The Lasting Effects of COVID-19

Speaker 1: [0:08] Hello, hello, and welcome to the Awesome in Seattle Podcast. Awesome. This is your host-

Speaker 2: [0:12] Yeah. Wait, wait, one second. I, I had to say something.

Speaker 1: [0:14] Yes.

Speaker 2: [0:15] You start every episode with, like, "Hello, hello." Hello. This just popped into my head. I realized why it sounded familiar- Uh-huh … the other day. RuPaul, on RuPaul's Drag Race- every time she enters the workroom, goes, "Hello, hello, hello." You stole your introduction from

Speaker 3: [0:35] RuPaul. Why do you think I always laugh when he does

Speaker 1: [0:35] that? That's amazing.

Speaker 2: [0:35] I just realized. I'm like, "That's where it comes from."

Speaker 1: [0:38] RuPaul had to have stolen that from me, because I've been doing this on Seattle Real Estate Radio, radio show that we had, like, six, seven years ago. Uh- We're all around longer. So, I don't know.

Speaker 2: [0:52] Yeah. She, she did add one more hello to it. Yeah. You only do two. Mm-hmm. So, just saying. Yep. Just saying.

Speaker 1: [0:57] Yep. All, all me. She's, she, he, she. I don't know how you … Yeah.

Speaker 3: [1:03] Just Rue

Speaker 1: [1:04] Yeah, Rue stole it from me That's, that's what happened there. That's, you know, I'm a, I'm a trendsetter, what can I say? So

Speaker 2: [1:11] Anyways, sorry to interrupt.

Speaker 1: [1:13] That's a g- that's a good interruption, I like it. Uh, so today on our Awesome in Seattle podcast, we are really gonna talk about the long-term effects of COVID on the city and the real estate market in general. We're gonna talk about stats, kinda how the procedures are in place to keep you guys safe while you're looking at homes, and then really kinda just go over the population change and how, how this kinda work from home mentality might shift some population, uh, within the city or out of the city, for, for example. So first off, let's talk about stats. What's the market doing, and all that fun stuff. Jason, you are the data, data f- I don't know, I was gonna say queen. Guru. Guru. Guru, yeah. I like guru. Let's go with that.

Speaker 2: [1:56] Yeah, y- you really give me the fun stuff, the data. Actually, I love this stuff. Yes,

Speaker 1: [1:59] I know you do.

Speaker 2: [2:02] Yeah, so you know, we always like to keep you in the loop of what's happening with the market, and just speak to the data first and foremost, because honestly, that's the best tool we have, and I think a lot of people kind of shy away from it. Yeah, so basically what we're seeing in terms of data right now, the market seems to be continuing its recovery from kind of its shock to the heart that happened in March, April, when- Mm-hmm … we saw, like, a 40% decrease in new listings and that sort of thing. Because obviously with COVID hitting, there was a lot of uncertainty, and so a lot of people s- decided, let me not buy a house right now. And honestly, a lot of sellers were like, "I'm taking my house off the market," or- Yeah … not listing it in the first place. So-

Speaker 1: [2:43] Yep … Speaker 2: there was a huge kind of shock to the system. And then in, uh, May, June, especially June, we saw a pretty strong recovery. In fact, both, like, this June and last year's June are basically, you know, the same. So it's back to last summer's levels in many, many ways. Yeah, which was crazy. I saw that stat yesterday and I was like, wow, that's, that's impressive that we basically have the same amount of homes available for sale now as we did a year ago exactly. Which kinda blew my mind, because we've been accustomed for the last few months to have way fewer homes available.

Speaker 2: [3:19] Exactly. So to just dive a little deeper, the median sales price in Seattle is currently $735,000. Um, what you will see is there's a huge disparity between single family detached homes, that includes townhouses by the way-

Speaker 1: [3:37] Mm-hmm … Speaker 2: and condos. And, uh, this kind of makes sense for two reasons. First off, I think a lot of people are at home, working from home now. Um, think, a, a lot of them renting, and that's why they wanna buy a house, and they're thinking, "Man, I really want a yard," or, "I wanna get outside the city." And both of those things have, y- you know, it's a knock against condos generally speaking, because most of the time condos don't include your own little yard, and most of the time condos are in more urban environments. And so if the idea is I wanna kind of, I don't have the need now to live so close to work because I might be working from home more, it's more expensive, I'm not taking advantage of this location in the first place, why pay it, for example, you know, it's a knock against condos. And so you're seeing a re- huge recovery in single family homes, and a stagnation in many ways of condos. Um, on average, houses are sitting on the market for about eight days, which is crazy quick any way you, you look at it. It's not historic lows for Seattle, but it's close to it. So- Yeah, we don't need that to be in a historic low. Yeah. That would make things so hard.

Speaker 2: [4:51] And to be clear, the historic low I think is seven days, maybe six. It might be six. It's pretty much- Yeah … it's pretty much where we're at already. But it's very competitive right now for single family homes. So then month's supply, how long the current amount of inventory would sustain the market, we're currently at around two months in Seattle. But keep in mind, condos are very much kind of an outlier. If you only look at single family homes, it's about one month, 1.4 months of supply. So it's, uh, there isn't a lot out there. There's fewer listings for the amount of buyers than we're kind of used to for the last two years. It was really competitive in 2017, 2000 and, the beginning of 2018. Since that time, it kind of cooled down, and then COVID hit. And, uh, looks like what we're seeing is fewer listings and a lot of buyers, because they're rethinking things. They wanna, e- either at home looking on Redfin a lot, maybe because they're sitting at a computer all day. Who knows? Just an idea. But, um, but yeah, that's kind of anecdotally what we're seeing as agents. And of course, in Seattle, this is pretty normal, but things on average are selling for 100% of list price. Now, if, this is across the board. If you look at specific neighborhoods or specific types of properties, it, you'll, you're seeing stuff at 120% of list price. That's not un- unheard of right now. So in other words, going 20% over list price.

Speaker 1: [6:19] Yeah. In fact, just right before we started recording this this morning, submitted an offer on a house in Wallingford that's going to go for, I think it was listed at 875, and it's gonna go for 100,000 plus over the asking price. So-

Speaker 3: [6:36] Eesh.

Speaker 1: [6:36] Yeah. Man. Yeah. Wowza. That literally just happened right before we started this. So yeah, it's, uh, it's competitive out there for single family homes, and this was a, a house that had a basement. It wasn't a legal ADU, but it was set up as an accessory dwelling unit with a separate two-bedroom apartment downstairs and a two-bedroom apartment upstairs. So yeah, it was a hot one.

Speaker 2: [7:00] That's basically my spiel. If you want me to really dial, uh, dig deep in these numbers, contact me directly, because otherwise people aren't gonna listen to a podcast where I'm just- … throwing numbers at you. Yeah. Numbers- You, you're like driving home, you're like t- trying to take notes, getting in a wreck. Not a

Speaker 1: [7:16] good idea. Yeah, don't do that. Numbers, uh, in a podcast just don't translate that well. But we do, on our email newsletter, we do have a video that explains all this stuff as well, so. Just as dry, just in video dr- format. It's great.

Speaker 2: [7:33] Exactly.

Speaker 1: [7:33] Um, all right. Sarah Kate, let's talk about procedures and maybe some of the things that, um, that we're kinda using and have been implemented since, since COVID hit that, uh, that are kinda helpful.

Speaker 3: [7:46] Yes, indeed. So things have changed a little bit for home tours with trying to keep all showings safe and keep socially distant so that we can all, you know, go out there and do our jobs and show our lovely clients' homes. So appointments are now a mandatory thing through the Northwest MLS. One of the ways that we have kind of been able to implement this in an easy way is a preexisting tool called ShowingTime, which is an appointment calendar for agents. It's something that all of us agents were a little hesitant to use at first, 'cause, you know, we, we're stuck in our ways and we like to do things the way we like to do them. Mm-hmm.

Speaker 1: [8:30] But it actually- Especially, especially when it comes to technology. Yeah, this was kind of a shock to the system, and it's, uh, it's been a beneficial one.

Speaker 3: [8:37] Yeah. I, I've actually really enjoyed it, and I've heard the same thing from a lot of other agents. It's, sometimes it can be a bit of a trip up when you finish one showing early and then have like 15 or 20 minutes to wait for your next one. But, you know, it gives you an opportunity to chat with your clients a little bit more and figure out their home buying needs. Mm-hmm. So it's not a total negative at all. It's just sometimes it's hard to bounce around a little bit. It's also made it easy to see how competitive a property's gonna be. So you can see if it's been on the market for two days, and those two days have been booked solid with appointments, that gives you an idea- About how hot the house is gonna be and how competitive it's gonna be. You can also see if there are inspections scheduled, pre-inspection scheduled, so that also, again, gives you a chance to see the competitiveness of the house.

Speaker 1: [9:29] Yeah. It's, uh- So- … it's really nice being able to just at a glance-

Speaker 3: [9:34] Yeah … Speaker: look at, you know, what available times are there for showings. Um, and part of that social distancing requirement for these appointments is, um, there's no overlapping appointments allowed. Currently, based on phase two requirements with the state of Washington, we're only allowed to have three people on site at a time, so that's really important to have these, uh, appointment blocks set aside for just one showing at a time. And, uh- Yeah, I agree … Speaker: yeah. Uh, now there- It also- … there probably are some negatives though, right? Well, I was gonna say one more positive- Okay … really quick. Yeah Is that, you know, when a house is really popular, you're often seeing, like, three, four tours at the exact same time, and you're not as able to speak openly with your client about the systems or things that you notice in the house that may be a positive or a negative. So I think it's nice to have that alone time in the house as well to really discuss what's going on in the home with your client.

Speaker 1: [10:37] Yeah, yeah.

Speaker 3: [10:38] Um-

Speaker 1: [10:38] Pre-COVID it was pretty popular to see numerous groups in the house at a time, and it was hard. I mean, it wasn't-

Speaker 3: [10:45] Yeah … Speaker: exactly. Like, our thing is we like to point out, you know, the red flags that we're seeing or potential red flags, and you know, when there's, when there's 10 other people in the house, that's really hard to do. So So I will say there are a few negatives for this showing time situation. Mm-hmm. So you also have to schedule your inspections, pre-inspections through showing time, and before, like sh- like tours, just regular showings, you could overlap-

Speaker 1: [11:18] Yep … Speaker 3: with, um, inspections, and now you cannot do that. And so on a competitive home where you have, you know, three or four people wanting to schedule pre-inspections, that also takes away from the showing time, and sometimes it can be really hard to schedule an inspection, and you really want that for your client to be able to see, you know, to be competitive, number one, and be able to waive that on your contract, but also to kind of give them an idea of the condition of the house. So I would say that is the one negative drawback. Mm-hmm.

Speaker 3: [11:50] It's really helpful when sellers, uh, provide an inspection that they procured. Mm-hmm. It makes things a lot easier, and I think ultimately probably gets them more offers.

Speaker 2: [12:02] Yeah. There is another feature of showing time that they just announced, and we'll see how well it's implemented, if it's successful and it's popular, but a virtual open house. So right now, obviously, you can't just open up a house, say, "Open house. Everyone come in and look," because everything has to be scheduled.

Speaker 1: [12:20] Mm-hmm.

Speaker 2: [12:20] Everything has to be a by appointment only, and only three people are allowed on site at any given time. So open houses have gone the way of the dodo since COVID hit. Um, but now they're implementing virtual open houses, where the agent can basically host, you know, like a Instagram live, um, and do it on an official platform. So it'll be interesting to see if this gains popularity, if people on Saturday now, instead of roaming neighborhoods, just sit in their living room, looking on showing time virtual open houses. You know, it'll be interesting to see. So more to come there, but.

Speaker 1: [12:55] Yeah. Yeah, I'm really curious how that's gonna, you know- Me

Speaker 3: [12:59] too … come into

Speaker 1: [12:59] play. It's

Speaker 3: [13:01] I think it's too hard right now with how competitive things are. If the agent wants to do one of those, they're taking away-

Speaker 1: [13:07] Yeah … Speaker 3: showings from- Yeah, exactly

Speaker 3: [13:10] from potential buyers. So I'm really curious to see how that pans out.

Speaker 1: [13:14] Yeah.

Speaker 2: [13:14] Yeah, it might be more popular in condos. You know, it'll be- Yep … interesting to see, so. Yeah,

Speaker 1: [13:17] good point. That's what I've, I've seen them already popping up, but they've pretty much exclusively only been in condos, because that market is quite slow compared to- Yeah … single family homes. And a lot of condos also, the building itself is not allowing visitors to even look at the amenities. So being able to show those off potentially during an open house, a virtual open house, is and could be a benefit, uh, for them if they get approval, especially if there's just one agent roaming around versus, you know, numerous people. So yeah, it'll be interesting to see if those catch on or not. Um- Yeah. It's kind of a, like you said, the… I really like that point. Like, it's kind of a double-edged sword. It's nice to be able to sit on your couch and watch a virtual open house, but for the seller, you're potentially taking away time from other buyers looking at the house in person that are probably more serious than someone sitting on their couch.

Speaker 3: [14:19] Exactly.

Speaker 1: [14:20] So in a competitive market like we're in, I'm not sure if they're really gonna take off. If the market were to shift or if you're in another, uh, another part of the country where it's not hot, um, where it's not a competitive market, I could definitely see that being a beneficial tool, but-

Speaker 2: [14:37] Or if we go back to intense lockdown, it might be the only way to really see a property.

Speaker 1: [14:43] Yeah.

Speaker 2: [14:43] You know, who knows how those will play out, so. Who's saying? Yeah.

Speaker 1: [14:45] Yep. Good point. All right. Well, let's, uh, speaking of lockdown and work from home and all that stuff, let's talk about how we're kind of seeing this potential work from home for potentially a longer time period than anyone ever expected. Um, and let's talk about how that could affect the Seattle market, um, and if it will affect it. I wanna get your guys' opinion. Like, what do you… what areas do you think could be hardest hit? I, I know my opinion, and we kind of already talked about it, but, um, what do you guys think could be the hardest hit, maybe it's property type or area?

Speaker 3: [15:24] Mm.

Speaker 2: [15:24] I think we already touched upon one, which is condos. Yeah. Obviously, that's what the data's saying. Yeah.

Speaker 1: [15:28] Yep.

Speaker 2: [15:29] Um-

Speaker 3: [15:30] And downtown.

Speaker 2: [15:31] Yep. Correct. Yeah. I mean, downtown, you know, it is expensive, and if you're sitting at home not even able to go out, everything's closed anyways, people are… I've had clients just tell me, you know, "Why am I spending all this money when I could spend a lot less a little outside the city- Mm-hmm and get the same out of it?" You know, Amazon still delivers here. Mm-hmm. You know? So.

Speaker 1: [15:52] Yep. No, I totally agree. It's, uh… I, I think the downtown condo market's gonna be hit the hardest. I don't know how long it's gonna be hit or, or what the effects are gonna be. Um, but, uh, we're already seeing that, uh, where, you know, there's just not a ton of interest in condos downtown right now. Um, it's, uh, very, very slow. It's quite the opposite of single-family homes in the area. Um, we're also seeing, like- I mean, we have one client who is looking quite a ways out of the city, like the Monroe area and even, even potentially further, and Sarah Kate, you made an offer for them just this last week, and there were how many offers on that again?

Speaker 3: [16:39] 18 offers.

Speaker 1: [16:40] Geez. Yeah. And it went for 100 plus over the asking price, is that right?

Speaker 3: [16:46] That is what the agent led me to believe, yes. Yeah. Which

Speaker 1: [16:48] is like a third- All cash

Speaker 3: [16:49] as well … Speaker: yeah, which is like a third of the purchase price, like it went that far over. Yeah. That's crazy. And then a couple days later we looked at another property that had two early offers, and I believe ended up with three offers a couple days after it went on the market, and went, went over ask as well, so. People are scooping up that land

Speaker 1: [17:11] Mm-hmm. Yeah. I think there's definitely a shift from apartments, um, for sure, uh, especially the, the core, uh, South Lake Union downtown apartments, even Pioneer Square. Sometimes they're moving out of Seattle in general just because that's less expensive and easier to afford. But there's also, um, there's also people still not necessarily always buying, but renting just a, a townhouse or a single family home still within the city or maybe outside the city. It's a, it's an interesting, interesting time, and I don't know how long it's gonna take for the downtown core to recover. I think it's gonna depend on if employers, you know, choose to let people back in and not work from home. Um, if they're… W- what their policies are gonna be, uh, on the employer level. Like- Yeah … are they gonna just mandate that everyone works from home, or are they gonna say, "You can come into the office, so we are gonna keep this office space"?

Speaker 2: [18:11] Yeah. The other thing that we've mentioned this almost every single podcast. In fact, we should rename it Light Rail with the Awesome Nossum Group. Hello, hello, hello. But, um-

Speaker 1: [18:21] It's only two with

Speaker 2: [18:22] me. Oh. Well, I'm the awesome. Uh, but yeah. I mean, I think this whole pandemic has kind of expedited the idea that, wow, light rail is right around the corner for- Yeah … a lot of this metro area- Mm-hmm especially North Seattle. That's opening up pretty soon.

Speaker 1: [18:38] Yep.

Speaker 2: [18:38] And so a lot of people who are looking in Greenwood and that sort of thing just… I have a couple clients who were very set in those neighborhoods, and now that the pandemic kind of removed a year of time out of the equation, because it looks like we're just gonna be working from home for the foreseeable future-

Speaker 1: [18:56] Mm-hmm

Speaker 2: [18:57] that's a year closer now that light rail's gonna hit Lynnwood and, and Shoreline. And so it's like, you know, that actually lets… Why are we,

Speaker 1: [19:05] w-

Speaker 2: [19:05] why are we, why are we not looking up there? So that's kind of… We're seeing that as well.

Speaker 1: [19:10] Yeah, definitely. I think that's a big reason why, you know, we're, we're getting multiple offers and there's a lot more competitiveness up north, so. Um, and then, I mean, we've already seen this. We've only talked north, but we had already seen this happening in Tacoma. This is not new down there. Last year, Tacoma was the number one real estate market in the nation in terms of- Sure was. Yeah. It's just crazy. So that's already been happening down there. Um- And I think that's why we're mostly focusing on up north, 'cause that's, that's a story that's already been told south. Um, I could also see kinda the, the northern neighborhoods, uh, you know, Mountlake Terrace. Shoreline was already getting hot, but Mountlake Terrace, Lynnwood, um, Mill Creek, Bothell, these areas are, are great for, in my opinion, for investors that are looking to, you know, snap up some stuff. Because if you can get a, a reasonably priced house, I think rents are gonna increase quite a bit up there. Um, and I'm talking like single-family rentals, townhouse rentals, which there's not a ton of townhomes up there. They're becoming more and more popular because they're also, those cities are also increasing density and changing zoning and allowing that kind of stuff. But it's, uh, there's some potential there for, for long-term house appreciation, but also, uh, rental price increases. So if you're an investor listening to this, I think that's a, a market that if you already weren't paying attention to, you probably should. Okay.

Speaker 3: [20:45] Boom.

Speaker 1: [20:46] Anything else you guys wanna mention?

Speaker 2: [20:49] I have nothing. I

Speaker 1: [20:53] have nothing. All right. Well, that is all for us here on the Awesome in Seattle podcast. If you ever have questions, if you ever wanna reach out, if you ever wanna chat, we will be here. Our website, if you ever want to schedule an appointment, is awesomeinossum.com/schedule. You can easily, quickly, uh, schedule anything with us right online. We are doing tons of Zoom and FaceTime, uh, consultations with people. There is no cost for this ever. And helpful tip, always remember that when it comes time to, uh, buy a house, you do not have to pay your real estate agent. The seller is the one that pays both the seller's agent and the buyer's agent, so there's no costs involved with hiring the best real estate agent, in your opinion. And, uh, hopefully that's us, but everybody has different flavors. So, um, feel free to reach out and see if you think we are a good fit. Again, there's no cost involved, and, uh, and we'd love to help you. So that's it. Hope you enjoyed this podcast, hope you learned a lot, and we'll see you next time.

Speaker 2: [22:05] Bye.

Speaker 3: [22:06] Bye.