what's driving Seattle's housing fates? people, rates or both? | the spring 2025 Seattle rennie landscape

The rennie podcast is about the real estate market and the people connected by it. Tune in for monthly discussions making sense of the latest market data.

EPISODE #75:WHAT’S DRIVING SEATTLE'S HOUSING FATES?
⁠PEOPLE, RATES, OR BOTH?

Listen as Ryan Berlin (Head Economist and VP Intelligence) and Will Ye (US Market Analyst) discuss the first-ever Seattle rennie landscape—our semi-annual report that examines everything impacting residential real estate. While US labor markets remain resilient, household debt levels modest, and population growth strong, rising trade tensions pose risks for inflation, bond markets, and, by extension, the housing market. It’s a conversation that separates signal from noise—and gets to the heart of what’s driving Seattle’s housing scene.

Ryan Berlin, Head Economist and Vice President of Intelligence

William Ye, US Market Intelligence Analyst

Spring 2025 Seattle rennie landscape

About the rennie landscape

The rennie intelligence division has just released its semi-annual publication, the rennie landscape, which provides thoughtful, contemporary analysis of the myriad factors impacting the housing markets of Metro Vancouver, the Central Okanagan, Seattle and Greater Victoria. The commentary in the rennie landscape is lively, and the insights are objective and data-driven. Key stakeholders in the real estate industry—including developers, realtors, commercial brokers, and institutional investors—rely on the rennie landscape for its succinct review of the latest trends that matter to our market.

We’d love to answer your real estate questions. Email us at intel@rennie.com or leave a voicemail, and we’ll try to respond in future episodes. 

Transcript

Welcome to the rennie Podcast, where we talk about the real estate market and the people connected by it. Our goal is to empower you to make informed decisions and provide context for the real estate world around you. We hope that with every episode, you will become a little more knowledgeable and a lot more curious.

Ryan Berlin: Welcome to the rennie Podcast. I'm Ryan Berlin, rennie's Head Economist and Vice President of Intelligence.

William Ye: And I'm Will Ye. I'm the rennie US Market Intelligence Analyst.

Ryan Berlin: How was your Mother's Day weekend?

William Ye: Uh, it was good. Um, you know, as you know, I'm originally from Vancouver and so I'm now in Seattle, but just that we're filming here today in Vancouver, Mm-hmm, so opportunity for me to come here and spend the weekend with my mom, so she's very happy, um, about that.

Ryan Berlin: Amazing. And you didn't have to get her a gift 'cause it was just your presence that was the present.

William Ye: Just the greeting. Yeah, exactly.

Ryan Berlin: So this is the first podcast episode that you and I have recorded together, and you're here because we've just published the first edition of the Seattle rennie Landscape.

William Ye: Right.

Ryan Berlin: We'll get into that in more detail shortly-

William Ye: Mm-hmm

Ryan Berlin:... but why don't you start by just telling us a little bit about what you do at rennie, what you're interested in, what turns your crank, and how we got to sitting here recording this episode.

William Ye: Yeah, yeah. So, uh, as I mentioned, I am the market analyst on the US side, so I do very similar things to what you and the team does, just with an American spin on it, I guess.

Ryan Berlin: Mm-hmm.

William Ye: I think of my core responsibility just to provide, you know, clarity and guidance to anyone we work with, so that's our rennie advisors, colleagues at head office and to other clients, and just sort of provide engaging but also useful, easy-to-digest insights. There's a lot of noise in the market, a lot goi-

Ryan Berlin: Mm-hmm

William Ye: ... a lot going on right now.

Ryan Berlin: Mm-hmm.

William Ye: So, you know, my goal is just to provide some clarity wherever that's possible. So I was actually born and raised here in Vancouver, and like rennie, sort of has expanded into the, the US market. I currently live in Seattle, um, so I have sort of a foundation of both, uh, both sides, and that's how I've, I knew of rennie before joining. I really love storytelling, I love to read, and so it was a nice natural marriage for me for this job in terms of going through the housing market, real estate, which I enjoy-

Ryan Berlin: Mm-hmm

William Ye:... but also getting to, to tell stories on it too.

Ryan Berlin: Yeah, and it's, it's great to have you onboard and, um, yeah, obviously what you do really mirrors what we do north of the border and it's, you know, imperative for our business to have that intelligence presence in the US. It's been great having you here for the past three, four months at this point. And in that time, you managed to pen, eh, the first edition of the rennie Landscape Report.

William Ye: Mm-hmm

Ryan Berlin: ... which is no small feat. Just so everyone who's listening or watching this knows, the rennie Landscape is our semiannual, um, signature report, if you will. It's produced by the intelligence division. And I guess what's unique about it across that continuum of content that rennie Intelligence produces is that it's far less focused on some of those traditional real estate metrics, like sales and listings and prices and how those things are changing, and it's more concerned with the wide variety of things, factors that influence the housing market. So we're talking about trends in the macro economy, interest rates, inflation, policy. We look at trends in credit and debt. We look at demographics, and then we look at aspects of the housing market that aren't necessarily all about sales and listings. We look at the mortgage market. We look at construction trends. So all of that is contained in the landscape, and the idea really is to understand how those factors, so ranging from global to national to more local, impact, in this case, the housing market in the Greater Seattle region.

William Ye: We produce a variety of content from, you know, monthly reports that focus on MLS stats. There's, you know, there's a lot more to address to the housing market overall, and this is really our flagship report that covers all those things. It's meant so that you can read it front to back, back to front, or you can just-

Ryan Berlin: Mm-hmm

William Ye:... pick the topics that interest you, you know? I- it's whether it's demographics, the economy, interest rates.

Ryan Berlin: And if you're watching this or listening to this, you can access the, uh, Seattle rennie Landscape Report on our website at rennie.com/intelligence. Excellent. Let's get on with the show.

William Ye: Yeah.

Ryan Berlin: Broadly speaking, there are a few key themes that emerged from the report that we'll cover today. Uh, we'll talk about the amount of noise in the current headlines, from inflation to tariffs to volatility and uncertainty. We'll talk about a resilient labor market nationally and a resilient housing market more locally. And then finally, as we look ahead, you know, we're seeing continued population growth against a backdrop of a somewhat constrained housing supply.

William Ye: Mm-hmm.

Ryan Berlin: Let's start unpacking some of the more relevant insights that you've landed on, Will, as you put together this report, as they relate to the housing market in Puget Sound.

William Ye: Yeah.

Ryan Berlin: Okay, so if you're someone who's, say, not an economist, lucky you. Lucky you if you're not an economist.

William Ye: [laughs]

Ryan Berlin: So i- if you're not an economist, how should you be viewing the US economy right now? Like, is there a single lens through which to be looking at things?

William Ye: Yeah. Yeah, I think it's a great place to start. I mean, the economy is, like, such that there's so many different ways that you can slice it, that sometimes depending on where you're looking, you can come away with a very different takeaway.

Ryan Berlin: Mm-hmm.

William Ye: That's especially true right now. I mean, as alluded to earlier, you can look at something like interest rates and inflation, which after three years in the US especially haven't come down meaningfully. Can look at the equity markets. Anyone who's been paying attention to their stock, uh, portfolios recently probably have lost, uh, some sleep. Or you can just look at confidence indices which are at all-time lows.

Ryan Berlin: Mm-hmm.

William Ye: I think when it comes to times like these where the data's a little bit muddy or cloudy or conflicting in different ways, I like to just start at the bottom and sort of zoom out from there. I think in this case a good place to start is with the labor market.

Ryan Berlin: Mm-hmm.

William Ye: I mean, we can talk about, you know, GDP, interest rates all we want, but I think at the end of the day...... whether or not you have your job and how you feel, how secure you feel in your position, that has the greatest impact to how someone feels about the economy and how, how they behave.

Ryan Berlin: Absolutely.

William Ye: Yeah. So I think to start from there, I mean, everything considered, the labor market has been surprisingly firm and a source of strength over the past three years.

Ryan Berlin: Mm-hmm.

William Ye: I mean, across the board if you go down the employment metrics, they've been more firm than long-term averages. So you think of something like the unemployment rate has been really consistently low and below, below long-term averages. Uh, wage growth has been quite strong and actually has outpaced inflation in recent years. And so if you go down this, you know, participation rate, all these things have held up quite firmly in spite of everything that we've been through over the past few years with, you know, CO- the COVID pandemic, the associated problem with that, interest rates at generationally high levels.

Ryan Berlin: Mm-hmm.

William Ye: And inflation at seven-plus percent at the peak in the US.

Ryan Berlin: Mm-hmm.

William Ye: Through all of that, firms have kept relatively stable, have kept growing, and have posted quite consistent results.

Ryan Berlin: As I have tracked the labor market in the US over the past few years and watched it evolve, it has been remarkable at how resilient it's been in the face of all of these, quote-unquote, "threats," right?

William Ye: Mm-hmm.

Ryan Berlin: Like you said, with, you know, high inflation and the response of the Federal Reserve, which was to raise interest rates, we saw longer term rates increase, mortgage rates increase, so life did become more expensive. Like if you owned a home or you didn't but you just buy stuff, [laughs] everything cost more. But, uh, through all of that, US firms were continuing to hire. So yeah, it's w- we're in an interesting spot now, I think, with the labor market, because there has been this it has been a source of continued strength. On a net basis, the country has been adding jobs. But we're now, you know, in some ways, I guess, the- the labor market data is lagging. It tells us about what happened most recently last month, but not necessarily where things... It doesn't tell us where things are going. And what we're seeing now, particularly in the last few months, is there's a lot more uncertainty in the market. Consumer sentiment has kind of taken a turn for the worse.

William Ye: Mm-hmm.

Ryan Berlin: You know, we're in an interesting transition period here, and now, like, actually parsing the labor market data month to month becomes increasingly important to understand not just what that headline number is, but what is that underlying composition of, uh, jobs by sector and part-time versus full-time and are young people still employed?

William Ye: Mm-hmm.

Ryan Berlin: Um, and those kinda things. Recognizing that broader context of seemingly daily changes to US trade and tariff policy, we're seeing these huge swings in equities markets and also in debt markets. If you were a CEO of a company, with all of this stuff swirling around you, would you view this as a good time to hire?

William Ye: Yeah, I think that's a great point. I mean, definitely not, right? I think what we're seeing right now is we're not quite at the point where mass layoffs are happening, but to your point, if you're-

Ryan Berlin: Mm-hmm

William Ye: ... if you have a decision whether or not to expand to a new market or to grow your business a lot, now would probably not be the best time to make that decision. And so I think we're really in a bit of a lull or a freeze right now. I think, to your point earlier, a lot of the recent uncertainty that we're seeing right now really began in the past few months.

Ryan Berlin: Mm-hmm.

William Ye: And labor data tends to move with a one to three-month lag just with revisions and capturing, uh, the most recent, uh, impacts. And so, anecdotally, you know, I think if you, a lot of our listeners at home, if you have friends or acquaintances that are looking in the job market right now, it's not necessarily all roses, as I may have been painting so far. I think a lot of firms are now at a point where they're saying, "Le's just take a step back and see where things go." But if the current activity continues to persist, I do think we will be, start to see some of that softening in labor numbers appear much more in the, in the data.

Ryan Berlin: A big part of me would be surprised if we didn't see that.

William Ye: Yeah.

Ryan Berlin: Um, I just think, you know, you're right, that if your market conditions and therefore the future are uncertain, yeah, it's probably not a time for all companies to reinvest in their workforce or e- even in technology or new space. It's just uncertainties does not create that foundation for medium to longer term planning, right? And I think that's... We'll, we'll get to it more, but that's also what's afflicting the housing market right now as well. Because buyers just aren't sure what lies ahead for the economy, what that means for inflation and interest rates, but also for many people, uh, what it means for their own job.

William Ye: Yeah.

Ryan Berlin: Right? So we'll, we'll get to that in a little bit more detail.

William Ye: Mm-hmm.

Ryan Berlin: But I think what that gets to the heart of is, you know, in some ways when we collectively we look at the economy, we're like, we're cynics, I think.

William Ye: Mm-hmm.

Ryan Berlin: We've talked about this before on the podcast, written about it before, this idea that, you know, we're either in a recession or we're simply waiting for the next one to arrive. So-

William Ye: Mm-hmm

Ryan Berlin: ... as we look ahead, I know it's very difficult to forecast in this environment.

William Ye: Mm-hmm.

Ryan Berlin: But as we look ahead, what are you anticipating?

William Ye: Yeah. So I mean, we're definitely not in a recession right now, so by your logic, we should be anticipating one. But yeah, I think that's a great caveat to add, like a prediction, especially for a recession prediction, always just that, a prediction. At the same time, you know, I'm not sure if you've seen the recent memes online about recession indicators.

Ryan Berlin: I haven't. [laughs]

William Ye: Okay. Well, there's, there'll be a guy on like on TikTok pointing to, you know, the price of X or the price of gasoline and saying, or, you know, Mercury's in retrograde and say, "Oh, recession confirmed." I think there's a lot of just speculation right now.

Ryan Berlin: Right. Right.

William Ye: Um, I think that I, at the same time, I think there are some actually compelling reasons to be cautious right now. One of them is the yield curve, which is an indicator that the Federal Reserve tends to track quite closely. You know, without getting too much into the weeds of how to calculate the curve and, and such, you know, in the past few decades, every single US recession has been preceded by an inversion of this curve, which is the indicator that we're looking at.

Ryan Berlin: Which is... W- what does that mean, like, in layman's terms?

William Ye: So we're looking at US government debt at the moment. And so the US will offer maturities of different lengths. So we have the 10-year maturity notes versus the three-month.... versus the one-year.

Ryan Berlin: Mm-hmm.

William Ye: And typically, investors will expect a higher rate of return for a longer maturity. You're tying up your money for a longer time.

Ryan Berlin: Yeah, there's more risk.

William Ye: Mm-hmm.

Ryan Berlin: Yeah, absolutely.

William Ye: And typically, you know, in, in normal circumstances, the yield on the 10-year one is higher because of that. But in terms of economic uncertainty, that relationship inverts.

Ryan Berlin: Mm-hmm.

William Ye: And so the yields on the shorter term rates end up being higher than the long-term rates.

Ryan Berlin: Mm-hmm.

William Ye: And that's just investor saying, you know, "Look, I think things are getting dicey in the short term. I think that I'd rather accept the lower rate of return over the longer horizon rather than subject myself to some of these shorter term uncertainties." And so what we're seeing recently is that curve has inverted, particularly during COVID where three-month notes particularly had the highest interest rate than the 10-year maturity. And like I alluded to earlier, every single US recession has been proceeded by this inversion.

Ryan Berlin: The line is that the yield curve has predicted nine of the last five recessions. An inverted yield curve doesn't necessarily mean that a recession is guaranteed.

William Ye: There's different types of yield curves.

 Ryan Berlin: Mm-hmm.

William Ye: Um, and overall, sometimes there have been false positives, right?

Ryan Berlin: Mm-hmm.

William Ye: The one I'm talking about specifically actually has never had a false positive.

Ryan Berlin: Mm.

 William Ye :And they've actually never missed a, a recession.

Ryan Berlin: Mm-hmm.

William Ye: And so it has a very compliant track record and that's, that's the reason that the Federal Reserve, uh, will specifically look at this one.

Ryan Berlin: So we're talking a lot about recessions here and I'm, I'm kind of of the mindset that a res- a recession's binary, right? You're either you're in a recession or you're not in a recession.

William Ye: Mm-hmm.

Ryan Berlin: We don't know if we'll actually technically be in recession territory in the coming six to 12 months, but I think what's likely is that we're gonna see a slowdown in the economy. I think that's the, that's kind of the, the big takeaway for me. There's some sort of dark clouds over the economy, but if we turn to housing, what are you seeing for homeowners as the economy sort of evolves downward a little bit? Are we gonna see fire sales? Are we gonna see falling prices? What do you anticipate?

William Ye: Here's where the housing market starts to behave a lot differently than some of the other markets like we talked about, like the stock market-

Ryan Berlin: Mm-hmm

William Ye: ... is now. Um, you know, real estate generally is considered a, an illiquid asset. So, you know, if you think of if someone loses their job, they might sell off some of their stock portfolio to cover their expenses, right? It's not the same with-

Ryan Berlin: Yeah

William Ye: ... their home. Nobody wants to lose, you know, your home. It's your, it's your anchor, it's your, uh, source of stability and that sense of prioritization is mashed up in the data. So we've seen that in times of economic strain, households will prioritize paying down their mortgage debt ahead of other types of debt like, you know, auto debts, credit cards. So in that sense, housing markets are sort of naturally insulated from some of the faster or more volatile movements in markets. And even if someone were, you know, unfortunately forced to, to sell their home, um, still it would still come with some lag. You need to fi- you know, list your home, prepare it-

Ryan Berlin: Yeah

William Ye: ... find a buyer and close.

Ryan Berlin: Yeah.

William Ye: Um, so with that all being said, the housing market tends to move with a lag from the wider stock market. So with all that being said, I think just naturally we definitely are still at risk of declining prices.

Ryan Berlin: Mm-hmm.

William Ye: But just naturally speaking, there is some breathing room there and some insulation there from the most dramatic sort of dips that we might be seeing in other kinds of markets.

Ryan Berlin: Yeah, so why don't we get down to the Seattle housing market?

William Ye: Mm-hmm.

Ryan Berlin: So prices absolutely tend to be downward sticky for a whole bunch of reasons. There are lags, people who own their home, um, will essentially sacrifice [laughs] other assets that they have before they give up on their principal residence. But, you know, that being said, we do see periods where prices do fall or they, they fail to increase and, you know, I think it's reasonable to assume that we're gonna be in a period where we're not gonna see rapidly rising prices. I don't see a lot of tailwinds there. But maybe you can speak to the current situation within the greater Seattle housing market as sort of a, some context for some of this, this broader forward-looking stuff that we're talking about.

William Ye: Yeah, so I think, like, another way to put what I just said is, you know, some of those factors are external to the Seattle housing market.

Ryan Berlin: Yeah.

William Ye: And, um, housing market's just generally a little bit more resistant to external forces. We can also turn to look at, you know, our local market specifically to see if there's any inherent signs of strain or cracks that begin to emerge. So when we're looking at the Seattle, uh, market specifically, you know, inventory levels right now are about that 10-year averages for a single family. You might expect with just the slower pace of sales that inventory levels would be higher, but I think it's just a function of what you were talking about earlier. Homeowners are stubborn, prices tend to be sticky downwards, and if people aren't getting the prices that they want, um, they're not gonna list their homes for sale. At the same time, if we do see some of this negativity persist, homeowners may be forced or, you know, incentivized further to sell against their wishes. One way to start looking at if that's showing up is to look at delinquency rates and-

Ryan Berlin: Mm-hmm

William Ye: ... other kinds of debt. So as I had mentioned earlier, delinquency rates tends to rise the latest.

Ryan Berlin: Yeah.

William Ye: Um, when we're looking at Washington numbers, auto debt and, um, credit card debt are above 10-year averages and have been rising consistently over the past three years. Mortgage delinquency rates aren't quite there yet, but should these rates, uh, delinquency rates persist, we would expect mortgage rates to follow. That will lead into, you know, 60-day delinquency rates, 90-day and eventually foreclosures. See inventory flooding the market or entering where there's not an equivalent demand asking for that, that's when we tend to see prices softening or

Ryan Berlin: Yeah. Yeah, that's right, and I n- I think there is a r- there is a risk here obviously for within the Seattle market where we are seeing delinquency rates, as you said, rising for things like credit cards and other personal loans. If the labor market becomes destabilized...... then it sort of just amplifies-

William Ye:Yeah

Ryan Berlin: ... some of these preexisting trends. And there are fewer buffers to the housing market and the mortgage market when other sources of credit are not in great shape, so to speak.

William Ye: Mm-hmm. Mm-hmm.

Ryan Berlin: As it relates back to the mortgage market, when we look at mortgage rates, obviously, you know, we're coming out of, we're about five years clear of the lowest mortgage rates on record.

William Ye: Yeah.

Ryan Berlin: And they rose significantly over the following few years. Where do they sit now? And, like as we look ahead through this year, maybe a little bit beyond.

William Ye: There is also some good news. When we dig a little bit deeper into mortgage rates specifically as well, you know, in US current 30-year fixed mortgage rates are about 6.8% today.

Ryan Berlin: Mm-hmm.

William Ye: Which is pretty much where we were at as of last year. So, you know, it's been a lot slower of a loosening path-

Ryan Berlin: Yeah

William Ye: ... than what we had expected. Last week the Fed just paused again, and we don't expect the pace of loosening to- to increase. And so there is a worry that for homeowners that maybe bought a few years ago during low, uh, periods of low rates, um, if they're forced to refinance, will that cause some strain? Yeah, so I think the interesting thing here when we dive into a little bit more mortgage rates specifically is that the distribution of outstanding debt in the US, mortgage debt, is actually quite positive.

Ryan Berlin: Mm-hmm.

William Ye: In that because we have the 30-year fixed, uh, mortgage available to us, um, a lot of people took advantage of that lower rate window in 2020, '21, and locked in really generationally low interest rates of two to three percent.

Ryan Berlin: Mm-hmm.

William Ye: Um, and those people are really, uh, sitting on those rates at the moment, and they actually s- account for, um, nearly a quarter of all outstanding debt. So it's nearly a quarter of all outstanding debt. That's quite a surprise considering, you know, when we're talking about interest rates these days-

Ryan Berlin: Mm-hmm

William Ye: ... you know, the headlines are, uh, you know, six to eight percent elevated interest rates. But just given that window, I think a lot of homeowners smartly and correctly-

Ryan Berlin: Hm

William Ye: ... locked those in. And so when we actually compare the overall distribution to 2015, back in 2015 about two-thirds of mortgages had rates above five percent. So if you think about those kind of homeowners and they're forced to contend with rates for a longer time and they l- lose their jobs, they're just at a naturally a much higher risk of defaulting, a financial strain. Nearly a third of Washington homeowners today are sort of insulated from that, relatively speaking, because of the fact that they took a- took, uh, advantage of those low rates.

Ryan Berlin: That is a very good thing for the stability of housing markets, and honestly this, th- the stability of neighborhoods and communities, right, that- that people are, you know, sort of... Not regardless of what happens to the economy, but, you know, we- we can see a bit of devolution in economic conditions and households have, you know, a- a good proportion of borrowers, homeowners, have, let's say, a little bit of a buffer, uh, somewhat favorable terms, right? Against the backdrop of higher current market rates, it creates that lock-in effect where, uh, homeowners are reluctant or unable to move-

William Ye: Yeah

Ryan Berlin: ... because they face much higher carrying costs going forward.

William Ye: Right. Another way to think about it would be, you know, given that one-third of current homeowners have rates under three percent, about a third of the inventory in Seattle, you're gonna need significant motivation to- to get those people to- to list their homes.

Ryan Berlin: Right.

William Ye: Yeah.

Ryan Berlin: That's a good way of looking at it. So, there's some context for the n- the next section that we want to segue into which is, um, about the tremendous growth, that is population growth, that is being seen in the Seattle region. So, sort of despite that backdrop-

William Ye: Yeah

Ryan Berlin: ... um, the region continues to grow. It's one of the fastest growing states in the US. A lot of the growth is driven by international migration. What does that mean for housing and housing demand?

William Ye: Yeah. I mean, so we just talked about the other side of the equation, supply, right? This is really the other side. Um,

William Ye: over 2020 to 2023, Seattle, uh, Washington was the sixth fastest growing state-

Ryan Berlin: Mm

William Ye: ... by percentage. A lot of that is being driven by international migration. So when we actually look at interstate migration, more people are leaving Washington State for other parts of the US than coming in.

Ryan Berlin: Hm.

William Ye: But when we account for, um, foreign migration from other countries, that catapults us quickly to the top of the list. I think a lot of that is a factor of just the local job market we have there.

Ryan Berlin: Mm-hmm.

William Ye: But really for the- the housing market, what that means is that despite some of the maybe macro or external forces to the market, there's gonna be this underlying current of demand that will support prices, um, in the medium to long term. The current administration has some shifting policies on, uh, immigration, so that might change in the coming years. Um, but definitely it is a source of, you know, encouragement if- if-

Ryan Berlin: Mm-hmm

William Ye: ... homeowners are worried about, uh, falling home prices.

Ryan Berlin: Right. So yeah, it's- it's not necessarily that prices are going to rise, but it's that counterbalance to maybe a softening housing market that currently, not because of structural reasons but more cyclical ones, has a little bit more inventory and there's obviously a bit more uncertainty out there as well. And so on- on that topic of supply,

Ryan Berlin: you note in the landscape report that we can forecast housing deliveries-

William Ye: Mm-hmm

Ryan Berlin: ... by considering current data on building permits. What are the numbers telling us about what's coming to the market or not coming to the market-

William Ye: Mm-hmm

Ryan Berlin: ... in the next few years?

William Ye: Mm-hmm. So just broadly speaking, Washington State over the past decade has seen a huge explosion of construction activity in general. And when we look at the permits and completion data, we can see that they track very closely together.

Ryan Berlin: Mm-hmm.

William Ye: And I think naturally that makes sense.

Ryan Berlin: Yeah.

William Ye: Every home that needs to be built needs to be permitted and so we will- we will see that in the data before, um, anyone can even touch the dirt. And so when we look at today's permitting data, a huge divergence...... uh, has been occurring.

Ryan Berlin: Mm-hmm.

William Ye: Since 2020, completions are up 25% at about 16,000, uh, multifamily completions per year.

Ryan Berlin: Okay.

William Ye: At the same time, over the same time period, permits are down 39%.

Ryan Berlin: Right.

William Ye: Right? And so what that means is that in the coming years, there's just simply less in a pipeline that will come to market. Even if, uh, market conditions improve, demand really returns in a meaningful way, developers aren't gonna be able to bring the matching amount of supply-

Ryan Berlin: Right

William Ye: ... to market. We can say with great confidence that-

Ryan Berlin: Yeah

William Ye: ... in the coming years completions of new homes specifically is gonna drop dramatically. Um, that, and so that, that coupled with the population growth we just talked about is just another sign of the structural strengths and resilience in the Washington market that's sort of gonna help us weather some of the, the greater macro forces that are at play.

Ryan Berlin: Right. Yeah. It's obviously a very difficult time to be, challenging time to be a forecaster.

William Ye: Mm-hmm.

Ryan Berlin: But I think one can have maybe more confidence in that type of forecast than almost any other housing or economic related one because there are, there's a necessary order-

William Ye: That's right

Ryan Berlin: ... to the provision of new housing.

William Ye: Yeah. And it's not to say that, you know, home prices won't decline-

Ryan Berlin: Hmm. Hmm-mm

William Ye: ... or that we won't see negativity in the market, but it sort of creates a natural floor-

Ryan Berlin: Right

William Ye: ... in, in, in the market.

Ryan Berlin: Great. So really enjoy that conversation. Obviously very wide ranging. There's a lot covered here as a reflection of what is written about in the rennie landscape, which includes not only words, but lots of visuals as well. And if I had to summarize essentially what I'm hearing from you today is that despite the noise in the market, in the headlines about the market, um, from inflation to tariffs and volatility, uncertainty as we talked about earlier. You know, for now or up until this point, the labor market has been a source of strength for the country's economy and also the more local economy. We are seeing some strains starting to emerge potentially, but I think we need a few more months of data to really confirm that there's potentially a new direction in the labor market data.

William Ye: Mm-hmm.

Ryan Berlin: We don't know that yet.

William Ye: Mm-hmm.

Ryan Berlin: So in housing, the story is really one of resilience. We have low interest debt, we have current inventory levels that are really in line with the long run average. And looking forward, we see real potential for limited new housing to be delivered to the market. So as you said, that should help to stabilize or put a floor under, um, values. And at the time, Seattle is a region that people wanna live in, that people continue to move to. So when we look long term and we look at demographic changes in how a market is evolving against that backdrop of trends in housing construction, demand can shift a lot faster than supply. So we go through these periods of mismatch-

William Ye: Mm-hmm

Ryan Berlin:... where sometimes we have too much housing [laughs] for the population-

William Ye: Mm-hmm

Ryan Berlin: ... and other times where it's not enough.

William Ye: Mm-hmm.

Ryan Berlin: And I think we're, we're likely based on the work that, that you've done to be moving in a direction of just a, a tighter, maybe more stabilized housing market over the coming years.

William Ye: Yeah. I think that's a great summary. I think what stands out to me really is that, you know, the macro numbers, the macro headlines are very loud right now, and I think ironically that's a great time to start leaning into, uh, more concrete numbers or some of the more local fundamentals. I think that's a major story playing out right now.

Ryan Berlin: Mm-hmm.

William Ye: Um, you know, structurally there's nothing inherently difficult or worrying about the Seattle housing market. It's more of a factor of weathering out the current anxieties in the market.

Ryan Berlin: Right.

William Ye: And once, you know, hopefully some of these clouds pass, um, the Seattle market is ready and sort of poised for growth.

Ryan Berlin: Again, if, uh, anyone who's listening or watching wants to read more, they can check out the spring edition of the Seattle rennie Landscape at, uh, rennie.com/intelligence. Will, thanks for being a part of this.

William Ye: Thank you.

Ryan Berlin: It was a lot of fun having this conversation. We'll do it again in six months.

William Ye: Until next time.

Ryan Berlin: Okay.

[instrumental music] 

Thank you for tuning into the Rennie Podcast, where we share our passion for homes, housing, community, and cities. We hope that today's episode sparked the same curiosity in you that drives us every day. If you enjoyed the conversation, don't forget to subscribe and follow us on your favorite podcast platform. And if you have a moment, we'd love for you to leave a review. It helps others discover the insights, analysis, and perspective we bring from the Rennie Intelligence Division. For the latest market updates, be sure to register at rennie.com.  

[instrumental music]

Thank you for joining us on the Rennie Podcast. If you'd like to learn more, all resources mentioned in the episode can be found at rennie.com/intelligence. To be the first to receive this information, register for intelligence updates. [instrumental music]