Currently Gathered Micro-Data Illustrating Summer is the New Spring Market

Since the onset of the COVID-19 pandemic reaching our region, I quickly shifted to updating you more frequently with information to help you stay informed on the real estate market. Since mid-March, I have been committed to gathering high-frequency data (micro-data) to help illustrate “Where We Are Now” and have provided this newsletter bi-monthly vs. monthly. I felt this was important as real estate is typically our biggest investment and the pandemic has certainly had its economic impact.

I have also closely followed Windermere’s Chief Economist Matthew Gardner, and Economist Steve Harney of Keeping Current Matters. They have both been knowledgeable guides and source their micro-data from various credible sources to help determine their conclusions. Check out Matthew’s latest video update below about the real estate market in relation to COVID-19.

The graphs below are a new data set I’ve been studying on a weekly basis. They compare the number of pending sales reported each week to the same week in 2019, which was another stellar year for our local real estate market. 2020 was outpacing 2019 when the National Emergency was declared and then dropped significantly once the Stay Home Orders were put in place in late March.

 

 

April stalled, and rightfully so: pending sales were down as people retreated into their homes and started new routines, such as working from home. As we ventured into May however, things changed. From mid-May until now, pending sales activity in both counties has started to reach or outpace 2019 numbers.

Spring is typically our peak season for real estate sales, and what is being made clear is that the historically-active spring market has now shifted to summer. As we come off the Summer Solstice and head into the warmer months, we are seeing tons of buyers out in the marketplace and a limited supply of available inventory. This combination has helped prices maintain, and in some areas appreciate.

One set of micro-data that is illustrating increased buyer demand is the uptick in mortgage applications. Last week, mortgage applications were up 20% over the same week last year. Note this is for purchase loans, not refinances. With the lowest rates we have ever seen in history it is no surprise that buyers are motivated to go secure a home with the lowest debt service ever!

Last week, the micro-data set of the recorded home-showing appointments displayed a 51% increase in showings over 2019! This is measured by comparing key box access compared to the same week last year. Demand certainly paused in the spring, but was not eliminated; it was being deferred to the summer. As we have reported from the beginning, this is a health crisis, not a housing crisis.

Our biggest challenge as we head into the peak summer months is the available inventory. We entered into 2020 with tight inventory to begin with, and COVID-19 has had a profound impact on the number of homes coming to market. We are expecting some homes to wait until the health crisis has passed, and others will be delayed by 45-60 days. Homes take time to prepare for market, and contractors and handy-persons were all at home in April, pushing prep time out to later spring/early summer for those ready to come to market.

We expect to see an increase in new listings as we head into July and August, which will be welcomed after a 40% deficit compared to 2019. Mortgage applications, historical interest rates, industries in our region that are thriving, and entering into Phase 2 are all micro-data sets that indicate strong buyer demand for the second half of 2020.

Unemployment numbers are also an important micro-data point to keep an eye on. Since the Stay Home Orders, initial unemployment claims have dropped significantly, but continued claims are maintaining. We anticipate the continued claims to reduce as more and more people return to work after being furloughed. Not all of those jobs will be recovered, indicating our greatest need for recovery.

The last three months have been an incredible journey helping people safely navigate the real estate market. Some folks just want to know that their nest egg is safe, and some are making actual moves. When COVID-19 hit there was a ton of uncertainty, we weren’t sure how this would play out in regards to housing. Since we went into this with a very formidable economy and housing values, we have sustained, and in some areas we are thriving. It has been remarkable to watch and be a part of. I am grateful every day that this is not the housing crash of 2008 all over again.

If you are curious about the value of your home in today’s market or are considering a move, please reach out. The interest rates are unbelievable and will greatly benefit those who take advantage of them. I am committed to safe business practices and follow all of the protocols put in place, which include mask-wearing, proper social distancing, and sanitizing. It is my goal to help keep my clients informed and empower strong, safe decisions, especially during unprecedented times. Thank you for your trust; I am honored to be your trusted advisor.

 

 

 

SHRED EVENT

NEW DATE! We are partnering with Confidential Data Disposal for our 9th year; providing you with a safe, eco-friendly way to reduce your paper trail and help prevent identity theft.

Saturday, July 18th, 10AM to 2PM
4211 Alderwood Mall Blvd, Lynnwood
Bring your sensitive documents to be professionally destroyed on-site. Limit 20 file boxes per visitor.

We will also be collecting non-perishable food and cash donations to benefit Concern for Neighbors food bank. Donations are not required, but are appreciated. Hope to see you there!

This is a no-contact, drive-through event. We ask that you stay in your vehicle and unlock your trunk or car door so that we can unload your boxes. We will be taking all proper precautions to keep everyone safe, including wearing PPE, maintaining distance, and using CDC-recommended disinfectants.

**This is a Paper-Only event. No x-rays, electronics, recyclables, or any other materials.


Posted on June 25, 2020 at 10:20 am
Andrea Wetzel | Posted in Community Information, Newsletter |

What is Happening with Home Prices?

What is Happening with Home Prices?

It is without question we are living in one of the most unique times in all of our lives. Who would have thought we’d experience living life during a global pandemic? Beyond staying safe, adjusting daily habits, and navigating a changing economy, I’ve kept a very close eye on the housing market. With Windermere’s Chief Economist, Matthew Gardner as one of my guides, I am happy to report that housing has been a bright light in the economy during a very challenging time.

May unemployment numbers settled around 13%, an improvement over April, but still far from the 5% we started out with at the beginning of 2020. We are also embarking on our second quarter of retraction in GDP which is the textbook definition of a recession. Many experts are predicting a V-shaped recovery and I’d venture to say that we are currently at the bottom of the V. 

With stay-at-home orders being lifted or eased depending on what part of the country you live in, we are starting to see jobs come back.  Conversely, we are also seeing some industries thrive, but we will also witness some businesses be required to pivot to remain relevant or go away altogether. For example, tech is thriving and aerospace is not. The reorganization and re-prioritizing that is occurring will be impactful to many, some positive and some challenging.

In our region of the country, we entered into this pandemic with a thriving economy and a strong housing market. In January it was predicted that we would see a year-over-year price appreciation of around 5%. This health crisis will slow that level of appreciation, but we are not expecting losses.

Spring is typically our busiest time in the market with many sellers coming to market and buyers shopping in order to land in their new home by summer and the start of the fall school season. COVID-19 and the associated limitations in our daily activities along with employment disruption created a slowdown in our typical spring market. The largest impact has been the amount of available inventory to choose from. Amazingly, the housing market has continued to hum along with many buyers still eager to purchase. Inventory is down 40% year-over-year and buyer demand is strong, creating a frenzy in some price ranges and neighborhoods.

According to Joel Kan, Economist for the Mortgage Bankers Association mortgage applications are on the rise and up 5% from the same time last year. Summer is looking to be the re-invented spring market as our country starts to re-open. Interest rates are the lowest they have ever been, which is encouraging buyers to act and creating a good-sized audience for sellers.

Below is a video where Matthew speaks to his predicted trajectory for home prices as we travel through the second half of 2020 and beyond. Also, note below the latest statistic for both King and Snohomish Counties for the month of May.

It is always my goal to report real-time numbers from the front lines and do my best to explain what is happening.  I choose to look at the numbers in tight snippets week-by-week and also dig deep on year-over-year numbers. Right now, we are reporting growth from March and starting to return to the same amount of activity that we saw at the same time last year. We must keep a close eye on unemployment figures and mortgage forbearance reporting, both of which are improving but still have a ways to go.

It is my goal to help keep my clients informed and empower strong decisions by studying the stats and reporting my day-to-day observations. Please reach out if you or someone you know has questions or concerns. These are unprecedented times and knowledge is one of your most powerful tools. I am honored to be your trusted advisor.

 

 Congrats Class of 2020!

The class of 2020 deserves a huge congratulations! The milestone of finishing elementary school, junior high, high school or college is always worth noting, but this class is extra-special!! They have navigated distance learning and missed out on the proper celebrations, but they’ve shown resilience and finished strong. The world is proud of you and so am I!

 

 

 

A heartfelt thank you to all the teachers, administrators and staff that helped guide all the students this school year!  Distance learning is not for the faint of heart and the teachers are amongst the heroes during this challenging time!

 


Posted on June 10, 2020 at 1:47 pm
Andrea Wetzel | Posted in Community Information, Newsletter, Uncategorized |

Will COVID-19 Impact Where People Want to Live?

Will COVID-19 Impact Where People Want to Live?

Recently, Matthew Gardner, Windermere’s Chief Economist released a video about the effects COVID-19 is having and/or could have on consumer tendencies in real estate. There seems to be quite the paradigm shift happening due to health reasons, appreciating simpler schedules, and the new phenomenon of many people working from home. Along with Matthew, Leading Real Estate Companies of the World and Keeping Current Matters are reporting similar indicators due to COVID 19.

 

The Flight to the Suburbs: Many buyers are listing more open space and less density as one of their top features when looking for a new home. The larger yards and separation from neighbors found in the suburbs versus urban areas are appealing for health reasons, due to the need to socially distance. Higher density buildings and townhouses found in-city were more appealing due to shorter commute times, but the newfound option to work from home has encouraged some buyers to venture out and consider commute times as less of a factor when choosing where they want to live.

Many high-tech employers such as Amazon, Google, and Facebook have extended the work-from-home option until the end of 2020 despite the phasing to get businesses re-opened. Companies like Twitter told some employees they could work from home indefinitely. This will have some buyers in these types of jobs capitalizing on suburban living, which is typically less expensive than in-city living and includes larger homes and yards. Look at the weekly stats for both King and Snohomish counties below. This compares the number of pending sales per week this year versus the same week last year, and the more suburban and affordable area of Snohomish County is thriving!

 

 

Return of the McMansion: Millennials had already begun looking at the suburbs as they embarked on crossing the threshold of big life events such as getting married and starting a family. Now, with more people working from home and desiring more space, the larger square footage homes are becoming more appealing.

This affords more flex spaces for at-home offices, especially if more than one adult is working from home. Space to enjoy hobbies and passions such as an in-home yoga or craft studio or in-home gym are predicted to be popular. Further, private outdoor spaces are a hit, such as fire pits, play areas for children, and outdoor entertaining space which encourages recreation and distancing.

 

Second-Home Market Boom: With air travel severely reduced, the desire to have a second home within driving distance has increased. Many people’s commitments have simplified and their dreams have shifted to accommodate more down-time closer to home. The change of scenery a lake, beach, or mountain property provides along with space to distance is quickly becoming in-demand. The use of homes like this versus large travel budgets could make a comeback, especially if future rental income is considered. Overall, we have seen an increased value put on local access to nature to decompress and down-shift.

Single-Family Residential Rentals vs. Apartment Rentals: Again this comes back to density versus open space. Renters also desire more room, and some are also working from home, so they may opt for a single-family home over an apartment building with shared space. There could also be a push for college students to prefer renting a single-family home instead of living in a dorm, increasing the rental value of such investment properties in college towns.

Check out the video below to hear Matthew’s entire take on all of these possible changes in how and where we want to live based on COVID 19 and the life lessons were are learning as we navigate this new way of life. What I can tell you is that the real estate market is moving! Activity has seen a large uptick since the first of May, and in many areas and price points we are lacking available inventory to meet the buyer demand.

If you are curious how these new trends and the state of current real estate market relates to your personal needs and dreams, please reach out. It is my goal to help keep my clients informed and empower storing decisions, especially during these unique times. Be well!

 

 

 

 

I am excited to share some updates from the Martha Perry Veggie Garden in Snohomish, WA! We have already purchased the vegetable starts to help support the Snohomish Garden Club, and have begun planting for the harvest. My office is working in socially distant groups, broken up by nine groups working over three weeks to get this acre of produce in the ground. By using starts instead of seeds we will be able to provide the harvest sooner and for longer throughout the season.

This is all possible thanks to your generosity! Our office raised $8,000 in under two weeks to benefit local food banks through our Neighbors in Need Program powered by the Windermere Foundation. A portion of that money was earmarked for this garden project and replaced our annual Community Service Day project that was done for the last four years in a large group of 50 people. This will provide local food banks with thousands of pounds of fresh produce throughout the summer and early fall and will be especially meaningful during this challenging time. Check out some of our first groups getting to work, making it possible for those in need to enjoy fresh produce instead of only non-perishable foods via the local food banks.

 


Posted on May 27, 2020 at 4:48 pm
Andrea Wetzel | Posted in Community Information, Newsletter |

Shred Event Postponed & COVID-19 Update

Due to the Stay Home, Stay Healthy orders being extended through May 4th, our annual Shred Event & Food Drive has been postponed to July 18, the first Saturday after the new income tax filing deadline. The safety of the attendees, our agents, staff and the public at large is our highest priority. We sincerely apologize for any inconvenience this may cause and look forward to seeing you in July!

This is our 9th year partnering with Confidential Data Disposal; providing you with a safe, eco-friendly way to reduce your paper trail and help prevent identity theft.

Saturday, July 18th, 10AM to 2PM
4211 Alderwood Mall Blvd, Lynnwood.
Bring your sensitive documents to be professionally destroyed on-site. Limit 20 file boxes per visitor.

We will also be collecting non-perishable food and cash donations to benefit Concern for Neighbors food bank. Donations are not required, but are appreciated.

**This is a Paper-Only event. No x-rays, electronics, recyclables, or any other materials.

 

As we head into week four of the Stay Home/Stay Healthy orders in Washington State, I turn my thoughts towards my gratitude for housing. It’s safe to say that over the last few weeks we’ve become quite intimate with our four walls, the brick and mortar that we call home. Concrete, steel, wood, and glass make up the structure that keeps us safe and protected, but it’s who and what is inside that makes it a home.

I don’t know about you, but I’ve never spent so much time in my home. This has developed a greater appreciation of the little things that make it special and even an acceptance of my not-so-favorite features. That quiet corner I can sneak away to, a blooming spring garden, a functional kitchen to create meals, and the community that surrounds us during a time of isolation are just a few items on my list of thank-yous. Our homes have become our sanctuaries, now more than ever. It goes beyond the sticks and stones that hold it upright; it is the heart in which our lives are pulsing.

I’ve always taken my role in helping people with their housing very seriously. To be asked to assist people in the purchase or sale of their home is an honor. The careful steps taken to protect liabilities and keen negotiations to ensure the highest and best value are very important components and ones I have a passion for. Now though, envisioning the connection one has or could have with a home is seen more deeply.

It is customary to have a list of features that one desires in a home and to pursue those features in the hunt for new housing or to celebrate them when selling. Buying and selling real estate is an emotional process and this experience has highlighted that connection more than I’ve ever realized before. Navigating finances is sensitive, but getting to the core of where you will spend your days or say good-bye to the place that housed you is meaningful. I’ve always seen real estate as a relationship business; while we do transactions that have a beginning and an end, the relationships are ongoing beyond the closing of a sale.

I wanted to take this time to say thank you for allowing me to be your trusted advisor when it comes to your housing. It means a lot to be a part of something so special and important in people’s lives. Also, just a reminder to please use me as a resource if you need any help maintaining your home. I have a list of reputable contractors and service providers that can help you care for your home should you have something break or want to make an improvement.

We’ve never navigated an environment like this before and I am committed to helping you stay informed.  I’m happy to report that we are still seeing positive real estate activity happening during the Stay Home/Stay Healthy orders. My next newsletter, in two weeks will re-cap the latest statistics and will start to tell the more complete story of COVID-19 and real estate. We headed into this health crisis on the shoulders of a very strong first quarter in real estate and still have many positive economic influences in the PNW. I am certain there will be pent up demand on the other side of this historical time and I am hopeful many jobs will return. Stay tuned for this upcoming report and please reach out if you’d like to discuss now. In the meantime, I wish you and yours good health, a warm heart, and a happy home. Be well!


Posted on April 16, 2020 at 12:01 pm
Andrea Wetzel | Posted in Community Information, Newsletter |

Monthly Newsletter: March 2020 – COVID-19 & the Real Estate Market: Real Time Numbers from the Front Lines

Things are changing rapidly these days, and if I had a dollar for how many times I have said “one day-at-a-time” over the last two weeks, I’d have a nice stack of cash. There are lots of questions swirling about simple everyday life and big life decisions like buying and selling real estate. I’m a believer in studying the numbers and sharing that data. It has always been my practice in my business to provide my clients with the information they need to help empower their decisions. With that said, I did a real-time pull of numbers on 3/18/20 in order to gain some understanding of the current trends amongst the COVID-19 outbreak.

 

I pulled three different market areas: Lake Stevens (North Snohomish County), Lynnwood (South Snohomish County) and Shoreline (North King County). I felt this would give a good representation of some different geographical markets and would avoid making any sweeping observations.

 

Below is an accounting of all of the active listings on the market in each of these cities along with all of the sales that went under contract from 3/11/20 to 3/18/20 (pulled around 1:30 pm PST) and the percentage relationship between those numbers. As you can see, we have had quite a bit of sales activity over the last week. Schools shut down through April 24th on 3/12/20 and restaurants and bars closed for dine-in business on 3/16/20, and homes continued to sell. We are certain that the historically low interest rates are fueling this demand. As of 3/17/20, the rate for a conventional, conforming loan was right around 3.5 – 3.65%.

Below you can see a chart that reports the average days on market for the homes that are currently active and the homes that went under contract over the last week. The average days on market for the homes that were absorbed over the last week were markedly shorter, indicating that the homes that sold were newer to the market, well-presented, and appropriately priced. The longer market times for the actives indicate possible overpricing, as the average days on market for the month of February were 27 for Lake Stevens, 53 for Lynnwood, and 50 for Shoreline. This also shows a trend for March average days on market to be shorter than February.

The last set of data that I pulled below is the average prices of the active listings and the average prices of the homes that went under contract last week. These percentage differences are in line with a similar comparison from February. In February, the percentage difference in the average active list price to the sold price was -22% in Lake Stevens, -9% in Lynnwood, and -29% in Shoreline. Since the under-contract sales have not published a closed sale price yet, we cannot take into consideration if there were any escalations above the list price. With the shorter-than-normal days on market and the stories I am hearing on the front lines of multiple offers, I believe we will have some escalations reported once these transactions close. I am sure there will be some concessions reported as well.

You may be wondering if this is still a good time to buy or sell, and the answer to that is different for each person. What I can say with certainty is that I am committed to bringing current facts and statistics to our conversations, and answering your questions as best I can. I hope you found the above figures to be encouraging, I did! Real estate is a cyclical business, and although the current economic shifts may be unsettling, we have weathered these cycles before. At this moment, record-low interest rates and low inventory are creating continued demand for homes, and from the figures reported, homes are going under contract. This is what I know today, and I felt it was worth sharing.

 

Below is a video from Windermere’s Chief Economist, Matthew Gardner that was released on Monday, 3/16/20 assessing the fate of the Greater Seattle real estate market during this time. Please contact me with your questions and concerns, I am here to help keep you informed!

Be well!

   

At this time, we are still planning to hold our annual Shred Event and Food Drive on April 18th. We will update you if anything changes due to crowd requirements and your safety.

 

This event will be vitally necessary to help stock our local food bank, which is struggling to meet demands. We also know that since many of you are staying home for extended periods of time, you will be cleaning and organizing, and will need the shredding services come April. We hope to meet these needs and bring our community together in a safe way.

 

Celebrate Earth Day with us! We are partnering with Confidential Data Disposal for our 9th year; providing you with a safe, eco-friendly way to reduce your paper trail and help prevent identity theft.

Saturday, April 18th, 10AM to 2PM
4211 Alderwood Mall Blvd, Lynnwood
Bring your sensitive documents to be professionally destroyed on-site. Limit 20 file boxes per visitor.

We will also be collecting non-perishable food and cash donations to benefit Concern for Neighbors food bank. 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

One of the most important lessons I’ve learned is the power of mindset. It is proven that what you focus on, expands. Setting aside time every day to focus on gratitude has been hugely beneficial in my business as well as my personal life, and I am finding this discipline to be even more important in today’s uncertain world. We are surrounded with scary news, unprecedented government announcements, and a whole lot of uncertainty. We are in uncharted territory, but the one thing we do have control over, is our own mindset.

 

Here are a few practical ideas to foster positivity in your life.

 

Daily Gratitudes. Carve out just a few minutes every day to write down two or three things you are grateful for. Make this part of your morning routine to help center yourself before the day begins, or part of your evening routine to help calm your mind before bed.

 

Savor small moments. No matter what situation you find yourself in, there are still many small moments to be enjoyed. The smell of coffee in the morning, or the quiet house in the evening when the children are all asleep. A hot shower or a luxurious lotion. Don’t rush through these. Stop and take a moment to really enjoy.

 

Look to the past. Humans are resilient. You have weathered uncertain times before, perhaps during the Great Recession, 9/11, or a major natural disaster. You made it through those, and you are stronger and better for the experience. Take a moment to look back at all you have been through as a reminder of your own resilience.

 

Follow social media accounts that provide good news only. There is quite a bit of doom and gloom out there right now. In addition to watching some funny YouTube videos or some heart-warming animal stories on Facebook, make sure you are plugged in and following some accounts that are all good, all the time. Some good ones on Facebook are

@GoodNewsGMA

@TanksGoodNews

@GoodNewsMove

 

If you’re on Instagram, be sure to check out

@Good

@UpWorthy

@TanksGoodNews

@GoodNews_Movement

 

Take social media breaks. This will be important. Not only because social media can be a hotbed of misinformation, but it can also provide an overload of general information. Many people are beginning to feel overwhelmed with the sheer amount of news, suggested kids activities, and overall noise happening on all social channels right now. Take some time every day to be intentional about closing these apps, putting your phone or laptop away, and focusing your attention on something else. #DigitalDetox

 

Above all, be deliberate with integrating positivity into your daily life, knowing that together, we will get through this.

If you have ideas of how to stay positive, please share them with me!


Posted on March 19, 2020 at 1:49 pm
Andrea Wetzel | Posted in Newsletter |

Monthly Newsletter – February: Interest Rates Bottom Out, Sparking High Buyer Demand

Most recently, we have experienced an uptick in market activity. In fact, King County saw a 35% increase in pending sales from December to January, and Snohomish County 38%. The seasonal uptick from the holidays to the New Year is normal, but it was quite sizable. This is reinforced by a 6% increase in pending activity this January over last January in King County, and a 10% increase in Snohomish County. This increase is being driven by multiple factors, such as our thriving economy and growing job market, generational shifts and historically low interest rates.

Currently, rates are as low as 3.5% for a 30-year fixed conventional mortgage – 1 point down from the fourth quarter of 2019. Moreover, the interest rate is down 1.75 points from 2 years ago. These levels are unprecedented!  The current rates are as low as they have been in 3 years. This is meaningful because the rule of thumb is that for every one-point decrease in interest rate, a buyer gains ten percent in purchase power. For example, if a buyer is shopping for a $500,000 home and the rate decreases by a point during their search, the buyer could increase their purchase price to $550,000 and keep the same monthly payment.

Why is this important to pay attention to? Affordability! The Greater Seattle area is not an inexpensive place to own a home; we have seen strong appreciation over the last 7 years due to the growth of the job market and overall economy. The interest rate lasts the entire life of the loan and can have a huge impact on the monthly cash flow of a household. This cost savings is also coupled with a balancing out of home-price appreciation. Complete year-over-year, prices are flat in King County and up around 3% in Snohomish County. Note that from 2018 to 2019 we saw an 8% increase in prices in both King and Snohomish Counties. Price appreciation is adjusting to more normal levels and is predicted to increase 5-7% in 2020 over 2019.

As we head into the spring market, the time of year we see the most inventory become available, the interest rates will have a positive influence on both buyers and sellers. Naturally, buyers will enjoy the cost savings, but sellers will enjoy a larger buyer pool looking at their homes due to the opportunities the lower rates are creating. Further, would-be sellers who are also buyers that secured a rate as low as 3.75% via a purchase or refinance in 2015-2017, will consider giving up that lower rate for the right move-up house now that rates would be a lateral move or possibly even lower.

This recent decrease in rate is making the move-up market come alive.  Baby Boomers and Gen X’er’s are equity rich and able to make moves to their next upgraded home or fulfill their retirement dreams. What is great about this, is that it opens up inventory for the first-time buyer and helps complete the market cycle. First-time buyers are abundant right now as the Millennial generation is gaining in age and making big life transitions such as getting married, starting families, and buying real estate.

Will these rates last forever? Simply put, no! Right now is a historical low, and depending on economic factors rates could inch up.  According to Matthew Gardner, Windermere’s Chief Economist, rates should hover around 4% throughout 2020. While still staying well below the long-term average of 7.99%, increases are increases, and securing today’s rate could be hugely beneficial from a cost-saving perspective. Just like the 1980’s when folks were securing mortgages at 18%, the people that lock down on a rate from today will be telling these stories to their grandchildren. Note the long-term average – it is reasonable to think that rates closer to that must be in our future at some point.

So what does this mean for you? If you have considered making a move, or even your first purchase, today’s rates are a huge plus in helping make that transition more affordable. If you are a seller, bear in mind that today’s interest rate market is creating strong buyer demand, providing a healthy buyer pool for your home. As a homeowner who has no intention to make a move, now might be the time to consider a refinance. What is so exciting about these refinances, is that it is not only possible to reduce your monthly payment, but also your term, depending on which rate you would be coming down from.  There are some pretty exciting money saving opportunities for people to take advantage of right now.

If you would like additional information on how today’s interest rates pertain to your housing goals, please contact me. I would be happy to educate you on homes that are available, do a market analysis on your current home, and/or put you in touch with a reputable mortgage professional to help you crunch numbers. Real estate success is rooted in being accurately informed, and it is my goal to help empower you to make sound decisions for your lifestyle and investment.

 

Celebrate Earth Day with us! We are partnering with Confidential Data Disposal for our 9th year; providing you with a safe, eco-friendly way to reduce your paper trail and help prevent identity theft.

Saturday, April 18th, 10AM to 2PM
4211 Alderwood Mall Blvd, Lynnwood
Bring your sensitive documents to be professionally destroyed on-site. Limit 20 file boxes per visitor.

We will also be collecting non-perishable food and cash donations to benefit Concern for Neighbors food bank. 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.

 

It’s a great time to begin preparing your home for spring. Here are a few general home maintenance tips to consider this time of year.

 

  • Clean the kitchen exhaust hood & filter.
  • Replace the furnace filter. It may be especially filthy after the winter months.
  • Inspect the roof for water damage. It’s also a good idea to check any fences, carports and sheds. TIP: check the south end of your roof first; it is the first to show wear.
  • Test the batteries in all smoke and carbon monoxide detectors.
  • Clear the gutters of any buildup to allow for proper functioning.
  • Start the grass revival cycle by aerating, thatching and fertilizing.
  • Be sure no inside or outside vents are blocked by fallen debris.
  • Clean the windows and screens. Repair any holes in screens or replace them if needed.
  • Inspect and repair siding and peeling paint. Fix or replace damaged siding. Strip peeling paint and replace it with a new coat.
  • Check the basement for water damage. Pay attention to musty smells, water stain and damp surfaces.
  • Invest in a carbon monoxide detector – every home should have at least one.

 


Posted on February 24, 2020 at 5:45 pm
Andrea Wetzel | Posted in Community Information, Newsletter |

Monthly Newsletter – January 2020: Top 12 Takeaways from Matthew Gardner for 2020, A Macro-to-Micro Look at the Economy & Housing Market

Last week, I had the pleasure of attending our office’s 11th Annual Matthew Gardner Economic Forecast Event.  At this event, Matthew gives the crowd a review of the previous year and forecasts trends for the economy and housing market for the next year and beyond.  Below are my Top 12 Takeaways worth noting as you start to chart your economic goals for 2020 and beyond.

  1. He anticipates our next recession taking place in 2021, not 2020 as previously thought. The last 11 recessions averaged 58 months in between one recession to the next, and we are currently at 127 months since the last recession, so we are due. Worth noting is the next recession will not be based on housing like the previous recession. It is predicted to be a more normal adjustment that should also be short in length, unlike the Great Recession of 2008-2010.
  2. Recessions do not always cause home prices to drop. Of the last six recessions, home prices actually ended up higher than when the recession began with the exception of the Great Recession of 2008-2010, which was based on housing due to predatory lending.
  3. The U.S. Economy will add 1.8M new jobs, but national unemployment rates should rise to 4% from 3.5% by the end of 2020. However, wage growth should start to improve as that has been slow over the last decade. In the Greater Seattle area, unemployment hovered at 3% in Q3 of 2019.
  4. We are living in our homes longer. In 2019, the average home seller in the U.S had owned their home for an average of 8.2 years compared to the average home seller in 2000 at 4.2 years. This is reflective of homeowners choosing to build more equity over time before they cash-out and move on to the next home, as well as the increased amount of Baby Boomers coming to market with their long-time homes as they pivot towards retirement.
  5. We are not headed toward a housing bubble. When seasonally adjusted, home prices are still 5.8% below the prior peak. In addition, predatory lending practices were eliminated after the 2008 housing crash and the average down payment is much higher. Overall, home equity is high with the national average in Q3 2019 sitting at 26.7% and the average FICO score of a borrower in Q3 of 2019 was 755. This, along with foreclosure starts being low, indicates that we are not headed towards a housing bubble.
  6. Interest rates should remain under 4% in 2020These are historical lows, but reflective of the last decade. In 2010, rates were around 5% and were as low as 3.4% in 2012. In late 2018, rates almost crested 5% but careened down under 4% for most of the year. The 2000’s averaged 6.3%, the 1990’s 8.1%, the 1980’s 12.7%, and the 1970’s 8.9%. This should put today’s rates in perspective.
  7. Single-family new construction remains muted due to the expensive cost of land, labor, materials, and regulatory fees. This has made inventory levels tighter and the appreciation of existing homes stronger. The lack of overbuilding is also another contributing factor to no housing bubble.
  8. Millennials are a force in the real estate market! They are the largest generation at 79M, are the largest cohort in the U.S. workforce, and more than 1M Millennial women are becoming moms every year. This generation has grown up and is experiencing big life transitions that lead to home ownership decisions. Nationally, they accounted for 37.5% of home purchases in Q3 of 2019. In the Greater Seattle area in 2019, 46% of home purchases were done by Millennials with an average down payment of 17% and with a FICO score of 741.
  9. The Greater Seattle economy looks to outperform the U.S. economy due to continued corporate growth, specifically in information services, which will balance out any losses we may see due to the current setbacks in aerospace.
  10. In the Greater Seattle area, as we start 2020 inventory levels are tight due to a high level of absorption over the course of 2019 after a big inventory dump in mid-2018. Many investors offloaded properties in 2018 and it took time to absorb this inventory as it accompanied a time frame where interest rates were near 5%. The market softened at that time, but now we have returned to constricted inventory levels and lower interest rates. This will bode well for home sellers and provide buyers low debt service.
  11. The average sale price in King County in December of 2019 was $830,000 and King County saw a 3% increase in home prices in all of 2019 over all of 2018. It is predicted, due to low inventory, strong job growth. and low interest rates that year-over-year price appreciation in King County in 2020 will be around 6.6%. Affordability and consumer sentiment are the biggest challenges in King County, especially in-city Seattle and on the Eastside, which are closer to job centers.
  12. The average sale price in Snohomish County in December of 2019 was $552,000 and Snohomish County saw a 5% increase in home prices in 2019 over 2018. It is predicted, due to low inventory, strong job growth, and low interest rates that year-over-year price appreciation in Snohomish County in 2020 will be around 7.3%. Snohomish County has benefited from the high prices in King County, leading folks to purchase further out for affordability purposes.

If you would like more information or a copy of Matthew’s PowerPoint, please reach out. It is my goal to help keep my clients well-informed in order to empower strong decisions. 2020 looks to be another positive year in real estate! If you or anyone you know is considering either buying or selling, please use me as a resource. It is an honor to help people make such important investments and meaningful lifestyle choices.

 

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.

 

 

I am pleased to present the fourth-quarter 2019 edition of the Gardner Report, which provides insights into select counties of the Western Washington housing market. This analysis is provided by Windermere Real Estate Chief Economist Matthew Gardner. I hope that this information will 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 me.

Read the full report here.

 

 

 

 

 

In 2019 Windermere agents, offices, and staff raised nearly $3 million for the Windermere Foundation, surpassing $40 million total raised since 1989. These dollars stay local, supporting low-income and homeless families in the communities where we do business. We’re proud of the work we’ve done so far, but there’s so much left to do. As we begin 2020, we look forward to seeing how we can further impact each community we serve.


Posted on February 4, 2020 at 8:05 am
Andrea Wetzel | Posted in Newsletter |

Monthly Newsletter – December 2019: Year In Review

2019 was a return to normalcy in the real estate market. After a volatile 2018 which encountered a sharp mid-year shift from an extreme seller’s market, 2019 had a more normal pace of seasonality and selection. After four to five years of multiple offers, week-long market times, waived inspections, and huge price escalations, we’ve now experienced a balancing out in price appreciation and in some areas, a correction.

Affordability and inventory have driven demand. A healthy increase in homes coming to market compared to two years ago has provided more selection and afforded buyers time to decern their choices. In-city prices found an affordability cap as buyers were forced to move north or south to find the payment they could afford. Close-in, in-city neighborhoods saw a bit of a price correction due to demand slipping for this reason. Overall, it’s been a welcome change to help buyers and sellers operate in a more balanced environment.

It’s important to understand that each market area has its own unique circumstances. Above and throughout this review, I divided the Greater Seattle area into 6 different market areas in order to illustrate this.

This chart is a study of the comparison of new listings to sold listings, which indicates demand. Over the last 12 months in each market area, sold listings have outpaced new listings. While some areas experienced more new listings from the same 12 months the year prior and some less, in each area the sold listings moved at a higher level than the previous 12 months. This is encouraging, as it shows that demand for our area is still very high.

This is driven by having one of the leading national job markets and continued low interest rates. One of the factors that affected the 2018 market shift was higher interest rates. The majority of 2018 rates were in the 4’s and almost reached 5% in late fall. In 2019, we started at 4.5%, and currently sit around 3.7% according to Y charts. In fact, since June we have remained under 4%. This has helped curbed affordability issues, brought first-time buyers out in force, and helped buyers that are also sellers move equity with low debt service. Believe it or not, experts are predicting rates will remain low throughout 2020. This is a key factor for consumers to pay attention to if they plan to jump into the market.

Above is a look at the new normal for market times and list-to-sale-price ratios. On average, it simply takes longer to sell your house now compared to the constricted, extreme seller’s markets of 2016-2018. The expectation of your home selling in the first weekend needs to be tempered, as the playing field of inventory has equaled due to more new listings coming to the market.

There is a phenomenon of Baby Boomers cashing out their equity and downsizing or moving out of the area. This is providing great move-up inventory for Gen X and Millennials to absorb. That absorption is then providing a nice selection of first-time-homebuyer houses. Bear in mind however, that the lower price points are where we are seeing the strongest demand, shortest market times, and stronger price appreciation. It’s a pretty awesome cycle to witness!

Sellers have had to negotiate a bit more, whether on the initial offering or during the inspection period. List-to-sale price ratios indicate that buyers and sellers are engaging in the dance of negotiations as prices return to a more normal level of price appreciation. Sellers on average are still getting very close to their list price. Since these are the averages, you must realize that there are still sellers that are escalating.

Homes that come to market with a well-thought-out pricing strategy, in great condition, and expertly merchandised are the ones we see breaking the average. Also, the influx of first-timers has helped drive demand in the lower price points, curtailing days on market and tighter list-to-sale price ratios in that section of the market.

When analyzing price appreciation, it is important to use a large data pull. For example, the chart above takes the last 12 months of prices and compares them to the previous 12 months. This provides a much more holistic observation of price growth versus a smaller data pull, such as month over month. Take note that the media often uses month-over-month data to paint a more dramatic story.

As mentioned above, the close-in, in-city markets have experienced a correction. It is clearly more expensive to live where you have a shorter commute to major job centers. Also, on the Eastside where the prices are the highest, they enjoy close proximity to some of the area’s biggest employers and arguably some of the best school districts in the area. The more out-lying communities found in south King and all of Snohomish County continue to see steady appreciation due to still-manageable commute times and affordability. The north Snohomish County market has been a hotbed for first-timers and Baby Boomers moving out of the area due to retirement and commutes not being a factor.

Note that this data pull is a complete year-over-year look at December 2018 to November 2019 compared to December 2017 to November 2018. Bear in mind that the first half of 2018 was an extreme seller’s market with sparse inventory and crazy escalations. This is where prices found their peak, and as we move away from those unique months and head into 2020, I believe that we will see the decrease in appreciation equal out and possibly have some subtle growth.

The chart above is a study of the months of inventory. This illustrates how quickly we would sell out of homes based on demand if nothing new came to market. We are calling the 2019 market a more normal market, but in reality, it was still measured as a seller’s market (0-3 months of inventory). It just hasn’t been so extreme, which has created a mentality that needs to be adjusted.

Just like the pricing study above, the data from the first half of 2018 included some markets that had only weeks of inventory versus months. That feels wildly different and takes some getting used to. Some may argue that the new normal of measuring a seller’s market is now 0-2 months, and that 2-4 months is a balanced market. Perspective is driving that viewpoint, as we have an entire portion of consumers that have known nothing besides historically low interest rates and low inventory levels. The vantage point of what is actually normal is finding its footing.

Right now, all six markets sit at a lower inventory level than the average of the year. This is due to seasonality. Many sellers prefer to come to market when the days are longer and we are outside of the holidays. I predict that the low interest rates and the turn of the new year will encourage strong buyer demand. New Year’s resolution goal setting always brings demand. With that said, the sellers that come to market earlier in the year prior to the spring rush will enjoy a large audience hungry for inventory to gobble up.

Overall, 2019 has been a very positive year in real estate. The majority of the sales have been propped up on incredibly favorable equity positions on behalf of sellers and historically low interest rates for buyers. If a person has owned their home for 3 or more years and hasn’t cashed equity out, they are in a positive equity position. For those that have been in their homes for 10 or more years, they are knocking it out of the park!

Below you can watch a short video from Matthew Gardner, Windermere’s Chief Economist, and hear what he thinks we have in store for 2020 on the national level. As we head into the New Year, please reach out should you have a curiosity about how your local real estate market relates to your financial and lifestyle goals. It is always my goal to help keep my clients informed and empower strong decisions through thorough research and a high level of communication.

Here’s to a happy holiday season and a prosperous 2020!

It’s that time of year when Windermere Real Estate’s Chief Economist Matthew Gardner dusts off his crystal ball and peers into the future to give us his predictions for the 2020 economy and housing market.

Holiday Giving!

This Christmas, my office adopted 23 foster boys, ranging in age from 13-18 years old, and living in group homes managed by Pioneer Human Services. These group homes serve boys who are struggling with emotional, behavioral and/or psychiatric problems that prevent placement in a traditional foster care setting. We purchased gifts, using wish lists from the boys, to help provide a joyful Christmas morning for these teenage boys who might otherwise be overlooked.

The office also raised money for grocery gift cards for families in need (also referred by Pioneer Human Services). This year we distributed $3,538 in grocery gift cards to 12 local families.

We are also thrilled to report that we were able to deliver a full car load of warm winter donations to Mary’s Place from all of your generous donations during our Thanksgiving pie giveaway and Santa photo events.

Happy Holidays!


Posted on December 18, 2019 at 2:51 pm
Andrea Wetzel | Posted in Newsletter |

Monthly Newsletter: November 2019 – Quarterly Economic Update

 

I am pleased to present the third-quarter 2019 edition of the Gardner Report, which provides insights into select counties of the Western Washington housing market. This analysis is provided by Windermere Real Estate Chief Economist Matthew Gardner. I hope that this information will 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 me.

Read the full report here.

 

 

 

As winter approaches, it’s time to make sure your home is ready for the harsh weather ahead. To avoid costly repairs later, take some time now preparing your home to withstand another cold season. Here are 30 important tasks to protect and prepare your investment. View the full list here.

 

 

 

Have you been keeping track of the Seahawks home game defensive tackles? We have. Every one means another $100 donated to Mary’s Place. After the last home game win against Tampa Bay, our total raised to date is $118,100. Every play matters in the fight against homelessness! Follow along on social media with #tacklehomelessness.  Go Hawks!

 

 

 


Posted on November 27, 2019 at 10:27 am
Andrea Wetzel | Posted in Newsletter |

Monthly Newsletter – October 2019: Dual Market, Transitioning from Residential to Condo

 

Last month, I did an analysis on the new phenomenon of a dual market. A dual market is when you have different market conditions within the same overarching real estate market. This duality presents amazing opportunities for sellers who are also buyers, depending on where they want to go. I reported on two dual markets, the move-up market and the move-out market. Another dual market that deserves to be shared is the condo market compared to single-family residential.

 

In September, single-family residential homes in Seattle Metro had an absorption rate of 43% while condos were at 27%. Months of inventory based on pending sales for single-family residential was only 1.9 months of available inventory, and condos, 3.5 months! That is the difference of a seller’s market for single-family residential to a balanced market for condos. After many solid years of strong appreciation, folks that are looking to cash out the equity on their single-family residential homes and move to a condo have the opportunity to move their investment with a sizable down payment and upgrade to a lifestyle that is often stair-free with less maintenance.

 

The median price for a condo in Seattle Metro in September was $455,000 and for a single-family residential home, $750,000. The median price for a condo in south Snohomish County is September was $343,000 and for a single-family residential home, $569,000. It is common for folks to sell their long-time family home and downsize into a condo and pay all cash. The buildup of equity over the years and paying down their loans allow for large cash-outs and easier all-cash purchases.

 

If one is getting a loan though, it is important to highlight today’s interest rates. They are a point lower than they were a year ago, affording buyers 10% more buying power. For example, a one-point-lower rate on a purchase at $500K will now afford a buyer the purchase of a home at $550K with the same monthly payment. Couple that with price appreciation tempering and you have a perfect downsizing market, which often includes condo purchases!

 

If you are curious about moving from a single-family home to a condo and the opportunity this dual market presents, please reach out. It is my goal to help keep my clients educated and empowered to make strong decisions. This is especially rewarding when it leads to their next chapter in life, which are amazing transitions to be a part of.

 

 

 

 

 

Did you know that giving thanks on a daily basis can reduce your trips to the doctor, increase your overall happiness, improve personal relationships, and lead to more exercise? Sounds like a magic pill to me, and it’s free! Harvard Medical School recently released a study that speaks to the benefits of practicing gratitude. With Thanksgiving approaching, challenge yourself to write down your gratitudes daily, and see how it goes.

 

 

 

It’s true!  A listing agent’s goal is to get their listing sold to a qualified buyer who will close. However, a good listing agent also realizes that once a home is under contract, they now have to sell the house to the appraiser if the buyer is getting a loan. You see, a buyer cannot complete their financing if the appraisal does not come in at the same value or higher than the agreed-upon contract price. A good strategy, especially if the price escalates above the list price, is for the listing agent to prepare an appraisal packet and meet the appraiser or share it with them via email. This gives the listing agent the opportunity to share their research and the story of the demand surrounding the property. This is some extra effort, but so worth it to ensure success for the seller!


Posted on October 31, 2019 at 6:42 pm
Andrea Wetzel | Posted in Newsletter |