Monthly Newsletter – November 2020

It is important that we pay attention to the data when measuring the health of the housing market. There are a lot of feelings and media influences that can play into one’s opinion of the housing market. I choose to focus on three things: inventory, equity levels, and the experts. This has been and will continue to be my guide in order to be a valuable aid to my clients. To quote Peter Kann, former publisher of the WSJ, “truth is attainable by laying fact upon fact”.

Inventory levels nationally and in our region continue to be historically low. In fact, national inventory levels are at 2.7 months of inventory, and are the lowest they have been since the National Association of Realtors (NAR) started to report them in 1982. There are only approximately 1.2 million single-family homes for sale across the nation. In King County, inventory levels sat at 0.8 months in September and only 0.4 months in Snohomish County. A seller’s market is defined by 0-3 months of inventory, and finding our region with less than one month has us operating in an extreme seller’s market!

The combination of scarce inventory and the lowest interest rates in history has led to above-average price growth year-over-year. Nationally, the single-family median home price is up 15% this September compared to the previous September. In King County, it is up 13%, and in Snohomish County up 14%. It is also important to measure complete year-over-year data. Taking just one month of data and comparing it to the same month a year ago definitely tells a story, but by taking the average of the last 12 months and comparing it to the previous 12 months, you get a more accurate picture of overall growth. It is important to look at both in order to analyze long-term and real-time trends. We must also consider the sustainability of such extreme price growth.

The complete year-over-year price growth percentages temper compared to just looking at the month of September. In King County, the single-family median price is up 5% complete year-over-year and up 8% in Snohomish County. This takes into consideration the stall we saw in the market when the pandemic hit, along with the less extreme inventory environment we started 2020 with. Looking at the data one way gives us the big picture and looking at the most recent data tells the story of what is happening now in comparison to a snapshot one year ago. Pricing is still an art in a seller’s market and even though we are seeing historically low inventory levels, it is certainly possible to over-price and miss the mark for a great outcome.

The multi-family market which includes condominiums is also seeing price growth, but not as strong as single-family. There seems to be a trend with more people working from home and retiring who want to obtain larger interior spaces and room for outdoor enjoyment. The suburbs and smalls towns are gaining a ton of traction with commute-times being lower on the list of considerations. However, the surge of first-time buyers coming into the market due to Millennials coming of age and the historically low interest rates has the multi-family market in growth mode as well.

Nationally, multi-family (which includes condo) inventory sits at four months of inventory, which is a balanced market. In King County, there are two months of available inventory and in Snohomish County 0.7 months. King County’s condo market has seen a larger flood of available inventory, with folks transferring equity to single-family homes in the suburbs and exiting the city. Both counties’ condo markets are still experiencing year-over-year price growth, but due to density in certain areas, price analysis should be studied by the specific building and location. The ability to eliminate commutes by working from home has taken the shine off of condo price affordability as some buyers are opting to purchase a single-family home further out, resulting in a similar monthly payment.

Equity levels across our nation are formidable. 42% of homeowners own their home free-and-clear and 58% of homeowners have 60% equity or more! Unlike the Great Recession of 2008 that was centered on housing, we are experiencing quite the opposite. With unemployment still an important issue, some homeowners will utilize their positive equity position to help relieve financial pressure as they pivot to an alternative career path and/or geographic location. Housing will be a tool for some to navigate the economic uncertainty the pandemic has caused.

The experts I continue to follow are Matthew Gardner, Windermere’s Chief Economist, and David Childers and Steve Harney from Keeping Current Matters. Along with following their well-researched and thoughtful insights I am committed to studying the local monthly, weekly, and daily statistics that represent our local real estate market.

Trends can vary from one neighborhood to the next or from one type of product to another. It is my mission to position myself as an expert in order to serve my clients, by digging deep into the local data, discerning, and reporting back the truth. The strategy of layering fact upon fact is my guide to help develop the most successful outcome possible for my clients.

As always, it is my goal to help keep my clients informed in order to empower strong decisions, especially during these unique times. Please reach out if you need some help, want to satisfy a curiosity, or have a friend in need of some solid real estate guidance. In the meantime, please check out the video below featuring Matthew’s latest update including three recent data points that tell a story about the housing market. Be well!

As the Official Real Estate company of the Seattle Seahawks, Windermere donates $100 to Mary’s Place for every home game Hawks tackle. During last Sunday’s game we raised another $4,200, bringing our total to $140,500.


Posted on November 6, 2020 at 4:43 pm
Travis DeFries | Posted in Monthly Newletter |

Matthew Gardner Report – Q3 2020

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

 

REGIONAL ECONOMIC OVERVIEW

Employment numbers in Western Washington continue to improve following the massive decline caused by COVID-19. For perspective, the area shed more than 373,000 jobs between February and April. However, the recovery has been fairly robust: almost 210,000 of those jobs have returned. Unemployment levels remain elevated; the current rate is 8.2%. That said, it is down from 16.6% in April. The rate, of course, varies across Western Washington counties, with a current low of 7.2% in King County and a high of 11.2% in Grays Harbor County. The economy is healing, but the pace of improvement has slowed somewhat, which is to be expected. That said, I anticipate that jobs will continue to return as long as we do not see another spike in new infections.

HOME SALES

  • Sales continued to improve following the COVID-19-related drop in the first quarter of the year. There were 25,477 transactions in the quarter, an increase of 11.6% from the same period in 2019, and 45.9% higher than in the second quarter of this year.
  • Listing activity remains woefully inadequate, with total available inventory 41.7% lower than a year ago, but 1.6% higher than in the second quarter of this year.
  • Sales rose in all but two counties, though the declines were minimal. The greatest increase in sales was in San Juan County, which leads one to wonder if buyers are actively looking in more isolated markets given ongoing COVID-19-related concerns.
  • Pending sales—a good gauge of future closings—rose 29% compared to the second quarter of the year, suggesting that fourth quarter closings will be positive.

 

 

 

HOME PRICES

  • Home-price growth in Western Washington rose a remarkable 17.1% compared to a year ago. The average sale price was $611,793.
  • When compared to the same period a year ago, price growth was strongest in Mason, Island, and San Juan counties. Only one county saw prices rise by less than ten percent.
  • It was even more impressive to see the region’s home prices up by a very significant 9.4% compared to the second quarter of 2020. It is clear that low mortgage rates, combined with limited inventory, are pushing prices up.
  • As long as mortgage rates stay low, and there isn’t an excessive spike in supply (which is highly unlikely), prices will continue to rise at above-average rates. That said, if this continues for too long, we will start to face affordability issues in many markets.

 

 

 

 

 

 

DAYS ON MARKET

  • The average number of days it took to sell a home in the third quarter of this year dropped two days compared to a year ago.
  • Snohomish County was the tightest market in Western Washington, with homes taking an average of only 16 days to sell. All but two counties—Lewis and San Juan—saw the length of time it took to sell a home rise compared to the same period a year ago.
  • Across the region, it took an average of 36 days to sell a home in the quarter. It is also worth noting that it took an average of 4 fewer days to sell a home than in the second quarter of this year.
  • The takeaway here is that significant increases in demand, in concert with remarkably low levels of inventory, continue to drive market time lower.

 

 

 

CONCLUSIONS

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

High demand, favorable interest rates, and low supply clearly point to a seller’s market in Western Washington. As such, I am moving the needle even more in favor of sellers.

As I suggested earlier in this report, although the market is remarkably buoyant, I am starting to see affordability issues increase in many areas—not just in the central Puget Sound region—and this is concerning. Perhaps the winter will act to cool the market, but something is telling me we shouldn’t count on it.

ABOUT MATTHEW GARDNER

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

In addition to his day-to-day responsibilities, Matthew sits on the Washington State Governors Council of Economic Advisors; chairs the Board of Trustees at the Washington Center for Real Estate Research at the University of Washington; and is an Advisory Board Member at the Runstad Center for Real Estate Studies at the University of Washington where he also lectures in real estate economics.


Posted on October 30, 2020 at 11:04 pm
Travis DeFries | Posted in Community Info |

South King County Quarterly Market Trends – Q3 2020

The real estate market continued to positively perform in the third quarter, and is the bright light in the economy during the COVID-19 health crisis. The protocols in place that have helped protect the safety of the community have recently been expanded to allow small group open houses to help address the demand in the market.

Interest rates remain historically low, hovering around 3% and creating robust buyer demand and a competitive marketplace. Coupled with available inventory being down 55% complete year-over-year, the third quarter saw many home sales escalate in price due to multiple offers. This perfect storm of supply and demand has amped up price appreciation. With only 0.6 months of available inventory based on pending sales, the median price is up 11% complete year-over-year.

Inventory is down due to the high absorption rate which resulted in many sales. There was a delay in homes coming to market in the spring, but the summer months got us within 5% of the previous year’s number of new listings. The influence of interest rates, along with many people making big lifestyle moves due to working from home, Baby Boomers retiring, and the younger generations transitioning their work and family statuses have resulted in just 2% fewer sales complete year-over-year.

These are unprecedented times and the real estate market has provided lots of opportunities. Equity levels are high, allowing for exciting lifestyle moves, relocations, and some ease from other financial pressures. It is my goal to help keep my clients informed and empower strong decisions, now more than ever. Please reach out if you’d like to discuss your real estate goals and how they relate to your lifestyle and bottom line. Be well!


Posted on October 18, 2020 at 12:08 am
Travis DeFries | Posted in Community Info |

Eastside Quarterly Market Trends – Q3 2020

The real estate market continued to positively perform in the third quarter, and is the bright light in the economy during the COVID-19 health crisis. The protocols in place that have helped protect the safety of the community have recently been expanded to allow small group open houses to help address the demand in the market.

Interest rates remain historically low, hovering around 3% and creating robust buyer demand and a competitive marketplace. Coupled with available inventory being down 58% complete year-over-year, the third quarter saw many home sales escalate in price due to multiple offers. This perfect storm of supply and demand has amped up price appreciation. With only 0.6 months of available inventory based on pending sales, the median price is up 6% complete year-over-year.

Inventory is down due to the high absorption rate which resulted in many sales. There was a delay in homes coming to market in the spring, but the summer months got us within 12% of the previous year’s number of new listings. The influence of interest rates, along with many people making big lifestyle moves due to working from home, Baby Boomers retiring, and the younger generations transitioning their work and family statuses have resulted in only 4% fewer sales complete year-over-year.

These are unprecedented times and the real estate market has provided lots of opportunities. Equity levels are high, allowing for exciting lifestyle moves, relocations, and some ease from other financial pressures. It is my goal to help keep my clients informed and empower strong decisions, now more than ever. Please reach out if you’d like to discuss your real estate goals and how they relate to your lifestyle and bottom line. Be well!


Posted on October 18, 2020 at 12:07 am
Travis DeFries | Posted in Community Info |

Seattle Metro Quarterly Market Trends – Q3 2020

The real estate market continued to positively perform in the third quarter, and is the bright light in the economy during the COVID-19 health crisis. The protocols in place that have helped protect the safety of the community have recently been expanded to allow small group open houses to help address the demand in the market.

Interest rates remain historically low, hovering around 3% and creating robust buyer demand and a competitive marketplace. Coupled with available inventory being down 17% complete year-over-year, the third quarter saw many home sales escalate in price due to multiple offers. This perfect storm of supply and demand has maintained price appreciation. With only 1.1 months of available inventory based on pending sales, the median price is up 3% complete year-over-year.

Inventory is down due to the high absorption rate which resulted in many sales. There was a delay in homes coming to market in the spring, but the summer months got us equal with the previous year’s number of new listings. The influence of interest rates, along with many people making big lifestyle moves due to working from home, Baby Boomers retiring, and the younger generations transitioning their work and family statuses have resulted in 10% more sales complete year-over-year.

These are unprecedented times and the real estate market has provided lots of opportunities. Equity levels are high, allowing for exciting lifestyle moves, relocations, and some ease from other financial pressures. It is my goal to help keep my clients informed and empower strong decisions, now more than ever. Please reach out if you’d like to discuss your real estate goals and how they relate to your lifestyle and bottom line. Be well!


Posted on October 18, 2020 at 12:05 am
Travis DeFries | Posted in Community Info |

North King County Quarterly Market Trends – Q3 2020

The real estate market continued to positively perform in the third quarter, and is the bright light in the economy during the COVID-19 health crisis. The protocols in place that have helped protect the safety of the community have recently been expanded to allow small group open houses to help address the demand in the market.

Interest rates remain historically low, hovering around 3% and creating robust buyer demand and a competitive marketplace. Coupled with available inventory being down 45% complete year-over-year, the third quarter saw many home sales escalate in price due to multiple offers. This perfect storm of supply and demand has maintained price appreciation. With only 0.7 months of available inventory based on pending sales, the median price is up 3% complete year-over-year.

Inventory is down due to the high absorption rate which resulted in many sales. There was a delay in homes coming to market in the spring, but the summer months got us within 6% of the previous year’s number of new listings. The influence of interest rates, along with many people making big lifestyle moves due to working from home, Baby Boomers retiring, and the younger generations transitioning their work and family statuses have resulted in 6% more sales complete year-over-year.

These are unprecedented times and the real estate market has provided lots of opportunities. Equity levels are high, allowing for exciting lifestyle moves, relocations, and some ease from other financial pressures. It is my goal to help keep my clients informed and empower strong decisions, now more than ever. Please reach out if you’d like to discuss your real estate goals and how they relate to your lifestyle and bottom line. Be well!


Posted on October 18, 2020 at 12:04 am
Travis DeFries | Posted in Community Info |

South Snohomish County Quarterly Market Trends – Q3 2020

The real estate market continued to positively perform in the third quarter, and is the bright light in the economy during the COVID-19 health crisis. The protocols in place that have helped protect the safety of the community have recently been expanded to allow small group open houses to help address the demand in the market.

Interest rates remain historically low hovering around 3% and creating robust buyer demand and a competitive marketplace. Coupled with available inventory being down 72% complete year-over-year, the third quarter saw many home sales escalate in price due to multiple offers. This perfect storm of supply and demand has amped up price appreciation. With only 0.4 months of available inventory based on pending sales, the median price is up 9% complete year-over-year.

Inventory is down due to the high absorption rate which resulted in many sales. There was a delay in homes coming to market in the spring, but the summer months got us within 10% of the previous year’s number of new listings. The influence of interest rates, along with many people making big lifestyle moves due to working from home, Baby Boomers retiring, and the younger generations transitioning their work and family statuses have resulted in only 3% fewer sales complete year-over-year.

These are unprecedented times and the real estate market has provided lots of opportunities. Equity levels are high, allowing for exciting lifestyle moves, relocations, and some ease from other financial pressures. It is my goal to help keep my clients informed and empower strong decisions, now more than ever. Please reach out if you’d like to discuss your real estate goals and how they relate to your lifestyle and bottom line. Be well!


Posted on October 18, 2020 at 12:03 am
Travis DeFries | Posted in Community Info |

North Snohomish County Quarterly Market Trends – Q3 2020

The real estate market continued to positively perform in the third quarter, and is the bright light in the economy during the COVID-19 health crisis. The protocols in place that have helped protect the safety of the community have recently been expanded to allow small group open houses to help address the demand in the market.

Interest rates remain historically low, hovering around 3% and creating robust buyer demand and a competitive marketplace. Coupled with available inventory being down 55% complete year-over-year, the third quarter saw many home sales escalate in price due to multiple offers. This perfect storm of supply and demand has amped up price appreciation. With only 0.5 months of available inventory based on pending sales, the median price is up 8% complete year-over-year.

Inventory is down due to the high absorption rate. There was a delay in homes coming to market in the spring, but the summer months finally caught us up with the previous year’s number of new listings. The influence of interest rates, along with many people making big lifestyle moves due to working from home, Baby Boomers retiring, and the younger generations transitioning their work and family statuses have resulted in 6% more sales complete year-over-year.

These are unprecedented times and the real estate market has provided lots of opportunities. Equity levels are high, allowing for exciting lifestyle moves, relocations, and some ease from other financial pressures. It is my goal to help keep my clients informed and empower strong decisions, now more than ever. Please reach out if you’d like to discuss your real estate goals and how they relate to your lifestyle and bottom line. Be well!


Posted on October 18, 2020 at 12:01 am
Travis DeFries | Posted in Community Info |

Monthly Newsletter – October 2020

Homeowners across our region are enjoying very healthy equity levels due to an amazing upswing in the real estate market over the last five years. In fact, the median price in King County is up 49% over the last five years and up 51% in Snohomish County. This growth in equity has given homeowners the exciting option to sell their homes for a price that will bear a sizable down payment or the ability to “buy all-cash” on their next home. This has many people exploring their next chapters, such as moving up to a larger home or downsizing for retirement. The strong price appreciation is great news and provides many opportunities; however, we have also faced some challenges in how to make these transitions work without moving twice.

Our biggest challenge for homebuyers in the marketplace right now is inventory levels. It is also the reason so many home sellers are doing so well. Currently, King County sits at 0.9 months of inventory based on pending sales and 0.6 months in Snohomish County. Historically, buyers that are also sellers would commonly secure a new home with a home sale contingency on the sale of their current home. Meaning the seller of the new home they are buying would give them a month or so to get their current house sold in order to be able to buy theirs.

Well in this market, utilizing a home sale contingency is only rarely an option, especially on desirable homes. So, the million-dollar question is this: how does one who has gained so much equity, now itching to get that bigger house, different location, or perfect rambler for settling into retirement, make this transition without having to move twice? We need to get creative and have a strategy. The Windermere Bridge Loan program has been a powerful tool to help homebuyers transition their equity without having to sell their house first.

This is an amazing tool for homeowners that own their homes free-and-clear or have gained a large amount of equity over time. This is also a low-cost and faster alternative to a cash-out re-fi or securing a HELOC which enables one to pull the equity out of their current house prior to selling it in order to make a non-contingent offer.

The way it works is we take the market value of the house the homeowner current lives in, established by a comparative market analysis (CMA) that I complete and is approved by my Broker. We then take 75% of the CMA value and subtract any debt owed, and that is the maximum amount the homeowner can borrow for their next down payment. For example, if the market value is $700,000: 75% of $700,000 is $525,000. Say the homeowner owes a remaining $225,000 on their mortgage; the max amount they could borrow would be $525,000 – $225,000 = $300,000.  If that same homeowner didn’t have a mortgage then they could borrow up to $525,000 as that is 75% of the CMA value.

This tool enables people to make transitions without having to sell their home first, attempt a home-sale-contingent offer, or go through the lengthy and expensive process of a cash-out re-fi or securing a HELOC. What makes this tool so efficient, is that it doesn’t require an appraisal (like a re-fi or HELOC does), and these can easily be turned around in 5-7 business days. This tool provides the opportunity to quickly and inexpensively pull your equity out, be competitive, and eliminates the double move.

The fees associated with this program are a 1% loan fee on the loan amount (minimum fee of $1,000), a title report, credit report, recording fees for the deed, and interest that is incurred between the loan funding and being paid off once the subject home is sold. That interest is conveniently wrapped up in the closing costs when the client closes the sale of the collateral home, eliminating the need to make monthly interest payments. Clients who use this program are also required to list the home 30 days after the loan has funded.  This allows time for the client to prepare their home for sale after they have moved out. Lastly, only homes in Washington state are eligible to be the collateral property, but note this can be a tool for relocating out-of-state which we are seeing a lot of.

In a strategy that is somewhat mind-blowing, we can sometimes use these bridge loans and never have to actually fund them. For example, if we secure a property non-contingent with the bridge loan and immediately get the subject home on the market, we can often secure a sale with a simultaneous closing, and never have to fund the loan. This eliminates the loan fee, interest, and the need to carry two mortgages. All this requires is getting pre-approved for the bridge loan and preparing the home for sale prior to shopping, so one is prepared to act quickly and line up both closings.

If you are excited about equity levels and today’s low interest rates and have thought about making that move you’ve been waiting for, but have been fearful of how to do it all – I can help. The Windermere Bridge Loan, along with great attention to detail, hand-holding, and careful planning have helped many people make these exciting transitions. It is my goal to help keep my clients informed and empower strong decisions. Please contact me if you would like further information on how this might work for you or someone you know.

As the Official Real Estate company of the Seattle Seahawks, Windermere donates $100 to Mary’s Place for every home game Hawks tackle. During the last home game against the Cowboys we raised $5,300, bringing our total to $131,000.

This weekend we take on the Vikings at Century Link and together, we’ll continue to #TackleHomelessness.


Posted on October 9, 2020 at 12:32 am
Travis DeFries | Posted in Monthly Newletter |

Pumpkin Patches 2020

 

Nothing feels more like fall than pumpkin picking, hay rides and corn mazes. Get your latte in hand and head out to any one of these great, local farms to have some harvest fun and find that perfect jack-o-lantern to light up your porch.

Please be sure to verify and take note of each farm’s COVID-19 safety guidelines, as well as any potential weather-related (or COVID-related) closures or changes.

 

SNOHOMISH COUNTY

Biringer’s Black Crow Pumpkins & Corn Maze
2431 Highway 530 NE, Arlington

Bob’s Corn & Pumpkin Farm
10917 Elliott Rd, Snohomish

Carleton Farm
630 Sunnyside Blvd SE, Lake Stevens

Craven Farm
13817 Short School Rd, Snohomish

The Farm at Swans Trail
7301 Rivershore Rd, Snohomish

Fairbank Animal Farm & Pumpkin Patch
15308 52nd Ave W, Edmonds
Closed for 2020 due to COVID-19

Fosters Pumpkin Farm
5818 State Route 530 NE, Arlington
Closed for 2020 due to COVID-19

Stocker Farms
8705 Marsh Rd, Snohomish

Thomas Family Farm
9010 Marsh Road, Snohomish

 

KING COUNTY

Carpinito Brothers
1148 Central Ave N, Kent

Fall City Farms
3636 Neal Road, Fall City

Fox Hollow Family Farm
12031 Issaquah Hobart Rd SE, Issaquah

Jubilee Farm
229 W Snoqualmie River Rd NE, Carnation

Oxbow Farm
10819 Carnation-Duvall Rd NE, Carnation

The Nursery at Mt Si
42328 SE 108th St, North Bend

Remlinger Farms
32610 NE 32nd St, Carnation

Serres Farm
20306 NE 50th St, Redmond

Thomasson Family Farm
38223 236th Ave SE, Enumclaw

Yakima Fruit Market
17321 Bothell Way NE, Bothell

 

PIERCE COUNTY

Double R Farms
5820 44th St E, Puyallup

Maris Farms
25001 Sumner-Buckley Hwy, Buckley

Picha’s Farm
6502 52nd St E, Puyallup

Scholz Farm
12920 162nd Ave E, Orting

Spooner Farms
9622 SR 162 E, Puyallup


Posted on September 25, 2020 at 12:14 am
Travis DeFries | Posted in Community Info |