Western Washington Real Estate Market Update

 

The following analysis of the Western Washington real estate market is provided by Windermere Real Estate Chief Economist, Matthew Gardner. We hope that this information may assist you with making better-informed real estate decisions. For further information about the housing market in your area, please don’t hesitate to contact your Windermere agent.

 

A MESSAGE FROM MATTHEW GARDNER

Needless to say, any discussion about the U.S. economy, state economy, or housing markets in the first quarter of this year is almost meaningless given events surrounding the COVID-19 virus.

Although you will see below data regarding housing activity in the region, many markets came close to halting transactions in March and many remain in some level of paralysis. As such, drawing conclusions from the data is almost a futile effort. I would say, though, it is my belief that the national and state housing markets were in good shape before the virus hit and will be in good shape again, once we come out on the other side. In a similar fashion, I anticipate the national and regional economies will start to thaw, and that many of the jobs lost will return with relative speed. Of course, all of these statements are wholly dependent on the country seeing a peak in new infections in the relatively near future. I stand by my contention that the housing market will survive the current economic crisis and it is likely we will resume a more normalized pattern of home sales in the second half of the year.

 

HOME SALES

  • There were 13,378 home sales during the first quarter of 2020, a drop of only 0.2% from the same period in 2019, but 27% lower than in the final quarter of 2019.
  • The number of homes for sale was 32% lower than a year ago and was also 32% lower than in the fourth quarter of 2019.
  • When compared to the first quarter of 2019 sales rose in eight counties and dropped in seven. The greatest growth was in Cowlitz and Lewis counties. The largest declines were in Island and Snohomish counties.
  • Pending sales — a good gauge of future closings — rose 0.7% compared to the final quarter of 2019. We can be assured that closed sales in the second quarter of this year will be lower due to COVID-19.

 

 

 

HOME PRICES

  • Home-price growth in Western Washington rose compared to a year ago, with average prices up 8.7%. The average sale price in Western Washington was $524,392, and prices were 0.4% higher than in the fourth quarter of 2019.
  • Home prices were higher in every county except San Juan, which is prone to significant swings in average sale prices because of its size.
  • When compared to the same period a year ago, price growth was strongest in Clallam County, where home prices were up 21.7%. Double-digit price increases were also seen in Kitsap, Skagit, Mason, Thurston, and Snohomish counties.
  • Affordability issues remain and, even given the current uncertain environment, I believe it is highly unlikely we will see any form of downward price pressures once the region reopens.

 

 

 

 

 

 

DAYS ON MARKET

  • The average number of days it took to sell a home in the first quarter of this year dropped seven days compared to the first quarter of 2019.
  • Pierce County was the tightest market in Western Washington, with homes taking an average of only 29 days to sell. All but two counties — San Juan and Clallam — saw the length of time it took to sell a home drop compared to the same period a year ago.
  • Across the entire region, it took an average of 54 days to sell a home in the first quarter of the year — up 8 days compared to the fourth quarter of 2019.
  • Market time remains below the long-term average across the region. This is likely to change, albeit temporarily, in the second quarter due to COVID-19.

 

 

CONCLUSIONS

This speedometer reflects the state of the region’s real estate market using housing inventory, price gains, home sales, interest rates, and larger economic factors.

Given the current economic environment, I have decided to freeze the needle in place until we see a restart in the economy. Once we have resumed “normal” economic activity, there will be a period of adjustment with regard to housing. Therefore, it is appropriate to wait until later in the year to offer my opinions about any quantitative impact the pandemic will have on the housing market.

 

 

ABOUT MATTHEW GARDNER

As Chief Economist for Windermere Real Estate, Matthew Gardner is responsible for analyzing and interpreting economic data and its impact on the real estate market on both a local and national level. Matthew has over 30 years of professional experience both in the U.S. and U.K.

In addition to his day-to-day responsibilities, Matthew sits on 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; and is 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.

Original post appeared at www.windermere.com.


Posted on April 17, 2020 at 6:17 pm
Oleg Doukhnevitch | Posted in Market Stats, Real Estate News, Real Estate Tips, windermere, Windermere Bellevue Commons News | Tagged , , , , ,

Saving to Buy A Home During COVID-19

Image Source: Canva

 

The COVID-19 pandemic is changing the way people plan for their future. For those saving to buy a home, the landscape may seem daunting. However, this new world of social distancing and stay at home orders is an opportunity to rethink your spending and saving plans. Keeping the following suggestions for your budget and finances in mind can help make your dream of buying a home a reality.

 

Rethink your budget:

If there have been changes to your income amid COVID-19, adapting your budget is a logical and necessary step. If your income has gone unchanged, certain tweaks to your budget can yield significant savings. Knowing the leisure portion of your normal expenditure has been removed for the time being is a great starting point for reassessing your spending.

 

  • Begin with your income and assets
  • Determine your household’s new baseline and arrange your new budget accordingly
  • Divide your budget expenses out into Fixed and Variable
  • Adjust for changes in essential costs—Housing, Utilities, Insurance, Food
  • Put into savings what normally would have been your leisure spending money

 

As the stay-at-home lifestyle continues, take a look at your unnecessary costs for such things as memberships, subscriptions, and online shopping. Reach out to the subscription organizations and see if they are offering any options to delay your membership until a later date.

 

  • Categorize all active memberships as Cancel, Adjust, or Keep
  • For live entertainment, research how far out the venues have postponed shows
  • Adjust your online shopping needs for your current lifestyle
  • Reassess the must-haves of your new stay-at-home daily life

 

Review your finances:

If you’re planning on buying a home in the near future, you are likely already on your financial planning journey. With added uncertainty around COVID-19’s effective timeline, the more information you can gather, the better. In these unprecedented times, flexible solutions are being provided to customers. Exploring what options your banks and issuers are offering will keep you informed and prepared while keeping your finances in order.

 

Contact your credit card issuer to see if they are offering any of the following options to customers:

  • Payment deferral or forbearance
  • Flexible fee policies
  • Lowering your monthly payment or interest rate temporarily
  • Forgiveness or relief from late fees

 

Following the steps outlined above can go a long way towards helping you save for a home. As your finances are impacted by the COVID-19 pandemic, take time to adjust accordingly. Continuing to gather information and developing a strategy will help you steer your eventual home purchase in the right direction through these uncertain times.

This post originally appeared on www.windermere.com.


Posted on April 16, 2020 at 4:14 pm
Oleg Doukhnevitch | Posted in Home Buying, Real Estate Tips | Tagged , ,

What’s Happening in the Market? March 2020 stats

As expected we have seen a dramatic increase in Sold prices for February 2020 numbers over the same time last year.  This is primarily due to the 4th Quarter correction in 2018 of homes that closed in February 2019.   Market times are falling and Multiple offers are heating up as February 2020 saw more than a 1/3 of the homes sell for over asking price by an average of 5%.  Inventory has now dipped to 0.8 Months and even though some Buyers & Sellers have put their Real Estate decisions on hold due to current uncertainties (Virus/Stock Market/Economy) we are still seeing strong activity. This might well be the case for some time to come as interest rates are at an all-time low (3.47%), prices continue to rise and jobs keep flowing into area at a steady pace


Posted on March 11, 2020 at 4:19 pm
Oleg Doukhnevitch | Posted in Home Buying, Market Stats, Real Estate News, Real Estate Tips, seattle, Windermere Bellevue Commons News | Tagged , , , , ,

Matthew Gardner’s Prediction: Will There Be A Recession in 2020?


Posted on February 25, 2020 at 7:03 pm
Oleg Doukhnevitch | Posted in Real Estate News, Real Estate Tips, Windermere Bellevue Commons News | Tagged ,

January 2020 What’s Happening in the Market Stats

 

As expected, the market has drastically picked up due to extremely low inventory and heighted Buyer activity that had been holding off purchasing during the holidays.  Since these stats are not a rolling 12 month average they are going to appear skewed due to the small sample size, but they do show year over year with many areas growing significantly from January 2019.  Pretty much every market has been on fire with Multiple offers on just about everything available for sale.  The Days on Market (DOM) have dramatically gone up, but that is primarily due to homes selling that had been on the market for a while that Sold over the holidays.  We expect to see the DOM fall significantly over the next couple months as most new listings are now selling in under 14 days & in many cases less than a week.   (Pro Tip- Buyers be prepared to put your best foot forward & Sellers to make sure their home is parade ready to get the highest dollar!)

 


Posted on February 12, 2020 at 8:41 pm
Oleg Doukhnevitch | Posted in Home Buying, Market Stats, Real Estate News, Real Estate Tips, Windermere Bellevue Commons News | Tagged , , , , ,

Local Market Update November 2019

A steady influx of buyers continued to strain already tight inventory throughout the area in October. Home sales were up, as were prices in much of the region. With our thriving economy and highly desirable quality of life drawing ever more people here, the supply of homes isn’t close to meeting demand. Homeowners thinking about putting their property on the market can expect strong buyer interest.

EASTSIDE

As the Eastside continues to rack up “best places” awards, it’s no surprise that the area is booming. Development is on the rise, fueled primarily by the tech sector. The appeal of the Eastside has kept home prices here the highest of any segment of King County. The median single-family home price in October was stable as compared to the same time last year, rising 1% to $900,000.

VIEW FULL EASTSIDE REPORT

KING COUNTY

King County’s 1.74 months of available inventory is far below the national average of four months. Despite the slim selection, demand in October was strong. The number of closed sales was up 5% and the number of pending sales (offers accepted but not yet closed) was up 11%. The median price of a single-family home was down 2% over a year ago to $660,000. However, some areas around the more reasonably-priced south end of the county saw double-digit price increases.

VIEW FULL KING COUNTY REPORT

SEATTLE

Seattle home prices took their largest year-over-year jump in 12 months. The median price of a single-family home sold in October was up 3% from a year ago to $775,000, a $25,000 increase from September of this year.  Seattle was recently named the third fastest-growing city in America.  Real estate investment is surging. A growing population and booming economy continue to keep demand for housing –and home prices—strong.

VIEW FULL SEATTLE REPORT

SNOHOMISH COUNTY

Both the number of home sales and home prices were on the rise in Snohomish County in October. Overall homes sales increased 7%, and the median price of a single-family home rose 5% over a year ago to $495,000.  Supply remains very low, with just six weeks of available inventory.

VIEW FULL SNOHOMISH COUNTY REPORT


This post originally appeared on GetTheWReport.com


Posted on November 20, 2019 at 8:30 pm
Oleg Doukhnevitch | Posted in Home Buying, Market Stats, Real Estate News, Real Estate Tips, seattle, windermere, Windermere Bellevue Commons News, Windermere Bellevue Commons News | Tagged homeless | Tagged , , , , , , , , , ,

Are You Better Off Paying Your Mortgage Early or Investing Your Money?

Photo Credit: Rawpixel via Unsplash

Few topics cause more division among economists than the age-old debate of whether you’re better off paying off your mortgage earlier, or investing that money instead. And there’s a good reason why that debate continues; both sides make compelling arguments.

For many people, their mortgage is the largest expense they will ever incur in their lives. So if given the chance, it only makes logical sense you would want to pay it off as quickly as possible. On the other hand, a mortgage is also the cheapest money you will ever borrow, and it’s generally considered good debt. Any extra money you obtain could be definitely be put to good use elsewhere.

The reality is, however, a little less cut and clear. For some homeowners, paying off their mortgage earlier is the right answer. While for others, it would be far more advantageous to invest their money.

 

Advantages of paying off your mortgage earlier

  • You’ll pay less interest: Each time you make a mortgage payment, a portion is dedicated towards interest, and another towards principal (we’ll ignore other costs for now). Interest is calculated monthly by taking your remaining balance, the length of your amortization period, and the interest rate agreed upon with your lending institution.

If you have a $300,000 mortgage, at a 4% fixed rate over 30 years, your monthly payment would be around $1,432.25. By the time you finish paying off your mortgage, you would have paid a total of $515,609, of which $215,609 were interest.

If you wanted to lower the total amount you pay on interest, you don’t need to make a large lump sum to make a difference. If you were to increase your monthly mortgage payment to $1,632.25 (a $200 a month increase), you would be saving $50,298 in interest, and you’ll pay off your mortgage 6 years and 3 months earlier.

Though this is an oversimplified example, it shows how even a small increase in monthly payments makes a big difference in the long run.

  • Every additional dollar towards your principal has a guaranteed return on investment: Every additional payment you make towards your mortgage has a direct effect in lowering the amount you pay in interest. In fact, each additional payment is, in fact, an investment. And unlike stocks, bonds, and other investment vehicles, you are guaranteed to have a return on your investment.
  • Enforced discipline: It takes real commitment to invest your money wisely each month instead of spending it elsewhere.

 

Your monthly mortgage payments are a form of enforced discipline since you know you can’t afford to miss them. It’s far easier to set a higher monthly payment towards your mortgage and stick to it than making regular investments on your own.

Besides, once your home is completely paid off, you can dedicate a larger portion of your income towards investments, your children or grandchildren’s education, or simply cut down on your working hours.

 

Advantages of investing your money

  • A greater return on your investment: The biggest reason why you should invest your money instead comes down to a simple, green truth: there’s more money to be made in investments.

Suppose that instead of dedicating an additional $200 towards your monthly mortgage payment, you decide to invest it in a conservative index fund which tracks S&P 500’s index. You start your investment today with $200 and add an additional $200 each month for the next 30 years. By the end of the term, if the index fund had a modest yield of 5% per year, you will have earned $91,739 in interest, and the total value of your investment would be $163,939.

If you think that 5% per year is a little too optimistic, all we have to do is see the S&P 500 performance between December 2002 and December 2012, which averaged an annual yield of 7.10%.

  • A greater level of diversification: Real estate has historically been one of the safest vehicles of investment available, but it’s still subject to market forces and changes in government policies. The forces that affect the stock and bonds markets are not always the same that affect real estate, because the former are subject to their issuer’s economic performance, while property values could change due to local events.

By putting your extra money towards investments, you are diversifying your investment portfolio and spreading out your risk. If you are relying exclusively on the value of your home, you are in essence putting all your eggs in one basket.

  • Greater liquidity: Homes are a great investment, but it takes time to sell a home even in the best of circumstances. So if you need emergency funds now, it’s a lot easier to sell stocks and bonds than a home.
First posted on windermere-bellevue.com.

Posted on July 3, 2019 at 5:08 pm
Oleg Doukhnevitch | Posted in Real Estate Tips, Windermere Bellevue Commons News | Tagged , , , , , , , , , ,

Western Washington Real Estate Market Update

The following analysis of the Western Washington real estate market is provided by Windermere Real Estate Chief Economist Matthew Gardner. We hope that this information may assist you with making better-informed real estate decisions. For further information about the housing market in your area, please don’t hesitate to contact your Windermere Agent. 

Economic Overview

Washington State continues to be one of the fastest growing states in the nation and there is little to suggest that there will be any marked slowdown in the foreseeable future. Over the past year, the state has added 105,900 new jobs, representing an annual growth rate of 3.2%. This remains well above the national rate of 1.65%. Private sector employment gains continue to be robust, increasing at an annual rate of 3.7%. The strongest growth sectors were Construction (+7.4%), Information (+6.2%), and Professional & Business Services (+6.1%). The state’s unemployment rate was 4.5%, down from 4.8% a year ago.

All year I’ve been predicting that Washington State’s annual job growth would outperform the nation as a whole, and we now know with certainty that this is going to be the case. Furthermore, I am now able to predict that statewide job growth in 2019 will be equally strong, with an expected increase of 2.6%.

Home Sales Activity

  • There were 22,310 home sales during the third quarter of 2018. This is a significant drop of 12.7% compared to the third quarter of 2017.

  • The number of homes for sale last quarter was up 14.5% compared to the third quarter of 2017, continuing a trend that started earlier in the year. However, the increase in listings was only in Seattle’s tri-county area (King, Pierce, and Snohomish Counties) while listing activity was down across the balance of the region.

  • Only two counties had a year-over-year increase in home sales, while the rest of Western Washington saw sales decrease.

  • The region has reached an inflection point. With the increase in the number of homes for sale, buyers now have more choices and time to make  a decision about what home to buy.

Home Prices

  • Home prices, although higher than a year ago, continue to slow due to the significant increase in the number of homes for sale. This, in my opinion, is a very good thing.

  • When compared to the same period a year ago, price growth was strongest in Lewis County, where home prices were up 15.3%. Six other counties experienced double-digit price increases.

  • Slowing price growth was inevitable; we simply could not sustain the increases we’ve experienced in recent years. Lower rates of appreciation will continue until wage growth catches up.

Days on Market

  • The average number of days it took to sell a home dropped by four days compared to the same quarter of 2017.

  • Across the entire region, it took an average of 39 days to sell a home in the third quarter of this year. This is down from 43 days in the third quarter of 2017 and down 2 days when compared to the second quarter of 2018.
  • King County continues to be the tightest market in Western Washington, with homes taking an average of only 19 days to sell. Every county in the region other than Skagit and King — which both saw the time on the market rise by 2 days — saw the length of time it took to sell a home drop when compared to the same period a year ago.

  • More choice in the market would normally suggest that the length of time it takes to sell a home should rise, but the data has yet to show that. That said, compared to last quarter, we are seeing some marked increases in days on market in several counties, which will be reflected in future reports.

Conclusions

This speedometer reflects the state of the region’s real estate market using housing inventory, price gains, home sales, interest rates, and larger economic factors. I started to move the needle toward buyers last quarter and have moved it even further this quarter. Price growth continues to slow, but more significant is the rise in listings, which I expect to continue as we move toward the quieter winter period.

I believe that psychology will start to play a part in the housing market going forward. It has been more than 15 years since we’ve experienced a “balanced” market, so many home buyers and sellers have a hard time remembering what one looks like. Concerns over price drops are overrated and the length of time it’s taking to sell a home is simply trending back to where it used to be in the early 2000s.

 

Matthew Gardner is the Chief Economist for Windermere Real Estate, specializing in residential market analysis, commercial/industrial market analysis, financial analysis, and land use and regional economics. He is the former Principal of Gardner Economics, and has more than 30 years of professional experience both in the U.S. and U.K.

 

This post originally appeared on the Windermere.com Blog.

First posted on windermere-bellevue.com.

Posted on October 31, 2018 at 8:06 pm
Oleg Doukhnevitch | Posted in Fanatical News, Home Buying, Market Stats, Real Estate News, Real Estate Tips, seattle, windermere, Windermere Bellevue Commons News | Tagged , , , , , , , , , , ,

Transforming Your House from Summer Home to Winter Hideaway

None of us want to admit it, but Winter is Coming. The new season of Game of Thrones might not be until 2019, but your home will need preparation before then. As the days shorten, you can mitigate many mid-winter headaches with some preemptive prep. Proper weatherizing can help protect your investment from preventable damage, save money on energy costs, and, most importantly, keep your home safe and warm for you and your loved ones throughout the winter season. Here is a useful checklist to manage your weatherization project. Setting aside some time on a couple Sundays should be more than enough to knock this out:

Getting started: Check your toolbox to make sure you have all the materials you need for home maintenance in one place. This NY Times article provides a good list of the tools you’ll really need to maintain your home. After your toolbox is put together, you can confidently begin the maintenance on your home.

Insulation: Insulating a home can reduce your energy bill by up to 50%. For the best results, your home should be properly insulated from the ceilings to the basement. By starting in your attic and progressively adding insulation to other areas of your home over time, you will avoid spending a large sum of money up-front.

Cracks & Leaks: Do a run-through of your entire house for cracks and leaks, from your roof to your baseboards. Winter weather is unpredictable. Whether your area gets rain, wind or snow, cracks in your house can lead to cold drafts or leaks that cause water damage. Depending on your house type, most cracks can be easily filled with supplies from your local hardware store in a do-it-yourself fashion. Use caulk to seal any cracks in the permanent building materials.

Windows & Doors: Another common place for heat leakage is in your windows and exterior doorways. Make sure seals are tight and no leaks exist. If you have storm windows, make sure you put them on before the cold season begins. Don’t underestimate the difference some weatherstrips and a door sweep can provide in preventing drafts and keeping the heat in.

Rain Gutters: Clean your rain gutters of any debris. In colder climates, buildup will cause gutters to freeze with ice, crack and then leak. Once you have removed the residue from the drains, test them by running hose water to make sure cracks and leaks have not already formed. Even in warmer locales, the buildup can put undue stress on your roof and home.

Pipes: Pipes are a number one risk in winter climates. A burst pipe can become a winter disaster in a matter of seconds. Remember to turn off your exterior water source and take in your hose. Internally, wrapping your pipes is a recommended precaution to take.

Heating System: What’s one thing gas fireplaces, wood burning stoves, and central air heating systems all have in common? They all need to be cleaned and maintained. Annual checks of are vital in avoiding dangers such as house fires. If you use an old-fashioned wood stove, make sure there are no leaks and that all soot build up or nests are removed. If a furnace is what you have, remember to change the filters as recommended or clean out your reusable filters.

Fireplace & Wood burning stoves: Make sure to have chimneys and air vents cleaned early in the season if you are planning on warming your home with a wood-burning source. When your fireplace is not in use make sure to close the damper, some resources estimate an open damper can increase energy consumption by as much as 30%.

Outside: As we mentioned before, make sure you bring your patio furniture inside (or cover) for the winter- but don’t forget other, smaller items such as your tools, including a hose and small planting pot. Clear out any piles around the side of your house, checking for cracks as you go so to avoid providing shelter for unwelcome guests over the cold season. If your property has large trees check for loose branches and call someone to trim back any items that may fall in your yard, on your roof or even damage a window.

Emergency Kit: Lastly, make sure your emergency kit is up-to-date with provisions, batteries, fresh water, food for animals, entertainment for kids, etc- especially if you live in an area prone to power outages.

First posted at windermere-bellevue.com


Posted on September 26, 2018 at 7:41 pm
Oleg Doukhnevitch | Posted in Christmas, Home Update, Real Estate Tips, Windermere Bellevue Commons News, winter | Tagged , , ,

How Will the Real Estate Market Respond to Rising Interest Rates?

Let Windermere Real Estate’s Chief Economist Matthew Gardner walk you through what to expect from the real estate market amidst rising interest rates.​

This post originally appeared on windermere-bellevue.com


Posted on August 8, 2018 at 4:27 pm
Oleg Doukhnevitch | Posted in Home Buying, Market Stats, Real Estate News, Real Estate Tips, seattle, Uncategorized, windermere, Windermere Bellevue Commons News | Tagged homeless | Tagged , , , , , , , ,