Recent Decrease in Interest Rates Spurs Opportunity

 

Most recently, we have experienced an uptick in market activity. In fact, in King and Snohomish counties we saw a 53% increase in pending sales from December to January. While it is seasonally normal to see activity increase at the first of the year, it was 16% higher than the previous January. This increase is being driven by multiple factors, such as our thriving economy and job market, price acceleration softening, and the recent decrease in interest rates.

Currently, rates are as low as 4.5% for a 30-year fixed conventional mortgage – 0.75 points down from the fourth quarter of 2018. In fact, the interest rate in November was the highest we’ve seen in five years!  The current rate level is the lowest we have seen in a year. This is meaningful because the rule of thumb is that for every one-point increase in interest rate, a buyer loses ten percent in purchase power. For example, if a buyer is shopping for a $500,000 home and the rate increases by a point during their search, in order to keep the same monthly payment, the buyer would need to decrease their purchase price to $450,000. Conversely, for every decrease in interest rate, a buyer can increase their purchase price and keep the same monthly mortgage payment.

Why is this important to pay attention to? Affordability! If you take the scenario I just described and apply it to the link above, you can see that the folks who choose to jump into the market this year will enjoy an interest cost savings when securing their mortgage. This 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 slow-down in home-price appreciation. Complete year-over-year, prices are up around 8% in both King and Snohomish counties, but note that from 2017 to 2018 we saw a 14% increase. Price appreciation is adjusting to more normal levels and is predicted to increase 4-6% in 2019 over 2018.

As we head into 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 demand 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 re-finance in 2015-2017, will consider giving up that lower rate for the right move-up house now that rates are not as big of a jump up as they were during the second half of 2018.

This recent decrease in rate is making the move-up market come alive. 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 buying real estate. According to Nerd Wallet, 49% of all Millennials have a home purchase in their 5-year plan.

Will these rates last forever? Simply put, no! According to Matthew Gardner, Windermere’s Chief Economist, rates should increase into the 5’s in 2019. While still staying well below the 30-year average of 6.85%, 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 30-year 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.

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 you and your family.


Posted on February 22, 2019 at 2:02 am
Becky and Steve Larsen | Posted in Statistical Information, Strategy |

Washington in Bloom

Washington in Bloom: 12 Spring Hikes for Wildflowers

~Published by the Washington Trail Association – See their website for more information:  https://www.wta.org/go-outside/seasonal-hikes/spring-destinations/spring-wildflower-hikes

With their bright pops of color tucked into our green forests or scattered across our central scablands, wildflowers herald a warmer, sunnier hiking season. From marshy yellow skunk cabbage to unlikely glacier lilies, you can find early spring wildflowers all over the state this time of year.

In Washington, we have a wildflower season that lasts from March through August. With so many unique ecosystems right in our backyard, many incredible flowers have found their niche.

The rich variety of flora could have you hiking for decades and still finding new wonders on the forest floor. Early spring is the perfect time to stride out on trail to see big, showy balsamroot, delicate calypso orchids or bright salmonberry bushes in bloom.

Tips for wildflower hiking:

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SUGARLOAF

Location: Puget Sound & Islands – Bellingham area
Length:
 2.5 miles, roundtrip
Elevation Gain: 890 ft.

Sugarloaf by hikingwithlittledogs..jpeg

Wildflowers dot the hills of Sugarloaf. Photo by hikingwithlittledogs.

The network of trails on the Anacortes Community Forest Lands is extensive enough that you can spend all day hiking and exploring here. Keep your eyes peeled for camas and delicate avalanche lilies dotting the hillsides. Don’t forget to look up from your wildflower hunt every now and then to take in the views of the sound, too!

>> Read more about Sugarloaf in WTA’s Hiking Guide

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FIDALGO HEAD LOOP TRAIL

Location: Puget Sound & Islands – Bellingham area
Length: 4.0 miles, roundtrip
Elevation Gain: 300 ft.

Fidalgo Head Loop Trail by blueshirtBob.jpeg

Fidalgo Head Loop Trail. Photo by blueshirtBob.

All the benefits of an island hike, without the ferry ride (unless you’re starting on the islands, of course). While this trail is known more for it’s wildlife-watching opportunities, the hillside meadows and trees come into bloom in early spring. On a sunny day, this is a terrific spot for a short hike and a picnic. When it the spring clouds roll in, you’ll still have great views and a little more solitude.

>> Read more about Fidalgo Head in WTA’s Hiking Guide

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FOURTH OF JULY CREEK TO ICICLE RIDGE

Location: Central Cascades – Leavenworth
Length:
 12 miles, roundtrip
Elevation Gain: 4370 ft.

Icicle Ridge by TreeLady.jpeg

Flowers line the trail on the climb towards Icicle Ridge. Photo by TreeLady.

While there is often still snow on the upper reaches of this trail in spring, this popular destination outside of Leavenworth offers a riot of wildflower offerings. You’ll have a good chance at balsamroot or lupine, but keep your eyes peeled for the rarer delights as well: flowers like Tweedy’s Lewisa or Chocolate Lilies. Come back in a month or two for less snow and summer flowers.

>> Read more about Icicle Ridge in WTA’s Hiking Guide

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CHELAN LAKESHORE TRAIL

Location: Central Cascades — Entiat Mountains/Lake Chelan
Length:
 17 miles, one-way
Elevation Gain: 4030 ft.

Chelan Lakeshore Trail by jar.berg.jpeg

Chelan Lakeshore trail. Photo by jar.berg.

This early-season trail features craggy, snow-capped peaks, a sapphire-blue lake, wildflowers, as well as regular maintenance by WTA volunteers. The 17-mile thru-hike on the Chelan Lakeshore Trail will take you to the delightful and secluded town of Stehekin where you can take a quick tour of the valley via bus or bike or visit the Stehekin Pastry Company—two miles from the ferry dock.

>> Read more about the Chelan Lakeshore trail in WTA’s Hiking Guide

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KLICKITAT RAIL TRAIL – KLICKITAT RIVER

Location: Southwest – Columbia River Gorge
Length:
 10.5 miles, roundtrip
Elevation Gain: 200 ft.

Klickitat Rail Trail by Jarv..jpeg

Fragrant lilac, bouquets of lupine, popcorn flowers, balsamroot,and miner’s lettuce can all be found along a section of trail starting in Lyle. Photo by Jarv.

Hop aboard for an early-season wildflower bloom amid open terrain and open air. At a healthy clip or a slow meander, this rail trail is fun at any speed! The Klickitat Trail runs 31 miles, with multiple access points placed in unique areas, from grass plains and the rugged Swale Canyon along the Wild and Scenic Klickitat River, to oak-filled valleys dropping down to Lyle and the Klickitat’s mouth at the Columbia River.

>> Read more about Kickitat Trail in WTA’s Hiking Guide

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COLUMBIA HILLS STATE PARK

Location: Southwest – Columbia River Gorge
Length:
 12.4 miles (Horsethief Butte)
Elevation Gain: 1870 ft.

Phox and Balsamroot on the Crawfor Oaks trail. Photo by Bob and Barb.jpeg

Phox and balsamroot on the Crawford Oaks trail. Photo by Bob and Barb.

Climb gentle hills exploding with lupine, paintbrush, balsamroot and other wildflowers. Make it multi-day adventure by camping in the state park and hiking Crawford Oaks and The Dalles Mountain. Go prepared for ticks.

>> Read more about Columbia Hills in WTA’s Hiking Guide

>> Get more ideas for Columbia River Gorge spring hikes

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WHISKEY DICK WILDLIFE AREA

Location: Central Washington, near Yakima
Length:
 8.0 miles, roundtrip
Elevation Gain: 1750 ft.

Whiskey Dick Ridge by David Hagen.jpeg

Lupines blooming over the Whiskey Dick Ridge. Photo by David Hagen.

Wander among a wide variety of wildflowers—including a rare species of cactus, Simpson’s hedgehog, with its hot pink blossoms—chunks of petrified wood, and panoramic views of the Columbia Basin, under usually sunny, blue skies. Bring your camera and your field guide. For those hikers who prefer vistas or bird-watching to finding flora, there’s plenty of that to go around, too.

>> Read more about Whiskey Dick Wildlife Area in WTA’s Hiking Guide

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SNOW MOUNTAIN RANCH

Location: Central Washington, near Yakima
Length:
 9.2 miles (with shorter options)

Cacti blooming on Selah Butte. Photo by Natasha'n'Boris.jpeg

Cacti blooms at in spring. Photo by Natasha’n’Boris.

Head towards Yakima for some of the best wildflower shows in the state. Spend the day roaming on this former ranch, which in spring is cloaked in wildflowers! Keep your eyes peeled for the delightfully bright hedgehog cacti, bitterroot and more. If you want to make

>> Read more about Snow Mountain Ranch

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FROG LAKE

Location: Central Washington — Potholes Region
Length: 3.0 miles, roundtrip
Elevation Gain: 235 ft.

Frog Lake by David Hagen.jpeg

Flowers line the trail on the approach to Frog Lake. Photo (c) David Hagen

Sitting inside the 30,000 acre Columbia National Wildlife Refuge, Frog Lake, and the nearby Crab Creek and Marsh Loop trails provide hours of trail exploration. With basalt views, sagebrush-steppe, rocky cliffs and budding wildflowers you won’t run out of beautiful views to take in—just watch out for ticks!

>> Read more about Frog Lake in WTA’s Hiking Guide

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PUFFER BUTTE

Location: Eastern Washington – Blue Mountains
Distance: 4.4 miles, roundtrip

Puffer Butte by Melanie Harding.jpeg

The spring views from Puffer Butte. Photo by Melanie Harding.

Tucked into the southeast corner of the state, this little trail in Field Spring State Park rewards with big views and solitude. The time to visit for wildflowers is now, when snow melt is feeding the first flush of wildflowers (and before things begin to heat up).

>> Read more about Puffer Butte in WTA’s Hiking Guide

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MIMA MOUNDS

Location: Olympia
Length:
 2.7 miles, roundtrip
Elevation Gain: 10 ft.

Mima Mounds by blamecanada.jpeg

Camas in bloom at Mima Mounds. Photo by blamecanada.

While many wildflowers have roots here, but these mysterious hills are best enjoyed when Washington’s native camas blooms blanket the rolling open landscape. This destination is a good one for families looking to just spend the day outside, and has paved trails for strollers or wheelchairs.

>> Read more about Mima Mounds in WTA’s Hiking Guide

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MILLER PENINSULA-THOMPSON SPIT

Location: Olympic Peninsula — Northern Coast
Length:
 5.0 miles, roundtrip
Elevation Gain: 360 ft.

Miller Peninsula-Thompson Spit by LQSeaton.jpg

Spring flowers on the Miller Peninsula-Thompson Trail. Photo by LQSeaton.

This wooded walk enters a lush ravine lined with remnant old-growth and gives way to an isolated beach with views of Protection Island. There are many miles of trails here — whether you do a meandering route around the area or the more direct 4 miles to the water and back. Additionally, it’s possible to create all sorts of loops as well. If you look closely, you may be able to spot a few wildflowers along the edges of the trail.

>> Read more about Miller Peninsula-Thompson Spit in WTA’s Hiking Guide


Posted on February 22, 2019 at 12:34 am
Becky and Steve Larsen | Posted in Just for Fun |

Freshen Up Your Home for Spring

Whether you hire an outside professional for help, or tackle the project yourself, now is a great time to get a jump on spring cleaning. Many people wait for warmer temps to start cleaning, but I think most everyone can agree that those weekends would be better spent outdoors, soaking up that sun. So, take some inspiration from the list below to get you started now on freshening up your home for spring.

 

It will only take a few hours to check everything off this list, and you’ll feel so much better enjoying the last few weeks of winter, knowing that when the warmer weather finally comes, you can get outside and really enjoy it!

 

Rotate your mattress. Most mattresses need to be rotated regularly in order to even out the overall wear and prolong the lifespan of your bed. However, keep in mind that Sleep Number and Tempur-Pedic mattresses typically should not be rotated. Always check with your manufacturer for their recommendations on your specific mattress. If you own an older mattress with no pillowtop, it should probably be flipped as well as rotated.

 

Clean your mattress. Strip the mattress of all linens and covers. Start by vacuuming the mattress with the upholstery attachment, paying close attention to crevices and seams. Next, sprinkle baking soda (up to a one-pound box) all over the surface of your mattress. Let this sit for at least an hour, but 24 hours is best. Then go back over your mattress with your vacuum’s upholstery attachment again. If you have a steam cleaner, break it out and go over your whole mattress. The steam will reach further into the mattress than your vacuum is able to, and kills dust mites. *It is generally not recommended to clean memory foam with a steam cleaner.

 

Organize & clean the laundry room. Clean the outside of your washer and dryer; scrape any dried detergent from crevices. Next, clean the inside of the washing machine. Most newer models have a self-cleaning cycle. If you have an older machine that does not have a self-cleaning cycle, run a cycle with hot water and a quart of white vinegar. After it is finished, clean the detergent dispensers, using a vinegar and water solution and a scrubber. If you have a front-loader, be sure to clean the rubber seal on the door. This area is prone to mold growth, so use an all-purpose cleaner or maybe even bleach to get under and around the seal.

Next, organize a bit. Throw away products you never use, replace damaged sorting bins, and don’t forget to clean out the dryer vent to prevent a fire.

 Deep clean the fridge. Twice a year (or more), you should give your fridge a front-to-back, top-down scrubbing. Start by taking everything out and throw away anything that has expired. Next, remove all the shelves and drawers. Put them to soak in a solution of two tablespoons baking soda and one-quart hot water. While they are soaking, wipe down the interior of the fridge with the same solution. Then scrub, rinse and dry the shelves and drawers.

Next, dry the drip pan. Remove the base grill, and pull out the drip pan. If it’s full of water, mop it with paper towels and wash the pan with soapy water. If your drop pan is fixed in place, wrap a cloth around the head of a long-handled brush and use to clean the pan.

Don’t forget the coils. In order to keep your refrigerator running efficiently, unplug it, pull it away from the wall, and use a coil brush or your vacuum’s crevice attachment to clean the condenser coils. This should be done at least twice a year, unless you have pets in the home, and then you should do this three to four times a year.

 Clean out spice cabinet. Throw away all expired spices and seasonings. Not only do these lose taste, they actually harbor mold and bacteria.

 Clean out expired medications & vitamins If you have unused medications, please take them to your local pharmacy for proper disposal.

 Vacuum, wash, or steam window curtains

 Wash window blinds

 Add color to your table. Treat yourself to fresh flowers while waiting for the spring blooms outside.

 


Posted on February 20, 2019 at 12:06 am
Becky and Steve Larsen | Posted in Helpful Information, Just for Fun |

Hill Day in Olympia – January 2019

Over 500 REALTORS® adorned with “Unlock the Door for Affordable Homeownership” scarves converged on Olympia for the Washington REALTORS® Legislative Day event. Over the course of two days, REALTORS® participated in governance meetings, installed our 2019 Leadership, networked and met with legislators to discuss solutions for the acute housing affordability crisis in Washington State.

Our event keynote speaker, Dr. James Young with the Washington Center for Real Estate Research, presented valuable information on real estate trends affecting REALTORS® and consumers alike. The statistics and data he presented highlighted the extreme difficulty for first-time buyers to find affordable housing and for “empty nesters” to trade down, creating a ripple effect in the housing market. Dr. Young also points out that the most efficient means of providing opportunities for first-time home buyers (affordable condominium development) has not taken place in this market due to supply constraints. These supply constraints are having a significant impact on the overall housing market which is why Washington REALTORS® have identified several legislative priorities to address them.

Over the course of over 140 different scheduled meetings with legislators on Thursday, January 24, 2019, REALTORS® received encouraging and positive response to the following Legislative Priorities:

  • Reforming Condominium Liability Laws
  • Increasing Urban & Suburban Housing Supply in Urban Growth Areas
  • Aligning the Short Subdivision Process with Ecology’s SEPA Regulations
  • Supporting the Housing Trust Fund for Homeownership
  • State Funding Support for Housing, Homelessness & Infrastructure
  • Expanding the Multi-family Tax Exemption Program
  • REET & Lodging tax—Local Funding Tools for Housing & Homelessness
  • Read more details about Washington REALTORS®’ Legislative Priorities.

All of our Legislative Priorities are part of the Unlock the Door for Affordable Homeownership initiative. Partnered with other non-profit and for-profit entities, Washington REALTORS® will continue to work with our legislators and lead the way to help create affordable homeownership opportunities for all.

Thank you to all of the REALTORS®, affiliates, and industry professionals who showed up to make Washington REALTORS® Legislative Day a success. Stay tuned throughout the Legislative Session for updates and news!

For more information regarding SCCAR visit their website at: https://www.sccar.org/

Originally posted February 6, 2019 by Snohomish-Camano Association of REALTORS 2019 – all article and photo credit to SCCAR.ORG

 

 


Posted on February 9, 2019 at 8:24 pm
Becky and Steve Larsen | Posted in Local News |

Windermere Foundation Surpasses $38 Million In Total Donations Raised

 

2018 concluded with another great year of fundraising and giving for the Windermere Foundation, thanks to the continued support of Windermere franchise owners, agents, staff, and the community. Nearly $2.5 million was raised in 2018, bringing our grand total to over $38 million raised since the Foundation’s inception in 1989! During the past year, nearly $1.9 million was donated to non-profit organizations throughout the Western U.S. that provide much-needed services to low-income and homeless families. In 2018, theWindermere Foundation fulfilled 689 grant requests and served 507 non-profit organizations.

 

A portion of the money raised every year is due in part to our agents who each make a donation to the Windermere Foundation from every commission they earn. Additional donations from Windermere agents, the community, and fundraisers made up 68% of the money collected in 2018. Each Windermere office has their own Foundation funds, which enable them to support local non-profits in their communities.

 

One organization that received Windermere Foundation donations from several Windermere Real Estate offices in the Seattle area is Treehouse. Treehouse’s mission is to give foster kids a childhood and a future. Their goal that they have set to achieve by 2022, is to see youth in foster care graduate from high school at the same rate as their peers across Washington State. And to provide them with support and a plan to launch successfully into adulthood. Donations from the Windermere Foundation have helped Treehouse clients like Ashley, get the support she needed to turn her life around.

 

“I didn’t have a childhood that all kids should have–like making friends my age or playing sports. I changed the path that I was on because I wanted to give people a reason to believe in me. You have to want to change and speak your truth, but you can’t do it without people believing in you. You can get through the darkest situations, you just gotta look for a little crack of light. Treehouse is that crack of light for me,” ~Ashley

2018 also marked the third year of our #tacklehomelessness campaign with the Seattle Seahawks, in which Windermere committed to donating $100 for every Seahawks home game defensive tackle to YouthCare, a non-profit organization that provides critical services to homeless youth. While the Seahawks didn’t make it past the first round of the playoffs, they did help us raise $31,900. When added to previous seasons, the total donation for the past three years is $98,700! We are grateful for the opportunity to provide additional support to homeless youth thanks to the Seahawks, YouthCare, and the #tacklehomelessnesscampaign.

 

 

 

 

 


Posted on February 1, 2019 at 10:41 pm
Becky and Steve Larsen | Posted in WRE Foundation |

Is Student Loan Debt a Threat to Home Ownership?

Over the course of the last thirty years, a shift has happened. An entire generation has been raised to believe that a college education is their key to unlocking opportunities that were not available to their parent’s or grandparent’s generations.

Due to this, student loan debt has soared to $1.5 trillion and represents the largest category of debt, surpassing credit card and auto loan debt in 2010 and never looking back. As more and more Americans continue their education amongst rising tuition costs, this number will no doubt increase.

Many housing experts have blamed student loans for a drop in the homeownership rate for young families, and to an extent, they’ve been right. Increased debt at the time of graduation has no doubt limited young people from being able to afford a home at the same rate as their parents or grandparents did at the same age.

In a recent Forbes article, the author explained that “in just the class of 2017, the average student has about $40,000 in debt — almost enough for a 20% down payment on a median-priced home.”

The Federal Reserve set out to determine exactly how much impact student loan debt has had on the homeownership rate of those 18-34 (millennials). Their results found that,

Every $1,000 in student loan debt delays homeownership by about 2.5 months, but it doesn’t prevent homeownership entirely.

 In fact, by the time college grads reach their 30s, those with student loan debt have a homeownership rate nearly identical to those who didn’t take out loans.” (emphasis added)

In the Wall Street Journal’s coverage of the Fed report, they found that recent graduates prioritize paying off their student loans over saving for a down payment, despite their desire to be a homeowner. Many with debt want to “get that monkey off (their) back (before they) make any new investments.”

This has just delayed the wave of young home buyers from hitting the market. But as Danielle Hale, the Chief Economist at realtor.com warns,

“2020 will be peak millennial, the year when the largest number of millennials will turn 30.”

 By age 30, those who attained a bachelor’s degree right after high school will be one or two years away from paying off their loans and will have been in their career long enough to earn a higher salary.

In the long run, research shows that attaining a bachelor’s degree or more actually increases the chances that someone will become a homeowner.

Bottom Line

If you are one of the many millennials who has prioritized paying down your student loans over saving for a down payment, you’re not alone. Even if you are a couple years away from paying off your loans, meet with a local real estate professional who can help you determine if waiting really is the best decision for you!

 


Posted on January 30, 2019 at 12:43 am
Becky and Steve Larsen | Posted in Helpful Information, Statistical Information |

Western Washington Real Estate Market Update Q4 2018

Posted in Western Washington Real Estate Market Update by Matthew Gardner, Chief Economist, Windermere Real Estate         January 28, 2019

The following analysis of the Western Washington real estate market is provided by Windermere Real Estate Chief Economist Matthew Gardner. We hope that this information may assist you with making better-informed real estate decisions. For further information about the housing market in your area, please don’t hesitate to contact your Windermere Agent. 

 

ECONOMIC OVERVIEW

The Washington State economy continues to add jobs at an above-average rate, though the pace of growth is starting to slow as the business cycle matures. Over the past 12 months, the state added 96,600 new jobs, representing an annual growth rate of 2.9% — well above the national rate of 1.7%. Private sector employment gains continue to be quite strong, increasing at an annual rate of 3.6%. Public sector employment was down 0.3%. The strongest growth sectors were Real Estate Brokerage and Leasing (+11.4%), Employment Services (+10.3%), and Residential Construction (+10.2%). During fourth quarter, the state’s unemployment rate was 4.3%, down from 4.7% a year ago.

 

My latest economic forecast suggests that statewide job growth in 2019 will still be positive but is expected to slow. We should see an additional 83,480 new jobs, which would be a year-over-year increase of 2.4%.

 

HOME SALES ACTIVITY

  • There were 17,353 home sales during the fourth quarter of 2018. Year-over-year sales growth started to slow in the third quarter and this trend continued through the end of the year. Sales were down 16% compared to the fourth quarter of 2017.​
  • The slowdown in home sales was mainly a function of increasing listing activity, which was up 38.8% compared to the fourth quarter of 2017 (continuing a trend that started earlier in the year). Almost all of the increases in listings were in King and Snohomish Counties. There were more modest increases in Pierce, Thurston, Kitsap, Skagit, and Island Counties. Listing activity was down across the balance of the region.
  • Only two counties—Mason and Lewis—saw sales rise compared to the fourth quarter of 2017, with the balance of the region seeing lower levels of sales activity.​
  • We saw the traditional drop in listings in the fourth quarter compared to the third quarter, but I fully anticipate that we will see another jump in listings when the spring market hits. The big question will be to what degree listings will rise.

 

 

HOME PRICES

  • With greater choice, home price growth in Western Washington continued to slow in fourth quarter, with a year-over-year increase of 5% to $486,667. Notably, prices were down 3.3% compared to the third quarter of 2018.
  • Home prices, although higher than a year ago, continue to slow. As mentioned earlier, we have seen significant increases in inventory and this will slow down price gains. I maintain my belief that this is a good thing, as the pace at which home prices were rising was unsustainable.
  • When compared to the same period a year ago, price growth was strongest in Skagit County, where home prices were up 13.7%. Three other counties experienced double-digit price increases.
  • Price growth has been moderating for the past two quarters and I believe that we have reached a price ceiling in many markets. I would not be surprised to see further drops in prices across the region in the first half of 2019, but they should start to resume their upward trend in the second half of the year.

 

 

 

 

 

 

 

 

 

DAYS ON MARKET

  • The average number of days it took to sell a home dropped three days compared to the same quarter of 2017.
  • Thurston County joined King County as the tightest markets in Western Washington, with homes taking an average of 35 days to sell. There were eight counties that saw the length of time it took to sell a home drop compared to the same period a year ago. Market time rose in five counties and was unchanged in two.
  • Across the entire region, it took an average of 51 days to sell a home in the fourth quarter of 2018. This is down from 54 days in the fourth quarter of 2017 but up by 12 days when compared to the third quarter of 2018.
  • I suggested in the third quarter Gardner Report that we should be prepared for days on market to increase, and that has proven to be accurate. I expect this trend will continue, but this is typical of a regional market that is moving back to becoming balanced.​

 

 

CONCLUSIONS

This speedometer reflects the state of the region’s real estate market using housing inventory, price gains, home sales, interest rates, and larger economic factors. I am continuing to move the needle toward buyers as price growth moderates and listing inventory continues to rise.

2019 will be the year that we get closer to having a more balanced housing market. Buyer and seller psychology will continue to be significant factors as home sellers remain optimistic about the value of their home, while buyers feel significantly less pressure to buy. Look for the first half of 2019 to be fairly slow as buyers sit on the sidelines waiting for price stability, but then I do expect to see a more buoyant second half of the year.

 

 

 


Posted on January 29, 2019 at 6:42 am
Becky and Steve Larsen | Posted in Quarterly Reports, Statistical Information |

2019 Economic & Housing Forecast

Before you read the complete Matthew Gardner forecast below, here are a few thoughts about the Seattle area:

  • Seattle remains strong economically and our job market is thriving.
  • Interest rates are still historically low and will rise, but not beyond 6%.
  • It is still a seller’s market in our area, but price escalations are softening, creating more balance and sustainability. We are NOT experiencing a bubble.
  • 25% of homeowners in our region have 50% equity in their homes.
  • An economic recession is upon us in 2020. This one should be much like the 1991 recession; short and not based in housing.
  • Be careful how you process the media’s take on the market as they often use extreme month-over-month numbers vs. richer long-term data.
  • Prices are expected to rise 5-7% in 2019, which is more normal, but above the long-term average, yet lower than the recent double-digit year-over-year gains we’ve seen since 2012.


What a year it has been for both the U.S. economy and the national housing market. After several years of above-average economic and home price growth, 2018 marked the start of a slowdown in the residential real estate market. As the year comes to a close, it’s time for me to dust off my crystal ball to see what we can expect in 2019.

The U.S. Economy

Despite the turbulence that the ongoing trade wars with China are causing, I still expect the U.S. economy to have one more year of relatively solid growth before we likely enter a recession in 2020. Yes, it’s the dreaded “R” word, but before you panic, there are some things to bear in mind.

Firstly, any cyclical downturn will not be driven by housing.  Although it is almost impossible to predict exactly what will be the “straw that breaks the camel’s back”, I believe it will likely be caused by one of the following three things: an ongoing trade war, the Federal Reserve raising interest rates too quickly, or excessive corporate debt levels. That said, we still have another year of solid growth ahead of us, so I think it’s more important to focus on 2019 for now.

The U.S. Housing Market

Existing Home Sales
This paper is being written well before the year-end numbers come out, but I expect 2018 home sales will be about 3.5% lower than the prior year. Sales started to slow last spring as we breached affordability limits and more homes came on the market.  In 2019, I anticipate that home sales will rebound modestly and rise by 1.9% to a little over 5.4 million units.

Existing Home Prices
We will likely end 2018 with a median home price of about $260,000 – up 5.4% from 2017.  In 2019 I expect prices to continue rising, but at a slower rate as we move toward a more balanced housing market. I’m forecasting the median home price to increase by 4.4% as rising mortgage rates continue to act as a headwind to home price growth.

New Home Sales
In a somewhat similar manner to existing home sales, new home sales started to slow in the spring of 2018, but the overall trend has been positive since 2011. I expect that to continue in 2019 with sales increasing by 6.9% to 695,000 units – the highest level seen since 2007.

That being said, the level of new construction remains well below the long-term average. Builders continue to struggle with land, labor, and material costs, and this is an issue that is not likely to be solved in 2019. Furthermore, these constraints are forcing developers to primarily build higher-priced homes, which does little to meet the substantial demand by first-time buyers.

Mortgage Rates
In last year’s forecast, I suggested that 5% interest rates would be a 2019 story, not a 2018 story. This prediction has proven accurate with the average 30-year conforming rates measured at 4.87% in November, and highly unlikely to breach the 5% barrier before the end of the year.

In 2019, I expect interest rates to continue trending higher, but we may see periods of modest contraction or levelling.  We will likely end the year with the 30-year fixed rate at around 5.7%, which means that 6% interest rates are more apt to be a 2020 story.

I also believe that non-conforming (or jumbo) rates will remain remarkably competitive. Banks appear to be comfortable with the risk and ultimately, the return, that this product offers, so expect jumbo loan yields to track conforming loans quite closely.

Conclusions
There are still voices out there that seem to suggest the housing market is headed for calamity and that another housing bubble is forming, or in some cases, is already deflating.  In all the data that I review, I just don’t see this happening. Credit quality for new mortgage holders remains very high and the median down payment (as a percentage of home price) is at its highest level since 2004.

That is not to say that there aren’t several markets around the country that are overpriced, but just because a market is overvalued, does not mean that a bubble is in place. It simply means that forward price growth in these markets will be lower to allow income levels to rise sufficiently.

Finally, if there is a big story for 2019, I believe it will be the ongoing resurgence of first-time buyers. While these buyers face challenges regarding student debt and the ability to save for a down payment, they are definitely on the comeback and likely to purchase more homes next year than any other buyer demographic.

Posted on Windermere.com in Market News by Matthew Gardner, Chief Economist, Windermere Real Estate

Originally published on Inman News.


Posted on January 25, 2019 at 11:41 pm
Becky and Steve Larsen | Posted in Statistical Information, Strategy |

Tips for Moving Into a Smaller Home as a Senior

Are you a senior moving or downsizing?

A Great article written By Michael Longsdon

For many seniors, there comes a time when the expense and upkeep of a big home no longer seem realistic. All of your kids have moved out, and suddenly, your multi-bedroom house feels excessively large and empty. Plus, it may be difficult to keep up with mortgage payments if you’re expecting a lower income during retirement. Whether downsizing is a financial necessity or an emotional decision, here’s how to tackle the process without getting overwhelmed.

Do Online Research

Before you start looking at houses in person, narrow down your options by doing some research online. Search the local housing market on sites such as Redfin to get a feel for house prices in your desired area. For example, homes in Seattle, Washington have sold for an average of $685,000during the past month. Explore listings in your preferred size range and location so you can come up with a realistic budget for your new home.

Think far ahead as you look at homes, considering the possibility that the needs of you and your spouse may change over time. One-story homes can be much more accessible for you and your friends down the line. You should also take time to research the neighborhood and pay attention to the house’s proximity to grocery stores, leisure centers, and public transportation.

Plan for Your Storage Needs

If you’re moving to an apartment or condo, you may not have the attic, basement, or even the closet space that you’re used to. Look for a nearby for an affordable self-storage unit so you aren’t left crowding boxes and furniture into your new home. Some simple online research can help you find the best deals in your area. In the last 180 days, for instance, self-storage units in Seattle, Washington cost an average of $88.45 per month.

Go Through Your Possessions Methodically

One of the hardest parts about downsizing is getting rid of things you’ve had for decades. Apartment Guide recommends looking at pictures of clutter-free rooms in magazines for inspiration before starting your own purge. This will mentally prepare you for getting rid of all the stuff you don’t need cluttering up your new, smaller space.

As you declutter, go room by room and sort items into no more than five piles: keep, donate, sell, gift, and throw away. Don’t be afraid to let go of things that are useful but not particularly necessary in your own life. Likewise, don’t keep things out of obligation or feelings of guilt. While you’re cutting the clutter, keep a floor plan of your new home nearby so you can plan out your rooms and ensure your furniture will fit. If you’re worried about accurately measuring your space, you can hire a professional to help you out.

Pack Like a Pro

Protect your items during your move and make them easier to unpack later by trying out some expert packing tips. For example, socks make great padding for glasses and mugs, while oven mitts are perfect for transporting knives a little more safely. Secure entire desk drawers and kitchen storage trays with plastic wrap for much faster unpacking later. Also, keep your clothing on hangers and simply slip a garbage bag over them for protection. Remember to pack an essentials box of everything you need during your first day and night in your new house.

Follow a Moving Checklist

There is a lot to remember to do before moving day. For example, you need to update your mailing address with the post office, find a new doctor, and transfer your utilities. Follow a moving checklist (or hire a senior move manager for around $316 per day) to avoid forgetting important tasks. One of your moving tasks should involve researching moving companies at least two months before your move. This gives you plenty of time to find the help you need within your budget. Learn about how to spot rogue moving companies so you can avoid being scammed, especially if you’re moving long distance.

Moving is exhausting for anyone. But moving into a smaller home can be especially emotional as you say goodbye to personal objects that have surrounded you for much of your life. For this reason, it’s important to take things slow while you sort through your possessions and search for the perfect place to spend your golden years.

 

Mr. Longsdon provides advice to seniors on downsizing and aging in place and can discuss concerns like tackling home accessibility modifications, how to find a great contractor, the benefits of aging in place, and more.​

 


Posted on January 19, 2019 at 12:05 am
Becky and Steve Larsen | Posted in Helpful Information |

Q4 Report – North King County

Q4: October 1 – December 31, 2018

NORTH KING COUNTY: 2018 was a year of change and growth. The market shifted from an extreme seller’s market,but still had strong gains. Year-over-year, median price is up 9% and since 2012 has increased 92%! Over the last 19 years, the average year-over-year price increase has been 6%. This puts into perspective the growth we have experienced, resulting in well-established equity levels. In 2018, inventory averaged 1.5 months, double that of 2017. This caused the month-over-month price gains to slow, and we experienced a price correction over the second half of the year. We expect to see more average levels of price appreciation in 2019 as the market continues to balance out.

After six years of expansion resulting in an extreme seller’s market, in 2018 we encountered a market shift in the late spring. Inventory increased, interest rates took a jump, and demand took a step back to re-evaluate the new playing field. This resulted in a tempering of month-over-month price appreciation, and has established some long-awaited balance. This balance has brought opportunities for both buyers and sellers. Buyers have more selection and are negotiating terms like inspection items and concessions. Sellers are sitting on 6+ years of equity growth, and are now able to sell their home and make a move without fearing where they will land next. Interest rates are still well below the 30-year average, currently hovering just under 5%. We are seeing demand start to re-engage now that the new normal has settled in.

This is only a snapshot of the trends in north King County; please contact me if you would like further explanation of how the latest trends relate to you.


Posted on January 17, 2019 at 12:50 am
Becky and Steve Larsen | Posted in Quarterly Reports, Statistical Information |