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Newsletter – Real-Time Market Update: Where We Are Now February 2020
The 2021 real estate market is off to a very brisk start. Historically low interest rates are driving buyer demand. This is coupled with a needed “catch-up” in available homes for sale. In 2020, we saw a stall in new listings during our normally plentiful spring market due to the pandemic. From April to June of 2020, new listings were only a portion of what would have been typical for that time of year. Where it became tricky was in May of 2020 when buyer activity rebounded, and we started to record higher levels of pending sales in 2020 over 2019. This led to the inventory deficit that we currently find ourselves in.
The stats above for King and Snohomish counties highlight the January statistics. In both markets, prices are up year-over-year and well above average appreciation levels. This is due to the phenomenon described above which is a classic case of supply and demand. This has led to months of inventory remaining tight, with mere weeks’ worth of available homes. Days on market have reduced by 38% in King County and 41% in Snohomish County year-over-year, and homes are consistently selling at or above list price.
What does this market mean for sellers? We have already seen sellers that have come to market in Q1 enjoying large buyer audiences and great results. Note that the stats in the image are closed sales in January, which means most of them went under contract (pending) in December. Transactions that closed over the last 7 days and most likely went pending after the first of the year are recording very favorable results for sellers. For example, in King County, there were 305 closed sales from 2/9/21 to 2/15/21 with average days on market at 24 days and a 108% list-to-sale price ratio. In Snohomish County, there were 101 closings in the same timeframe, with average days on market at 14 days and a 104% list-to-sale price ratio. Tight inventory and motivated buyers are creating these results. As we head into spring, we expect to see more homes come to market which could soften these escalations. This would not be a bad thing as sellers are sitting on 9 years of equity growth and these recent gains have been a bonus.
What does this market mean for buyers? Well, you must have a plan! Pre-underwritten financing, pre-offer performed due diligence, organized funds for the down payment, and possible appraisal cushions have been key elements for success. In addition, aligning with a skilled broker to help a buyer prevail is paramount. A responsive broker who is a good communicator can be the difference-maker in winning a home. Listing agents and sellers will not only vet the elements of an offer, but they will also consider the working relationship established with buyers’ brokers as they review offers. There is a special magic to developing these relationships and it takes extra effort. Windermere as a company has been a market leader for many years and continues to work hard to make strong connections for success.
Buyers are anxious to secure their next home with today’s interest rates helping to off-set the expense of price appreciation. With debt service so low, buyers are hungry for more inventory and will most likely start to see an increase in selection in the spring and summer months. Fortitude is the name of the game for buyers, but it will be worth it in the end as the interest rates are amazing and price gains don’t seem to be going away anytime soon.
If you are curious about how today’s market relates to your real estate goals or know someone that needs real estate assistance, please reach out. I am constantly studying the activity in the market to anticipate where we are headed in order to provide sound guidance. It is always my goal to help keep my clients informed and empower strong decisions.
At Windermere, we help people buy and sell homes, but we also help build community. I’m proud to support the Windermere Foundation which has raised over $43 million in the past 32 years for low-income and homeless families right here in our local community.
In 2020, the Windermere Foundation provided over $2.5M in funds to 569 organizations, while keeping administrative expenses to 2%. The Foundation has been dedicated to helping homeless and low-income families and individuals since 1989. A portion of every commission is donated to this effort along with funds raised from special projects in individual offices.
In 2020, my office donated 5,600 lbs of food and $24K to various food banks associated with The Volunteers of America of Snohomish County as a result of four separate food drives we held throughout the year. We partnered with the YMCA’s Camps Orkila and Colman and donated just over $9K in order to keep the camp operating even though they were not able to open due to the pandemic. This will ensure they will be ready to have kids enjoy the benefits of camp when it is safe. We also sponsored 24 teenage foster boys at Christmas and made sure they had gifts on Christmas morning. We aligned with Pioneer Human Services to create this connection as well as provided grocery gift cards totaling over $3K to eleven families so they could enjoy well-stocked cupboards during the holidays. These opportunities to give back bring purpose to our work and we will continue to work with these organizations in 2021.
Newsletter: Matthew Gardner’s Top 10 Things to Look for in 2021 in the Economy and Our Housing Market
Last week I had the pleasure of attending Matthew Gardner’s 2021 Economic Forecast. Matthew is Windermere’s Chief Economist and coveted expert in our region often called upon by the local and national media for his insights on the economy and housing. Windermere has relied upon his forecasts and advice for over 15 years, and we were lucky to appoint him Chief Economist in 2015. He has been a huge asset to Windermere brokers who utilize his knowledge to help educate their clients in order for them to be empowered to make strong decisions.
Here are Matthew’s Top 10 Things to Look for in 2021:
#1 THE ECONOMY. Matthew expects the economy to continue to recover from the impact caused by the pandemic. He notes that we have already started to see jobs return, but with the vaccine starting to be administered he predicts additional gains in jobs over the second half of the year as businesses start to re-open at full capacity. In addition to jobs, he shared that many Americans have not been spending money like they typically do and have excess cash to spend, leaving many folks eager to travel, make big purchases, or just go out to dinner. The combination of re-opening and more disposable spending will help re-build industries hit hard like entertainment, hospitality, and dining. Supporting small businesses within your community was also something he encouraged consumers to engage with as that will trickle back into the recovery of the overall economy. He expects an increase in spending and additional job creation to boost the economy as we head into spring and summer.
#2 SURGE TO THE ‘BURBS. In 2020 we saw a large number of buyers moving to the suburbs due to the work from home (WFH) phenomenon and affordability. Living in urban areas is more expensive, and with many companies planning on continuing to let their employees WFH indefinitely or half-time moving forward, this has reduced the importance of commute time on a buyer’s wish list. This has also afforded buyers larger homes and yards in comparison to the more compact urban options. Do note however, that Seattle is not losing population, as the net in-migration figure for Seattle in 2020 was up 3.3%.
#3 PREFERRED HOME FEATURES. What buyers are looking for in a home is changing. Open-concept floorplans used to be all the rage, but now buyers are looking for separate spaces where an at-home office or Zoom space can be incorporated. Outdoor living areas are also coveted due to the option for year-round entertaining and/or exercise/home gym space. Rural homes with high-speed internet are coming at a premium as these properties create room to roam and the option to WFH. Not all rural areas have the infrastructure in place to support the technology needed to WFH, so the areas that do are in demand.
#4 INTEREST RATES. In 2020, we broke the all-time low for interest rates 16 times! We are currently under 3% and down an entire point from the previous year. This has fueled demand in all segments of the market, particularly first-time homebuyers, luxury buyers, retirees downsizing, and move-up buyers. Note that a one-point drop in interest rate gives a buyer 10% more buying power, which is helping off-set the expense of price growth. While Matthew anticipates rates rising in 2021, he expects them to settle around 3.1%. With the long-term average at 7.9%, a bump up above 3% is still something to celebrate and will continue to be the gas in the tank of buyer demand.
#5 MORTGAGE FORBEARANCE. In the spring of 2020, the banks were quick to offer the option of mortgage forbearance in response to the job losses created by the pandemic. Many homeowners that needed to, took advantage of this option. The good news is that since May there has been a 43% reduction in participants in the program. Currently, there are 2.7M people in the program, many of which are returning to work and will be able to continue with their mortgage payments. For those that will not be able to afford the monthly payments, the option to sell after double-digit year-over-year price appreciation in markets such as WA, CO, OR, MT, and ID will provide a financial benefit. Matthew disagrees with the naysayers that think we are sitting on the brink of a wave of foreclosures in our region as equity levels are in favor of a homeowner selling vs. giving their home back to the bank. Buyer demand is also at an all-time high ensuring a plentiful homebuyer audience.
#6 HOME PRICES & SALES. Strong buyer demand will continue due to low interest rates and lifestyle moves influenced by the option to WFH and Baby Boomers retiring. Matthew believes we will have an increase in closed sales in 2021 and that we will continue to have price appreciation. Bear in mind that we are coming off above-average year-over-year price appreciation in 2020 (up 12% in Snohomish County & 7% in King County), and he expects price growth to temper in 2021 year-over-year which will help with affordability and rate increases.
#7 LUXURY HOME MARKET. 2020 was an amazing year for the luxury home market, with closed sales over $1M in King and Snohomish Counties up 30% and over $2M up 28%. There was a brief stall in the spring when jumbo loan rates surged and were in some cases unavailable at some banks. By May, jumbo loans found their place in the market, and homebuyers in the upper price points were able to enjoy the historically low interest rates as well. Matthew sees this continuing in 2021 along with more foreign buyers coming to the market with international travel opening back up in the second half of the year.
#8 ZONING. Matthew sees affordability as the biggest challenge in our market and zoning changes are the most efficient way to solve it. He expects legislators to have more discussions about adjusting zoning policies to create more affordable housing. He does not expect this to happen overnight or even in 2021, but for the stage to start to be set to make progress in this arena.
#9 APARTMENT RENTAL MARKET. The pandemic has been rough on the rental market, especially apartment rentals in big cities such as Seattle. The WFH option and a newfound aversion to shared living spaces have driven increases in vacancy rates. This has caused rental rates to decrease, and with an anticipated bumper crop of new apartments set to come to market in 2021 this segment of the market will take some time to recover due to supply and demand. Single-family rentals have fared much better than apartments. We expect the eviction moratorium to be lifted in tandem with increased vaccination rates and the rebound of the job market.
#10 ADAPTIVE REUSE. While the expense to convert apartments to condominiums is cost-prohibitive, he sees some opportunity to convert some hotel spaces to residential living. This goes in-line with creating more affordable housing and could be a positive economic option for motel or inn owners that have suffered during the pandemic. Other adaptive reuse options due to the surge in online commerce would be shopping malls converting to mixed-use (commercial with residential) space, and strip malls being bought out by developers for residential units.
Overall, Matthew’s take on the economy as we head into 2021 is hopeful and on the housing market extremely positive. If you would like the recording of his forecast or the Power Point slides in PDF format to review the data yourself, please reach out. It is always my goal to help keep my clients informed and empower strong decisions.
I am pleased to present the fourth quarter 2020 edition of the Gardner Report, which provides insights into select counties of the Western Washington housing market. This analysis is provided by Windermere Real Estate Chief Economist Matthew Gardner. I hope that this information will 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 me.
Windermere and the Seattle Seahawks partnered for the fifth season to #TackleHomelessness, raising an additional $32,100 for Mary’s Place to support homeless children and families, bringing our total raised to $160,300! Read more on the Windermere blog.
South King County Quarterly Market Trends – Q4 2020
The 2020 real estate market was a bright spot in the economy and the fourth quarter finished strong, with the median price up 11% complete year-over-year. Interest rates started the year just over 3.5% and ended the year under 3%! The long-term average rate is 7.9%, putting into perspective the massive advantage for homebuyers which has created feverish demand for available homes. Even though new listings remained even year-over-year, low interest rates helped drive a 3% increase in closed sales in 2020.
Pandemic-driven moves were spurred by folks working from home, taking early retirement, and in some cases responding to job loss. Remote working eliminated the need to have a home close to work which encouraged people to flee to the suburbs. Eliminating the commute and the desire for larger spaces with outdoor enjoyment quickly moved to the top of peoples’ wish lists. The last 8 years of positive price growth has led to formidable seller equity, enabling early retirement for some and/or the opportunity to liquidate and recover from the negative effects in some employment industries.
We expect rates to stay low in 2021 and with many Millennials coming of age there will continue to be large amounts of homebuyers eagerly waiting for fresh inventory. Ending the year at 0.5 months of inventory is essentially ground zero for selection, putting home sellers in the driver’s seat for now. I will continue to keep you updated throughout 2021 as we navigate these unique times. It is my goal to help keep my clients informed and empower strong decisions; please reach out if I can help.
North Snohomish County Quarterly Market Trends – Q4 2020
The 2020 real estate market was a bright spot in the economy and the fourth quarter finished strong, with the median price up 10% complete year-over-year. Interest rates started the year just over 3.5% and ended the year under 3%! The long-term average rate is 7.9%, putting into perspective the massive advantage for homebuyers which has created feverish demand for available homes. Even though new listings remained even year-over-year, low interest rates helped drive an 8% increase in closed sales in 2020.
Pandemic-driven moves were spurred by folks working from home, taking early retirement, and in some cases responding to job loss. Remote working eliminated the need to have a home close to work which encouraged people to flee to the suburbs. Eliminating the commute and the desire for larger spaces with outdoor enjoyment quickly moved to the top of peoples’ wish lists. The last 8 years of positive price growth has led to formidable seller equity, enabling early retirement for some and/or the opportunity to liquidate and recover from the negative effects in some employment industries.
We expect rates to stay low in 2021 and with many Millennials coming of age there will continue to be large amounts of homebuyers eagerly waiting for fresh inventory. Ending the year at 0.5 months of inventory is essentially ground zero for selection, putting home sellers in the driver’s seat for now. I will continue to keep you updated throughout 2021 as we navigate these unique times. It is my goal to help keep my clients informed and empower strong decisions; please reach out if I can help.
Seattle Metro Quarterly Market Trends – Q4 2020
The 2020 real estate market was a bright spot in the economy and the fourth quarter finished strong, with the median price up 6% complete year-over-year. Interest rates started the year just over 3.5% and ended the year under 3%! The long-term average rate is 7.9%, putting into perspective the massive advantage for homebuyers which has created feverish demand for available homes. Even though new listings were up 8% in 2020, low interest rates helped drive a 12% increase in closed sales.
Pandemic-driven moves were spurred by folks working from home, taking early retirement, and in some cases responding to job loss. Remote working eliminated the need to have a home close to work which encouraged people to flee to the suburbs. Eliminating the commute and the desire for larger spaces with outdoor enjoyment quickly moved to the top of peoples’ wish lists. The last 8 years of positive price growth has led to formidable seller equity, enabling early retirement for some and/or the opportunity to liquidate and recover from the negative effects in some employment industries.
We expect rates to stay low in 2021 and with many Millennials coming of age there will continue to be large amounts of homebuyers eagerly waiting for fresh inventory. Ending the year at one month of inventory is essentially ground zero for selection, putting home sellers in the driver’s seat for now. I will continue to keep you updated throughout 2021 as we navigate these unique times. It is my goal to help keep my clients informed and empower strong decisions; please reach out if I can help.
Eastside Quarterly Market Trends – Q4 2020
The 2020 real estate market was a bright spot in the economy and the fourth quarter finished strong, with the median price up 10% complete year-over-year. Interest rates started the year just over 3.5% and ended the year under 3%! The long-term average rate is 7.9%, putting into perspective the massive advantage for homebuyers which has created feverish demand for available homes. Even though new listings were down by 6% in 2020, low interest rates helped drive a 3% increase in closed sales.
Pandemic-driven moves were spurred by folks working from home, taking early retirement, and in some cases responding to job loss. Remote working eliminated the need to have a home close to work which encouraged people to flee to the suburbs. Eliminating the commute and the desire for larger spaces with outdoor enjoyment quickly moved to the top of peoples’ wish lists. The last 8 years of positive price growth has led to formidable seller equity, enabling early retirement for some and/or the opportunity to liquidate and recover from the negative effects in some employment industries.
We expect rates to stay low in 2021 and with many Millennials coming of age there will continue to be large amounts of homebuyers eagerly waiting for fresh inventory. Ending the year at 0.6 months of inventory is essentially ground zero for selection, putting home sellers in the driver’s seat for now. I will continue to keep you updated throughout 2021 as we navigate these unique times. It is my goal to help keep my clients informed and empower strong decisions; please reach out if I can help.
North King County Quarterly Market Trends – Q4 2020
The 2020 real estate market was a bright spot in the economy and the fourth quarter finished strong, with the median price up 7% complete year-over-year. Interest rates started the year just over 3.5% and ended the year under 3%! The long-term average rate is 7.9%, putting into perspective the massive advantage for homebuyers which has created feverish demand for available homes. Even though new listings remained even year-over-year, low interest rates helped drive a 7% increase in closed sales in 2020.
Pandemic-driven moves were spurred by folks working from home, taking early retirement, and in some cases responding to job loss. Remote working eliminated the need to have a home close to work which encouraged people to flee to the suburbs. Eliminating the commute and the desire for larger spaces with outdoor enjoyment quickly moved to the top of peoples’ wish lists. The last 8 years of positive price growth has led to formidable seller equity, enabling early retirement for some and/or the opportunity to liquidate and recover from the negative effects in some employment industries.
We expect rates to stay low in 2021 and with many Millennials coming of age there will continue to be large amounts of homebuyers eagerly waiting for fresh inventory. Ending the year at 0.7 months of inventory is essentially ground zero for selection, putting home sellers in the driver’s seat for now. I will continue to keep you updated throughout 2021 as we navigate these unique times. It is my goal to help keep my clients informed and empower strong decisions; please reach out if I can help.
South Snohomish County Quarterly Market Trends – Q4 2020
The 2020 real estate market was a bright spot in the economy and the fourth quarter finished strong, with the median price up 12% complete year-over-year. Interest rates started the year just over 3.5% and ended the year under 3%! The long-term average rate is 7.9%, putting into perspective the massive advantage for homebuyers which has created feverish demand for available homes. Even though new listings were down by 6% in 2020, low interest rates helped drive a 3% increase in closed sales.
Pandemic-driven moves were spurred by folks working from home, taking early retirement, and in some cases responding to job loss. Remote working eliminated the need to have a home close to work which encouraged people to flee to the suburbs. Eliminating the commute and the desire for larger spaces with outdoor enjoyment quickly moved to the top of peoples’ wish lists. The last 8 years of positive price growth has led to formidable seller equity, enabling early retirement for some and/or the opportunity to liquidate and recover from the negative effects in some employment industries.
We expect rates to stay low in 2021 and with many Millennials coming of age there will continue to be large amounts of homebuyers eagerly waiting for fresh inventory. Ending the year at 0.3 months of inventory is essentially ground zero for selection, putting home sellers in the driver’s seat for now. I will continue to keep you updated throughout 2021 as we navigate these unique times. It is my goal to help keep my clients informed and empower strong decisions; please reach out if I can help.
Goal Setting with Self-Compassion
We all know that there is no magic in the first day or month of the year, and yet we are all drawn to the idea of new beginnings. A fresh start. And so with 2020 finally put to bed, many of us are setting goals for this fresh, new year.
The topic of new year’s resolutions or goals can be a polarizing one. The fact that most people give up on or forget about their resolutions within a month or two is a widely known fact. So is it better to avoid setting goals entirely? Should we make broad, unrealistic resolutions knowing they won’t last, just to feel like we’re doing something?
If we set goals simply because we feel like we should, or because we are wishing for change in our lives, there is little chance they will be accomplished. There must be a deep-rooted reason for setting a goal so that there is lasting motivation to achieve it. They must be attainable. And we must have grace for ourselves for when we inevitably fall off the wagon.
I have put together a few thoughts to consider during this first month of 2021:
Give Yourself Grace
Arguably the most important aspect of goal setting, and for many, the most difficult. We are all going to mess up at some point. Forget to do the thing we decided to do. Skip a day. Sleep in.
The big question is – do we let our guilt paralyze us from getting back on track? Do we slip into self-pity and frustration, losing sight of our desired outcome? Enter grace. Self-compassion.
There are three important aspects to self-compassion:
- Be mindful (instead of identifying with the problem). For example, be mindful of the fact that you are struggling with exercising regularly, instead of seeing yourself as a failure at exercise.
- Connect with other people (instead of isolating yourself). For example, realize that you are probably not the only one who struggles with exercise. Talk about your struggle with people who love and support you.
- Be kind to yourself (instead of being judgmental). For example, try saying to yourself “I forgive myself for my shortcomings, and I will try again.”
Self-compassion means applying the same understanding and kindness we have for other people to ourselves. Because everyone is worthy of compassion.
Goals > Resolutions
Words matter. A resolution is a firm decision to do or not do something. A goal is the object of a person’s effort.
Setting a goal provide us with a direction to follow. Goals require intention, planning and action, but they are less rigid than all-or-nothing resolutions. Often when we are shooting for a goal, even if we do not achieve exactly what we aimed for, we will still end up closer to it than when we started. Progress in the right direction is every bit as important as hitting that goal.
Is it Necessary?
When everyone around us is making changes and launching new things, it is easy to get swept up in the feeling of needing to do something. Before making any decisions or setting goals, ask yourself if it really needs to change. Or do you just want to feel like you’re doing something?
Often, change is needed. Other times, we would be better off sticking to what we are already doing. Part of the goal-setting process should always include serious thought and research on the things in your life or business that genuinely require change or movement.
Consider the Impact
Once we have decided that something does, indeed need to change, it is important to spend some time thinking about the impact that this change will have. How will it make you feel? What will it bring to your life?
This gives us something to hold on to when we are wavering down the road. Hold tight to the feeling or the outcome this change will make in your life and keep coming back to that when things are hard.
Break it Down
Everyone’s heard this advice before, but it’s incredibly important to break our goals down into manageable bite-size pieces. Setting broad goals will inspire frustration and discouragement when they aren’t achieved. Small, specific goals are more doable, keeps us from getting overwhelmed, and each little “win” provides motivation to keep going.
If you’ve already set your 2021 goals, I invite you to reflect on what you have set, why you have set them, and how you can show self-compassion in 2021. Remember that it isn’t about changing things to fit the perfect “mold”, but figuring out what it is we really want to do. Let’s make changes in a sustainable way that allows us space to be kind to ourselves along the way.
A new year is a great opportunity to set goals and work towards change. But really, any day is an opportunity. What are you working towards today?
December 2020 Newsletter – Helping our Neighbors in Need
As 2020 comes to a close, we pause to take inventory for what we are thankful for and look for opportunities to give back to those in need. We would typically be hosting our annual Santa Photo Event around this time, but this year we are pivoting to this very important food drive. The global pandemic and the effect it has had on the economy have increased the amount of people in our community that are food insecure. We are closing out the year with our fourth food drive to help support our Neighbors in Need.
Please consider stopping by my office from December 9th through the 16th from 9 am-3 pm to drop off food or cash donations. There will be carefully placed food bins just outside of our suite door and box for cash donations. If you can’t make it to my office, you can also make a donation to our GoFundMe fundraiser. We will deliver the bounty to the Concern for Neighbors Food Bank in time for the holidays.
Together we can make a difference and help keep the cupboards full this holiday season for our Neighbors in Need.
Thank you & Happy Holidays!
