ASK SERENA: Why is Seattle Inventory So Low?

Welcome to my new Real Estate advice column, “Ask Serena,” where I answer all your burning Real Estate questions. Send them to me at serena@windermere.com, and I’ll try to answer them in future columns.

Real estate continues to go gang busters, and I am often asked by buyers why inventory in our area is so low, but according to the New York Times, the number of available homes has fallen steeply in metros across the country. And while it’s partly due to the pandemic, there are other reasons such as the ones below:

• Covid-19 has played a part in keeping housing inventory low, as most homeowners are baby boomers or older, a group which is at higher risk. So many have been reluctant to move out and downsize over the past year and those considering moving into assisted living or nursing homes have been way less likely to do so, given the fatalities in nursing homes and the number of lockdowns in those facilities.
• There are less starter homes on the market too, as folks who want to sell and move up can’t because of the reason above. Also, the unknowns of whether working remotely may become the norm allows homeowners to consider moving to a less expensive place.
• Mortgage forbearance by government backed loans (extended to June) has enabled people who lost their incomes to stay in their homes; normally homeowners would have been forced to sell or their houses would have been foreclosed upon. Luckily that did not happen!
• Relatively low interest rates have been an incentive for folks to stay in their homes.
• Also, low rates have encouraged homeowners who bought a new home not to sell their previous one, but to instead treat it as an investment property.
• Finally, for over a decade, less housing has been built relative to historical averages. The housing crash decimated the home building industry and pushed many construction workers into other jobs. Local building restrictions and neighbor objections have also slowed new construction. Plus, Trump’s strict immigration policies further restricted the labor supply in the industry, and his tariffs pushed up the price of building materials.

Got real estate questions? Contact me today, I’d love to help!