Summer is the New Spring Real Estate Market

Since the onset of the COVID-19 pandemic reaching our region, I quickly shifted to updating you more frequently with information to help you stay informed on the real estate market. Since mid-March, I have been committed to gathering high-frequency data (micro-data) to help illustrate “Where We Are Now” and have provided this newsletter bi-monthly vs. monthly. I felt this was important as real estate is typically our biggest investment and the pandemic has certainly had its economic impact.

I have also closely followed Windermere’s Chief Economist Matthew Gardner, and Economist Steve Harney of Keeping Current Matters. They have both been knowledgeable guides and source their micro-data from various credible sources to help determine their conclusions. Check out Matthew’s latest video update below about the real estate market in relation to COVID-19.

The graphs below are a new data set I’ve been studying on a weekly basis. They compare the number of pending sales reported each week to the same week in 2019, which was another stellar year for our local real estate market. 2020 was outpacing 2019 when the National Emergency was declared and then dropped significantly once the Stay Home Orders were put in place in late March.

April stalled, and rightfully so: pending sales were down as people retreated into their homes and started new routines, such as working from home. As we ventured into May however, things changed. From mid-May until now, pending sales activity in both counties has started to reach or outpace 2019 numbers.

Spring is typically our peak season for real estate sales, and what is being made clear is that the historically-active spring market has now shifted to summer. As we come off the Summer Solstice and head into the warmer months, we are seeing tons of buyers out in the marketplace and a limited supply of available inventory. This combination has helped prices maintain, and in some areas appreciate.

One set of micro-data that is illustrating increased buyer demand is the uptick in mortgage applications. Last week, mortgage applications were up 20% over the same week last year. Note this is for purchase loans, not refinances. With the lowest rates we have ever seen in history it is no surprise that buyers are motivated to go secure a home with the lowest debt service ever!

Last week, the micro-data set of the recorded home-showing appointments displayed a 51% increase in showings over 2019! This is measured by comparing key box access compared to the same week last year. Demand certainly paused in the spring, but was not eliminated; it was being deferred to the summer. As we have reported from the beginning, this is a health crisis, not a housing crisis.

Our biggest challenge as we head into the peak summer months is the available inventory. We entered into 2020 with tight inventory to begin with, and COVID-19 has had a profound impact on the number of homes coming to market. We are expecting some homes to wait until the health crisis has passed, and others will be delayed by 45-60 days. Homes take time to prepare for market, and contractors and handy-persons were all at home in April, pushing prep time out to later spring/early summer for those ready to come to market.

We expect to see an increase in new listings as we head into July and August, which will be welcomed after a 40% deficit compared to 2019. Mortgage applications, historical interest rates, industries in our region that are thriving, and entering into Phase 2 are all micro-data sets that indicate strong buyer demand for the second half of 2020.

Unemployment numbers are also an important micro-data point to keep an eye on. Since the Stay Home Orders, initial unemployment claims have dropped significantly, but continued claims are maintaining. We anticipate the continued claims to reduce as more and more people return to work after being furloughed. Not all of those jobs will be recovered, indicating our greatest need for recovery.

The last three months have been an incredible journey helping people safely navigate the real estate market. Some folks just want to know that their nest egg is safe, and some are making actual moves. When COVID-19 hit there was a ton of uncertainty, we weren’t sure how this would play out in regards to housing. Since we went into this with a very formidable economy and housing values, we have sustained, and in some areas we are thriving. It has been remarkable to watch and be a part of. I am grateful every day that this is not the housing crash of 2008 all over again.

If you are curious about the value of your home in today’s market or are considering a move, please reach out. The interest rates are unbelievable and will greatly benefit those who take advantage of them. I am committed to safe business practices and follow all of the protocols put in place, which include mask-wearing, proper social distancing, and sanitizing. It is my goal to help keep my clients informed and empower strong, safe decisions, especially during unprecedented times. Thank you for your trust; I am honored to be your trusted advisor.

NEW DATE!
We are partnering with Confidential Data Disposal for our 9th year; providing you with a safe, eco-friendly way to reduce your paper trail and help prevent identity theft. Saturday, July 18th, 10AM to 2PM
4211 Alderwood Mall Blvd, Lynnwood
Bring your sensitive documents to be professionally destroyed on-site. Limit 20 file boxes per visitor.

 We will also be collecting non-perishable food and cash donations
to benefit Concern for Neighbors food bank. Donations are not required, but are appreciated. Hope to see you there!

 This is a no-contact, drive-through event.
We ask that you stay in your vehicle and unlock your trunk or car door so that we can unload your boxes. We will be taking all proper precautions to keep everyone safe, including wearing PPE, maintaining distance, and using CDC-recommended disinfectants.

**This is a Paper-Only event. No x-rays, electronics, recyclables, or any other materials.

Do you want to be “In the Know” in your neighborhood? Sign up for a monthly overview of what’s happening in the zip code(s) of your choice. Neighborhood News is a great tool to stay informed about the home values and activity in your own backyard or to study a new market you may be interested in. Click here to sign up on my website.
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LynnwoodWA 98036

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Posted on June 29, 2020 at 8:33 pm
Ginna Demme | Posted in Newsletter Blog |

Will COVID-19 Impact Where People Want to Live?

Recently, Matthew Gardner, Windermere’s Chief Economist released a video about the effects COVID-19 is having and/or could have on consumer tendencies in real estate. There seems to be quite the paradigm shift happening due to health reasons, appreciating simpler schedules, and the new phenomenon of many people working from home. Along with Matthew, Leading Real Estate Companies of the World and Keeping Current Matters are reporting similar indicators due to COVID-19.

The Flight to the Suburbs: Many buyers are listing more open space and less density as one of their top features when looking for a new home. The larger yards and separation from neighbors found in the suburbs versus urban areas are appealing for health reasons, due to the need to socially distance. Higher density buildings and townhouses found in-city were more appealing due to shorter commute times, but the newfound option to work from home has encouraged some buyers to venture out and consider commute times as less of a factor when choosing where they want to live.

Many high-tech employers such as Amazon, Google, and Facebook have extended the work-from-home option until the end of 2020 despite the phasing to get businesses re-opened. Companies like Twitter told some employees they could work from home indefinitely. This will have some buyers in these types of jobs capitalizing on suburban living, which is typically less expensive than in-city living and includes larger homes and yards. Look at the weekly stats for both King and Snohomish counties below. This compares the number of pending sales per week this year versus the same week last year, and the more suburban and affordable area of Snohomish County is thriving!

Return of the McMansion: Millennials had already begun looking at the suburbs as they embarked on crossing the threshold of big life events such as getting married and starting a family. Now, with more people working from home and desiring more space, the larger square footage homes are becoming more appealing.

This affords more flex spaces for at-home offices, especially if more than one adult is working from home. Space to enjoy hobbies and passions such as an in-home yoga or craft studio or in-home gym are predicted to be popular. Further, private outdoor spaces are a hit, such as fire pits, play areas for children, and outdoor entertaining space which encourages recreation and distancing.

Second-Home Market Boom: With air travel severely reduced, the desire to have a second home within driving distance has increased. Many people’s commitments have simplified and their dreams have shifted to accommodate more down-time closer to home. The change of scenery a lake, beach, or mountain property provides along with space to distance is quickly becoming in-demand. The use of homes like this versus large travel budgets could make a comeback, especially if future rental income is considered. Overall, we have seen an increased value put on local access to nature to decompress and down-shift.

Single-Family Residential Rentals vs. Apartment Rentals: Again this comes back to density versus open space. Renters also desire more room, and some are also working from home, so they may opt for a single-family home over an apartment building with shared space. There could also be a push for college students to prefer renting a single-family home instead of living in a dorm, increasing the rental value of such investment properties in college towns.

Check out the video below to hear Matthew’s entire take on all of these possible changes in how and where we want to live based on COVID-19 and the life lessons we are learning as we navigate this new way of life. What I can tell you is that the real estate market is moving! Activity has seen a large uptick since the first of May, and in many areas and price points we are lacking available inventory to meet the buyer demand.

If you are curious how these new trends and the state of current real estate market relates to your personal needs and dreams, please reach out. It is my goal to help keep my clients informed and empower storing decisions, especially during these unique times. Be well!

I am excited to share some updates from the Martha Perry Veggie Garden in Snohomish, WA! We have already purchased the vegetable starts to help support the Snohomish Garden Club, and have begun planting for the harvest. My office is working in socially distant groups, broken up by nine groups working over three weeks to get this acre of produce in the ground. By using starts instead of seeds we will be able to provide the harvest sooner and for longer throughout the season.

This is all possible thanks to your generosity! Our office raised $8,000 in under two weeks to benefit local food banks through our Neighbors in Need Program powered by the Windermere Foundation. A portion of that money was earmarked for this garden project and replaced our annual Community Service Day project that was done for the last four years in a large group of 50 people. This will provide local food banks with thousands of pounds of fresh produce throughout the summer and early fall and will be especially meaningful during this challenging time. Check out some of our first groups getting to work, making it possible for those in need to enjoy fresh produce instead of only non-perishable foods via the local food banks.

Do you want to be “In the Know” in your neighborhood? Sign up for a monthly overview of what’s happening in the zip code(s) of your choice. Neighborhood News is a great tool to stay informed about the home values and activity in your own backyard or to study a new market you may be interested in. Click here to sign up on my website.
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Copyright © 2020 Windermere Real Estate/ North Inc., All rights reserved.

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My mailing address is:

Windermere Real Estate/ North Inc.

4211 Alderwood Mall Blvd, Ste #110

LynnwoodWA 98036

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Posted on June 2, 2020 at 11:12 am
Ginna Demme | Posted in Newsletter Blog |

Interest Rates Bottom Out, Sparking High Buyer Demand

Most recently, we have experienced an uptick in market activity. In fact, King County saw a 35% increase in pending sales from December to January, and Snohomish County 38%. The seasonal uptick from the holidays to the New Year is normal, but it was quite sizable. This is reinforced by a 6% increase in pending activity this January over last January in King County, and a 10% increase in Snohomish County. This increase is being driven by multiple factors, such as our thriving economy and growing job market, generational shifts and historically low interest rates.

Currently, rates are as low as 3.5% for a 30-year fixed conventional mortgage – 1 point down from the fourth quarter of 2019. Moreover, the interest rate is down 1.75 points from 2 years ago. These levels are unprecedented! The current rates are as low as they have been in 3 years. 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, the buyer could increase their purchase price to $550,000 and keep the same monthly payment.

Why is this important to pay attention to? Affordability! The Greater Seattle area is not an inexpensive place to own a home; we have seen strong appreciation over the last 7 years due to the growth of the job market and overall economy. The interest rate lasts the entire life of the loan and can have a huge impact on the monthly cash flow of a household. This cost savings is also coupled with a balancing out of home-price appreciation. Complete year-over-year, prices are flat in King County and up around 3% in Snohomish County. Note that from 2018 to 2019 we saw an 8% increase in prices in both King and Snohomish Counties. Price appreciation is adjusting to more normal levels and is predicted to increase 5-7% in 2020 over 2019.

As we head into the spring market, the time of year we see the most inventory become available, the interest rates will have a positive influence on both buyers and sellers. Naturally, buyers will enjoy the cost savings, but sellers will enjoy a larger buyer pool looking at their homes due to the opportunities the lower rates are creating. Further, would-be sellers who are also buyers that secured a rate as low as 3.75% via a purchase or refinance in 2015-2017, will consider giving up that lower rate for the right move-up house now that rates would be a lateral move or possibly even lower.

This recent decrease in rate is making the move-up market come alive. Baby Boomers and Gen X’er’s are equity rich and able to make moves to their next upgraded home or fulfill their retirement dreams. 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 getting married, starting families, and buying real estate.

Will these rates last forever? Simply put, no! Right now is a historical low, and depending on economic factors rates could inch up. According to Matthew Gardner, Windermere’s Chief Economist, rates should hover around 4% throughout 2020. While still staying well below the long-term average of 7.99%, 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 long-term average – it is reasonable to think that rates closer to that 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 plus in helping make that transition 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. There are some pretty exciting money saving opportunities for people to take advantage of right now.

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 your lifestyle and investment.

Celebrate Earth Day with us! We are partnering with Confidential Data Disposal for our 9th year; providing you with a safe, eco-friendly way to reduce your paper trail and help prevent identity theft.

Saturday, April 18th, 10AM to 2PM
4211 Alderwood Mall Blvd, Lynnwood
Bring your sensitive documents to be professionally destroyed on-site. Limit 20 file boxes per visitor.

We will also be collecting non-perishable food and cash donations to benefit Concern for Neighbors food bank. Donations are not required but are appreciated.

Hope to see you there!

**This is a Paper-Only event. No x-rays, electronics, recyclables, or any other materials.

It’s a great time to begin preparing your home for spring. Here are a few general home maintenance tips to consider this time of year.

  • Clean the kitchen exhaust hood & filter.
  • Replace the furnace filter. It may be especially filthy after the winter months.
  • Inspect the roof for water damage. It’s also a good idea to check any fences, carports and sheds. TIP: check the south end of your roof first; it is the first to show wear.
  • Test the batteries in all smoke and carbon monoxide detectors.
  • Clear the gutters of any buildup to allow for proper functioning.
  • Start the grass revival cycle by aerating, thatching and fertilizing.
  • Be sure no inside or outside vents are blocked by fallen debris
  • Clean the windows and screens. Repair any holes in screens or replace them if needed.
  • Inspect and repair siding and peeling paint. Fix or replace damaged siding. Strip peeling paint and replace it with a new coat.
  • Check the basement for water damage. Pay attention to musty smells, water stain and damp surfaces.
  • Invest in a carbon monoxide detector – every home should have at least one.

Posted on February 27, 2020 at 1:35 pm
Ginna Demme | Posted in Newsletter Blog |

How Long Things Last

We all know that nothing lasts forever, but when everything is working fine it is easy to forget that all of the systems and appliances in your home have a finite lifespan. Keep this information in mind, whether you are buying or selling a home, budgeting for improvements, or deciding between repairing and replacing.

Here’s a brief look at some of the components of your home and their average lifespans (courtesy of the National Association of Home Builders)

 

ROOFING, SIDING, WINDOWS & DECKS. You can expect slate or tile roofs to last around 50 years, wood shingles 25-30, metal will get you about 25 years, while asphalts typically last about 20 years. The lifespan for siding can vary quite a bit. Brick will last 100 years or more, aluminum about 80 years and stucco will probably last you 25 years. Wood siding can last anywhere from 10 to 100 years depending on the climate you live in and how it is maintained. Both aluminum and vinyl windows will last 15 to 20 years, while unclad wood windows can have a life of 30 years or more. Cedar decks will average 15-25 years as long as they are properly treated and cleaned, and a high quality composite deck will last 30 years with minimal maintenance.

 

FLOORING. The natural flooring materials such as wood, marble, slate or granite will all last 100 years or more, while tile has an average life of 70-100 years. Vinyl can last up to 50 years, while laminate and linoleum will get you up to 25 years. Expect your carpet to last 8-10 years, depending on use.

 

KITCHEN & BATH. Laminate countertops can have a life of 20 years or more, but it will vary depending on use. Wood, tile and stone should last a lifetime, and cultured marble will typically see a lifespan of 20 years. You can expect your stainless steel sink to last you about 30 years, while an enamel-coated sink will give you five to 10 years. Slate, granite, soapstone and copper will be around for 100 years or more. Bathroom faucets should give you about 20 years, and toilets will average a 50-year lifespan, although some of the parts will need replacing.

 

APPLIANCES. The lifespan of appliances will vary widely depending on the appliance, the brand, model, and use. Use these average lifespan numbers as a rough guide for when it may make more sense to replace rather than repair. Gas ranges tend to have the longest lifespan of your major appliances, giving around 15 years of use. Electric ranges on the other hand, are closer to 13 years, which is also the expected lifespan for standard refrigerators and clothes dryers. Your garbage disposal should give you about 10 years of use, while the dishwasher and microwave will be around nine years. You can expect your electric furnace to last about 15 years, 18 for gas and 20 for oil-burning. Central air systems will live 10 to 15 years on average.

 

Check out the NAHB website for more information.


Posted on October 9, 2019 at 1:18 pm
Ginna Demme | Posted in Newsletter Blog |

Consulting Your Trusted Advisor Vs. Following the Media

Spring is in the air! The bulbs are starting to poke out of the ground and we recently hit 70 degrees in the Greater Seattle area. This is the time of year, due to weather and the end of the school year approaching, that the local real estate market starts to take off with activity. Not only is the sun thawing out gardens and backyard patios, helping to ready homes for market, but interest rates are continuing to fall, providing a heyday for buyers and sellers.

Spring is the time of year we see more homes come to market providing more selection for buyers. This is what we call our peak season. This spring, however, is especially meaningful due to the recent decrease in interest rates. Seasonality naturally brings more activity, but 2019 has started out with a downward trajectory in regards to interest rates, which has been a welcome shift after watching rates increase by almost an entire point over the course of 2018.

According to Ycharts.com, as of March 14th the US 30-year mortgage rate is at 4.31%, compared to 4.41% the week prior and 4.46% last year. This is quite a bit lower than the long term average of 8.07%. Additionally, rates are now over half a point lower than they were just four months ago, which gives buyers 5% more buying power. Meaning they can increase their price range by 5% and keep the same mortgage payment.

We are beginning to see a ton of activity at open houses, market times are starting to shrink, and multiple offers are popping up again. Demand is on the rise, with first-time home buyers out in full-force along with move-up and down-size buyers all going after the same inventory. Price appreciation will start to happen again month-over-month as the tulips start to open and veggie gardens start sprouting.

This assessment is not only factual and researched, it is anecdotal. You see, statistics are only reported monthly from the NWMLS, so the stories from the streets tell the real story of where we have been, what’s happening now, and where we are headed in the real estate market. My daily engagement with the market, either helping buyers or sellers, researching values, showing properties, negotiating contracts, and working on inspections and appraisals helps me to be informed of the trends before they are even reported.

Around the third of each month, the NWMLS distributes a press release to the media reporting the previous month’s statistics. The media grabs the numbers that are most exciting to them to craft a story around. They create headlines to entice readership, which in turn sells advertising. The problem is that these news stories often only tell part of the story.

A classic example of cherry picked statistics used to create a headline came earlier this month. The Seattle Times reported in a sub-headline that Snohomish County home prices were falling at their fastest rate in seven years. This is simply not the whole truth. This is a common tactic of the media often only using month-over-month numbers (comparing the current month to the same month a year ago) versus a complete year-over-year analysis. Real estate is a long-term investment, and month-over-month numbers tend to provide more of a snapshot rather than a longer-term analysis of data and what influenced it.

We need to look at the data from all angles. Where were we a year ago, what has happened over the course of the last year in comparison to the previous year, and what happened this month compared to last month? Real-time experiences matter too, as the market changes weekly and even daily. Interactions throughout the month help me understand what opportunities the current environment will provide before the ink even dries on the media release. All of this helps us understand where we have come from and where we are headed. Couple that with front-line, daily experiences, and your trusted advisor can help you determine how all of this relates to your bottom line much more effectively than an article in the newspaper.

Another important factor to consider is that the bulk of the statistics reported in that monthly NWMLS press release are based on closed sales. While closed sales are very important, we must also closely track pending sales activity (homes currently under contract). Closed sales show where we have been and pending sales indicate where we are headed. February was a misleading month because of Snowmageddon. It halted new inventory reaching the market and kept buyers at home. The second half of February once the roads were cleared, had buyers lined up. Many of those buyers are anxiously waiting for that seasonal surge in inventory as we head into spring. This is indicated by conversations being had at open houses and one-on-one encounters with clients. Buyers want to take advantage of these surprisingly low interest rates now and sellers are enjoying the audience they are providing.

Unfortunately, the media is the initial source of information, and sometimes the only source a consumer considers when making such big decisions. I can’t tell you how often I encounter people that are grossly misled by alarming headlines and bite-sized bits of media when it comes to their largest asset, or the consideration of entering into home ownership.

Supply and demand illustrates where we are at in the market, and factors such as interest rates, the local and global economy, and simple things like weather and consumer mindset drive the market. Consumer mindset is influenced by the media. Take it a step further and make sure you are aligned with a professional who is committed to tracking all of this and can help explain how it all relates to you. Everyone has their own goals and their own concerns; it is the analysis of a well-researched trusted advisor that can help you navigate these meaningful financial decisions. It is my goal to provide my clients with the most up-to-date information to help empower strong decisions. If you are curious how this all relates to you, please reach out. I’d be happy to discuss and help educate.

Growing your own vegetables is both fun and rewarding. It might seem intimidating if you’ve never done it before, but once you get started, you’ll find it isn’t very hard. Gardening is a learning experience, though. You’ll find that some things work better than others, and every planting season gives you another opportunity to make some tweaks and try again.

The first thing you need to decide is where to plant. For most veggies, this should be the sunniest spot you have. And of course, the second big question is what to plant. Go for the things you love to eat, as well as plants that will thrive in the amount of sun you have.

Our climate in the Pacific Northwest requires some crops to be started indoors in the winter and transplanted outside in the spring. But it’s not too late to get started. There are lots of plants that you can sow directly into the garden in early spring. Here are a few:

There are also many crops that can be planted in the summer for a fall harvest. Click here for a complete timeline of planting vegetables in the Seattle area.

Celebrate Earth Day with us! Bring all your sensitive documents to be professionally destroyed on-site by Confidential Data Disposal. Limit 20 file boxes per customer.

We will also be collecting non-perishable food and cash donations to benefit Concern for Neighbors Food Bank. Donations are not required, but are appreciated.

Saturday, April 20th, 10am – 2pm.
4211 Alderwood Mall Blvd, Lynnwood 98036

*This is a shredding-only event. Only paper will be accepted – no electronics or recyclables.

Do you want to be “In the Know” in your neighborhood? Sign up for a monthly overview of what’s happening in the zip code(s) of your choice. Neighborhood News is a great tool to stay informed about the home values and activity in your own backyard or to study a new market you may be interested in. Click here to sign up on my website.
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Posted on March 26, 2019 at 10:19 am
Ginna Demme | Posted in Newsletter Blog |

The current break-even horizon* in the seattle metro area is 1.69 yearS!

 

*The amount of time you need to own your home in order for owning to be a superior financial decision.

 

 

With expensive rental rates, historically low interest rates, and home prices softening, there are advantages to buying versus renting.

 

In fact, the Seattle Metro area has seen some of the sharpest rent hikes in the country over the last few years! There are several factors to consider that will lead you to make the best decision for your lifestyle and your financial bottom line. Zillow Research® has determined the break-even point for renting versus buying in our metro area. In other words, the amount of time you need to own your home in order for owning to be a superior financial decision. Currently in Seattle, the break-even point is 1.69 years – that is quick! What is so great about every month that ticks away thereafter, is that your nest egg is building in value.

 

I am happy to help you or someone you know assess your options; please contact me anytime.

 

 

 

These assumptions are based on a home buyer purchasing a home with a 30-year, fixed-rate mortgage and a 20 percent down payment; and a renter earning five percent annually on investments in the stock market.

 

 

Read the full article on the Zillow Research website here

 

 

 

 

Zillow Research® is a trademark of Zillow, Inc.


Posted on February 27, 2019 at 12:16 pm
Ginna Demme | Posted in Newsletter Blog |

2018 Year in Review

2018 was a year of growth and change. The dynamic greater Seattle area and hottest real estate market in the country started to head toward some balance. After six years of expansion resulting in an extreme seller’s market, we encountered a market shift in the late spring. Where it is tricky, is the media paints a somewhat scary picture, cherry picking month-over-month statistics instead of looking at the entire year in review. I thought I’d take the opportunity to recap what led to this shift and where we might be headed.

In May, we saw a 40% increase in homes for sale. For so many years, the lack of inventory was the central theme of the market, with inventory levels as low as a two-week supply in the first quarter of 2018. These constricted inventory levels led to huge price escalations from buyers competing in multiple offers. It was not uncommon to have 10 buyers fighting over one house, resulting in a sale price 20% over the list price. That type of price growth is unreasonable and the result of the extreme market conditions. In May, that changed as many sellers started to come to market. Suddenly, buyers had more choices and multiple offers started to wane. This phenomenon led to a decrease in month-over-month price appreciation.

It just so happened that the increase in inventory was accompanied by two other influential factors. We had an increase in interest rate, and the now-repealed “Seattle Head Tax” was passed on May 14th, 2018 by the Seattle City Council.

Interest rates had been hovering in the low 4%s during all of 2017 and even in the high 3%s in 2016. We started 2018 in the low 4%s, but by May the rate had jumped a half-point. Coupled with extreme price jumps from limited inventory, affordability became an issue for many buyers. This started bringing folks to the sidelines.

A large contributor to the growth in our real estate market over the past 6 years was our robust job market, and the employment growth of companies such as Amazon. The “Seattle Head Tax” that passed in mid-May, but then repealed on June 12th, 2018, was a huge threat to our thriving economy. The angst it created in our region about the future of Seattle’s job market was palpable, and had companies like Amazon making bold moves such as halting all current construction projects. Also, we were in the midst of Amazon’s HQ2 search, and the head tax had Seattle on the line in regards to remaining the home to the big employers that have fed our job growth and economic rise.

The combination of a 40% increase in new listings, a half-point rise in interest rates, and the month-long battle over the head tax created pause in our real estate market. With more selection, more expensive money, and the drama in the Seattle City Council, folks were unsure of where we were headed. This created confusion, and when people are not clear they are less likely to make decisions. In retrospect, it was the perfect storm. Like any storm, it changed the environment, and like a washed-out road, we had to find a new route.

The new route, while a bit bumpy and new to navigate, has been refreshing and necessary. For so many years, we have been begging for more inventory to help temper price growth and create more mobility in the market. From 2016 to 2017, we had 14% year-over-year growth in median price in both King and Snohomish counties. To put that in perspective, the average year-over-year appreciation rate over the last 19 years has been 6%. Home values growing at double-digit appreciation rates was unsustainable, and quite frankly not affordable. This balancing-out of the market is a healthy and more sustainable new route.

Year-to-date, Snohomish County’s median price has grown 10% over the previous year and King county, 9%. A large part of that growth happened in the first half of the year, and we have seen some month-over-month prices go down since, as the market starts to find some balance. The media loves to report these month-over-month numbers to create headlines, but buries the big picture of growth over the previous year and the fact that balance is healthy, in the last few paragraphs of any given article.

The mobility that this created has been a welcome change. People were not putting their homes up for sale because they feared the prospect of finding their next one, so they stayed put. The almost overnight increase in selection created a more comfortable environment for the seller who also had to buy their next home. We have even started to see home sale contingency offers come together as this market has started to balance out.

As we round out 2018, in Snohomish County we ended November with two months of inventory based on pending sales, and 2.4 months in King County. This is still a seller’s market, but not the extreme seller’s market that had only two weeks of inventory – and that is a good thing. A balanced market is when you hit four months of inventory, and we have a way to go to get there. Bear in mind that these measurements are of the entire county and do not take price points into consideration. We have seen inventory pile a little higher in the higher price points. The big news is that sellers are sitting on a ton of equity. In Snohomish County, we have seen a 62% increase in median price since 2012, and in King County, 66%. As long as sellers keep this in perspective and understand that pricing needs to reflect the inventory levels, they will find great success.

The opportunity to make a move-up, downsize, or even buy your first home is awesome right now. Selection is actually an option and interest rates are still historically low. Currently, we are hovering around 5%, and they have actually recently dropped. Rates are predicted to head toward the mid 5%s in 2019, making a purchase now very appealing.

If you are just curious about the value of your home in today’s market or you are considering a move in 2019, please reach out. I’d be happy to relate the current market conditions to your investment and your goals. Education and awareness lead to clarity, and when one is clear, they are empowered to make strong decisions. It is my mission to help educate my clients and assist them in making these big life decisions. Whatever your goals are in 2019, it is my honor to help keep you informed on all things real estate related.

Why Conserve Water?
There are several compelling reasons to take measures at home to conserve water. Not only will you save money on your utility bill, but conserving water will also help to protect our environment. Reducing how much water we use (and waste) also reduces the energy required to process and deliver it to our homes and businesses. This helps reduce pollution and conserve fuel. Minimizing water use also helps to extend the life of septic systems, and can help avoid costly sewage system expansions.

It’s easy to forget that water is a finite resource, but the stark truth is that only 3% of the water on Earth is fresh water. As populations grow, if we do not protect this precious resource, we may find down the road a lack of adequate, healthy water supply. This would have drastic consequences on water costs, food supplies, and health hazards.

The most effective way to save water is to upgrade your appliances and fixtures. But there are many other ways to reduce the amount of water used at home, most of which do not require any significant investment. Check out this list to get you started. A quick google search will provide even more ideas. Making just a few small changes over the next year can add up to hundreds or even thousands of gallons in water savings!

New Year’s Eve 2018 is almost upon us, and if you are still looking for something to do, read on! There are lots of options in the greater Seattle area, whether you are looking for the biggest blow-out bash or an earlier, family-friendly event.

  1. New Year’s Eve Celebration at Seattle Center

There are actually two parties that will converge at midnight for the iconic Seattle fireworks show.
The Armory Stage will host rock band SWAY from 8pm until midnight. And at the International Fountain, you can dance the night away with live electronic music and video projection show (starts at 10pm). Tickets are required for both parties, however the big fireworks show is free to enjoy.

  1. SPECTRA: New Year’s Eve Under the Arches

The Pacific Science Center transforms on NYE with fire sculptures, drinks and live music. There will be special entertainment throughout the night, as well as the standard Science Center exhibits. At midnight, head outside for the Space Needle fireworks. Purchase tickets in advance.

  1. New Year’s Eve pARTy at Chihuly Gardens and Glass

Watch the Seattle Center fireworks from under the glass of Chihuly Gardens. The evening includes appetizers, desserts, live music and a midnight toast. Purchase tickets in advance.

  1. INDULGENCE New Year’s Eve Bash at MoPOP

Another Seattle Center option, the Museum of Popular Culture offers four 21+ parties in one. With live music on three performance stages, comedians, party favors, special VIP areas, more than 20 bars, and a special singles-only cocktail hour, this is one of the largest parties of the year. Museum access is included in the price of the party, purchase tickets in advance.

  1. Tacoma’s First Night

First Night is an all-ages, family-friendly celebration in Downtown Tacoma’s Theater District. The affordable admission price includes museums, music, art, drama, dance, and a whole day and night of activities. The cost of entry increases as the festival gets closer, so buy early to save!

  1. Nighttime Party for Families at Imagine Children’s Museum

The perfect NYE celebration if you have older kids, this pajama party features comedians, balloon makers, pizza, snacks, and educational, hands-on activities throughout the night. The fun culminates at 9pm with a ball drop.

  1. New Year’s Eve with Ivar’s Salmon House

Ivar’s on Northlake will host live music, tasty food and view of the fireworks without the crowds. Advanced reservations are required, and will range in price depending on your selections.

  1. Slamming’ Jammin’ New Year’s Eve Party

Ring in the new year with the latest in R&B, Old School, Jazz and Hip Hop music. This is a 21+, semi-formal event, and hotel packages are available with your ticket purchase.

  1. Resolution New Year’s Eve Party at WAMU Theater

A Seattle tradition for almost a decade, this 18+ party always brings a mixed crowd together for a night of dancing. This is one of the biggest EDM parties of the year.

  1. New Year’s at KidsQuest Bellevue

Celebrate the coming new year all day at KidsQuest! There are activities every hour from 10am to 4pm, including Bubble Wrap Stomp, New Year’s Hats, Storytime, glittery tattoos, and more. Admission is free with membership or museum admission.

Do you want to be “In the Know” in your neighborhood? Sign up for a monthly overview of what’s happening in the zip code(s) of your choice. Neighborhood News is a great tool to stay informed about the home values and activity in your own backyard or to study a new market you may be interested in. Click here to sign up on my website.
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Posted on January 30, 2019 at 12:21 pm
Ginna Demme | Posted in Newsletter Blog |

2019 Economic & Housing Forecast

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Happy 2019! As we head into the New Year, it’s a great time to look ahead to what the real estate market has in store. Just last week, I had the pleasure of hosting an Economic Forecast Event with Windermere’s Chief Economist, Matthew Gardner, and soaked up his knowledge and predictions. Below are his general predictions for the at-large real estate market across the nation, please review and let me know if you have any questions.

Beyond the national forecast, at the event Matthew reported specifically on the Greater Seattle market, including both King and Snohomish counties. I received his Power Point presentation and I am happy to share his slides, should you request them.

A few take-a-ways to note are:

  • Seattle remains strong economically and our job market is thriving.
  • Interest rates are still historically low and will rise, but not beyond 6%.
  • It is still a seller’s market in our area, but price escalations are softening, creating more balance and sustainability. We are NOT experiencing a bubble.
  • 25% of homeowners in our region have 50% equity in their homes.
  • An economic recession is upon us in 2020. This one should be much like the 1991 recession; short and not based in housing.
  • Be careful how you process the media’s take on the market as they often use extreme month-over-month numbers vs. richer long-term data.
  • Prices are expected to rise 5-7% in 2019, which is more normal, but above the long-term average, yet lower than the recent double-digit year-over-year gains we’ve seen since 2012.

It is always my goal to help empower my clients with information to help them make informed decisions regarding their real estate.  Let me know if you’d like that Power Point. I’m happy to share and help you dissect the information. Here’s to a great 2019!


2019 Economic and Housing Forecast
Posted on Windermere.com in Market News by Matthew Gardner, Chief Economist, Windermere Real Estate 

What a year it has been for both the U.S. economy and the national housing market. After several years of above-average economic and home price growth, 2018 marked the start of a slowdown in the residential real estate market. As the year comes to a close, it’s time for me to dust off my crystal ball to see what we can expect in 2019.

The U.S. Economy

Despite the turbulence that the ongoing trade wars with China are causing, I still expect the U.S. economy to have one more year of relatively solid growth before we likely enter a recession in 2020. Yes, it’s the dreaded “R” word, but before you panic, there are some things to bear in mind.
Firstly, any cyclical downturn will not be driven by housing.  Although it is almost impossible to predict exactly what will be the “straw that breaks the camel’s back”, I believe it will likely be caused by one of the following three things: an ongoing trade war, the Federal Reserve raising interest rates too quickly, or excessive corporate debt levels. That said, we still have another year of solid growth ahead of us, so I think it’s more important to focus on 2019 for now.

The U.S. Housing Market

Existing Home Sales
This paper is being written well before the year-end numbers come out, but I expect 2018 home sales will be about 3.5% lower than the prior year. Sales started to slow last spring as we breached affordability limits and more homes came on the market.  In 2019, I anticipate that home sales will rebound modestly and rise by 1.9% to a little over 5.4 million units.

Existing Home Prices
We will likely end 2018 with a median home price of about $260,000 – up 5.4% from 2017.  In 2019 I expect prices to continue rising, but at a slower rate as we move toward a more balanced housing market. I’m forecasting the median home price to increase by 4.4% as rising mortgage rates continue to act as a headwind to home price growth.

New Home Sales
In a somewhat similar manner to existing home sales, new home sales started to slow in the spring of 2018, but the overall trend has been positive since 2011. I expect that to continue in 2019 with sales increasing by 6.9% to 695,000 units – the highest level seen since 2007.

That being said, the level of new construction remains well below the long-term average. Builders continue to struggle with land, labor, and material costs, and this is an issue that is not likely to be solved in 2019. Furthermore, these constraints are forcing developers to primarily build higher-priced homes, which does little to meet the substantial demand by first-time buyers.

Mortgage Rates
In last year’s forecast, I suggested that 5% interest rates would be a 2019 story, not a 2018 story. This prediction has proven accurate with the average 30-year conforming rates measured at 4.87% in November, and highly unlikely to breach the 5% barrier before the end of the year.

In 2019, I expect interest rates to continue trending higher, but we may see periods of modest contraction or levelling.  We will likely end the year with the 30-year fixed rate at around 5.7%, which means that 6% interest rates are more apt to be a 2020 story.

I also believe that non-conforming (or jumbo) rates will remain remarkably competitive. Banks appear to be comfortable with the risk and ultimately, the return, that this product offers, so expect jumbo loan yields to track conforming loans quite closely.

Conclusions
There are still voices out there that seem to suggest the housing market is headed for calamity and that another housing bubble is forming, or in some cases, is already deflating.  In all the data that I review, I just don’t see this happening. Credit quality for new mortgage holders remains very high and the median down payment (as a percentage of home price) is at its highest level since 2004.

That is not to say that there aren’t several markets around the country that are overpriced, but just because a market is overvalued, does not mean that a bubble is in place. It simply means that forward price growth in these markets will be lower to allow income levels to rise sufficiently.

Finally, if there is a big story for 2019, I believe it will be the ongoing resurgence of first-time buyers. While these buyers face challenges regarding student debt and the ability to save for a down payment, they are definitely on the comeback and likely to purchase more homes next year than any other buyer demographic.

Originally published on Inman News.
At Windermere we help people buy and sell homes, but we also help build community. I’m proud to support the Windermere Foundation with every home I help sell or buy. 2018 concluded with another great year of fundraising and giving for the Windermere Foundation, thanks to the continued support of agents, franchise owners, staff, and the community. Nearly $2.5 million was raised in 2018, bringing our grand total to over $38 million raised since the Foundation’s inception in 1989! This money goes right back into our community, helping low-income and homeless families. Read the full blog post here.
This past Christmas, my office adopted 22 foster boys, ranging in age from 13-18 years old, and living in group homes managed by Pioneer Human Services. These group homes serve boys who are struggling with emotional, behavioral and/or psychiatric problems that prevent placement in a traditional foster care setting. We purchased gifts, using wish lists from the boys, to help provide a joyful Christmas morning for these teenage boys who might otherwise be overlooked.

The office also raised money for grocery gift cards for families in need (also referred by Pioneer Human Services). This year we distributed $2,068 in grocery gift cards to 15 local families.

We are also thrilled to report that through our partnership with the Seattle Seahawks, this season Windermere raised a total of $31,900 for YouthCare, an organization that provides critical services for homeless youth. This brings our three-year total to $98,700 towards our #tacklehomelessness campaign! Thank you to the Seahawks and to YouthCare for helping us support homeless youth in our community. We’ll be back next year to raise even more!

Do you want to be “In the Know” in your neighborhood? Sign up for a monthly overview of what’s happening in the zip code(s) of your choice. Neighborhood News is a great tool to stay informed about the home values and activity in your own backyard or to study a new market you may be interested in. Click here to sign up on my website.
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Posted on January 30, 2019 at 12:17 pm
Ginna Demme | Posted in Newsletter Blog |

Quarterly Economic Update for Western Washington

Quarterly Economic Update for Western Washington
We are so fortunate here at Windermere to have Matthew Gardner, Windermere’s Chief Economist to help keep us informed on our economy and the real estate market. Each quarter Matthew compiles in-depth research on counties from across Western Washington. Click here to download Matthew’s full Q3 2018 report and check out the latest on the area you call home.
At the close of the third quarter, the Windermere Foundation had donated (year-to-date) over $1.2 million to non-profit organizations in communities throughout the Western U.S. that provide services to low-income and homeless families.

During the third quarter alone, the Windermere Foundation collected over $742,226 in donations; 70 percent of which came from individual contributions and fundraisers, while 30 percent came from donations through Windermere agent sales transactions. This brings the grand total to $37,151,731 raised since 1989!

If you would like to learn more about how the Windermere Foundation is supporting low-income and homeless families in our communities, check out this blog post. And for information on how we’re helping the California Wildfire Relief Fund, click here.

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

Click here to learn more about the Windermere Foundation.

#Tacklehomelessness Update
Consider this house protected. In our last home game win against the Packers, the Seattle Seahawks also brought home $2,800 to be donated to YouthCare to #TackleHomelessness. With that, we’re up to $15,000 raised this season and $81,800 in total! Great work and #GoHawks!

Posted on November 28, 2018 at 10:31 am
Ginna Demme | Posted in Newsletter Blog |

What’s In Your Toolbox to Navigate the Changing Market?

The late spring market brought about some welcomed change to our local real estate markets. In May, we experienced the largest increase in inventory in a decade! North King County and South Snohomish County are two examples of what is happening in all the markets across the Puget Sound as we head into the second half of 2018. Below is a breakdown of the current environment; further is an explanation of what it all means.

North King County (Ship Canal to Snohomish County Line):

  • 38% increase in new listings from April to May 2018
  • 16% more new listings in May 2018 vs. May 2017
  • Overall 5% more new listings over the last 12 months vs. the previous 12 months
  • Average list-to-sale price ratios reduce to 104% from 105% in May 2018
  • Median Price up 15% complete year over year, but down 1% vs. the previous month, landing at $815K.

South Snohomish County (Snohomish County Line to Everett):

  • 27% increase in new listings from April to May 2018
  • 10% more new listings in May 2018 vs. May 2017
  • Overall 2% more new listings over the last 12 months vs. the previous 12 months
  • Average list-to-sale price ratios reduce to 102% from 103% in May 2018
  • Median price up 12% complete year over year, but equal with the previous month, landing at $500K.

This increase in inventory is awesome! It is providing more selection for buyers and is helping temper price growth, which was increasing at an unsustainable level. It is still a Seller’s market by all means, which is defined by having three or less months of available inventory. Both market areas are still just under one month of inventory based on pending sales, but not as low as the two-week mark they were experiencing in March.

The increase in inventory is the result of pent up seller demand. From 1985-2008 the average amount of time a homeowner stayed in their home was 6 years. From 2008-2017 it grew to 9 years. With a resounding amount of equity under their belts, many homeowners are now deciding to make moves. Some are moving up to the next best thing and others are cashing out and leaving the area for a new beginning or retirement. This is providing buyers with the selection they have been waiting for after a very tenuous, inventory-starved start to 2018. The buyers that have stayed on the forefront of the market are now being rewarded with choices. These choices are best accompanied with keen discernment in order to craft the best negotiations – the broker they choose to align with is key.

The price analysis above indicates strong equity positions for sellers, but also a leveling off in price growth. Over the first quarter we saw prices increase month-over-month quite handily; now that more inventory is appearing and demand is being absorbed, price growth is not as extreme. This has highlighted the importance of having a strategic pricing and marketing plan for sellers wanting the highest price and shortest market time. The broker they choose to align with is key.

The importance of both buyers and sellers aligning with a knowledgeable, well-researched and responsive broker is paramount. One might think that it is “easy” to sell a house in this market, but the pricing research, home preparation, market exposure, varied marketing mediums, close management of all the communication, and how negotiations are handled can make or break a seller’s net return on the sale. With market times increasing, having a broker with a tight grasp on the changing environment will help create an efficient market time, resulting in the best price and terms for a successful closing. It is important that sellers do not overshoot this market, and it takes a broker with a keen gut sense rooted in in-depth research to help get them their desired results.

If you’re a buyer, it is overwhelmingly important that you are aligned with a broker that knows how to win in this market. The increase in selection has left some room for contemplation in some cases. Considering possible terms and price based on thorough market research as you head into negotiations are what set a highly capable selling broker apart and are required to prevail. With more selection coming to market, buyers have more to consider, and having a broker alongside them to help craft a strategy of negotiations will ensure they don’t overpay.

If you have any curiosities or questions regarding the value of your current home or purchase opportunities in today’s market, please contact me. It is my goal to help keep you informed and empower strong decisions.

Windermere Community Service Day 2018

On June 8th, 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 Fourth of July is right around the corner.  With it being on a Wednesday, it makes sense to stay local.  Here is a list of fireworks shows nearby to help you celebrate the great U.S. of A!

  • Bellevue – Downtown Park 10:05 p.m.
  • Des Moines – Marina 10:20 p.m.
  • Edmonds – Civic Stadium 10 p.m.
  • Everett – Port Gardner Bay 10:20 p.m.
  • Federal Way – Celebration Park 10:15 p.m.
  • Kent – Lake Meridian Park 10 p.m.
  • Kenmore – Log Boom Park 10:00 p. m.
  • Kirkland – Marina Park 10:15 p.m.
  • Lakewood – Joint Base Lewis-McChord 10 p.m.
  • Newcastle – Lake Boren Park 10 p.m.
  • Renton – Coulon Park 10 p.m.
  • SeaTac – Angle Lake Park 10 p.m.
  • Seattle – Lake Union 10:20 p.m. BIG!
  • Tacoma – Ruston Way 10:10 p.m. BIG!
  • Tukwila – Fort Dent Park 10 p.m.
Do you want to be “In the Know” in your neighborhood? Sign up for a monthly overview of what’s happening in the zip code(s) of your choice. Neighborhood News is a great tool to stay informed about the home values and activity in your own backyard or to study a new market you may be interested in. Click here to sign up on my website.
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Copyright © 2018 Windermere Real Estate/ North Inc., All rights reserved.

Posted on June 29, 2018 at 8:38 am
Ginna Demme | Posted in Newsletter Blog |