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.

 


This post originally appeared on the Windermere.com Blog


Posted on April 23, 2020 at 8:08 pm
Karen Prins | Posted in Uncategorized | Tagged , , , , , , , , , , ,

Local Happenings: Social Distancing Edition (March & April)

With the cancellation of major local events and a statewide shelter in place order, now is a great time to find alternative ways to stay entertained and support the community while still keeping a safe distance.

Intentionalist recently shared a helpful roundup of 10 ways to support local small business owners and employees. Here are a few ways to stay productive while hunkering down.

Support Comic Con Creators

The postponement of Emerald City Comic Con left many artists, writers, cartoonists and creators who depend on income generated by convention sales in the lurch. To help mitigate the unexpected expense of covering travel costs, unsold merchandise, and lost sales, creators are holding flash sales and fundraisers. Local businesses have also put together pop-up shopping events and virtual shopping networks to help out. Check out this Geekwire roundup and pay a visit to some of the shops to support these independent artists, and considering supporting the Seattle arts community at large through donations or online shopping. This GoFundMe is a good place to start.

Order Takeout from Local Restaurants

Support the local food scene by ordering in. Delivery services like Postmates and Grubhub are elevating the experience with no-contact delivery options. While these apps are convenient, they can be an added expense for restaurants so, if you can, consider ordering takeout directly from the restaurant and picking it up yourself. (In light of the recent closure mandate, many restaurants are offering drive-thru or curbside pickup options, so you don’t even need to enter the restaurant.)

Donate to a Food Bank

Seattle-area food banks have been hit hard recently, particularly since many items commonly donated by local grocers have been consistently sold out. Food banks serve our most vulnerable populations, which is more important now with kids out of school and parents potentially out of work. You can donate food and bags as well as your time — volunteers are needed to help pack food bags and make home deliveries to those who can’t leave their homes. The South Seattle Emerald has published a list of ways to get involved HERE and you can use this MAP to find local food banks.

Donate Blood

Did you know it takes 1,000 donations per day to keep our blood supply stable? Bloodworks Northwest has declared a local blood supply emergency. Mobile blood drives make up almost 60% of our region’s supply, but many have been canceled due to the coronavirus. If you are healthy and able, you can donate blood directly at any of Bloodworks Northwest’s donor centers.

Join a Virtual Book Club

Connect with others and converse over a good book, all from the comfort of your home. The Stranger is hosting a coronavirus book club called The Quarantine Club. You can get all the details and read about the first book selection HERE. If this club isn’t the right fit, consider starting a book club of your own! Share your favorite selections with friends and foster conversation over social platforms.

Take a Hike

There’s no shortage of scenic hikes surrounding Seattle. From stunning parks with sweeping views right here in the city to breathtaking mountain peaks, there are plenty of places to enjoy the outdoors, get some exercise and enjoy the fresh air. Hiking is explicitly allowed with the new shelter in place order, as long as PROPER SOCIAL-DISTANCE is kept in the process. With that said, staying closer to home and going to urban parks on off hours to avoid crowds is advised. “Nature’s not closed, but staying closer to home is the best choice,” says Kindra Ramos, director of communications at the Washington Trails Association. Read more HERE

Catch a Concert Online

As the coronavirus outbreak takes its toll on the arts community, many venues are getting creative and streaming their services online. The Seattle Symphony is now streaming previous performances as well as new soloist performances on Facebook and YouTube. While many are turning to YouTube, there are other streaming services where you can catch a variety of live performances. Checkout The Verve for a handful of options. You can also take this opportunity to explore museums around the world from the comfort of your couch, thanks to these virtual tours.

 


This post is an edited version of the original that appears on GettheWReport.com


Posted on March 25, 2020 at 9:25 pm
Karen Prins | Posted in Uncategorized | Tagged , , , , , , , , , , , , ,

5 Cool New Smart Home Gadgets from CES 2020

An international springboard for consumer tech, the CES conference this year did not disappoint, with plenty of new technologies, gadgets galore and even innovative food products (plant-based Impossible pork, anyone?).

A veritable smorgasbord of smart home tech was on full display for every space, from garages and walkways to under-sink cabinets and showerheads. Here are seven new smart home products that caught our attention:

KOHLER SMART SHOWERHEAD WITH SPEAKER

Kohler offers a range of high-tech shower speakers, from basic bluetooth to Amazon-Alexa-enabled. The luxurious showerhead option has a magnetic docking system that holds the speaker — crafted with Harmon Kardon audio tuned to cancel out water noise — right in the center.

BOSCH FRIDGE WITH FOOD RECOGNITION

We’ve all lost food containers to the depths of our refrigerators. While reducing food waste isn’t the top goal for Bosch’s Home Connect Fridge, it’s inventory abilities can certainly help. In partnership with Chefling — a recipe planning app — this fridge keeps track of what you have on hand and can recommend recipes so nothing goes to waste.

LG ThinQ Washing Machine

Working to make your weekly washing a little easier (on you and your water bill), the ThinQ washing machine is equipped with AI that can sense the type of fabric and automatically determine the best cycle for your clothing. As an added bonus, if you have the compatible dryer, the machines can communicate and share the optimal drying settings too.

HUB FREE SMART SWITCHES (THAT DON’T NEED A NEUTRAL WIRE)

GE Lighting is swinging for the fences with it’s smart home lighting lineup — from color-changing bulbs to motion-sensing switches. It’s latest offering includes three-wire and hub-free switches that are available in 5 different designs, are well-priced, include dimming and motion-sensing functionalities. Most impressively, only need three wires to connect (line, load, and ground), making them an excellent option for older homes.

BALLIE ROLLING BUTLER

Unlike Google Assistant or Amazon Alexa, this AI assistant from Samsung is on the move. It can navigate your home and interact with you and other smart home devices. Like a rolling butler, it can do everything from dim lights to active your Roomba. Outfitted with a camera, Ballie (and you) can keep eyes on what goes on around the house.

 


This post originally appeared on GettheWReport.com


Posted on February 26, 2020 at 10:00 pm
Karen Prins | Posted in Uncategorized | Tagged , , , , , , ,

What You Need to Know About the US Luxury Housing Market

MLS #1279916

 

Posted in Luxury by Matthew Gardner, Chief Economist, Windermere Real Estate 

Luxury homes sales across the U.S. continue to perform strongly, but I’m noticing some headwinds starting to appear that are worthy of a closer look.

It’s often thought that luxury real estate runs totally independent of the overall market, and while this is true in some respects, there are definitely correlations between high-end housing and the rest of the market.

The first similarity is that the luxury market has suffered from some the same inventory constraints that are almost endemic across all price points in the U.S. But, similar to the overall market, we are starting to see a rise in inventory, which should be good news for real estate agents and luxury home buyers alike.

Impact of rising inventory 

This increase in the number of luxury homes for sale has started to have a tapering effect on price growth, which again, is similar to what we’re seeing in the rest of the market. But as real estate professionals, we know full well that all housing is local and some markets are performing far better than others.

For example, luxury markets in Maui, Northern California, Colorado, and Sarasota, Florida, are all experiencing substantial price growth, while there are noticeable slowdowns in many parts of New York and New Jersey. Even Queens and Jersey City, which have continued to benefit from high demand, have seen price growth stall recently, indicating that those markets could be losing some steam.

Why the slowdown? 

The slowing of luxury sales in certain areas around the country piqued my interest, so I decided to explore why this is happening. The first thing I noticed is that cities with high property taxes are fairly prevalent on the list of slowing markets; this includes cities like Boston, Austin, New York City, and Chicago. It is likely that the federal tax changes limiting the deductibility of property taxes are the culprit for such slowdowns in these areas.

Something else that has undoubtedly impacted luxury home sales in markets, such as New York City and Seattle, is the significant decline in foreign buyers from countries like China and Canada. According to the National Association of Realtors, the number of purchases by international buyers fell by 21 percent between 2017 and 2018, amounting to a drop of $32 billion – the largest decline on record.  Foreign buyers spent $121 billion on 266,754 properties, making up 8 percent of the buyers of existing (previously lived in) homes.

My research tells me that foreign home buyers are pulling back amid political uncertainty in the U.S. Ongoing concerns about a potential trade war, combined with rhetoric against foreigners, have done their part to dampen some of the enthusiasm to invest in U.S. housing. Also playing a role in this slowdown is the Chinese Central Government which has started placing tighter controls on the ability to spend money outside of mainland China. And finally, rising home prices and a strong U.S. dollar are likely two other key factors behind the tumbling interest in luxury real estate from overseas buyers.

So how do I see the luxury market performing in 2019?

Luxury real estate sales in markets like Boston, Clearwater, Austin, and Alexandria, Virginia will continue to slow down for the reasons stated earlier, but in other parts of the country, home buyers will provide the demand needed to keep the market plugging along at a healthy pace.

The changes affecting mortgage interest deductions and property taxes will also continue to impact the luxury market in certain areas, but this will, to a degree, be offset by other tax changes that favor high-income households and increase their disposable income. Something else that will help keep the luxury real estate market afloat in the coming year is jumbo mortgage interest rates which remain remarkably competitive compared to historic standards.

On a whole, high-end real estate sales have been strong over the past few years. While I am predicting somewhat of a slowdown next year given the headwinds discussed earlier, 2019 will be remembered as a year where balance started to return to the luxury housing market.

Mr. 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 Blog.


Posted on September 19, 2018 at 9:52 pm
Karen Prins | Posted in Uncategorized |

Local Market Update – September 2018

The number of homes for sale in August increased dramatically over the same time a year ago. This is the result of a moderate increase in new listings and a much slower pace of sales. Homes are staying on the market longer, giving buyers more choices and more time to make an informed decision. While home prices are up compared to a year ago, the rate of increase was in the single digits rather than the double-digit surges of past months. It’s still a seller’s market, but sellers need to have realistic expectations about pricing their homes as the market softens.

Eastside

>>>Click image to view full report.

The median price of a single-family home on the Eastside was up nearly 10 percent from the same time last year to $935,000. Home prices have declined each month from the all-time high of $977,759 set in June. Inventory increased 73 percent over last August. With supply soaring and home prices moderating, sellers need to work with their broker to price their home to meet the current market conditions. A year ago 47 percent of the homes on the Eastside sold for over list price. This August that number was down to 29 percent.

King County

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King County experienced yet another flood of inventory with the number of homes for sale jumping 65 percent over the previous year. Despite the growth, the county has just 1.9 months of inventory and remains a seller-oriented market. The market has slowed but it remains fast-paced, with 62 percent of the properties here selling in fewer than 15 days. While home prices were up 3 percent from a year ago, the median price of $669,000 represented the third straight month of declines from the record-high of $726,275 reached in May.

Seattle

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After leading the nation in home price growth for nearly two years, Seattle is finally cooling off. The median home price in August was $760,000, up just 4 percent from last year and down from the record $830,000 reached in May. Inventory soared in August, but the city still has just two months of supply, far short of the four to six months that is considered balanced. Bidding wars are becoming less common and price drops more common. Sellers must adjust their expectations to what appears to be a long waited moderating of the market.

Snohomish County

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Mirroring the market slowdown in King County, Snohomish County also experienced a cooling off in August. The median price of a single-family home was $492,000, up 8 percent from a year ago but down from the record high of $511,000 two months prior. Inventory increased nearly 30 percent, but at just 1.6 months of supply the market remains very tight and sales are brisk. Sixty percent of homes here sold within 15 days.

This post originally appeared on the WindermereEastside.com Blog.


Posted on September 12, 2018 at 6:29 pm
Karen Prins | Posted in Buying a Home, For Your Home, Local Market Update, Real Estate Investing, Selling a Home, Uncategorized | Tagged , , , , ,