Real Estate Market Update – July 2022

Recent news of the housing market may cause unsettling feelings. Often times the news headlines don’t turn into reality. So I thought this would be a perfect time to take a trip down “Headline Memory Lane” to provide reassurance during this transitional period.

I partnered with Eric Aasness at Homebridge to compile the last 10 years of headlines and actualities:

2012: “Shadow inventory will cause prices to fall.”
Reality: the shadow inventory (distressed homes) supply was less than 6 months and did not result in a bubble.

2013: “Housing will crash because the FED is tapering and mortgage rates are rising.”
Reality: the 10-year yield shot from 1.6% to 3%, cooling housing noticeably but there were no negative price declines as inventory levels were below 5 months.

2014: “Housing will crash because purchase applications were down 20%.”
Reality: even though sales activity fell and inventory grew, home prices did not decline and inventory levels remained close to 6 months.

2015: “Boomers turning 62 will start a tsunami of downsizing that will collapse prices because nobody could afford to buy these homes.” 
Reality: the “Silver Tsunami” never materialized.

2016: “Manufacturing was in a recession and stocks pulled-back 15%, leading to a crash.”
Reality: home prices grew because inventory fell once again.

2017: “Because house prices were back to the housing bubble peak, prices had to crash.”
Reality: inventory fell again and house prices rose.

2018: “With mortgage rates rising to 5% and new-home sales sector getting hit, housing would crash.”
Reality: sales fell but total inventory didn’t grow. No crash.

2019: “Housing would crash because inventory was up year over year.”
Reality: as rates fell, housing rebounded in the second half of 2019.

2020: “Covid-19 hit and the economy stalled. A crash is imminent.””
Reality: we saw a K-shaped recovery and witnessed the greatest housing recovery ever.

2021: “Forbearances from Covid-19 will result in mass foreclosures, causing a housing crash.”
Reality: we experienced one of the lowest foreclosure rates in history.

2022: “Rising rates will cause housing to crash.”
Reality: there is no correlation between rates and a housing crash. Housing prices are a factor of supply and demand. Rates are cyclical, meaning a refinance to a better rate is almost always around the corner.So what does this mean for our wonderful Burien real estate market?

At present:

Our current market in Burien remains slightly favorable to sellers; however, buyers are seeing a much-needed reprieve as prices are no longer skyrocketing with massive escalation clauses…in fact, we have even experienced offers where buyers can and do perform their own inspections, (not seen since pre-Covid).

Times of uncertainty can definitely be uncomfortable, but we have weathered such times before and will do it again.

Continue to shop local and enjoy our Gem of the Sound!