Phase 2 Snohomish County – Now What? Our office re-opened on June 15th, and we’ve been allowed to expand our activities to serve our clients in the safest way possible. We can now show homes to three people at a time instead of two! Yay! Contact us for all the details…the change is good!
On Monday, the National Bureau of Economic Research (NBER) announced that the U.S. economy is officially in a recession. This did not come as a surprise to many, as the Bureau defines a recession this way:
“A recession is a significant decline in economic activity spread across the economy, normally visible in production, employment, and other indicators. A recession begins when the economy reaches a peak of economic activity and ends when the economy reaches its trough. Between trough and peak, the economy is in an expansion.”
Everyone realizes that the pandemic shut down the country earlier this year, causing a “significant decline in economic activity.”
Though not surprising, headlines announcing the country is in a recession will cause consumers to remember the devastating impact the last recession had on the housing market just over a decade ago.
The real estate market, however, is in a totally different position than it was then. As Mark Fleming, Chief Economist at First American, explained:
“Many still bear scars from the Great Recession and may expect the housing market to follow a similar trajectory in response to the coronavirus outbreak. But, there are distinct differences that indicate the housing market may follow a much different path. While housing led the recession in 2008-2009, this time it may be poised to bring us out of it.”
Four major differences in today’s real estate market are:
- Families have large sums of equity in their homes
- We have a shortage of housing inventory, not an overabundance
- Irresponsible lending no longer exists
- Home price appreciation is not out of control
We must also realize that a recession does not mean a housing crash will follow. In three of the four previous recessions prior to 2008, home values increased. In the other one, home prices depreciated by only 1.9%.
Yes, we are now officially in a recession. However, unlike 2008, this time the housing industry is in much better shape to weather the storm.
KCM June 10, 2020
We are making it happen and getting it done! COVID-19 is not getting in the way of our annual Community Service Day! With social distancing and safety as a priority, we broke our office up into small groups and are getting the Martha Perry Veggie Garden planted to help provide fresh produce to food banks in Snohomish County. It feels good to get outside, get our hands dirty, and give back!
This year we worked in several small groups to achieve the same Community Investment – Keeping the Martha Perry Garden going!
Although we couldn’t all be working together at the same time – we got it done! Our hearts were in the same place – in our community!
For those seeking a useful way to spend their time during social distancing—or anyone simply interested in forging a deeper connection with their homes—HB has launched Home Love, a series of daily tips and ideas to make every minute indoors more productive (and gratifying!).
Summer is on its way and warmer temperatures have us running outside to enjoy any space we have. Whether you’re working with a fire escape patio or a wide open backyard, we’ve rounded up plenty of ways to work with what you have. Read on—the perfect outdoor activity awaits.
Those with less space can opt for an outdoor version of the boho swing chair, for a space-saving version of the vacation staple.
We’re all doing our part to save the bees, planting flowers and plants that will help attract and boost the population, but for those ready to take the next step and foster a hive, beekeeping isn’t as hard as it looks.
Beekeeping isn’t just for the honey, either. Owning bees can help give a boost to your garden, provide propolis, wax and other by-products for health and home, and serve as a science lesson during homeschooling.
Whether you’ve been sucked into the tie-dye trend or are looking for a classic shibori, hand dyeing slipcovers, curtains, or napkins can is a fun way to customize your home goods and enjoy outdoor space. All you need are a few buckets, a clothesline, and good idea.
4. Keep Free Range Chicken
As urban food deserts spread, people are turning to their backyards and roofs to host their own mini-poultry farm. The low cost of chicks and the high cost of eggs might be attractive to first time chicken farmers, but they are still animals. Just like our pets, chickens need proper care to stay healthy.
Curious on where to start? Find our favorite chicken coops here.
Maximize your time outdoors by planning nighttime activities, especially for hot summer days. A big sheet, a picnic blanket and some popcorn can give you the summer screening experience we’re all missing without leaving your yard.
Need some help with your outdoor theater? Find our guide to backyard screening here.
Create a backyard summer camp with tents, blankets, and nature lessons for kids. If you have outdoor space to spare, fire pits are perfect for s’mores or even tin cookware for those missing mountain days. Our favorites blend in with outdoor decor for a stylish look when out of use. Shop fire pits here.
Sound baths are the space-saving way to get zen at home and create a spa-like space. Forest baths, based on the Japanese shinrin-yoku, invite people to absorb the sights, sounds and smells of nature as a way to re-connect and center themselves.
The best part? You don’t need to go on a hike to experience it. Sound baths are best when the body is still, so lay a blanket in the backyard and let your mind wander.
Urban sounds interrupting your introspection? Our guide to sound bathing and home spas gives tips on how to enjoy no matter your location. Read it here.
8. Make Clay Pottery
When it’s too hot to turn the oven on, substitute kiln or polymer-based clays with sun or air-drying clay mixtures. These can be shaped and left to dry in the outdoors and can look just as beautiful as the traditional version.
Just paint with a clear or tinted sealant to prevent water leakage if your end result is a vase. And reminder: some self-hardening clays are not food-safe.
Extra square-footage in your yard? A fresh coat of paint and upgraded lighting can upgrade a tool shed into a she-shed or a home office space.
If you have the space, but not the structure, Amazon can ship you a DIY tiny home kit. Ranging from storage sheds to guest homes, the kits come with everything you’ll need to build an at-home escape. Shop our picks here.
Now that all that hard gardening work is paying off, it’s time to bring the celebration full circle. Cook a meal with fresh herbs and vegetables, setting the table with a wildflower arrangement. Change up the table setting to match your cuisine to give the feel of your favorite summer brunch spot.
Hosting a virtual picnic can be a great way to upgrade your zoom happy hour and have everyone asking how you pulled together your backyard. Get your patio inspiration here.
11. Create a DIY Swim Park
Whether it’s for kids to build a championship-worthy sand castle or just to function as a zen garden feature, sand pits are the versatile lawn item the backyard is missing. Easily covered and hidden, sand pits are cheap and easy to assemble for hours of playtime or just giving you the feeling of a beach vacation without leaving your home.
Far beyond your dad’s grill, portable kitchen gadgets are coming in all types, making al fresco cooking and dining so much easier. Maybe your grill is due for a modern upgrade, or picnic ready pizza ovens are more your style. Either way, you won’t need a contractor or a culinary degree to navigate your outdoor kitchen.
Have old pieces laying in your garage? Maybe your entry table is begging for a trendy navy blue chalk paint. Now that we are using our masks for medical reasons, home improvement projects are better done outside, in fresh air, and by hand. No power sanders, spray paints or compressed air sprayers allowed.
It’s a good thing we can still refinish, repurpose, and repair our favorite pieces with that change of seasons.
There have been a lot of questions that I have encountered about the stability of the housing market due to the global health crisis of COVID-19. I have kept close track of the statistics and daily activity in our market in order to help keep my clients well informed. Inventory levels remain very tight and buyer demand has started to return since the Stay Home Orders were put in place.
Interest rates are at the lowest point they have ever been, providing amazing opportunities for both buyers and sellers. Interest rates continue to fuel buyer demand and create an audience for home sellers. Recently, rates were as low as 3.33%, which is historic.
Below is a chart that shows the amount of weekly pending sales in 2020 in relation to the weekly pending sales during the same week in 2019.
In King County, you can see that we started the year off with activity similar to the robust year of 2019. In February 2020, there were more sales, but that was due to “Snowmageddon” in February 2019. March 2020 started off in concurrence with 2019, but once the Stay Home Orders were put in place there was a dramatic and expected drop in pending sales activity.
When the Stay at Home Orders were first put in place, showings were not allowed, causing a legitimate pause in transactions. The following week, the orders were adjusted to allow for showings and since then the amount of pending sales has increased each week. Protocols for showings include only two people in the home at one time, by appointment only, while practicing 6-foot social distancing.
These protocols, along with virtual showings and many different digital tools using video, have helped buyers and sellers safely come together in transactions. Agents are getting creative in order to best serve their buyers and sellers during this unique time. This has helped quell demand brought on by interest rates and the many industries still thriving despite recent unemployment numbers. See this video from Matthew Gardner regarding the latest unemployment report and his forecast.
Snohomish County followed the same initial pattern as King County, but has seen a quicker return to 2019 sales levels. This is due in part to the more affordable price points in Snohomish County compared to King. In fact, the days on market for closed sales in April 2020 were quicker by 34% at 21 days, and the list-to-sale price ratio was up 1% to 101% over April 2019. Additionally, the median price is up 3% complete year-over-year. In King County, the median price was up 1% complete year-over-year and days on market quicker by 41% at 17 days, and a flat list-to-sale price ratio of 101%.
Tight inventory started in January and continued due to sellers holding off coming to market amid COVID-19. Available inventory is currently not meeting the buyer demand in the market, especially in the lower to middle price ranges. The higher price points have been affected by the increased cost to obtain a jumbo loan, but are still seeing movement. We anticipate more homes coming to the market as we enter into the different phases Washington State has planned to reopen the economy and remain as safe as possible.
For some, now is the right time to sell, and for some it will be later down the road. The timing, safety, and comfort all need to be assessed along with the market data. What I’m pleased to report is that our market is not crashing. In fact, it is adapting! We will most likely find a balance as we head into the remainder of Q2 and start Q3. Many jobs are set to return as the phases unfold. Unlike the 2008 Great Recession, this is a health crisis, not a housing crisis; see this video from Matthew Gardner on this topic. The numbers are telling that story and so is the recent activity.
We strive for excellence when it comes to educating my clients, especially during these historic times that have created uncertainty. We are committed to providing accurate data and real-time information. Please reach out if you’d like to discuss this information and how it relates to your investment and lifestyle. It is simply our goal to help keep you informed and empower strong decisions. Be well!
The pressure the COVID-19 global pandemic is putting on the economy is a reality. As real estate brokers, we take great pride in having the honor of being your trusted advisor when it comes to your investment in the housing market and protecting the value of your home. We have been asked several times, “Is this the Great Recession all over again?”
At Windermere, we have continued to rely on the expertise of Matthew Gardner, Windermere’s Chief Economist. This is a chart he shared from Black Knight Financial comparing the housing market as we headed into this global health crisis versus the start of the Great Recession in 2007. Matthew predicted the Great Recession and does not shy away from heeding the truth, even if it is not great news. We trust him and I hope you do too.
Some key points of note:
With the share of homeowners having less than 10% equity being materially lower in 2020, in the event of an economic contraction, the likelihood of owners owing more on their homes than they are worth is significantly less, which allows more owners to use their equity to get through challenging times if needed and keep their homes.
Average Current Loan to Value (LTV) is also lower—we owe less on our mortgage balances reducing the amount of leverage.
Average Debt to Income (DTI) at origination is similar, but prior to the Great Recession, many borrowers’ incomes were not vetted thoroughly prior to loan approval which created false qualificiation—remember hearing “stated income loans” then?
Average Current Credit Scores are now significantly higher. Coming into 2020, borrowers were in such a good position, the Mortgage Delinquency Rate of 3.3% was the lowest on record.
Payment to Income Ratio is the % of income needed to service a mortgage. Despite home prices climbing faster than incomes, the lower amount for 2020 is primarily a function of lower interest rates which the majority are fixed.
The last 4 data sets typify the primary reason we saw the housing market bubble burst in 2007. When rates reset on Adjustable Rate Mortgages (ARMs), homeowners were crippled with massive monthly payment increases. Now, as the Federal Reserve has lowered rates, many homeowners with ARMs will likely see their rates drop and the amount of ARMs are down by 75%.
Bottom line, we are heading into this economic challenge with a much more formidable foundation based on more stringent lending practices, higher equity levels, and we are anticipating a shorter 1-2 year V-shaped recovery, compared to the long U-shaped recovery of the 5-year Great Recession. In fact, we have seen pending sales rise over the last three consecutive weeks, some even with multiple offers.
Every neighborhood and every price-point has its own story. Please reach out with any questions or concerns. It is our goal to help keep you informed and empower strong decisions.
To access Matthew Gardner’s explanation via video please access: https://www.windermere.com/blogs/windermere/authors/matthew-gardner-chief-economist-windermere-real-estate/posts/matthew-gardner-weekly-covid-19-housing-economic-update-4-27-2020