Monthly Newletter September 7, 2024

Monthly Newsletter – 09/06/2024 (End of Summer Market Update)

Summer 2024 welcomed an increase in available inventory, a drop in interest rates, and continued price stability, which has upheld strong home equity levels. After a double-digit ramp-up in price appreciation in the first half of 2024, prices have slightly come off the peak of May 2024 and found stability. This trend is historically consistent with seasonal patterns and nothing to be alarmed about.

Increased selection for buyers was a welcome relief as inventory was extremely tight in the spring. While there are still homes getting multiple offers and escalating, we have also seen some buyers make purchases contingent on the sale of their current home. The market has become a bit more nimble for buyer’s terms in some cases. It is important to understand the nuances of each location, product, and price point, as the environment can vary which would indicate whether a buyer would need to compete or be able to negotiate more.

These trends are coupled with rates dropping below 7% in June and they have recently sat in the mid-6%. Rates were a point and a half higher in October 2023; this is a great improvement! We anticipate rates slowly dropping further which will put upward pressure on prices. The Fed meets again this month and if rates come down even more, buyer activity will increase. Between the lower rates and higher inventory, buyers should be excited and ready to act!

As you can see from the chart below, this shift in rate directly relates to a buyer’s monthly payment. Homes are expensive, so the cost to carry a loan is critical. These recent drops are helping out and should be paid close attention to as buyers are payment-driven in most cases. The opportunity to secure a home now with today’s rate could mean a buyer could enjoy a stable price and choose to re-finance or adjust to a lower rate later, keeping their same basis. Buyers should also understand that homeownership is a key component to building wealth.

I anticipate a healthy late summer and fall market. Over the Labor Day Weekend, buyer traffic was busy despite the holiday and activity is bubbling up. The lower rates are helping some folks jump off the fence. Even some sellers are getting ready to sell and relinquish their lower rate, so they can move to a home that better fits their needs. I’m excited about the real estate market for the remainder of 2024 and into 2025. If you are curious about how the trends relate to your goals, please reach out. I am committed to staying connected and up-to-date on the latest trends so my clients make well-informed decisions.

Here is a quick update on a topic I have been keeping you up-to-date on all year. On August 17, 2024, the NAR Settlement requirements were enacted. This required significant changes to real estate practices across the country. This made big news and stirred headlines. The good news is in WA state we made the majority of these changes back on January 1, 2024, when the law surrounding buyer agency was changed.

Since January 1, 2024, we have been required to obtain Buyer Brokerage Services Agreements (BBSAs) with buyers we are providing real estate brokerage services. These agreements can be exclusive or non-exclusive, must establish clear buyer brokerage compensation parameters, have a defined agreement term, and call out whether dual agency is allowed. I have embraced these changes and have brought value to my clients through this modernized process.

Our local MLS, the NWMLS, chose to opt out of the NAR settlement in May 2024. They felt confident that the risk for exposure was low due to advancements they have been making since 2019 to elevate transparency around brokerage compensation. Their proactive consumer-focused approach along with the new WA state law have had our state ahead of the curve.

The majority of the required practice changes required by the settlement were already in place in WA state as of January 1, 2024. Due to their choice to opt out, the NWMLS will not have to comply with the requirement to not publish a seller’s offer of compensation to a buyer’s brokerage. This is confusing to all parties of a transaction and the opposite of transparency. I am proud to run my business as a member of the progressive NWMLS and under the new law established by our state on January 1, 2024.

On August 15th, 2024, the NWMLS made some slight updates to some of their forms to coincide with the final settlement details. Most notably, buyer brokerage compensation was made more clear in the Purchase and Sale Agreement. It can be connected to what the seller is offering in their listing, what is agreed upon in the BBSA, or both. Sellers can choose to offer buyer brokerage compensation, choose not to, or request to negotiate it as a term in a buyer’s offer. Depending on how the established BBSA aligns with the Purchase and Sale Agreement, the buyer brokerage compensation will be paid by the seller, buyer, or a combination of both.

If you have any questions about the settlement and all of the changes we have navigated since 2019 until now, please reach out. I am committed to providing valuable services and clear communication to the buyers and sellers I serve. I understand that purchasing and selling real estate is one of the largest financial decisions a person ever makes and it is often related to big life changes.  Navigating such importance takes great skill and care and I am committed to obtaining the best results for my clients while creating an enjoyable experience along the way.

Thank you to everyone who pitched in during the Summer Food Drive! Through your generosity, we collectively donated $1,240 and 1,058 pounds of food to Volunteers of America Western Washington food banks! This is all going directly into our communities to help our neighbors in need.

Thank you!

Monthly Newletter August 15, 2024

Monthly Newsletter 08/14/2024

As we approach November and the Presidential election nears, it would be good to look back on how election years have historically affected the real estate market.  There is certainly a lot going on and this stimulation can cause pause.  Buying and selling real estate is a big life event and the election is a big national event.  Some buyers and sellers will delay their moves until after they know how the election is going to pan out.  Sometimes this delay is caused by pure distraction and sometimes there is a level of uncertainty that is created until a decision is made.

Here is some interesting data that illustrates the trends of consumer behavior surrounding a Presidential election.  Interest rates, the rate of home sales, and price growth are all analyzed below.  Looking back to look forward provides some concrete evidence of how a Presidential election can affect the performance of the housing market.

First, interest rates!  We have recently experienced a nice drop in rates.  Rates have been extremely volatile over the last two years.  Last October, rates peaked at almost 8%, came down to 6.75% in January 2024, went back up to 7.4% in April 2024, and have recently dropped to the lowest level we have seen since April 2023 and are hovering around 6.5%.  This is largely due to inflation finally settling and a recent jobs report showing increased unemployment.  This trend is predicted to continue as the Fed considers a rate cut in September with the plan of easing rates as we finish 2024 and head into 2025.

The chart below shows what rates have done over the last eleven election cycles and it certainly looks like the current trend with rates follows historical norms.  This is an opportunity for buyers to jump into the market as this reduction in rate is accompanied by an increase in inventory.  With lending costs lower and more selection buyers could even find themselves in a position to negotiate a further reduction in rate to help with the overall affordability of a purchase.

The market is very much driven by what a buyer’s monthly payment would be.  Lending costs are a huge factor that will play into consumer confidence and the amount of sales happening.  Further, we expect more home sellers to come to market as rates ease as they will be more inclined to give up their low rate to move to a home that is a better fit for their lifestyle.

The chart below shows the increase in home sales in nine out of the eleven past election cycles.  In fact, the first year after an election is historically robust with activity.  If history repeats itself in 2025, buyers who are ready may want to consider making a move now.  With the dip in rate, increased selection, and some buyers sidelined it could be a great time to make a purchase with a little less competition.

Even better news is that historically prices increase after an election year.  In seven out of the last eight post-election years, prices increased.  The only year they did not, was 2008 which was in the hollows of the Great Recession.  Of course, we will not be able to measure this until a year from now and this will be something that I will be paying close attention to.

So far, 2024 has been a year of price growth.  We experienced huge gains in the first half of the year over 2023.  2024 marks the year of recovering from the 2022 post-pandemic correction and re-gaining price stability.  Equity levels in our area are very strong with close to 60% of homeowners having at least 50% home equity.  We expect the movement of this equity to become more nimble as the cost of borrowing money comes down.

What we have in store over the next three months will be distracting, stimulating, and just a lot.  I hope the information above provides some history that helps ground the facts during a time of heightened angst and uncertainty.  As always, life dictates changes in real estate needs.  If you or someone you know has come up on some life changes that indicate a move would be beneficial, please reach out.

Despite the chaos of the election, you can never plan too early for these big life transitions and there might be some great opportunities amongst the noise.  Whether it’s a purchase, a sale, or both, I am equipped to help you assess your goals and help you devise a plan.  The best time to make a move is when you’re ready and I’m here to help.

Are you looking for an opportunity to give back to your Neighbors in Need? In tandem with our annual Windermere Community Service Day, and aligning with our passion to help alleviate food insecurity within our communities, we are holding a Summer Food Drive through Monday, August 19th. Everything we collect will go to the Volunteers of America of Western WA who will responsibly distribute these funds across their network of food banks.

>> Click here to donate or drop your non-perishable food donations at my office by August 19th.

To kick off the food drive, on June 7th my office spent our annual Windermere Community Service Day with the Snohomish Garden Club tilling soil, weeding, staking beds, planting, and labeling a half-acre of produce! The Garden Club will harvest this half-acre, which will yield close to 10,000 pounds of fresh produce to be donated to VOA food banks in Snohomish County over the summer and fall.  The combination of your donations and the bounty from the garden will make an impact; thank you for considering.

Monthly Newletter July 29, 2024

Monthly Newsletter 07/25/2024

Higher-density housing is happening in our state and quite possibly right in your own backyard. This is called middle housing. Middle housing is a term for buildings that are compatible in scale, form, and character with detached single-family houses. In 2023, House Bill 1110 was passed in a bipartisan 35-14 vote in the Senate and 79-18 vote in the House, and is likely to affect most homeowners and purchasers by the summer of 2025 when state law requires local municipalities to enact changes to their local codes. The state’s intention behind HB 1110 is to help provide more affordable housing options in the wake of the Washington State housing affordability crisis, which in turn, creates more density. It has been over a year since this was enacted and municipalities are starting to process and absorb these changes, and middle housing is coming to life.

Some items to consider are listed below:

  • Cities with more than 75k people must allow 4 units per lot; they must allow 6 units if within a quarter mile of a (major) transit stop, among other rules.
  • Cities between 25k-75k must allow 2 units per lot, among other rules.
  • Cities with fewer than 25k have to allow 2 units per lot.
  • Cities may not enact standards for middle housing that are more restrictive than for single-family housing.
  • Cities may not require off-street parking as a condition of permitting.

Putting political opinions aside, I want to help bring understanding to this option for homeowners and potential homebuyers. The call for higher density has allowed for some properties to be condominium-ized (creating units) vs. subdivided lots in order to add Accessory Dwelling Units (ADU). This is a much simpler process that can be done on smaller-sized properties vs. the larger lot requirements of subdivision. These ADUs can either be attached (AADU) or detached (DADU) and it depends on the size of the property and the location. Here is an example of what one could look like in the City of Seattle.

The City of Seattle has building guidelines that align with creating this density more easily via smaller building setbacks and tax requirements. Other cities have more restrictive requirements, it is location-dependent on how this will play out. Additionally, if a neighborhood has Covenants, Conditions, and Restrictions (CC&Rs) that were recorded before HB 1110 went into effect that prohibit ADUs, then this development will not be allowed despite the legislative change. Assessing this development potential starts with researching CC&Rs (if applicable) and inquiring with the city and/or county planning department where the property is located.

If a property is eligible for this type of growth, getting the condominium approved is a rather quick task. The condo map and declaration need to be drafted and recorded to be official and can take anywhere from 6-10 weeks depending on the responsiveness and availability of a qualified surveyor. The map will address the number of units, where they are located, Common Elements, and Limited Common Elements. The total cost for creating and recording these documents hovers around $10,000 and requires the services of a surveyor and experienced attorney.

If a homeowner is not ready to execute these plans right away, that is OK. They can stop at the recording step and would be grandfathered in to execute these plans in the future even if the municipality changes its building requirements down the road.  Of course, many more details are involved, and hiring experts to help navigate the creation of these documents and development is key. Some homeowners are taking the step to create a condominium on their property to expand profitability when they go to sell, and some want to create multi-generational housing options for their families.

The point of this information is to elevate the awareness around these housing options and for homeowners to understand how to maximize the potential of their asset. It should also provide hope for some home buyers who think they are priced out of the market knowing that more of these housing opportunities are coming. If you are curious or have specific questions related to middle housing, please reach out. I have access to experts in the field who I can connect you with, so you can obtain accurate information. As always, it is my goal to help keep my clients well-informed and empower strong decisions.

Are you looking for an opportunity to give back to your Neighbors in Need? In tandem with our annual Windermere Community Service Day, and aligning with our passion to help alleviate food insecurity within our communities, we are holding a Summer Food Drive through Friday, August 16th. Everything we collect will go to the Volunteers of America of Western WA who will responsibly distribute these funds across their network of food banks.

>> Click here to donate  or drop your non-perishable food donations at my office.

To kick off the food drive, on June 7th my office spent our annual Windermere Community Service Day with the Snohomish Garden Club tilling soil, weeding, staking beds, planting, and labeling a half-acre of produce! The Garden Club will harvest this half-acre, which will yield close to 10,000 pounds of fresh produce to be donated to VOA food banks in Snohomish County over the summer and fall.  The combination of your donations and the bounty from the garden will make an impact; thank you for considering.

Uncategorized July 14, 2024

South Snohomish County Market Report – Q2 2024

Home values had positive growth in the second quarter of 2024, and inched close to the peak levels we saw in Q2 2022 before the post-pandemic housing correction. Despite inflation and interest rates remaining stubborn, demand has continued to be strong, resulting in a seller’s market.

A bright light for buyers is the recent uptick in new listings, which has opened up more opportunities after starting the year with minimal selection. Additional inventory will cause home prices to stabilize after rapid growth over the last six months. The average homeowner has close to 60% in home equity resulting in great returns when making a sale.

If you are curious about how today’s market relates to your real estate goals, please reach out. It is my goal to educate, inform, and empower strong decisions.

 

Uncategorized July 14, 2024

North King County Market Report – Q2 2024

Home values had positive growth in the second quarter of 2024, and inched close to the peak levels we saw in Q2 2022 before the post-pandemic housing correction. Despite inflation and interest rates remaining stubborn, demand has continued to be strong, resulting in a seller’s market.

A bright light for buyers is the recent uptick in new listings, which has opened up more opportunities after starting the year with minimal selection. Additional inventory will cause home prices to stabilize after rapid growth over the last six months. The average homeowner has close to 60% in home equity resulting in great returns when making a sale.

If you are curious about how today’s market relates to your real estate goals, please reach out. It is my goal to educate, inform, and empower strong decisions.

 

Uncategorized July 14, 2024

Eastside Market Report – Q2 2024

Home values had positive growth in the second quarter of 2024, and inched close to the peak levels we saw in Q2 2022 before the post-pandemic housing correction. Despite inflation and interest rates remaining stubborn, demand has continued to be strong, resulting in a seller’s market.

A bright light for buyers is the recent uptick in new listings, which has opened up more opportunities after starting the year with minimal selection. Additional inventory will cause home prices to stabilize after rapid growth over the last six months. The average homeowner has close to 60% in home equity resulting in great returns when making a sale.

If you are curious about how today’s market relates to your real estate goals, please reach out. It is my goal to educate, inform, and empower strong decisions.

 

Uncategorized July 14, 2024

Seattle Metro Market Report – Q2 2024

Home values had positive growth in the second quarter of 2024, and inched close to the peak levels we saw in Q2 2022 before the post-pandemic housing correction. Despite inflation and interest rates remaining stubborn, demand has continued to be strong, resulting in a seller’s market.

A bright light for buyers is the recent uptick in new listings, which has opened up more opportunities after starting the year with minimal selection. Additional inventory will cause home prices to stabilize after rapid growth over the last six months. The average homeowner has close to 60% in home equity resulting in great returns when making a sale.

If you are curious about how today’s market relates to your real estate goals, please reach out. It is my goal to educate, inform, and empower strong decisions.

 

Uncategorized July 14, 2024

North Snohomish Market Report – Q2 2024

Home values had positive growth in the second quarter of 2024, and inched close to the peak levels we saw in Q2 2022 before the post-pandemic housing correction. Despite inflation and interest rates remaining stubborn, demand has continued to be strong, resulting in a seller’s market.

A bright light for buyers is the recent uptick in new listings, which has opened up more opportunities after starting the year with minimal selection. Additional inventory will cause home prices to stabilize after rapid growth over the last six months. The average homeowner has close to 60% in home equity resulting in great returns when making a sale.

If you are curious about how today’s market relates to your real estate goals, please reach out. It is my goal to educate, inform, and empower strong decisions.

 

Uncategorized July 14, 2024

South King County Market Report – Q2 2024

Home values had positive growth in the second quarter of 2024, and inched close to the peak levels we saw in Q2 2022 before the post-pandemic housing correction. Despite inflation and interest rates remaining stubborn, demand has continued to be strong, resulting in a seller’s market.

A bright light for buyers is the recent uptick in new listings, which has opened up more opportunities after starting the year with minimal selection. Additional inventory will cause home prices to stabilize after rapid growth over the last six months. The average homeowner has close to 60% in home equity resulting in great returns when making a sale.

If you are curious about how today’s market relates to your real estate goals, please reach out. It is my goal to educate, inform, and empower strong decisions.

 

Monthly Newletter June 30, 2024

Monthly Newsletter – 06/28/2024

As we approach the mid-point of the year, I want to take a moment to explain all that has happened in the 2024 real estate market and where we might be headed. We have had strong price growth since December 2023, and in May 2024 prices matched the peak we saw in spring 2022. The interest rate increase and inflation-induced correction that took place in the spring of 2022 has shown very strong signs of recovery and stabilization. The chart below shows the last 17 months of median prices in both King and Snohomish Counties and also tracks the ebb and flow of interest rates.

Despite interest rates fluctuating between 6.75-7.5% from January through May 2024, price growth has been on an upward trajectory. Most recently, rates have hovered close to 7%. Inventory started the year very low! In King County, there were only 1,324 new listings in January and 534 in Snohomish County. This trend continued throughout Q1 2024 and has started to increase in Q2. In May 2024 there were 3,245 new listings in King County and 1,272 in Snohomish County. That was a 145% increase in King County from January to May and 138% in Snohomish County. Markedly, there was a 27% jump in new listings from April 2024 to May 2024 in King County and 34% in Snohomish County.

Adequate selection for buyers was limited, which drove prices up over the past five months. Buyers are starting to see some relief! There is healthy net in-migration into the Greater Seattle area, a stable job market, and the Millennial generation is out in force making their first purchases and some even moving up from their first homes. Since December 2023, the median price in King and Snohomish Counties has increased by 21%. One must take seasonality into account which elevates that growth, but there has certainly been a recovery in home values in the correction. Sellers are sitting on tons of equity as it was measured in November 2023 that homeowners in King County had at least 60% home equity and 57.5% in Snohomish County. This figure does not take into account the price growth we have seen in 2024 thus far.

So, what does all of this mean going forward? We typically will reach our seasonal peak in prices in May or June. This phenomenon is a result of price growth decelerating due to inventory growth over the second half of the year. The rate of price growth will slow as more homes come to market; this is not price depreciation, but deceleration. Homeowners are standing on the shoulders of immense growth over the last 5 months and need to keep that and the long-term growth in perspective. If the rapid rate of price growth continued, it would not be sustainable and would create market volatility.  Moderation and price stability benefit the overall health of the real estate market and economy over prolonged extreme price increases.

As we head into the summer months, I anticipate more selection for buyers which will temper price growth. Sellers will enjoy the gains that have been made over the last 2 years and so far in 2024, not to mention the last 10 years. The recent increase in inventory has given buyers more opportunities to make a move. The constriction we started the year off with was restrictive for some buyers to enter the market and we see that changing. Buyers who were discouraged earlier this year may consider re-engaging so they can benefit from the increase in selection.

As far as interest rates, experts predict they will slowly recede and be dependent on inflation calming which has been stubborn. Affordability has been a dance of balancing home prices, rates, and monthly payments. Some buyers have been creative with rate buy-downs to manage the monthly expense and some are purchasing based on today’s rates with the hope of re-financing in the future. A sound piece of advice for buyers is to buy based on payment, not on the peak of what you can qualify for. Your monthly output needs to be sustainable and somewhat comfortable to make sense.

Real estate is an investment and a key component to building wealth. While it might seem scary or risky to make a purchase, the long-term gains are favorable in comparison to other investment vehicles. Plus, you get to live in your home, love your home, and make memories in your home while it creates a nest egg. Life changes create reasons to move. Assessing where you want to be and how it matches your lifestyle is where the decision-making starts. If you have experienced some life changes and are curious about how the market relates to your housing goals, please reach out. It is my goal to help keep my clients informed and empower strong decisions.

Are you looking for an opportunity to give back to your Neighbors in Need? In tandem with our annual Windermere Community Service Day, and aligning with our passion to help alleviate food insecurity within our communities, we are holding a Summer Food Drive through Friday, August 16th. Everything we collect will go to the Volunteers of America of Western WA who will responsibly distribute these funds across their network of food banks.

>> Click here to donate  or drop your non-perishable food donations at my office.

To kick off the food drive, on June 7th my office spent our annual Windermere Community Service Day with the Snohomish Garden Club tilling soil, weeding, staking beds, planting, and labeling a half-acre of produce! The Garden Club will harvest this half-acre, which will yield close to 10,000 pounds of fresh produce to be donated to VOA food banks in Snohomish County over the summer and fall.  The combination of your donations and the bounty from the garden will make an impact; thank you for considering.