Mr. Gardner is a land use economist and principal with Gardner Johnson Land Use Economics and is considered by many to be one of the foremost real estate analysts in the Pacific Northwest. Mr. Gardner has recently submitted the second in a series of economic reports acknowledging the downturn in Washington’s housing market. Below are some graphs that reflect data gathered for our regional economics and real estate.
First, Gardner shares his opinion by saying that we will see an upward pressure on unemployment rates as we learn to deal with high gas prices and low consumer sentiment.
“The increases in the overall unemployment rates are, for the most part, a function of contraction in construction and financial activity sectors that are a direct result of the housing downturn.”
However, even though the job market has slowed, our sixteen-county region still added 32,500 new jobs (29,000 of which were in King, Snohomish, and Pierce counties).
Percent Change in Annual Employment (provided by Gardner-Johnson)
As far as real estate is concerned, Gardner pointed out that there has been inconsistencies in the percentage declines in sales. He then later follows up with a “however” and states that we are seeing more equal declines across the region.
In the second quarter of this year, transactional velocities remained stubbornly low with all of the counties surveyed seeing decreases of between 25 to 40 percent from the same timeframe in 2007—overall, sales are down 35 percent.
As many other industry professionals say, Gardner hypothesizes that the market is struggling with tight credit restraints and still in fear (or hopes) of further price reductions. We still say, buy–if you can. The average home value has increased by 60 percent between June 2003 to June of this despite recent slowing. While the recent downturn may have scared away many investors, those looking to buy to live can still expect the area as a “positive long-term asset,” Gardner states.
Median Home Price Escalation Rate (provided by Gardner-Johnson)
Mr. Gardner concluded the report by saying sidelined buyers should return back to the market as we see more stability in our national economy. His speculation, as well as mine, is that we should see more buyer activity towards the end of this year by having more showings, phone inquiries, and increased traffic at open houses. If this is the case, then much of the public won’t see the “activity” until the media catches up in the second quarter. The first quarter of the year is where we would expect to begin documenting an increase in activity with more offers, pendings, and solds.
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