The Gardner Report – Q1 2016

Matthew Gardner, Windermere's Chief Economist, has just released his latest quarterly report for the real estate market in Western Washington. He breaks down the economic overview of the region as well as what happened in the housing market over the last three months.

Here are some highlights:

• "Washington State has seen very robust growth over the past 12 months with the addition of 102,600 new jobs, which is 224,000 more jobs than seen at the previous peak in 2008."

• Home sales are up 3.8 percent from the same quarter last year. Sales activity, however, "continues to slow as a function of inventory constraints."

• Home prices are up by an average of 10.1 percent year-over-year. This is up from the 9.3 percent average growth in prices reported in the fourth quarter of 2015.

• "The average number of days it took to sell a home dropped by sixteen days when compared to the first quarter of 2015."

You can read the full Gardner Report online on Windermere.com.

Posted on April 25, 2016 at 10:00 am
Steve Harwood | Category: Housing Market Statistics

Supply of Inventory Affects Housing Market

The supply of available homes remains at critical levels, with both King and Snohomish counties showing less than a month’s supply of inventory. With demand far outstripping supply, home prices increased by double-digits over last year throughout the Puget Sound area. The red hot market allows sellers to call the shots. Since some sellers are hesitant to put their home on the market for fear they won’t be able to find their next home quickly enough, many are negotiating with buyers to stay in their house for several months after the sale to ease the transition.

Eastside

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Eastside home prices were up 17 percent over last March to $739,440. That price was unchanged from February of this year. Inventory, which traditionally increases in the spring, continued to shrink. With under a month’s supply of properties on the market, homes at every price point are selling quickly and often with multiple offers.

King County

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After breaking records in February, home prices hit a new high in March. The median price of a single-family home soared to $531,250, a 21 percent increase over the same time last year. Homes are selling within days, and the area has only several weeks of available inventory. Frustrated buyers are waiting for more sellers to take advantage of the jump in prices and put their home on the market.

Seattle

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A booming economy has drawn many new residents to the Seattle area. The city has the lowest inventory in the region, and that is reflected in home prices. The median price of a single-family home was up 20 percent over last March to $640,000. That was down slightly from the high of $644,950 in February.

Snohomish County

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After posting more moderate gains than King County so far this year, Snohomish County home prices jumped 13 percent over last March. The median price for a single-family home climbed to $385,000. With buyers increasingly looking to the area for more affordable home options, inventory has shrunk to historic lows. Multiple offers are now the norm.


VA Loan

Are you ready to buy a home and qualify for the VA loan? Let me help you out! As a local real estate broker in Bellevue, WA and a Veteran of foreign wars, I am committed to help you find the home you deserve through the VA loan.

Posted on April 18, 2016 at 11:05 am
Steve Harwood | Category: Housing Market Statistics | Tagged , , , , , , ,

3 Reasons We’re Not in a Housing Bubble

Home prices are rising three to four times faster than wages while credit conditions are loosening, says Lawrence Yun, chief economist for the National Association of REALTORS®. However, you don't need to be wary of a housing bubble on the horizon. Here's why:

"Even though the credit conditions appear to be easing somewhat, the move is from overly stringent conditions to not-so-overly-stringent conditions," Yun writes. "It is a far-fetched view to imply the current mortgage approval process in any way resembles the loosey-goosey, easy subprime mortgage access conditions of a decade ago."

Indeed, mortgage credit scores are nowhere near where they were during the housing bubble. Today, scores are at about 740 to 750 compared to 710 to 720 during the housing crisis, according to Fannie Mae data.

And even though housing prices are rising above wages, our low mortgage rates have been a silver lining.

Yun says you can squash those bubble fears by just looking at the housing supply. Existing-home sales and new-home sales combined were at 8.4 million back then. In 2015, combined home sales were 5.76 million — about one-third lower, Yun notes. It's mainly the limited supply of homes that's behind the latest home price increases, not the chaotic spending of money that buyers can't pay back.

Windermere's Chief Economist Matthew Gardner has been talking about this extensively over the last few months, especially as it relates to our own Seattle real estate market.

You can view the full article for more information from Realtor Magazine Online.


VA Loan

Are you ready to buy a home and qualify for the VA loan? Let me help you out! As a local real estate broker in Bellevue, WA and a Veteran of foreign wars, I am committed to help you find the home you deserve through the VA loan.

Posted on March 17, 2016 at 3:30 pm
Steve Harwood | Category: Housing Market Statistics, Veterans in Real Estate | Tagged , , , , , ,

Large Bellevue Development On The Way

Construction is a common scene in Bellevue these last several months. Plenty of growth has been seen through our region as inventory continues to decrease. Just last week, a homebuilder in our area was approved to build a 176-unit town home project for the property where grocer Haggen used to operate next to the Crossroads shopping center. There will also be retail space in the project.

This is a large project that is definitely going to change the pace of Bellevue's growth and should help with our lowered inventory. The Crossroads neighborhood in East Bellevue saw inventory plummet 57 percent between the end of 2014 and 2015, according to the Northwest Multiple Listing Service (NWMLS). Demand is well outpacing supply.

Based on these numbers, the NWMLS calculates that East Bellevue has less than half a month's supply of homes for sale. That's among the lowest in King County, and far below the four- to six-month supply that Realtors say represents a market that is balanced between buyers and sellers. Last year ended with a 1.7-month supply of houses for sale across the four-county metro region.

I'm excited to see what these new town homes mean for East Bellevue and how the increase in units affects our already labored inventory. 2016 seems to already be full of good news for our local real estate market!

For more information, make sure you read the full article from the Puget Sound Business Journal.

VA Loan

Are you ready to buy a home and qualify for the VA loan? Let me help you out! As a local real estate broker in Bellevue, WA and a Veteran of foreign wars, I am committed to help you find the home you deserve through the VA loan.

 

Posted on January 28, 2016 at 6:37 pm
Steve Harwood | Category: Housing Market Statistics, Local News, Veterans in Real Estate | Tagged , , , , ,

King County Had Almost Half of 2015’s 30 Most Competitive Neighborhoods in America

We probably don’t need to tell you that 2015 was a crazy year in real estate, especially in our area. Bidding wars and listings lasting mere days on the market is something we’ve all grown accustomed to. But it turns out we’re not alone. Curbed recently published an article that focused on the 30 most competitive neighborhoods in America. What’s the most mind blowing thing about this list? Of the 30 neighborhoods listed, 13 of them are in King County.

2015-competitive-markets

The Eastside was well represented on this list with Bellevue and Redmond making huge claims. Overlake was was the second-most competitive market in the entire nation! Honorable mentions were Grass Lawn (#7), Newport Hills (#14), Idylwood (#28), and Newport (#30). It’s hard to say exactly what 2016 has in store, but our very own Chief Economist, Matthew Gardner, has a few ideas (such as expecting that housing in Seattle will continue to appreciate in value, but at a slightly lower rate than 2015).

Read more on Seattle Curbed.

Posted on January 14, 2016 at 4:14 pm
Steve Harwood | Category: Housing Market Statistics, Local News | Tagged , , , , ,

The Gardner Report – Q3 2015

gardnerimageQ32015

Economic Overview

After a period of above-average growth, Washington State has seen a modest slowing in employment growth, but we continue to add jobs at a respectable rate. The State unemployment rate was measured at 5.3%, marginally above the national level, but it is trending in the right direction.

Although growth continues to be uneven across the state, there are some encouraging signs which suggest that all of our main metropolitan areas should see positive job growth for the foreseeable future.

Home Sales Activity

• There were 22,207 home sales during the third quarter of 2015, up by 14.1% from the same period in 2014.

• For the first time in several years, there were no counties that saw annual decreases in home sales.

• The growth in sales was most pronounced in Kittitas County, and all but two counties saw double-digit percentage increases from the same period last year.

• The lack of available inventory in the region continues to be a concern. Listings in the third quarter were down by 18% from the second quarter, and down by 24.5% from the third quarter of 2014.

Home Prices

• Prices in the region rose by an average of 6.3% on a year-over-year basis and were 9.6% higher than seen in the second quarter of 2015.

• The only county where home prices fell on an annualized basis was in Kittitas County, but the drop was a minuscule 0.5%. Kittitas County saw sale prices grow by 5.8% between the second and third quarters of this year.

• When compared to the third quarter of 2014, San Juan County showed the fastest price growth with an increase of 14.6%. Double-digit percentage gains were also seen in four other counties.

• As long as inventory constraints persist, it is likely that price growth will continue. However, if interest rates rise in 2016, as they’re expected to do, we will likely see price growth slow.

Days on Market

• The average number of days it took to sell a home dropped by nine days when compared to the third quarter of 2014.

• It took an average of 74 days to sell a home in the third quarter of this year—down from 84 in the second quarter.

• There were just two markets where the length of time it took to sell a home did rise, but the increases were minimal. Jefferson County saw an increase of eight days while Mason County rose by two days.

• King County remains the only market where it takes less than a month to sell a home.

Conclusions

This speedometer reflects the state of the region’s housing market using housing inventory, price gains, sales velocities, interest rates, and larger economics factors. For the third quarter of 2015 I have moved the needle a little farther in favor of sellers. Although sales did slow between the second and third quarters, I attribute this to a lack of inventory rather than any other factors. Additionally, interest rates dropped between the second and third quarters, which made buying more favorable. The persistently low levels of inventory in the region remain a concern. Such an imbalance between supply and demand is unsustainable. When I look at the ratio between listings and pending sales there are some counties with less than two months of inventory, which is troublesome. Any number below four months is certainly considered to be a seller’s market and, in my experience, a prolonged period of time with less than six months of inventory results in an unstable market. In normal housing market cycles, when such an imbalance exists we could expect home builders to fill in the gap with inventory, but this has not happened thus far. Unless we see a rapid escalation in construction activity, the market will remain remarkably tight well into 2016.

About Matthew Gardner

content_Headshot_-_Matthew_GardnerMatthew 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 over 25 years of professional experience both in the U.S. and U.K. This blog was originally posted on the Windermere Blog.

Posted on November 13, 2015 at 10:53 am
Steve Harwood | Category: Housing Market Statistics

The Nation’s Hottest Housing Market

I think we all know that the housing market in Seattle and the Eastside has been on fire and quite active for a few months. Our regular statistics consistently report on those numbers.

Now we've captured the attention of Auction.com who recently ranked Seattle as the hottest market for single-family homes this fall.

"Seattle's economy is seeing healthy growth as the market's large technology sector drives employment to new all-time highs. The metro's single-family market is rapidly expanding and seasonally adjusted home prices have eclipsed the previous record high set in 2007. Prices jumped 4.4 percent over the last quarter and 10.9 percent year-over-year. Meanwhile, home sales are up 12.6 percent from a year ago, but remain below their prior peak, which leaves room for additional growth. Despite strong demand, single-family homes remain affordable and in-line with apartment affordability," the site said.

The report went on to say that in the Northwest, "both Seattle and Portland are experiencing robust housing fundamentals and strong demand, which are supported by strong local economies that have received significant boosts from the tech sector."

With home prices and sales up and everything remaining relatively affordable, your window to make a jump into the housing market might have expanded a bit. Make sure you take advantage of it this fall — a window like this won't be open forever.

Find out more about the report online or from KOMOnews.com.

VA Loan

Are you ready to buy a home and qualify for the VA loan? Let me help you out! As a local real estate broker in Bellevue, WA and a Veteran of foreign wars, I am committed to help you find the home you deserve through the VA loan.

Posted on October 22, 2015 at 3:15 pm
Steve Harwood | Category: Housing Market Statistics | Tagged , , , , , , , ,

Local Market Update – October 2015

Strong sales continue to whittle down a dwindling supply of homes. The lack of supply to meet demand kept driving home prices upward in September. While the Puget Sound area saw steady appreciation over a year ago, there are signs that that the frenzied level of growth may be starting to moderate – good news for a market that was starting to look unsustainable.

Click the images below to view the full reports.

Eastside

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The Eastside continues to lead the region in home values. The median price for homes sold in September was $680,000, an increase of 12 percent over a year ago. Sales were up as well, with many homes selling within days of being listed. As a result, inventory is at historic lows, with only a six week supply available. That is far below the three to six months of supply that is considered to be balanced.

 

 

 

 

 

Seattle

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The Seattle market continues to be very hot. Homes are snapped up as soon as they come on the market. As a result, the city has under a month of available inventory, the lowest in the region. Home prices climbed 10 percent over last year to a median of $571,000. That increase hasn’t seemed to decrease demand from buyers, who have become accustomed to facing multiple offers on newly listed homes.

 

 

 

 

 

Snohomish County

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While the 1.7 months supply of inventory in Snohomish County is still far below what is considered a balanced market, it represents more home choices than what’s available in King County. Home prices are considerably more reasonable as well. While the median price of a home increased 8 percent over last September in Snohomish County, the $355,500 median price is nearly 30 percent less than the price of a home in King County.

 

 

 

 

 

 

 

Posted on October 15, 2015 at 5:02 pm
Steve Harwood | Category: Housing Market Statistics

Home Affordability Improves to Two-Year Low

RealtyTrac, the nation's leading source for comprehensive housing data, and Clear Capital, the leading provider of commercial and residential real estate valuations, data and analytics, and more, yesterday released a joint report showing that buying a home was at the most affordable level in two years in the first quarter of 2015 despite the average U.S. home price increasing at more than twice the pace of the average weekly wage nationwide over the past year.

RealtyTrac analyzed recently released average weekly wage data from the first quarter of 2015 and average prices for single family homes and condos derived from publicly recorded sales deed data. Clear Capital analyzed data from its Home Data Index to determine counties at highest risk and lowest risk based on affordability and potential for price growth. The results were very positive for those who are still looking for a sign to get into the housing market right now.

"Affordability is a key metric in determining the overall health of a housing market as it largely represents the barrier to entry for first time homebuyers. First time buyers represent the 'fuel' for which overall market growth is determined due to the fact that this demand segment starts a chain reaction that allows existing home owners to sell and move-up thereby churning the housing market and price growth," said Alex Villacorta, Ph.D., vice president of research and analytics at Clear Capital.

Windermere Chief Economist Matthew Gardner shared his insight on these changes and what they mean for some our local market. "There is no question that when interest rates start to rise it will impact home sales, but I expect wage growth to offset any pronounced negative effects in the Seattle market," said Gardner. "That being said, over the next year, I predict interest rates will rise to 5 percent, which in conjunction with the strong growth in home prices, could make affordability an even bigger issue than it already is, especially for first time buyers."

For more information, read the full article here.

VA Loan

Are you ready to buy a home and qualify for the VA loan? Let me help you out! As a local real estate broker in Bellevue, WA and a Veteran of foreign wars, I am committed to help you find the home you deserve through the VA loan.

Posted on October 1, 2015 at 2:13 pm
Steve Harwood | Category: Home Buying, Housing Market Statistics | Tagged , , , , , ,

Average US Rate on 30-Year Mortgage Drops

According to The Seattle Times, the average long-term U.S. mortgage rates declined this week following the Federal Reserve's decision to keep interest rates at record lows–for now.

Mortgage giant Freddie Mac said Thursday that the average rate on a 30-year fixed-rate mortgage fell to 3.86 percent from 3.91 percent the previous week. The rate on a 15-year mortgage fell to 3.08 percent, being 3.11 percent the week before.

Rates have stayed below 4 percent for nine straight weeks. This is great news for anyone who is thinking about making their next home purchase. The window for low rates has been extending but won't last forever, so if you're ready to make the jump, now is the time.

The Seattle Times continued to report that "Fed policy makers announced last Thursday they had decided to keep a key short-term interest rate close to zero in the face of threats from a weak global economy, persistently low inflation and unstable financial markets.

Rates may still creep higher before the end of the year and into next year, so if you're ready to make a decision soon, give me a call!

Read more from The Seattle Times.

VA Loan

Are you ready to buy a home and qualify for the VA loan? Let me help you out! As a local real estate broker in Bellevue, WA and a Veteran of foreign wars, I am committed to help you find the home you deserve through the VA loan.

Posted on September 24, 2015 at 3:59 pm
Steve Harwood | Category: Home Buying, Housing Market Statistics | Tagged , , , , ,