The Gardner Report – Third Quarter 2018

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

Washington State continues to be one of the fastest growing states in the nation and there is little to suggest that there will be any marked slowdown in the foreseeable future. Over the past year, the state has added 105,900 new jobs, representing an annual growth rate of 3.2%. This remains well above the national rate of 1.65%. Private sector employment gains continue to be robust, increasing at an annual rate of 3.7%. The strongest growth sectors were Construction (+7.4%), Information (+6.2%), and Professional & Business Services (+6.1%). The state’s unemployment rate was 4.5%, down from 4.8% a year ago.

All year I’ve been predicting that Washington State’s annual job growth would outperform the nation as a whole, and we now know with certainty that this is going to be the case. Furthermore, I am now able to predict that statewide job growth in 2019 will be equally strong, with an expected increase of 2.6%.

Home Sales Activity

  • There were 22,310 home sales during the third quarter of 2018. This is a significant drop of 12.7% compared to the third quarter of 2017.

  • The number of homes for sale last quarter was up 14.5% compared to the third quarter of 2017, continuing a trend that started earlier in the year. However, the increase in listings was only in Seattle’s tri-county area (King, Pierce, and Snohomish Counties) while listing activity was down across the balance of the region.

  • Only two counties had a year-over-year increase in home sales, while the rest of Western Washington saw sales decrease.

  • The region has reached an inflection point. With the increase in the number of homes for sale, buyers now have more choices and time to make​ a decision about what home to buy.

Home Prices

  • As inventory levels start to rise, some of the heat has been taken off the market, which caused home prices in the Western Washington region to go up by a relatively modest 6.2% over last year to $503,039. Notably, prices are down by 4.4% when compared to the second quarter of this year.

  • Home prices, although higher than a year ago, continue to slow due to the significant increase in the number of homes for sale. This, in my opinion, is a very good thing.​​

  • When compared to the same period a year ago, price growth was strongest in Lewis County, where home prices were up 15.3%. Six other counties experienced double-digit price increases.

  • Slowing price growth was inevitable; we simply could not sustain the increases we’ve experienced in recent years. Lower rates of appreciation will continue until wage growth catches up.

Days on Market

  • The average number of days it took to sell a home dropped by four days compared to the same quarter of 2017.

  • Across the entire region, it took an average of 39 days to sell a home in the third quarter of this year. This is down from 43 days in the third quarter of 2017 and down 2 days when compared to the second quarter of 2018.​
  • King County continues to be the tightest market in Western Washington, with homes taking an average of only 19 days to sell. Every county in the region other than Skagit and King — which both saw the time on the market rise by 2 days — saw the length of time it took to sell a home drop when compared to the same period a year ago.

  • More choice in the market would normally suggest that the length of time it takes to sell a home should rise, but the data has yet to show that. That said, compared to last quarter, we are seeing some marked increases in days on market in several counties, which will be reflected in future reports.

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 started to move the needle toward buyers last quarter and have moved it even further this quarter. Price growth continues to slow, but more significant is the rise in listings, which I expect to continue as we move toward the quieter winter period.

I believe that psychology will start to play a part in the housing market going forward. It has been more than 15 years since we’ve experienced a “balanced” market, so many home buyers and sellers have a hard time remembering what one looks like. Concerns over price drops are overrated and the length of time it’s taking to sell a home is simply trending back to where it used to be in the early 2000s.

Matthew Gardner is the Chief Economist for Windermere Real Estate, specializing in residential market analysis, commercial/industrial market analysis, financial analysis, and land use and regional economics. He is the former Principal of Gardner Economics, and has more than 30 years of professional experience both in the U.S. and U.K.

This post originally appeared on the Windermere.com Blog.


Posted on October 25, 2018 at 9:11 pm
Sheri Putzke | Posted in Real Estate Trends | Tagged , , , , , , , , ,

Help Homeless Youth Stay Warm This Winter

Windermere and the Seattle Seahawks have come together for another season to help #Tacklehomelessness in our community.

As part of that campaign, Windermere is hosting a “We’ve Got You Covered” winter drive for YouthCare, a non-profit that provides support and services to homeless youth throughout the Puget Sound area.

We are collecting NEW hats, scarves, gloves/mittens, and warm socks.

From October 15 through November 9, you can drop off donations to participating Windermere offices in King and Snohomish Counties**. Our friends at Gentle Giant Moving Company are generously donating their time and trucks to pick up all of the donations from our offices. Donations can also be dropped off directly to YouthCare, Monday through Friday from 9am-5pm, at 2500 NE 54th St, Seattle, WA 98105.

Each night, over 1,500 young people are homeless in King County. Please help them stay warm during the cold winter months by dropping off your donations to our participating offices.

Feel free to contact your Windermere agent or local office for more information, or email justask@windermere.com.

**Windermere Winter Drive Drop-Off Locations

Bellevue

Bellevue West

Kirkland Central

Kirkland Yarrow Bay

Lynnwood

Mercer Island

Property Management – Bellevue

Propery Management – Edmonds

Property Management – Seattle North

Property Management – South

Redmond

Seattle-Ballard

Seattle-Eastlake

Seattle-Greenwood

Seattle-Madison Park

Seattle-Magnolia

Seattle-Mount Baker

Seattle-Northgate

Seattle-Northwest

Seattle-Queen Anne

Seattle-Sand Point

Seattle-Wall Street

Seattle-Wedgwood

Seattle-West Seattle

Services Company

Shoreline

Woodinville

This post originally appeared on the Windermere.com Blog.


Posted on October 18, 2018 at 7:26 pm
Sheri Putzke | Posted in Our Brokers |

Local Market Update – October 2018

It appears that balance is slowly returning to the local housing market. Home price growth slowed in September. Inventory continued to climb, but is still far short of the four to six months that indicate a normal market. Homes are staying on the market longer, giving buyers the breathing room to make the right choice for their situation.  With our region’s healthy job growth, and demand still exceeding supply, it’s likely to take some time to move to a fully balanced market.

Eastside

>>>Click image to view full report.

Home price increases moderated into the single-digits in September. The median price of a single-family home on the Eastside was up 4 percent from the same time last year to $890,0000 but down from a median price of $935,000 in August. Inventory increased significantly and price drops jumped. While the market is softening, the recent expanded presence of Google and Facebook on the Eastside means demand should stay strong.  In addition, the area’s excellent school system continues to be a large draw for buyers both locally and internationally.

King County

>>>Click image to view full report.

Inventory was up 68 percent year-over-year in King County due to a higher number of sellers listing their homes and fewer sales.  There is now more than two months of inventory in the county, a number we haven’t seen in nearly four years. Despite the increase, there is a long way to go to reach the four to six months of inventory that is considered balanced.  In September, the median price of a single-family home was $668,000; an increase of 7 percent from the same time last year and virtually unchanged from August.

Seattle

>>>Click image to view full report.

Inventory in Seattle surged in September from a year ago. Only San Jose, CA saw the number of homes for sale rise faster than Seattle last month. The median home price in September was $775,000. Up slightly from the $760,000 median price in August and a 7 percent increase from last year. The double-digit price growth of past years appear to be waning and overzealous sellers who listed their homes at unrealistically high prices have been forced to reduce them. Bidding wars have declined and the typical well-priced house is now selling right at asking price.

Snohomish County

>>>Click image to view full report.

While not nearly as dramatic as the case in King County, inventory in Snohomish County was up 40 percent. The area has just over two months of inventory with home prices moderating. The median price of a single-family home increased 8 percent over a year ago to $485,000. That’s down from the $492,000 median reached in August and $26,000 less than the peak of the market reached in spring.

This post originally appeared on the WindermereEastside.com Blog.


Posted on October 8, 2018 at 11:39 pm
Sheri Putzke | Posted in Statistics | Tagged , , , , , , , , , , , ,

Local Market Update – September

The number of homes for sale in August increased dramatically over the same time a year ago. This is the result of a moderate increase in new listings and a much slower pace of sales. Homes are staying on the market longer, giving buyers more choices and more time to make an informed decision. While home prices are up compared to a year ago, the rate of increase was in the single digits rather than the double-digit surges of past months. It’s still a seller’s market, but sellers need to have realistic expectations about pricing their homes as the market softens.

Eastside

>>>Click image to view full report.

The median price of a single-family home on the Eastside was up nearly 10 percent from the same time last year to $935,000. Home prices have declined each month from the all-time high of $977,759 set in June. Inventory increased 73 percent over last August. With supply soaring and home prices moderating, sellers need to work with their broker to price their home to meet the current market conditions. A year ago 47 percent of the homes on the Eastside sold for over list price. This August that number was down to 29 percent.

King County

>>>Click image to view full report.

King County experienced yet another flood of inventory with the number of homes for sale jumping 65 percent over the previous year. Despite the growth, the county has just 1.9 months of inventory and remains a seller-oriented market. The market has slowed but it remains fast-paced, with 62 percent of the properties here selling in fewer than 15 days. While home prices were up 3 percent from a year ago, the median price of $669,000 represented the third straight month of declines from the record-high of $726,275 reached in May.

Seattle

>>>Click image to view full report.

After leading the nation in home price growth for nearly two years, Seattle is finally cooling off. The median home price in August was $760,000, up just 4 percent from last year and down from the record $830,000 reached in May. Inventory soared in August, but the city still has just two months of supply, far short of the four to six months that is considered balanced. Bidding wars are becoming less common and price drops more common. Sellers must adjust their expectations to what appears to be a long waited moderating of the market.

Snohomish County

>>>Click image to view full report.

Mirroring the market slowdown in King County, Snohomish County also experienced a cooling off in August. The median price of a single-family home was $492,000, up 8 percent from a year ago but down from the record high of $511,000 two months prior. Inventory increased nearly 30 percent, but at just 1.6 months of supply the market remains very tight and sales are brisk. Sixty percent of homes here sold within 15 days.

This post originally appeared on the WindermereEastside.com Blog.


Posted on September 12, 2018 at 9:30 pm
Sheri Putzke | Posted in Local Market News, Real Estate, Real Estate Trends, Statistics, Uncategorized | Tagged , , , , , , ,

What’s Really Happening in the Housing Market?

Our housing market is finally cooling a bit, from scorching hot to slightly-less-sweltering. While some alarmists are talking bubble or impending crisis, the statistics tell a different story. The market does appear to be shifting, and that’s good news! The steep price increases of the past few years are not sustainable, and also risk pricing buyers out of the market altogether.

Where The Market Is Today

  • Inventory is up, but still far short of demand. Despite a considerable increase in inventory, King County has just six weeks of supply. Four to six months of inventory is what is considered a balanced market, and we’re far short of that.
  • Homes are staying on the market a bit longer. New listings have increased in the past few months, but the increase in inventory is primarily due to homes staying on the market longer. With buyers accustomed to homes being snapped up in days, “longer” is a relative term. Homes in King County are taking an average of 15 days to sell.
  • Prices appear to be moderating. While home prices are up compared to a year ago, the rate of increase is in the single digits rather than the double-digit surges of past months. Prices are down 4 percent from the record high reached this spring.

What This Means For The Housing Market

  • The shift towards slower, consistent appreciation will result in a healthier market.
  • Buyers have more choices and more time to make an informed decision.
  • It’s still a seller’s market, but sellers need to have realistic expectations about pricing their homes as the market softens.
  • More inventory is still needed to meet demand.

Whether you’re thinking about buying or selling, it’s important to have the most current information about the market. Our Windermere brokers can provide you with statistics about today’s market and answer any questions you may have.

This post originally appeared on the Windermere Eastside Blog.


Posted on September 5, 2018 at 8:46 pm
Sheri Putzke | Posted in Local Market News, Real Estate, Real Estate Trends, Statistics | Tagged , , , , , ,

The Eastside Market Review – Second Quarter

The Eastside Market Review is now available for the second quarter of 2018.

Read the full report online by clicking the image below.

EastsideMarketReview_Q2_2018_Page_01

This post originally appeared on the WindermereEastside.com Blog. 


Posted on August 15, 2018 at 10:33 pm
Sheri Putzke | Posted in Local Market News, Statistics | Tagged , , , , , , , , , , , ,

Local Market Update – Aug 2018

For the first time in years, the real estate market is finally starting to deliver good news for buyers. The region experienced its third straight month of significant growth in inventory.  Homes are sitting on the market longer, prices are moderating, and multiple offers are becoming more rare. Despite the surge in homes for sale, it is still a seller’s market.  Inventory would need to triple to reach what is considered a balanced market.

Eastside

>>>Click image to view full report.

Inventory on the Eastside soared 47 percent over the same time last year. There was a slight increase in new listings, but the jump was mostly due to homes staying on the market longer. Price drops have become more common.  With buyers having more choices, sellers need to work with their broker to make sure they price their home correctly the first time. After setting a new high of $977,759 in June, the median price of a single-family home dropped to $947,500 in July.  While offering some hope that prices may have started to moderate, the median is still 10 percent higher than it was the same time a year ago.

King County

>>>Click image to view full report.

King County saw the biggest increase in inventory in a decade, with the number of homes for sale jumping 48 percent over a year ago.  However, at 1.5 months of supply that’s still well below the 4-6 months of inventory that is considered balanced.  The median price of a single-family sold in July was $699,000. That represents an increase of 6 percent from a year ago, but is down 4 percent from the record high of $725,000 set in April. Perceptions that the market is cooling needs to be kept in perspective. Homes here took an average of 15 days to sell.

Seattle

>>>Click image to view full report.

Seattle saw inventory shoot up 60 percent over a year ago, bringing the supply to its highest level in over three years.  Even with the sharp increase, much more inventory is needed to meet the demand for homes in the city and sellers may well decide to jump into the market. According to a Zillow study, more than 97 percent of homes in Seattle are worth more now than the peak level before the housing market crashed. Median home prices are 29 percent above the bubble peak level with the median price in July landing at $805,000; up 7 percent from last July and down from the record $830,000 reached in May.

Snohomish County

>>>Click image to view full report.

Snohomish County also had double-digit increases in inventory, though not nearly as great as King County. The number of homes for sale in July increased nearly 16 percent over the same time a year ago, but inventory continues to be very tight. The median price of a single-family home rose 9 percent year-to-year to $495,000. That figure is down from the record high of $511,500 set in June. A move towards a more moderated market is encouraging for buyers and an incentive for sellers to list their homes soon.

This post originally appeared on the WindermereEastside.com Blog.


Posted on August 14, 2018 at 8:31 pm
Sheri Putzke | Posted in Local Market News | Tagged , , , , , , , , , ,

The Gardner Report – Q2 2018

Gardner Report Q2 2018

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.

Economic Overview

The Washington State economy added 83,900 new jobs over the past 12 months, representing an annual growth rate of 2.5%. This is a slowdown from the last quarter, but employment growth remains well above the national rate of 1.6%. Employment gains continue to be robust in the private sector, which was up by 2.8%. The public sector (government) grew by a more modest 1.1%.

The strongest growth sectors were Retail Trade and Construction, which both rose by 4.8%. Significant growth was also seen in the Education & Health Services and Information sectors, which rose by 3.9% and 3.4%, respectively.

The State’s unemployment rate was 4.7%, down from 4.8% a year ago. Washington State will continue adding jobs for the balance of the year and I anticipate total job growth for 2018 will be around 80,000, representing a total employment growth rate of 2.4%.

Home Sales Activity

  • There were 23,209 home sales during the second quarter of 2018. This is a drop of 2.3% compared to the same period a year ago.

  • Clallam County saw sales rise the fastest relative to the same period a year ago, with an increase of 12.6%. Jefferson County also saw significant gains in sales at 11.1%.

  • The number of homes for sale last quarter was down by a nominal 0.3% when compared to the second quarter of 2017, but up by 66% when compared to the first quarter of this year. Much has been mentioned regarding the growth in listings, but it was not region-wide. King County saw a massive 31.7% increase in inventory, though all but three of the other counties covered in this report saw the number of listings drop compared to a year ago.

  • The takeaway from this data is that while some counties are seeing growth in listings — which will translate into sales down the road — the market is still out of balance.

Q2 Annual Change In Home Sales

Home Prices

  • HomePrice Change Map Q2As inventory is still fairly scarce, growth in home prices continues to trend well above the long-term average. Prices in Western Washington rose 12.2% over last year to $526,398.

  • Home prices continue to trend higher across Western Washington, but the pace of growth has started to slow. This should please would-be buyers. The spring market came late but inventory growth in the expensive King County market will give buyers more choices and likely lead to a slowing down of price growth as bidding wars continue to taper.

  • When compared to the same period a year ago, price growth was strongest in Mason County, which was up 17.4%. Eleven other counties experienced double-digit price growth.

  • Mortgage rates, which had been rising significantly since the start of the year, have levelled off over the past month. I believe rising rates are likely the reason that inventory levels are rising, as would-be sellers believe that this could be the right time to cash out. That said, the slowing in rate increases has led buyers to believe that rates will not jump soon, which gives them a little more breathing room. I do not expect to see any possible slowdown in demand until mortgage rates breach the 5% mark.

Days on Market

  • The average number of days it took to sell a home dropped by seven days compared to the same quarter of 2017.

  • King County continues to be the tightest market in Western Washington, with homes taking an average of only 13 days to sell. Every county in the region other than Clallam saw the length of time it took to sell a home drop when compared to the same period a year ago.

  • Across the entire region, it took an average of 41 days to sell a home in the second quarter of this year. This is down from 48 days in the second quarter of 2017 and down by 20 days when compared to the first quarter of 2018.

  • Although we did see some inventory increases when compared to the first quarter of the year, we are essentially at the same level of homes on the market as a year ago. The market has yet to reach equilibrium and I certainly do not expect to reach that point until sometime in 2019.

Average Days On Market, Q2 2018

Conclusions

Market Speedometer

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. For the second quarter of 2018, I have moved the needle very slightly towards buyers, but it remains firmly a seller’s market. This shift is a function of price growth tapering very slightly, as well as the expectation that we should see more homes come on the market as we move through the balance of the year.

 

Matthew Gardner is the Chief Economist for Windermere Real Estate, specializing in residential market analysis, commercial/industrial market analysis, financial analysis, and land use and regional economics. He is the former Principal of Gardner Economics, and has more than 30 years of professional experience both in the U.S. and U.K.

 

This post originally appeared on the Windermere.com Blog.


Posted on July 26, 2018 at 3:47 pm
Sheri Putzke | Posted in Uncategorized |

How Will the Real Estate Market Respond to Rising Interest Rates?

Windermere Real Estate’s Chief Economist, Matthew Gardner, walks us through what to expect from the real estate market amidst rising interest rates.​

How Will the Real Estate Market Respond to Rising Interest Rates?

With interest rates on the rise, Windermere Real Estate's Chief economist Matthew Gardner gives us some insight on how this could impact our local market.

Posted by Windermere Eastside on Thursday, July 19, 2018

This post originally appeared on the Windermere.com Blog.


Posted on July 19, 2018 at 7:56 pm
Sheri Putzke | Posted in Real Estate Trends | Tagged , , , , , , ,

Commute vs. Home Price Trade-Off: How Far Are You Willing To Drive?

Would you be willing to swap a longer commute time for a lower monthly mortgage payment? With prices of homes near city centers skyrocketing, many buyers are rethinking their priorities and choosing to “keep driving until they can afford it.”

Housing Search Trade-Off: Price vs. Commute Time

Windermere examined active listing on the Northwest Multiple Listing Service and their drive-time proximity to downtown Seattle. Looking at homes within a 30-minute radius from downtown, the median home price was $1,612,500. Homes located within a 31 to 60-minute commute from downtown had a median price of $890,000–that’s 45 percent less. This means if you are willing to commute over an hour, the price of the average home in the area would be $1 million less than if you lived close to the city.

Search for Homes by Commute Time on Windermere.com

The Drive Time Search function on my website allows you to customize the search criteria with your work address, time of day that you commute, and maximum amount of time you want to spend driving to and from work. The results will exclusively show homes for sale within your preferred drive time. 
Search By Drive Time
Are you ready to look for a home?
I can help you choose the right area, narrow down your criteria, and create a strategy for getting you the home you want at a price you can afford.

This post originally appeared on the Windermere.com blog.


Posted on July 17, 2018 at 3:47 pm
Sheri Putzke | Posted in Uncategorized |