Most recently, buyers have enjoyed more selection in the marketplace which has led to more open negotiations versus bidding wars. This is illustrated by an increase in average Days on Market and a decrease in the average Sold-to-List Price Ratios complete-year over year (the last 12 months over the previous 12 months). In King County, the average Days on Market increased from 22 days to 36 days complete-year over year, and the Sold-to-List Price Ratio decreased from 101% to 98%. In Snohomish County, the average Days on Market increased from 25 to 35 days complete-year over year, and the Sold-to-List Price Ratio decreased from 100% to 98%.

Buyers have had more selection to choose from which has tempered price growth complete-year over year. Median price remains even in King County and up 3% in Snohomish County. Multiple offers are not as commonplace as they were, but terms such as inspection contingencies and home sale contingencies are doable in some areas and price ranges. This balancing out has created some more normal terms for buyers, while sellers are getting close to full price on average and cashing out on the above-average appreciation we enjoyed from 2012 to 2018.

It is still a seller’s market, yet we are heading towards balance. The months of available inventory based on pending sales (the amount of time it would take to sell out of homes if no new homes came to market) currently sits at 1.7 months in King County and 1.5 months in Snohomish County. Zero to 3 months is a seller’s market, 3-6 months a balanced market, and 6+ months a buyer’s market. In 2017 to early 2018, inventory levels were commonly under one month, which was a very volatile and constricted environment within which to purchase a home. The direction towards balance is welcome and providing much more comfort when making a move.

The inventory levels are an amazingly beneficial phenomenon due to the fact that buyers are simultaneously enjoying the lowest interest rates we’ve had since 2016! Currently, the 30-year mortgage rate is hovering around 3.6% and the 15-year around 3.07% according to Freddie Mac. Not only are rates the lowest we’ve seen in 3 years, but they are an entire point lower than they were a in Q4 of 2018. When rates crested 4.5% last year, we saw a marked reduction in pending sales. This highlights the recent opportunities that have come alive for buyers to secure such low debt service and for sellers to have a larger audience. When rates rise, folks reassess and sometimes step aside, which is why this current opportunity should be taken advantage of.

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This is meaningful because the rule of thumb is that for every one-point decrease in interest rate, a buyer gains ten percent in purchase power. For example, if a buyer is shopping for a $500,000 home and the rate decreases by a point during their search, they can up their price ceiling to $550,000 and keep the same monthly payment. This is huge, especially in the wake of intense price growth over the last 6-7 years, which priced many buyers out of the market. Buyers that took a break and stepped to the sidelines in the past may want to consider their opportunities now. This is the most favorable buyer environment (inside of a seller’s market) we’ve seen in some time!

This recent decrease in rate is helping the move-up market come alive. What is great about this, is that it opens up inventory for the first-time buyer and helps complete the market cycle. First-time buyers are abundant right now as the Millennial generation is gaining in age and making big life transitions such as buying real estate. According to Nerd Wallet, 49% of all Millennials have a home purchase in their 5-year plan. The rates are also providing very low debt service for investors, second-home buyers, and down-size buyers headed toward retirement.

Will these rates last forever? Simply put, no! According to Freddie Mac, rates should increase closer to the 4’s as we round out 2019 and head into 2020. While still staying well below the 30-year average of 6.85%, increases are increases, and securing today’s rate could be hugely beneficial from a cost-saving perspective. Just like the 1980’s when folks were securing mortgages at 18%, the people that lock down on a rate from today will be telling these stories to their grandchildren. Note the 30-year average – it is reasonable to think that higher rates must be in our future at some point.

So what does this mean for you? If you have considered making a move, or even your first purchase, today’s rates are a huge advantage in helping make a move more affordable. If you are a seller, bear in mind that today’s interest rate market is creating strong buyer demand, providing a healthy buyer pool for your home. As a homeowner who has no intention to make a move, now might be the time to consider a refinance. What is so exciting about these refinances, is that it is not only possible to reduce your monthly payment, but also your term, depending on which rate you would be coming down from.

If you would like additional information on how today’s interest rates pertain to your housing goals, please contact me. I would be happy to educate you on homes that are available, do a market analysis on your current home, and/or put you in touch with a reputable mortgage professional to help you crunch numbers. Real estate success is rooted in being accurately informed, and it is my goal to help empower you to make sound decisions for you and your family.

I am pleased to present the second-quarter 2019 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.

Click to view the full report

Summer is quickly coming to a close, and it’s time to think about prepping your yard for fall.  Here are a few quick tips to get you started, and a full article here.

Fertilizing

All summer long, plants and grass are using up nutrients in the soil. After months of growing, your soil’s reserves become depleted, which is why a fall fertilizer is great to restore nutrients and give your grass, shrubs, and perennials a boost to help them make it through winter. It is recommended to fertilize once every season.

Stop Pruning and Watering

Late summer and fall might seem like a good time to prune dead flowers and branches, but several experts recommend waiting until spring to prune anything. Pruning stimulates new growth, but with the frost coming, chances are this new growth won’t survive. Pruning also interferes with the plant when it is going dormant.

In late September, you should also stop watering your plants to help them go dormant as well.

>>Keep reading

Price appreciation has been a hot topic for some time, but over the last year, prices have started to balance out and it takes some explaining. As you can see from the map above provided by the National Association of Realtors, price appreciation over the long haul has been robust. The map above points out price appreciation since 2005, which was prior to the economic downturn. This demonstrates that if a homeowner was able to retain their home through the downturn of 2007-2012, that they came out on the other side well-positioned. Real estate is typically a long game, and that is one of the key points we will cover here.

First, let’s review price growth after the down turn. Since 2014, price appreciation has been out of the ordinary! The average (normal) price appreciation is 3-4% year-over-year. For clarity, “year-over-year” is defined by the last 12 months averaged over the previous 12 months. This is a larger data pull and tells a deeper story than just taking one month and comparing it over that same month the year prior like the media typically does.

Over these last five years, we have seen double-digit year-over-year appreciation, specifically from 2015-2018. In fact, 2018 started out with 14% price gains over 2017. This was due to rapid job growth, tight inventory, and low interest rates. It was the perfect storm to rapidly drive up prices. In the second half of 2018, interest rates started to rise, inventory had huge gains, and affordability became an increasing issue. This stalled out demand and prices came off their spring peak. The second half of 2018 brought on a price correction and started to lead a path toward more normal appreciation levels.

In the beginning of 2019, we saw year-over-year price gains average from 8-9%. As we finished out the second quarter of 2019, the year-over-year price growth continued to balance out toward typical, historical levels. We are at a place in the year-over-year data where the crazed price appreciation is no longer within 12 months, and we are tracking from the correction that happened in the second half of 2018, reflective of more normal inventory levels.

The majority of the large gains in 2018 happened in the first half of the year. Since May of 2018, inventory has grown, meaning we have seen more homes come to market, providing buyers more selection which tempers price growth. This has evened out price growth to more sustainable levels and aided in affordability. Coupled with the recent drop in interest rate (.75% since November 2018) the market has provided more ease for buyers to make purchases and for buyers that are sellers to make transitions without having to move twice. It is still a seller’s market with inventory levels under 3-months, but we are starting to move toward more balance. This is a good thing!

What does all of this mean?  Quite a bit, but I’ll touch on some key points.

• Many homeowners are in very favorable equity positions, especially those who bought prior to 2016 (back to that long-game point).
• The days of owning your home for 1-3 years and turning a profit with a quick sale are a blip in history from 2015-2017.
• Buyers simply have more selection, so the homes that are in good condition, show-ready, and priced appropriately are seeing fantastic results such as quick market times, favorable terms, and full-price or sometimes over-list-price offers.
• Overpricing is becoming more common as home sellers wrap their heads around the new normal of price appreciation. Attention to market trajectory and aligning with a trusted professional can help avoid this pitfall.
• The more affordable areas have seen higher gains recently as the core areas balance out from hitting affordability ceilings.
• Historically low interest rates (lowest in three years!) continue to drive demand and should be as important to watch for a seller as they are for a buyer.

Below are some national price appreciation predictions from CoreLogic and various economists. It is predicted that we will continue to have price appreciation, but for it to be more subtle. The fear of equity loss on a national level from these experts is minimal. It is understandable that when price gains become more subtle that it may seem like the sky is falling, but it is important to keep the long game in perspective.

Real estate is a complicated investment to navigate, but one that can provide amazing opportunity. It also relates to big life choices; whoever said moving was easy? That is why aligning with a trusted professional is key to help make these life-changing transitions. If you are curious about the value of your home in today’s market or have thought about a move or even a first-time purchase, please reach out. It is our mission to help keep our clients informed and empower strong, life-changing decisions.

We’re halfway through the Windermere Foundation’s 30-year anniversary and there’s no sign of donations slowing down. In the second quarter of this year, the Windermere Foundation collected $556,937, bringing our year-to-date total to $865,029, and our grand total to $38,871,157 raised since 1989. These donations are used to support non-profit organizations and programs that help low-income and homeless families throughout the Western U.S.

Every Windermere office has its own Windermere Foundation fund account from which we make donations to help those in need in our local communities. These funds come from each real estate transaction that we close, as well as individual donations from agents, staff, and the community.

Thank you for your support! Together, we are able to make a real difference for those in need in our local communities.

All of us at Windermere are very excited to kick-off our fourth season as the Official Real Estate Company of the Seattle Seahawks!

Once again, our #tacklehomelessness campaign is front-and-center, with the Windermere Foundation donating $100 for every Seahawks home-game defensive tackle to Mary’s Place, a Seattle-based non-profit organization that provides safe, inclusive shelter and services supporting women, children, and families on their journey out of homelessness. We are looking forward to raising even more money – and awareness – for this important cause. 

Our partnership with the Seahawks and Mary’s Place fits perfectly with the mission of the Windermere Foundation which is to support low-income and homeless families in the communities where we have offices. Through the #tacklehomelessness campaign, we hope to be able to do even more.

Check out the Seahawks schedule here, the preseason is just a couple of weeks away!

Changes are coming: The Washington State Legislature is changing the way in which real estate excise taxes (REET) are calculated. REET are different from your annual property taxes; they are the tax that a seller pays when they sell their home, based on the sale price.

Currently, the Washington State excise tax is 1.28 percent. Local municipalities add their excise tax on top of the state tax, with most cities in our area adding 0.50 percent, to total 1.78 percent. Effective January 1, 2020, Washington State will begin calculating real estate excise taxes based on a tier system. Below are examples of how this change will affect the different price points.

The majority of sellers will enjoy a slight savings once the new tax structure starts in 2020, however, sellers whose homes are worth $1.5M or more should pay close attention as the tiered system will cost them more in 2020. If you own a high-end home and have been considering downsizing, doing so inside of 2019 may be a winning strategy.

If you or someone you know is curious about the value of your home or you have considered a move, please reach out. It is our goal to help keep our clients informed and empower strong decisions.

On June 7th, my office spent our annual Community Service Day with the Snohomish Garden Club constructing trellises, weeding and staking beds and planting and labeling a half-acre of produce!

The Snohomish Garden Club will harvest this half-acre, which will yield close to 10,000 pounds of fresh produce to be donated to various food banks and senior centers in Snohomish County. The land for the garden is generously donated by the Bailey Family Farm.

For more information on how you can lend a hand, please visit: SnohomishGardenClub.com

Windermere’s Community Service Day was established in 1984 to offer agents and staff a chance to volunteer an entire workday to give back to the neighborhoods in which they live and work.

The longer days and warmer weather means that your favorite movie is no longer relegated only to a dark stuffy room. Grab the folding chairs, blankets and popcorn, and check out a few of these fun outdoor movies. You’ll find classics like Ferris Bueller’s Day Off and The Princess Bride, as well as newer releases like Mary Poppins Returns and Spider Man: Into the Spider-Verse. Most of them are free, and many locations also offer fun, family-friendly activities before the movie starts.