Rate.
Possibly one of the best indicators for where the market is and where the stats may be headed, because regardless of what the current inventory number or median house price is, absorption rates measure the relationship between buyer and seller activity now. For example, earlier in June inventory had ticked down a bit, and median house price had ticked up. But, on the back-end the Alex Black Absorption Rate had quickly turned downward. This meant that regardless of whatever inventory and median house prices were at that moment, with declining absorption rates, it would imply that future-forward inventory levels would increase and median house price would decline a bit.
And guess what, in the past week and a half, my data now shows median house price as having fallen 4.46%, and inventory rising 5.97% in Seattle specific. So to the realtors who read my last update and disagreed, thinking “NO! The market isn’t being resilient. Inventory is increasing and things are softening!” My apologies, the data now shows the trends you were already seeing taking place out in the marketplace. Thus, moving forward, it will be important to add the Alex Black Absorption Rate to my stat-mix.
What We Can Learn From This
As we head into the summer real estate season, it looks like things are indeed slowing down a bit in the market per recent trends in inventory and median house price (percentage decline in median price, and the percentage increase of inventory listed above). As always, only time will tell where things will eventually go.