By Windermere Chief Economist, Matthew Gardner
Windermere Group One and Jeff Thompson, CEO and owner, invited Windermere’s Chief Economist, Matthew Gardner, for a special presentation of the current U.S. and local economy and its impact on the real estate market. The company’s agents were invited to attend along with special guests such as land commissioners and port directors. The event was held on Tuesday, September 14 at the Three Rivers Convention Center in Kennewick.
Gardner has over 28 years of professional experience from the U.S. and U.K. He is a part of 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. In addition, he is also 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.
Gardner started off his presentation by giving the attendants a big picture of the U.S. economy from the beginning of 2020 to 2021 currently. Employment was impacted, especially those who were in the hospitality sector. However out of the 8.5 million hospitality jobs lost due to the pandemic, 6.5 million of those have been recovered nationally. 2020 had the “biggest contraction” in economic history as well as the largest expansion due to the pandemic, he stated. By 2022, he predicted that we would start seeing “full employment”, meaning that numbers would stabilize to where they were pre-pandemic. 2021 is still on track for positive growth, even with inflation rates and COVID cases rising.
The presentation then moved on to regional economic numbers for Benton and Franklin Counties. Gardner stated that around 12,000 jobs were lost at the beginning of the pandemic however a little more than half have returned while the region continues to add 200-400 jobs per month. He expects a full economic recovery by 2022 and this particular region is recovering better compared to the entire state of Washington.
Housing numbers for Benton County
-Only 3.9% of homes in Benton County in forbearance
-$560,000 average listing price (leading indicator), 23% change
-$486,875 average sale price
-$220/sqft
-14 days of inventory, 9 median days on market
-New construction makes up 23.3% of homes sold
Housing numbers for Franklin County
-Only 4.3% of homes in Franklin County in forbearance
-$488,000 average listing price (leading indicator), 11.7% change
-$412,000 average sales price
-12 days of inventory
-New construction makes up 35% of homes sold (Permit demand is keeping up with building demand)
Big Takeaways:
To wrap up his presentation, he had a few big takeaways for the attendants. He stated that the local market was far from balanced, meaning that we have more buyers looking for homes than we have available homes on the market. Our local market has been this way since 2012 and looks to continue being unbalanced for the foreseeable future. The price growth for existing homes will slow down and become steady while there will be an increase in listing activities. Finally, he also stressed the importance of affordability and not pricing first-time homebuyers out of the market to keep demand high but also understanding that the second-home purchasers will also be a factor in the remaining 2021 and 2022 markets.