Matthew Gardner, principal at Gardner Economics, stated that “location” is the most appropriate theme for this first quarter analysis. Depending on the location in Western Washington, the signs of recovery for both the job market and real estate market varied. However, to quote Gardner, “…we have come out of the free fall and are starting up the long road to recovery on both the job front as well as in our real estate markets.” Between March 2011 and March 2012, 54,230 jobs were added in the counties examined for the report. That is a 2.58% growth rate, exceeding the growth rate of Washington State as a whole and the United States average.
While not all the counties experienced job growth — 9 of the counties examined did, while 7 experienced a decline to their employment base — compared to this time last year the statistics show definite improvement. The 3 counties which saw the most employment growth were Snohomish, King and Whatcom. The growth rate we’re seeing in our regional employment base right now is not a rate that Gardner sees as sustainable, so he chose to give the current employment situation in Western Washington a “B-” grade. This is up some from his last assessment, and is at a grade level Gardner sees as maintainable with our current economic trends.
The sales of existing homes in Western Washington saw a growth of 13.7 percent when compared to the first quarter of 2011. The counties which experienced the biggest gain were Mason, San Juan, Snohomish , Pierce, and King. When examining sale price numbers for the region, it appears that there was a 4.5% decline in price over the 1st quarter of 2011. However, the mercurial stats from San Juan County greatly skewed the data. Remove those numbers from the aggregate and home prices in Western Washington actually rose by 2.9% year-over-year.
Short sales and foreclosures are still a formidable force in the market, and their presence has been keeping home prices lower. While it’s difficult to continue to deal with these distressed properties, Gardner discusses how it’s part and parcel of the process of recovery.
“Getting through this inventory is a process, and it can be a painful one. That said, it is an important part of any recovery. We know that the percentage of “all cash” sales are far higher than we have ever seen, which indicates to me that investors are now buying, and this will likely help in depleting this inventory.” ~Matthew Gardner
Gardner again stresses location when discussing recovery. Depending on how close the county is to economic centers, and how much growth home sales saw in yesteryear, will impact how quickly counties will see more of an increase in home prices. And while recovery signs are positive in so many local markets, Gardner rates Western Washington’s real estate market at a “C” grade this quarter. The low inventory, in his opinion, greatly affects the health of the market and he does not see an improvement of his assessment until there is a larger inventory of homes available for sale.
The take away from Gardner’s 1st quarter report of Western Washington is we have come a long way to climb out of the hole the recession left in our job and real estate markets, however we still have work to be done. Gardner states “We are not out of the woods yet, but the forecast is a positive one.” Please take some time to read the full report on Neighborly News. It’s well worth your time– his analysis is insightful and he shares several graphs to illustrate his points.
“Overall, I am still looking to 2012 as the year that we emerge from the recession and, in our own inimitable Washingtonian manner, stride forward in the belief that the way ahead is a good one. (After all, who else wears shorts when it’s 50 degrees outside?)” ~Matthew Gardner