When Punxsutawney Phill climbed up to his perch at Gobblers Knob on February 2nd and did not see his shadow, an early spring was predicted. Little did we know that he would be referring to the real estate market! As we experience temps in the 30s and scattered snow showers in the first week of March, we are also experiencing a white-hot seller’s market.

We started 2024 with the lowest amount of inventory we have seen since the beginning of 2022. Over the last 2 years, we have experienced a correction and recovery in the real estate market due to inflation and interest rates. The market peaked in April 2022 in Snohomish County when the median price reached $830,000, and in May 2022 in King County when prices reached $1M. Prices started to correct when rates crested 5% in April 2022 and then found themselves squarely at 7% by October 2022. This rapid 2-point increase put downward pressure on prices and stalled buyer and seller demand.

Loan servicing affordability caused prices to bottom out in Snohomish County in February 2023 at $685,000, and in King County in January 2023 at $800,000. The bulk of the correction took place in 2022, and 2023 was the year of resetting price stability and the return of appreciation. What was fascinating about this growth is that interest rates still averaged around 7% throughout 2023.  

In Snohomish County prices were up 6% in February 2024 over February 2023, and in King County they were up 16%, and rates are still hanging around 7%. Since the first of the year, it was like a switch went off for many buyers and demand flooded the market. The feedback that I am hearing is that many buyers have adapted to the new normal of interest rates and will refinance when rates come down; but they want to buy now. The increase in buyer demand coupled with the lowest inventory we’ve seen in two years has caused a flurry of multiple offers, price escalations, and an early start to the spring market.

Now that we are certain buyers are back, the next effective change in the market would be the addition of more inventory. This would meet the demand and create more movement in the market. We are well aware that many homeowners are reluctant to make a move because they don’t want to give up their low rate/payment. We also know that because of this, many would-be sellers are living in homes that do not match their needs and wants. 

This pent-up seller demand is starting to come to market, but more is needed. The average level of equity in Snohomish County was reported at the end of 2023 at 57.5% and in King County at 60%. With the recent uptick in median price, this level is growing, which will allow many sellers to move their equity into a home that better fits their lifestyle. This growth should also be supported by interest rates slowly coming down throughout 2024.  

The latest predictions from the Home Price Expectation Survey (HPES) have rates decreasing to 6% by the end of 2024 which will only add to buyer demand, highlighting the need for more listings. If you are a homeowner and your house is not matching your life, now might be the time to consider a move! What has already transpired in the first 2 months of 2024 has been encouraging for seller gains. 

Writing a playbook and creating a strategy to make these transitions requires a well-curated plan. It is my mission and passion to help clients make these moves. There can be challenges to overcome along the way, such as does one sell or buy first and how to do you get your home ready for market. Tools such as the Windermere Bridge Loan, The Windermere Ready Loan, and other alternative financing have helped make these dreams become a reality. That is why hiring a professional who is well-versed in market knowledge, creative planning, expert marketing, and keen negotiations is key!  

Please reach out if you or someone you know is curious about the market and how it relates to your financial and lifestyle goals. Real estate reflects life and if there is one constant in life, it is change! Helping people match their homes to their lives is one of the most rewarding aspects of my job. The adjustments over the past two years got in the way of many people making those matches. As the market and consumer confidence continue to open up, don’t let this opportunity pass you by. It is my goal to help keep my clients well-informed and empower strong decisions whether that works for you now or sometime down the road. Let’s talk it out, dig deep into the trends, and start your strategic planning with no pressure.

Effective January 1, 2024, the statute in Washington that governs real estate brokerage relationships (RCW 18.86) otherwise known as the “Agency Law” – was significantly revised. The revisions modernize the 25-year-old law, provide additional transparency and consumer protections, and acknowledge the importance of buyer representation.

KEY REVISIONS
For decades, real estate brokerage firms were only required to enter into written agency agreements with sellers, not buyers. The Agency Law now requires firms to enter into a written “brokerage services agreement” (agency agreements) with any party the firm represents, both sellers and buyers.

This change is to ensure that buyers (in addition to sellers) clearly understand the terms of the firm’s representation and compensation, much like a listing agreement. The new agreements are called Buyer Brokerage Service Agreements (BBSA) and they are to be initiated in writing prior to or upon rendering real estate brokerage services, such as showing homes.

The services agreement with buyers must include:

• The term of the agreement (with a default term of 60 days and an option for a longer term);
• The name of the broker appointed to be the buyer’s agent;
• Whether the agency relationship is exclusive or non-exclusive;
• Whether the buyer consents to the individual broker representing both the buyer and the seller in the same transaction (referred to as “limited dual agency”);
• Whether the buyer consents to the broker’s designated broker/managing broker’s limited dual agency;
• The amount the firm will be compensated and who will pay the compensation; and
• Any other agreements between the parties.

Last week, my office hosted our 16th Annual Economic Forecast Event featuring Matthew Gardner. Matthew is a sought-after economist focused on the national and local economies and has a deep understanding of the housing market across the country and right in our own backyard. He is an economic advisor for the State of Washington, Governors Council, lectures on real estate economics at the University of Washington, and is found quoted in various media outlets throughout the year as a respected expert. He is certainly a trusted real estate advisor that I look to to stay informed to help educate my clients.

The event was virtual and I have the recording and his PowerPoint in a PDF that I am happy to share with you, please reach out if you would like me to email it to you. So much was shared in his 60-minute presentation that was focused on the national economy and a deep dive into both King and Snohomish Counties, followed by Q & A. I can’t quite cover it all here, but here are some highlights!
 
1. Inflation levels have dropped from their peak and are now tracking with more normalized levels. This has caused interest rates to start to drop, which is a trend he sees continuing in 2024.

2. The U.S. unemployment rate measured at 3.8% at the end of 2023 and is forecasted to rise ever so slightly and remain under the long-term average of 4.5%. In King and Snohomish Counties the unemployment rate averaged 4% at the end of 2023.

3. There is a major labor gap in both King and Snohomish Counties, with job postings heavily outweighing labor supply. Biotech is the darling of the moment which will balance out the IT side in the overall jobs picture.

4. Interest rates are predicted to gradually decrease throughout 2024 as inflation softens. The Fed will slow-play these reductions to get them right, so they do not have to raise them again.

5. The Tri-County area of Snohomish-King-Pierce Counties had massive organic population growth from 2020-2022, much of which was international vs. domestic.

6. Homeowner equity averages 60% in King County and 57.5% in Snohomish County. According to the median price in King County in December 2023 that is $511,200 and $391,000 in Snohomish County. Homeownership proves to have the strongest impact on household wealth.

7. There will NOT be a bubble in the housing market! Given that prices remained stable in 2023 amongst the highest interest rates we’ve seen in two decades along with inflation at a high, the housing market has proven to be a fortuitous economic marker. Rates and inflation are both improving, which will bode well for home values. Our biggest challenge is the lack of inventory and affordability.
 
8. Price growth in King and Snohomish Counties was flat year-over-year (2022 to 2023) after massive growth from 2020-2022, which was positive given the correction in prices and rise in interest rates. Prices are forecasted to modestly increase in 2024. Tight inventory and continued buyer demand will drive this growth while interest rates temper.

Please reach out if you would like to learn more and receive the documents and recording. Also, you can count on me to follow the trends, statistics, and rhythm of the market throughout the year. It is my goal to gain knowledge and understanding so I can help keep you informed. This level of service helps empower my clients to make thoughtful, sound decisions when navigating their investments and big life choices.

The holiday season came and went in a flash with so much going on.  As I reflect on the joys that the holiday season brings, one thing that I love is that our office makes it a priority to come together as a team to lift up our neighbors in need.  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 $3,115 and 1,787 pounds of food for Volunteers of America Western Washington food banks, just in time for the holidays. The current need in our area is high, and our local food banks need all the help they can get. These numbers are all thanks to friends and clients like you. Thank you for your generosity!
 
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 WA Kids in Transition, who work with social workers in the Edmonds School District to collect wish lists from students living in shelters, tents, cars, transitional housing, or other temporary housing. Together, the brokers in our office provided gifts and hygiene items for 28 kids.
 
Then we provided $3,700 in grocery gift cards for 13 families, comprised of 60 individuals. Some of these families are unemployed or living in transitional housing, some are walking through grief and loss, and some are coming out of domestic violence. It is our privilege to partner with Pioneer Human Services, to help relieve some of the burdens for these families.
 
Next, we always put together a volunteer group at Christmas House in Everett. Christmas House is a 100% volunteer, non-profit organization that provides an opportunity for qualifying, low-income, Snohomish County parents to select free holiday gifts for their children age infant-18. This is an amazing day 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 2024, 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 2024 and beyond.