Community Info • January 16, 2022

North Snohomish County Market Report – Q4 2021

by Travis DeFries

2021 was a year that will go down in infamy in regards to the real estate market. Tight inventory levels, historically low interest rates and increased buyer demand influenced by pandemic lifestyle shifts made for an eventful year! 2021 price appreciation is on top of the strong price growth we also saw in 2020. Seller equity is undeniable as homeowners are sitting on top of a wave of appreciation that has been mounting since 2012! Wherever you sit in this decade of price growth, if you are considering selling, you will enjoy phenomenal returns. As for buyers, they are securing homes with low debt service which has helped offset the affordability of housing prices.

We anticipate 2022 being another fruitful year for the real estate market, but expect price appreciation to temper as interest rates slowly creep up. Look to me to continue to help keep you updated as the year progresses. It is always my goal to help keep my clients well informed and empower strong decisions.

Community Info • January 16, 2022

Seattle Metro Market Report – Q4 2021

by Travis DeFries

Community Info • January 16, 2022

Eastside Market Report – Q4 2021

by Travis DeFries

Community Info • January 16, 2022

North King County Market Report – Q4 2021

by Travis DeFries

Community Info • January 16, 2022

South Snohomish County Market Report – Q4 2021

by Travis DeFries

Monthly Newletter • January 6, 2022

Real Estate Newsletter – 01/05/2022

by Travis DeFries

2021 was a wildly eventful year in the real estate market! Price appreciation was the highest we have ever seen, interest rates remained historically low, and demand for housing was elevated by the ever-changing shifts in our lifestyles due to the pandemic. Further, our overall economy in Washington State and the Greater Seattle area had many bright spots, but also some challenges.Matthew Gardner, Windermere’s trusted and reputable Chief Economist will join us for a virtual economic forecast event (details below) and will touch on the economy, both nationally and locally in addition to our local real estate market. He will recap 2021 and look at what to expect moving forward in 2022 and beyond. He is both informative and entertaining! His quick wit, English accent, and simple breakdown of complicated figures make this a fun event, some laughs are promised!Real estate is most often someone’s largest single investment, so we see this opportunity to hear what Matthew has to share as a valuable element to help our clients nurture their investment(s). Even if you don’t own a home yet, this will help equip you with the knowledge to make a formidable plan. It is always my goal to help empower my clients with knowledge and information to help guide strong decision-making for both their long-term investments and to enhance their lifestyles. I sure hope you can make it!Please join me for a very special virtual live event: AN ECONOMIC FORECAST FOR 2022 & BEYONDwith Matthew Gardner, Chief Economist for Windermere Real Estate Wednesday, January 19, 20226:30pm – 8pm Presentation from 6:30-7:30 pm, Q&A to follow Please RSVP by phone/text or email by January 14th, 2022to receive an emailed event link prior to the event.

Every holiday season, the brokers in my office come together to sponsor local teenage foster boys for Christmas gifts, and several families in need for grocery gift cards. It’s such a privilege to give back in a small way, and I always love seeing the gifts under our office Christmas tree before they are sent off to the group homes. This opportunity to give back at the end of every year is a reflection of the gratitude we all have for our clients and their support of our businesses. Here’s a little bit about what we did for Christmas 2021:

We gifted Christmas presents for 17 teenage foster boys living in 3 group homes managed by Pioneer Human Services.
- We purchased gifts totaling $3,296 for the boys, which also included outings for all the boys to Traxx racing, a movie theater, and bowling.

We divided a total of $4,210 in Safeway grocery gift cards amongst 13 families (comprised of 52 individuals); all referred by Pioneer Human Services.
- We collected $2,050 in money
- We received a match of $2,000 from The Windermere Foundation
- And Safeway included a bulk buy bonus of $160

Monthly Newletter • December 6, 2021

Monthly Real Estate Newsletter – December 2021

by Travis DeFries

At Windermere, we have the benefit of being expertly guided by our Chief Economist, Matthew Gardner. Every year he shares his predictions for the US Economy and Housing Market. I have included a list of highlights below along with a link to a video where he spells it all out.Matthew’s Forecast for the US Economy:

The US will still continue to feel the effects of the COVID-19 pandemic on the economy. He acknowledges that we are healing, but still experiencing drag due to supply chain delays and Covid-sensitive consumers. He expects this to improve as we head into spring and the second half of 2022.
He predicts a 4% increase in GDP in 2022.
Even though we are still experiencing supply chain delays and labor shortages he does not anticipate a recession.
He predicts more robust job growth in 2022 and returning to pre-Covid employment in the second half of 2022.
Inflation is still very much affected by supply chain issues and labor shortages, but he sees that settling out mid-2022.
Interest rates will help to counteract inflation and will start to increase in 2022, but not crest 4%.

Matthew’s Forecast for the US Housing Market:

There will be a modest reduction in home sales year-over-year, but realize this is coming off of a high volume of sales in 2021.
After a record-breaking 16% increase in median price in 2021, he predicts a 7% increase in median price year-over-year in 2022. This slow down in appreciation will be due to increased interest rates, affordability, and a slight increase in supply.
Housing starts will increase, but more importantly, construction completion will increase due to supply chain issues and labor shortages improving.
Interest rates will increase towards 4% as we travel through 2022, but will still be well below the 30 year average of 7.5%.
There will not be a housing bubble due to high demand for housing, job growth improving, and the overall recovery of the US economy.
He is not concerned about forbearance, but more so affordability for the aging millennial generation who would like to purchase their first home.
He sees the housing market moving towards more balance in 2022 after an incredible year of growth in 2021.

Look for Matthew’s local economy and housing market predictions from me in January. My office is also hosting a virtual Economic Forecast event with Matthew on January 19th. Stay tuned for more information.Overall, this is a positive outlook weighted with some real challenges that we still face as we recover from the global pandemic. It is always my goal to help keep my clients well-informed and empower strong decisions. Please reach out if you are curious about how the housing market relates to your goals or if you’d like to attend the virtual economic forecast event with Matthew in January.

Thank you to everyone who donated to our Thanksgiving food drive! Because of your generosity, we were able to give The Volunteers of America Food Banks a check for $3,075 and 2,169 pounds of food! That will provide a total of 3,498 meals for our community.

Food insecurity is one of the most prevalent social issues of our time. VOA food banks, food pantries, and distribution center all exist to tackle hunger in our community and also serve as touchpoints to connect our neighbors with other basic needs.Thank you!

This holiday season, I invite you to join me in this tangible way of showing gratitude and support to our healthcare workers, who have worked so long and hard under the most difficult circumstances.In tandem with The Windermere Foundation and local non-profit We Got This Seattle, my office is collecting donations that will be used to purchase meals from local restaurants. We will be personally delivering these meals over three weeks to a coordinated point person at Providence Hospital in Everett, Swedish Edmonds, and UW Medical Center-Northwest. Meals and treats will be distributed to frontline workers such as nurses, doctors, respiratory therapists, and cleaning staff.All funds collected through:12/6-13 will provide meals to Providence Everett12/14-20 will provide meals to Swedish Edmonds12/21-27 will provide meals to UW Medical Center – Northwest>> Click here to donate!Thank you for your generous gifts in support of our community.Happy Holidays!

Monthly Newletter • November 13, 2021

Monthly Real Estate Newsletter – November 2021

by Travis DeFries

The recent news of Zillow’s plan to shut down their iBuyer program due to a $328 million loss in the third quarter has heads spinning in the real estate world and on Wall Street. Sadly, Zillow plans to eliminate 25% of its workforce because of its decision to move away from the practice of purchasing and re-selling homes due to their mismanagement of property price evaluations. “Fundamentally, we have been unable to predict the future pricing of homes to a level of accuracy that makes this a safe business to be in,” Zillow CEO Rich Barton. This is a bold statement from a CEO who built their company on a computer algorithm that spits out a home value called, the Zestimate. A Zestimate is an AVM (Automated Valuation Model). The product of an automated valuation technology comes from analysis of public record data and computer decision logic combined to provide a calculated estimate of a probable selling price of a residential property. An AVM generally uses a combination of two types of evaluation, a hedonic model and a repeat sales index. The results of each are weighted, analyzed, and then reported as a final estimate of value based on a requested date. Zillow’s iBuyer program sought to find eager home sellers who wanted a quick, no-nonsense sale. They would present a cash offer based on their algorithm and close on a mutually agreed-upon date. After closing, Zillow would turn these properties around with some improvements and bring them back to the market. This is often labeled a “flip”. The problem was Zillow overpaid for the majority of their purchases which proved that their computer-generated evaluation (AVM) lacks market accuracy. On average, they re-sold these homes for $80,800 less than what they purchased them for. Thorough market research that includes touring the subject and neighboring properties, seeking info from other brokers about the terms of recent sales and overall experience helps to determine accurate market conditions in comparison to the swirl of data used to establish the Zestimate. Computers can’t do this type of in-depth research, nor do they have the instinct to predict shifts in the market, but humans (real estate brokers) can! Often times when I am talking with potential sellers, their Zestimate (or other AVMs) come up in the overall conversation. I understand why, too. This is information that is relatively easy to access and gives the seller a starting point on the value of their home. Where an AVM can become dangerous is when a consumer thinks it’s the be-all, end-all. Even worse, when a consumer makes a major financial decision solely based on this information. According to Zillow, 39% of all Zestimates in the Seattle metro area are not within 5% of the actual value. In fact, they publish an accuracy report that you can access here.In October, the median home price in the Seattle Metro area was $850,000. With 39% of all Zestimates not within 5% of the actual value, that is a beginning margin of error of $42,500! Further, they claim that 82% of their Zestimates are within 10% of the actual value, which is a marked difference – up to $85,000. Where AVMs are incomplete is that the basis of their formula is tax records, which in my experience are often inaccurate. Also, and most importantly, an AVM does not take into consideration the condition of the home, the neighborhood, and other environmental impacts such as school district, road noise, and unsightly neighboring homes, to name a few.So why does the Zestimate exist? Zillow is a publicly-traded company (ZG) and their website is the vehicle to create profit. The Zestimate drives consumers to the website who are often dipping their toes in the pool to see what their home might be worth or searching available homes for sale. When a consumer is searching on Zillow’s website they are surrounded by real estate broker and mortgage broker ads on every page. These real estate brokers and mortgage brokers are paying for that advertising space, which is how Zillow makes its money and why there is a Zestimate. The Zestimate is not a public service, it is a widget to bring eyes to their advertising space which in turn, sells more ads to brokers looking for leads.The moral of the story is this: use Zillow as one of the many tools in your real estate evaluation and search toolbox. Zillow provides a great starting point and contains a ton of information to whet your palate when embarking on a real estate endeavor. However, we live in a time of information overload and we are overstimulated at best. Nothing beats the evaluation and discernment of a knowledgeable and experienced real estate broker to help you determine accuracy, which will lead to the empowerment of clarity. At Windermere, we like to call this, The Human Algorithm.If you are curious about the value of your home in today’s market, please contact me. I can provide an annual real estate review of all of your real estate holdings, and can even dive deep into a complete comparative market analysis if you would find that helpful. It is my goal to help keep my clients informed and empower strong decisions.

Zillow® and Zestimate® are trademarks of Zillow, Inc.

Matthew Gardner is the Chief Economist at Windermere and a sought-after expert on real estate, both locally and across the country. Every quarter, Matthew breaks down the real estate market by region and provides the Gardner Report; you can read this quarter’s full report here. If you have any questions or curiosity about the current real estate market that you would like to discuss, please reach out. Are you curious about the value of your home, are you contemplating a move, or considering a new purchase? I can help! It is always my goal to help empower my clients to make strong financial decisions and to help them understand how real estate can positively affect their lifestyle.

Community Info • October 27, 2021

Western Washington Gardner Report – Q3 2021

by Travis DeFries

Q3 2021 Western Washington Market Trends

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 Real Estate agent.

REGIONAL ECONOMIC OVERVIEW

The emergence of the of COVID-19 Delta variant had a palpable impact on the region’s economy, which, naturally, impacted the job recovery. Employment levels in Western Washington had been picking up steam in the spring but started to slow quite dramatically over the summer. To date, the region has recovered more than 201,000 of the jobs that were lost due to the pandemic, but we appear to be in a bit of a holding pattern. That said, the ending of enhanced unemployment benefits has led many business owners to see more applicants for open positions, so I am hopeful the numbers will pick back up as we move into the winter months. The most recent data (August) shows the region’s unemployment rate at a respectable 5%, but we still have a way to go before we reach the pre-pandemic low of 3.7%. On a county level, the lowest unemployment rate was in Kitsap County (4.4%) and the highest was in Grays Harbor County (6.6%). There are still many hurdles in front of us, but I believe we will continue to add jobs and reach full employment recovery by mid-2022.

WESTERN WASHINGTON HOME SALES

❱ Sales in the third quarter rose 6.4% year over year, with a total of 27,280 homes sold. The increase matched what we saw in the second quarter of this year.

❱ I was pleased to see sales growth continue. This rise was supported by a 28.4% increase in the number of homes for sale. Listings rose the most in Grays Harbor (+62.6%), Lewis (+53.6%), and Skagit (+52.0%) counties.

❱ Sales activity was mixed. Nine counties saw year-over-year growth, but sales slowed in six counties. That said, sales were up in every county other than King and San Juan compared to the second quarter of 2021.

❱ The ratio of pending sales (demand) to active listings (supply) showed pending sales outpacing listings by a factor of 4.6. Even with the increase in the number of new listings, the market is far from balanced.

A bar graph showing the annual change in home sales for various counties in Western Washington during the third quarter of 2021.

WESTERN WASHINGTON HOME PRICES

A map showing the real estate market percentage changes for various counties in Western Washington during the third quarter of 2021.

❱ Home prices rose 18.9% compared to a year ago, with an average sale price of $726,168—another all-time record.

❱ When compared to the same period a year ago, price growth was strongest in Clallam, San Juan, and Jefferson counties, but all markets saw prices rise more than 12% from a year ago.

❱ Average sale prices pulled back 1.1% compared to the second quarter of this year. Given the massive increase in value over the past few years, it is not at all surprising. The key indicator has been a softening in list prices and that naturally translates to slower price growth. This is nothing to be worried about. It simply suggests that the market may finally be heading back to some sort of balance.

❱ Relative to the second quarter of this year, all counties except San Juan (-0.1%), Island (-0.5%), and Whatcom (-0.5%) saw higher sale prices.

A bar graph showing the annual change in home sale prices for homes in various Western Washington counties during the third quarter of 2021.

DAYS ON MARKET

❱ It took an average of 17 days for a home to sell in the third quarter. This was 19 fewer days than in the same quarter of 2020, and 1 fewer day than in the second quarter of this year.

❱ Mirroring the second quarter, Snohomish, Kitsap, Thurston, and Pierce counties were the tightest markets in Western Washington, with homes taking an average of 9 days to sell in Snohomish County and 11 days in the other three counties. The greatest reduction in market time compared to a year ago was in San Juan County where it took 102 fewer days for homes to sell.

❱ All counties contained in this report saw the average time on market drop from the same period a year ago, but eight counties saw market time rise from the second quarter; however, the increases were minimal.

❱ Even with inventory levels increasing in most markets, the region’s housing market remains remarkably tight. That said, I do see some of the heat dissipating and I am hopeful that if inventory levels continue rising, we will start a slow move back toward a balanced market.

A bar graph showing the average days on market for homes in various counties in Western Washington during the third quarter of 2021.

CONCLUSIONS

A speedometer graph indicating a seller's market in Western Washington during the third quarter of 2021.

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.

Even given the speedbump that hit the region’s economy with the emergence of the Delta variant, the housing market remains remarkably resilient. Demand from buyers continues to be very strong, and modestly increasing inventory levels appear to have—at least for the time being—reduced some of the fever from the market. Mortgage rates remain very favorable, and my current forecast is for them to stay in the low- to mid-3% range until next summer. Rising inventory levels have led price growth to slow and days on market to start increasing, which may be a sign that the market is retreating from a prolonged period of exuberance.

As we move through the balance of the year, I believe demand will remain solid, but we will continue to see price growth soften as more listings compete for the buyers that are out there. That is not to say price growth will turn negative; rather it suggests that we are slowly moving back toward a more balanced market. That said, the market certainly still favors home sellers. As such, I am leaving the needle in the same position as the second quarter. I may move it a little in the direction of buyers next quarter if the current trend continues through the winter months.

ABOUT MATTHEW GARDNER

Matthew Gardner - Chief Economist for Windermere Real Estate

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.

Monthly Newletter • October 21, 2021

Monthly Real Estate Newsletter – October 2021

by Travis DeFries

Embarking on a home purchase in a seller’s market can be intimidating, but it can be done. Long-term price growth confirms that owning a home is a key element to building household wealth. Home equity gained over time is typically the largest asset that contributes to a household’s net worth. Homeownership is not only an investment, but also provides shelter and fits the lifestyle needs of the owner. We have seen many lifestyle-driven moves during the pandemic highlighting the value of location and features for buyers. Also, with the advent of remote work, many buyers have been able to be more flexible in determining their top locations. This has contributed to stronger price growth in suburban and rural locations.

Buyers having a well-thought-out plan is paramount to finding success in today’s market. Partnering with their broker to assess their budget and how it relates to the location(s) and features they desire is the strategic formula that helps a buyer gain clarity. Buyer clarity is what leads a buyer to be able to make a sound decision to offer on a home. If a buyer is not clear, they will not be empowered to make a decision; in turn elongating the process and costing them more money. We have seen intense price growth since the beginning of the year illustrating the cost of waiting. In King County median price is up 16% year-over-year and up 21% in Snohomish County.

The tool that we use to help a buyer determine a productive search for their new home is The Triangle of Buyer Clarity. It is an expert tool for a buyer to help determine the parameters of their home search in order to save them time and money. The relationship between Price, Location, and Features/Condition is paramount in helping a buyer gain clarity and efficiency in their search.

Helping buyers stay focused on the reality of what their budget can afford them by applying The Triangle is an effective tool. For instance, if a buyer is set on a turn-key home that requires minimal updates, they may have to go up in price or further out in location, or both. The sides of The Triangle are often adjusted to make an uneven triangle, resulting in an effective home search and a successful purchase. An equilateral triangle is like a unicorn; buyers often have to adjust at least one side of the triangle to match the market with their ability to perform. Now here’s the geometry lesson: a buyer will often start the process with an equilateral triangle in mind, but will find success with either an isosceles (two equal sides) or a scalene (no equal sides) triangle. The moral of the geometry lesson is we have to be willing to compromise.

Understanding that compromise is OK and that it is actually a tool is when a buyer gains the clarity they need to successfully move forward. This is even further nuanced when two people are buying a home together; the adjustments must be done as a team. A skilled broker is well-versed in helping guide this process and making sure each participant is being heard and hearing each other. At the end of the day, real estate is a relationship business, and effectively curating this process is dependent on trust and care.

Helping buyers find their next home is one of the most joy-filled activities I have the honor of being a part of. It may appear simple, but it is not. The crucial conversations, contemplation, and planning that happen in order to find success are intentional. Taking the time upfront to analyze my buyers’ goals instead of just jumping in the car and starting to look at homes is a responsible part of my process that builds trust and effectively leads to success. It is my goal to help keep my clients well informed in order to empower thoughtful decisions. If you have any questions about the market or you’re ready to dive in, please reach out.

On this episode of “Monday with Matthew,” Matthew analyzes the latest Home Purchase Sentiment Index survey by Fannie Mae which helps us understand how buyers and sellers are feeling about the housing market.