Last month, my office invited a panel of insurance professionals to discuss the volatility of the Homeowner’s Insurance (HOI) market so we could learn the latest to best inform our clients. In the wake of several natural disasters, the LA Fires is one of the most recent, HOI companies have become much more scrutinous and expensive. The increase in natural disasters such as flooding, wildfires, hurricanes, earthquakes, landslides, tornadoes, and extreme cold snaps have accelerated losses and depleted their recovery funds. This has caused carriers to increase premiums, limit coverage, and, in some cases, cancel policies.

Hearing of the neighborhoods in the Palisades Fires that were canceled or not renewed by their carriers just weeks before the fires, motivated us to want to learn more to help educate our clients so they are equipped to be protected. After all, we help people secure their most significant asset; we want to empower them to protect it adequately as well. On the evening of May 7th at 6:30 pm, my office is hosting a virtual webinar event for our clients featuring the same panel of insurance professionals (see the link below to register; registration closes on May 4th). There will be two insurance brokers and one captive company agent from Allstate who will spend an hour answering questions about the current market.

For an hour, they will be led by a moderator to provide tips to ensure you are properly insured, highlight what to look for in your carrier’s contracts, explain which riders to a contract are most effective, and go over when it is appropriate to make an HOI claim and when you should not. All of this will help educate homeowners so they are empowered to make informed decisions about their coverage and costs and hopefully not find themselves in a situation like the victims of the LA Fires. We will then open it up for 30 minutes of Q&A and provide follow-up materials. I hope you can make it! Registering is easy with the link below, and you can also contact me directly to talk about the event and the topic overall.

In the meantime, here are a few things you can do now to evaluate your current coverage:

• Make an appointment with your insurance agent/broker to review your policy. This should be done annually.
• Reevaluate your policy after making any upgrades to your home.
• Add an inflation endorsement to your policy.
• Build a relationship with your agent/broker.

Here are a few important elements to focus on to ensure adequate coverage:

• Replacement Cost Value (RCV): The amount of money needed to repair your home at today’s prices of building supplies or to replace your belongings at today’s cost of a similar or like item. It is important to discuss replacement costs with your insurance agent/broker when purchasing your policy. This is the figure that dictates the completeness of your coverage.
• The cheapest policy is not always the best policy. Often, the most inexpensive policies lack the coverage you desire. Make sure to dig deep into the details and evaluate your RCV and deductible.
• What exclusions are in your policy contract? You don’t want to find out after making a claim that you are not covered because of an exclusion. You may need to add specific riders to expand your coverage.
• Be aware of what activities would void your coverage. For example, leaving your home vacant for more than 30 days often voids coverage without a vacancy rider. Snowbirds who winter in the sunshine should be keenly aware of this.
• Understand the balance between your deductible and a claim amount. Making a claim could increase your premium or even get you canceled. Analyzing the impact of a claim and weighing the cost/benefit is key. If you can afford to pay for the repair on your own, it might make sense not to make the claim.
• If you are a renter or own a condo, what policies should you have to protect your belongings? Renters need a renter’s policy to cover their personal belongings should something happen to the structure such as a fire. Additionally, condominium associations have a master policy that covers common areas and exterior elements. Condo owners should have personal policies to cover what the master policy doesn’t cover, along with their personal belongings.

These are just a few things to get you started on an HOI audit. If you need any referrals to reputable insurance agents or brokers, please let me know. While HOI is not my direct area of expertise, I’m happy to connect you with professionals to help you better. I hope you can attend the virtual panel event on May 7th so you can learn even more. It will provide you with useful insights and create value for your investment. It is always my goal to help you stay informed about the value of your home, market trends, and how to protect your home. You can click on the link below to register or reach out to me directly and I will get you the link to attend.

You’re invited to our annual Paper Shredding Event & Food Drive. We partner with Confidential Data Disposal to provide a safe, eco-friendly way to reduce your paper trail and help prevent identity theft.

Saturday, April 19th, 10AM to 2PM (or until the trucks are full)
4211 Alderwood Mall Blvd, Lynnwood
Bring your sensitive documents to be professionally destroyed on-site. Limit 10 file boxes per visitor.

We will also be collecting non-perishable food and cash donations to benefit Volunteers of America Western Washington food banks. 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.

As we start a new year, I am often asked where home prices are headed.  While I don’t have a crystal ball, I study the market trends and activity closely.  Many aspects affect home prices, such as the overall economy’s health, inventory levels (supply & demand), and interest rates.  Seasonality is also a pattern I pay close attention to, and we are headed into the time of year when we see most of the annual price growth happen.  As we prepare for the Spring market, I have pulled some data that shows the seasonal patterns and the impact interest rates have had on prices, and long-term equity growth.

First, before we look forward, we must look back to understand the relationship between rates and prices.  We went on a long run of rates being below 5% from 2010 to mid-2022, outside of the second half of 2018. Price growth was consistent after the recovery from the Great Recession in 2012 to 2018 and, in some cases, incredibly rapid.  When the increase in interest rates happened in 2018, along with the proposed Seattle Head Tax, we saw a correction in home prices.  It took the market about 15 months to recover from that correction.

Then, we hit the pandemic-fueled market of 2020-2022, where price growth was off the charts.  During that time, work-from-home moves flooded the suburbs and rural markets, early retirements and relocations to other states created movement, and interest rates under 3% drove prices up by double digits.  At the beginning of 2022, rates started to creep up to counter inflation and increased by 2 points in four months, landing at 5.5% in May 2022.  This, like 2018, forced a correction in prices.  This correction took 24 months to recover, with prices regaining their May 2022 peak in May 2024.

This recovery all happened amidst interest rates peaking at 7.91% in Oct 2023 and never going under 6% the entire time.  Rates have hovered from 6.75%-7.25% over the last year, outside of a small window in the Fall when they were in the mid-6%.  This illustrates that the market has become accustomed to the new normal of interest rates, and prices have been strong and stable.  Tight inventory has helped bolster price stability and growth with limited supply to fuel demand.

If you look at the recovery from May 2022 to May 2024, you must also understand the seasonality of the market.  This pattern has rung true for decades and has much to do with inventory levels.  We typically start the new year with the lowest amount of available homes for sale due to the holiday slow down, short, dark days, and many families timing their moves around the school year.  Once the new year starts, would-be buyers hit the market with their housing goals blowing wind into their sails.

This new demand is coupled with tight inventory, and the price growth for the year starts to take shape via price escalations via multiple offers.  This becomes commonplace in Q1, and we begin to see inventory catch up in Q2 when the days are longer, the flowers are in bloom, and we are a little closer to the opening of summer break for schools, creating a less disruptive move.  Despite the correction in 2022 and rates stubbornly remaining in the 6-7% range, sellers have realized incredible gains, and buyers who have made purchases have secured their trajectory of building wealth through owning real estate.

Even though price growth is more accelerated in the first half of the year, the deceleration of price growth sits on the shoulders of the gains in Q1 & 2, ultimately leaving prices higher year-over-year.  This is a pattern we have seen for some time, and we are already starting to see it unfold in 2025.  Month-to-date prices are up in February 2025 over January 2025 by 5% in King County and 1% in Snohomish County.  This pattern can guide one’s timing of the market, and so can life.  As much as hitting the perfect week when there is less competition and rates drop may feel like hitting your bet at the roulette table, making a move is much more nuanced than that.  The timing of a move needs to work with the demands of life, and the good news is the year-over-year gains are positive regardless.

As we head into the spring market for 2025, we anticipate additional price growth from where we are now and following the trend of prices peaking in late Spring.  We should regain and most likely eclipse the peak prices we saw in 2024.  To expand this to the bigger picture, let me share some fun facts about long-term price growth and homeowner equity with you.  This is especially important as real estate is a long-term investment, the four walls where you create your life, and not meant to be a lucky bet on black.

Check out the charts below that show how far prices have come over the last ten years!  In King County, the January median price is up 74% since 2016 and up 36% since 2020.  In Snohomish County, the January median price is up 103% since 2016 and up 51% since 2020.  Equity levels are high across our region, with over 50% of homeowners having 50% equity or more.  Many homeowners are in the fortunate position to reposition their equity into a home that is a better fit for their lifestyle if they are experiencing life changes such as a change in family size, job change, or a financial shift.

In 2024, the Windermere Foundation raised just over $3.5M and served 583 organizations.  Since its inception in 1989, they have raised over $56M!  The Foundation was created to help give back to our communities and focused on assisting homeless and low-income families and children.  Each Windermere agent participates by donating a portion of each commission earned, and additional fundraising is done annually by agents and offices.  Local chapters vet organizations aligning with the Foundation’s mission, and funds are responsibly disbursed.

Offices also take on projects to help give back throughout the year.  Our office consistently raises funds and collects food for the Volunteers of America (VOA) Food Banks of Snohomish County, and we hold three food drives a year.  We understand that food insecurity is a relevant need, especially amid high inflation.  Our next food drive is on Saturday, April 19th, and we will be combining it with our Paper Shredding Event that will be held at our office from 10 am to 2 pm.  If you have some paper to shred, please stop by and bring some food or a cash donation to benefit the food banks managed by VOA.

We also work with Washington Kids in Transition (WKT) and organize a Christmas-giving tree that benefits two dozen youths in the Edmonds and Everett School Districts.  WKT has also started a new mentorship program that helps homeless teens learn critical life skills, such as managing finances and nutrition.  The program also organizes outings and events under the moniker of the Friendship Club that give these teens the opportunity to build relationships and have experiences that would not be available to them like attending a play or a ball game.  These giving projects are near and dear to our hearts, and we are proud to align with these reputable organizations that do such meaningful work.

On January 22, my office hosted renowned economist and housing market specialist Matthew Gardner, who shared his 2025 Economic & Housing Market Forecast. We spent an hour listening to his keen analysis and insights, which included a look back at 2024, some discussion about what to expect with the new administration, and a look ahead to 2025 and beyond. Please let me know if you want to receive a link to the recording or a PDF of his PowerPoint slide deck.

He expertly broke down his presentation using a macro-to-micro approach, starting with the national economy and then narrowing down locally by presenting stats, figures, and predictions about the King and Snohomish County economies and housing markets. Here are my top takeaways.

✅ NATIONAL ECONOMY:

Inflation has become “sticky”! It slowly trended down in 2024 but could tread water in 2025, depending on what happens with tariffs under the new administration. If tariffs are instituted across the board, many countries are predicted to respond by implementing their own tariffs, which would increase the cost of goods.

The Federal Funds Rate will slowly decrease over the course of 2025. Until we get clarity on proposed tariffs on U.S. trade partners, the Federal Reserve will remain aggressive with rates to combat inflation. The current consensus is for the Fed to make two rate cuts instead of four, with the first possibly being in February. NOTE: The Federal Funds Rate is the short-term interest rate (credit cards, car loans, etc.), not Mortgage Rates.

There is no sign of a recession. The balance of inflation, rates, and the overall health of the economy has created a soft landing that avoided a recession. In fact, GDP is up by 2% and the textbook definition of a recession is when the GDP decreases over two successive quarters.

Tepid job growth in 2025. The labor market has cooled nationally after the “catch-up” period seen after the pandemic. Going forward, proposed immigration reform could weigh on labor force growth and hamper job creation. Weak labor force growth keeps the unemployment rate from rising in any meaningful way and is anticipated to peak around 4%.

✅ GREATER SEATTLE AREA JOB MARKET:

Job growth is still happening, yet ever so slightly! Jobs expanded by 1.2% in 2024 and should expand by 1.5% in 2025. The tech sector props up King County, and Snohomish County did have a relatively positive recovery post-Boeing strike. The construction sector is down, and some businesses will “wait and see” about growth once the administration starts to take shape with trade and immigration policies, which will directly affect labor costs.

✅ GREATER SEATTLE HOUSING MARKET:

Inventory will increase in 2025 over 2024 by 8-10%. In 2024, inventory increased by 14% over 2023, which saw the lowest levels since the Great Recession. Lower inventory has been driven by the “lock-in” effect created by the previous low interest rates. Moves have been less discretionary and more so motivated by death, divorce, and diapers. More discretionary moves will happen when homeowners see mortgage rates closer to within 2% of their current rate. However, equity levels are high (over 50% of homeowners have 50% or more equity), enabling buyers who are also sellers to reposition their equity to a home that better fits their lifestyle, should the monthly payment work for them.

Mortgage rates will modestly decrease throughout 2025 and should end up in the low 6%. The biggest headwind is deficit spending now that inflation has settled. This spending will keep the 10-year treasury high, which will have a direct impact on mortgage rates. These are two key factors to watch if you’re waiting for mortgage rates to drop significantly.

Prices increased in King and Snohomish counties in 2024 and are expected to grow again in 2025 despite stubborn mortgage rates. In King County, inventory was up by 10%, sales were up 12%, and the median price was up 10.7% year-over-year. Price growth is predicted to increase by 4% in 2025, which is higher than the historical national annual average. In Snohomish County, inventory was up by 17%, sales were up 8%, and the median price was up 9.9% year-over-year. Price growth is predicted to increase by 5% in 2025.

Affordability is the biggest challenge. With price growth steady coupled with higher interest rates, monthly payments have grown faster than incomes. This has put first-time homebuyers at a disadvantage in core job center locations. Down payment assistance (gift funds) from family and/or high-paying salaries in the tech, biotech, and big corporate companies have differentiated the ability of some first-time homebuyers compared to others with limited down payment funds and higher debt-to-income ratios.

The American Dream is still alive! Homeownership has proven to be one of the strongest hedges against inflation and the single most lucrative wealth-building asset a household can have over time. A key piece of advice for first-time homebuyers would be to do what you can with what you have, which may mean buying a smaller property or going further out in location. Regardless of where one buys, this will put them on the trajectory of building household wealth through real estate and open up an opportunity to upgrade later. In fact, the net worth of a homeowner in 2023 was $396,200 vs. $10,400 of a renter.

This is certainly a lot to unpack as we head into 2025. Stay tuned for even more insights on what we learned from Matthew in my next newsletter. In the meantime, I am here to encourage you and point out that this is a lot of good news. We look forward to more moderate growth in 2025, which is good. Severe increases are not healthy. While we are combating an affordability crisis, the steady wave of moderation on top of incredibly high equity levels should play out to create a stable and fruitful 2025 real estate market.

If you are curious about how all of this relates to your real estate goals or you know someone that needs some guidance, please reach out. I will continue to help keep you well informed so you can be empowered to make strong decisions.

Reflecting on the joy of the holiday season always brings with it gratitude. One of the most important pieces of my business is working with an office that always makes it a priority to come together as a team throughout the year to lift up our neighbors in need and give back to our communities. Our collective gratitude runs deep, and spreading some love and support within our community is the best way we can celebrate everything we are thankful for.

This year our holiday food drive brought in $1,372 and 1,422 pounds of food for Volunteers of America Western Washington food banks. These numbers are all thanks to friends and clients like you. Thank you for your generosity! The current need in our area is high, and our local food banks need all the help they can get.

Next, we had the absolute joy of helping bring some Christmas magic to homeless/housing-insecure youth in our area. We partnered again this year with Washington Kids in Transition, who work with social workers in Edmonds School District schools (includes the communities of Edmonds, Lynnwood, Brier & Mountlake Terrace) to collect wish lists from homeless/housing insecure students living in shelters, tents, cars, transitional housing or other temporary housing and partners with the community to fulfill those wishes. The brokers in my office all came together and we adopted the wish lists of 24 local youth, who would have otherwise gone without this holiday season.

The rest of the year, Washington Kids in Transition provides emergency closets (coats, diapers, toiletries, etc.), hotel vouchers, utility assistance, rental deposits, and recently started a teen mentorship program. This new program is in high demand, but does not yet have reliable funding, so we decided to also raise funds for that as well over the holiday. We raised a total of $3,815 for this new program, which helps teens learn basic life skills as well as have fun activities they otherwise wouldn’t have access to.

Another holiday staple at my office is putting together volunteer groups at Christmas House and also Holly House this year. Both organizations are local non-profits (100% volunteer-run) that provide opportunities for qualifying, low-income parents to select free holiday gifts for their children. This is always an amazing time helping families in need have a joyful Christmas.

You can access any of the links above to learn more about these organizations or to donate yourself.  As we head into 2025, our commitment to giving back to the community that we serve will remain a cornerstone of our business. Here’s to a happy, healthy, and heartwarming 2025 and beyond.