Oregon and South West Washington Real Estate Market Update

 

ECONOMIC OVERVIEW

The total number of Oregonians employed in March reached 1.94 million, which was up substantially from 1.84 million in March 2015. The rapid rise in the number of employed is the main driver of an increase in Oregon’s labor force participation rate, which shot up to 62.3% in March from a recent low of 60.8% in March 2015.

Oregon’s unemployment rate dropped to a record low of 4.5% in March—the lowest point since comparable records began in 1976. Oregon’s February unemployment rate was 4.8%. A year ago, in March 2015, Oregon’s unemployment rate was 5.7%.

Rapid job growth in concert with historically low unemployment rates demonstrates to me that Oregon’s labor market is stronger than it has been in decades.

 

HOME SALES ACTIVITY

  • Sales activity rose by 8.8% compared to the first quarter of 2015, with 13,094 home sales.
  • Double-digit percentage increases in closed sales were again seen in a majority of the counties, but we did see some declines in five of the 26 counties that are contained in this report.
  • Sales rose the fastest in smaller counties, with Linn, Skamania, Yamhill, Jefferson and Marion Counties leading the way.
  • Decreases in sales activity also tend to be more prominent in smaller counties, which are prone to pronounced swings. At this point, I don’t believe any drop in sales is a function of declining demand.

 

HOME PRICES

  • Average prices in the region rose by 9.1% year-over-year to $315,746. The modest slowdown that was discussed in the last quarter’s report did not continue but has actually reversed course and started to increase at a faster pace than seen in recent quarters.
  • All but four counties saw prices rise compared to the first quarter of 2015, with seven counties showing double-digit percentage gains.
  • When compared to first quarter of 2015, Skamania County maintains its position as the market with the strongest price growth with home prices rising by 16.5%. This remains a function of the size of the market, which allows for substantial swings in price.
  • Double-digit growth was seen in Clackamas, Clark, Coos, Washington, Clatsop and Multnomah Counties, demonstrating that markets close to urban centers, as well as smaller counties, can show fast price appreciation.

 

DAYS ON MARKET

  • The average number of days it takes to sell a home in the region dropped by 13 days when compared to the first quarter of 2015.
  • The average time it took to sell a home in the region was 109 days.
  • Jefferson and Skamania Counties were the only markets where the average time it takes to sell a home rose, but they are remarkably small areas, so the change does not concern me at this point.
  • The fastest sales pace was seen in Washington and Multnomah Counties, which registered at a little over one month.

 

CONCLUSIONS

The speedometer reflects the state of the region’s housing market using housing inventory, price gains, sales velocities, interest rates and larger economics factors. Growth in the Oregon economy is impressive and unlikely to slow down in the foreseeable future. This bodes well for the housing market.

Anticipated inventory growth in the spring has yet to emerge, but I am hopeful that we will see a modest uptick in listing activity as we move toward the summer months.

Interest rates will remain at very favorable levels which will continue to encourage buyers who, unfortunately, will still have to be very patient during the home buying process. As such, I have moved the needle just a little more in favor of sellers.

 

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 over 25 years of professional experience both in the U.S. and U.K. 

Join Us This Weekend at the 30th Annual Windermere Cup

This Saturday, May 7 marks the 30th anniversary of the Windermere Cup rowing regatta – an event held in conjunction with the Seattle Yacht Club on the Opening Day of boating season. This year is an especially exciting year as we celebrate 30 remarkable years of an event that was started by Windermere founder John Jacobi and the University of Washington, who came together to turn Seattle’s opening-day rowing regatta into something that could attract the highest caliber crews from around the world.

Over the years, countless universities and more than 20 countries have rowed in the Windermere Cup, including England, Germany, New Zealand, China, Australia – and the former Soviet Union, who raced in the event’s historic first year during what were very politically unstable times between the U.S. and USSR. Thirty years later, the Windermere Cup has invited Russia back to compete against the Husky men, bringing the event full circle.

“The very first Windermere Cup saw the former Soviet Union take on the UW in an epic matchup that would ultimately make international sporting history,” said OB Jacobi, president of Windermere Real Estate. “Bringing Russia for the 30th anniversary is as close as we can come to recreating that celebrated first race of this storied event.”

In addition to Russia, the UW men will face Stanford, while the UW Women will go up against the University of San Diego and Cambridge University.

To celebrate this year’s milestone anniversary, Windermere has released a coffee table book that tells the story of the Windermere Cup. Through insightful interviews, original documents, and breathtaking photography, the book captures the historic moments and colorful stories that have turned the Windermere Cup into an enduring, world-renowned rowing event. For more information and to purchase a copy of the Windermere Cup book, please visit http://windermerecup.withwre.com/ourstory/

We hope to see you along the shores of the Montlake Cut on Saturday, May 7 for this free, family-friendly community event. Races start at 10:20 ending with the Windermere Cup around noon, and followed by the Opening Day boat parade. There will also be food vendors, booths to purchase UW and Windermere Cup gear, as well as a bouncy house. More information can be found at www.windermerecup.com. You can also follow us at www.facebook.com/WindermereCup and @WindermereCup.

 

 

 

#YourStoryIsOurStory: It’s Never too Late to Fall in Love

In November 2015, Windermere Real Estate agent, Vivian Peterson met some new friends that would teach her an invaluable lesson.

At an open house, Richard (76) approached Vivian about selling his current home. After almost 40 years in his place, a home he shared with his first wife until she passed away, Richard was looking to sell. This is a move uncharacteristic of Richard, but he had recently met a special woman, Virginia (74) on OK Cupid, and was looking to move to a home the two of them could share for the rest of their lives.

Vivian helped the two love birds exchange a multi-level home for a single story rambler in Monroe, accommodating her mobility needs, and in-turn made some lifelong friends. When Richard and Virginia tie the knot, Vivian is invited as a witness. In Vivian’s words, working with Richard and Virginia taught her a valuable lesson: it’s never too late to fall in love. 

 

 

Throughout the year we will be posting some of our favorite #YourStoryIsOurStory videos, photos, and blog posts. Please take a minute to share your experiences, and follow #YourStoryIsOurStory on our blogFacebookTwitterInstagramYouTube, and Pinterest pages.

Keeping Up with The Joneses: Seven Yard Tools a First-Time Homeowner Needs

So basically, when you have a baby and wife and a career, your home reno slows down a little when your extended family flies back to their respective time zones. Last month, we shared about that pesky 15% of a project that gets left undone.  And maybe we still haven’t fixed the grout line in the shower but… we did start a new project!  Cleaning up the yard!

Did you know that gardening tools are really expensive?  I didn’t.  We even priced out what it would cost to have a landscaper come every two weeks just to mow and edge our front and back yard (which would leave us to the weeding, sweeping, etc.) but alas… that is also expensive (about $100 per month).  So… Hi-ho, hi-ho, it’s off to Home Depot we go…

 
Seven Yard Tools All First Time Home Buyers Need:

Lawnmower: Self-propelled so you don’t have to work as hard. Just being real.  Our lot is about 7,000 square feet so there’s a whole lot of other things I will do to break my back.  Mowing the yard doesn’t have to make the cut (the cut… because it’s a lawn mower… get it?) $399 + gasoline (verses $150 for a bagless push mower… ain’t nobody got time for that.) 

 

Weed-eater: Not just for trimming weeds but more for making the edges of things look more like edges rather than wobbly overgrown lines.  It basically gets to the stuff your mower can’t.  My dad advised we buy a gas-powered trimmer – he said they last longer and can be more powerful.  A little more tricky to start though and more maintenance.  I guess we could have gone either way.  Who knew gardening would be such a gamble?  No wonder my wife loves to garden.  She also loves the casino. $119 + gasoline (Sorry, environment!) 

Hose Reel: Speaking of my wife, I called Jenn from Home Depot and told her that I had found the perfect solution to our front yard hose, all coiled up on the ground.  I had found a $70 hose reel/box.  It was the prettiest hose box I had ever seen.  My wife said that spending $70 on a plastic hose box may be a little extravagant so we met in the middle and purchased this $30 reel that seems to do the trick. 

 

Gardening Gloves: Protective gloves are probably the cheapest thing on this list… yet we have not bought them.  After paying over $100 for literal dirt to fill our raised garden boxes, I guess some luxury had to be sacrificed.  $3.98/pair which is less than my typical triple shot Americano (which is a luxury I cannot part with.) 

 

Hedge Trimmer: I haven’t used ours yet as my wife has taken up hedge trimming to express herself artistically.  The previous owner of our 1940s fixer was really into her yard and planted some really cool stuff over the last 65+ years.  But as she aged, the yard was less tended to and some of the larger bushes took on a life of their own. This trimmer does the trick.  I recently asked Jenn to commission a topiary of our dog, Whiskey.  She declined. $49.97 for a corded trimmer. 

 

Push Broom: Good for sweeping up the big mess you make when you’re trimming stuff.  I love that ours is called the “Quickie Bulldozer.” Doesn’t that just radiate power and sweeping efficiency? $9.98 well spent. 

Blower/Vacuum: I experienced the thrill of my lifetime when I realized that our electric leaf blower was also a vacuum!  Perfect for sucking up all the lawn clippings left behind from the weed eater.  It puts that Quickie Bulldozer to shame.  It’s got a max air speed of 250 MPH for $63.21.  Enter manly grunt akin to Tim “The Tool Man” Taylor.  

 

Tyler Davis Jones is a Windermere Real Estate agent in Seattle who, with his wife Jenn, recently traded in their in-city condo for a 1940s fixer-upper. Tyler and Jenn, along with the help of some very generous friends and family members, are taking on all the renovations themselves. You can follow the transformation process on the Windermere Blog or on Tyler’s website and Instagram

An Incoming Tide Raises All Ships: How the Growth in Homeowner Equity Continues to Stabilize the U.S. Housing Market

Every quarter, the U.S. Federal Reserve releases its report regarding the Financial Accounts of the United States. Although this is a very lengthy and detailed analysis, it does contain some interesting statistics on housing. The particular “nuggets” that I look for relate to the total value of residential real estate, mortgage debt and, rather importantly, details regarding homeowner equity.

The chart below shows all of these datasets going back to 2000, and the results are rather fascinating. In regards to total real estate values, you can clearly see the pre-bubble run-up and subsequent burst that followed. From its peak figure of $22.5 trillion at the end of 2006, home values lost an enormous $6.4 trillion in value by mid-2011.

 

Housing Value, Equity & Debt

 

However, what is even more interesting is that by the end of 2015, home values had regained almost all of the value they lost in previous years, and now stand at $22.03 trillion.

A price recovery is clearly in place.

But this is not the end of the story. As much as I like to see housing values grow, if this growth is simply led by leverage (borrowing), then it is a house of cards. However, I am happy to report that this is definitely not the case here.

While home values have grown quite quickly over the past four years, we have added very little to our debt load. As the chart above shows, mortgages peaked in 2008 at around $10.7 trillion, but have since tapered to $9.49 trillion, and remain well below their historic peak.

So what does all this mean?

It means that with home prices rising and consumers not taking on additional mortgage debt, equity levels have grown substantially. The country went through a very painful period of negative equity during the housing recession, but the growth started returning in 2012, and we moved back into a period of positive equity again by the summer of 2013. In 2015, equity levels increased by an impressive 10.2 percent to $1.17 trillion. Total owner equity now stands at $12.54 trillion and is closing in on the all-time high seen in 2006.

With the appreciable gain in home owner equity levels, we have seen a rapid drop in the number of “underwater” homes, as well as an increase in so-called “equity-rich” homes (those with a loan to value ratio of less than 50 percent).

Core Logic suggests that the percentage of underwater homes has dropped to 8.5 percent at the end of 2015 – down from 25.9% in early 2010 – and according to RealtyTrac, the percentage of “equity-rich” homes has now risen to 22.5 percent. This data should ease people’s concerns regarding the formation of a housing bubble – at least a national one. Growing equity levels will certainly act as a cushion against unforeseeable drops in home values.

If this data does show one potential issue, it is that we will likely start to see more “move-up buyers” enter the housing market as they tap into regained equity and look to upsize. On the down side, this could put more buyers into an already crowded marketplace, but it may also result in a new supply of homes for sale – something that is much-needed in markets all across the U.S.

Western Washington Real Estate Market Update

Great article on our Western Washington real estate market. You’ll notice a moderate increase in the number of homes sold in Skagit County, and a very large increase in the average home sale price locally. Low inventory and low interest rates are keeping buyers busy. content_16088_WWA_GardnerReportQ1_Masthead

New Home Construction Trends to Watch Out For

Earlier this week, at the Windermere Builder Solutions Breakfast, more than 100 Windermere brokers came together to listen to Windermere President OB Jacobi lead a panel discussion on new home construction trends in the greater Seattle area. The panelists included Mike Owen, General Manager: Macadam Floor & Design; Belinda Leppa, Sr. Designer: Macadam Floor & Design; Curtis Gelotte, Sr. Principal: Gelotte Hommas Architecture; and Eric Drivdahl, Principal: Gelotte Hommas Architecture.

 

 

 

 

Macadam Floor and Design is a new builder design center located in Kirkland and they always give us the down low on the latest trends. So, what’s in?

  • Bringing the outdoors inside. Do this with larger glass windows or folding glass doors.
  • Minerals as hardware.
  • Large geometric tiles on floors.
  • Mixing metals, such as brass and gold.

Interior paint color – Grey still has a heavy influence, but it is warming up a bit and getting softened with a stone color. Of course, the Pantone colors of the year are playing a big part with light blues and soft pinks.

Wallpaper – Always a great place to get a little crazy. Textural, geometric patterns are so in.

Carpet – 2016 is about modernizing the traditional themes. People are doing geometric shapes and soft grays. However, hardwood floors continue to be on trend. It’s not uncommon for someone to do hardwood floors throughout the whole home, others are even putting wood on the walls. Fun fact: When the economy is good, floor color tends to lighten up, and when economy is bad, floors tend to darken.

Tile– Geometry, 3D textures, and extra extra extra-large tiles. Marble counter tops are still big and concrete is becoming more common in custom homes.

Cabinets – Many are painting them white with muted tones or contrasting wood tones. Mix and match. Get venturesome, but not reckless.

Lighting – Gold has come back in (don’t worry, not the gold of the 80’s). These are different from the pendants of last year; they’re brass and gold statement pieces. Remember: lighting is the jewelry of the home.

 

 

Plumbing – Plumbing is functional art. Brass, soft gold, and black (faucet) statement pieces are where it’s at.

We also learned that home owners are going bonkers for statement dining rooms. They love having a bold, fun place to entertain their guests. These are tying into a theme, which is: Nature luxe. Like we said earlier, it’s all about bringing the outside in. Yes, we’re seeing a lot of brave ideas and statement pieces going on, but it’s important to be subtle and do it in a tasteful way.

 

 

Gelotte Hommas Architecture kept the trend going with outdoor living. Seattleites think our climate is not the greatest for outdoor spaces, but according to Gelotte, with our mild winters and not-too-hot summers, we actually have the ideal climate for outdoor living… who knew! The most important thing to know about outdoor living is that it needs to flow from the inside to the outside. The space doesn’t need to be huge; a good rule of thumb is having your outdoor space roughly the size of your kitchen.

What’s being built? Modern, contemporary homes are still very much in demand. However, contextualizing a home into a neighborhood is really important so it doesn’t stand out too much. It’s about appropriate scale and size.

Multi-gen living is on the rise. Homes are being built to accommodate extended family which usually involves having an in-law suite. Also, bonus rooms are being made into living spaces.

When it comes to thinking green, most custom home clients are concerned with energy consumption, so they opt to get solar panels or geothermal heating.

That’s a wrap for the latest trends! How are you going to incorporate them in your home?

 

This article originally appeared on WindermereSeattle.com  

 

Western Washington Real Estate Market Update

 

ECONOMIC OVERVIEW

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. With this robust growth, it is unsurprising to see the unemployment rate trend down to 5.8%—well below the long-term average of 6.4%. As pleasing as it is to see the unemployment rate drop, it is equally pleasing to see that the decrease comes in concert with growth in the civilian labor force, which continues to grow at a very solid pace. I continue to believe that there is no risk that we will see a statewide decline in the employment picture in 2016.

 

HOME SALES ACTIVITY

  • There were 13,841 home sales during the first quarter of 2016, up by 3.8% from the same period in 2015. Sales activity continues to slow as a function of inventory constraints. Any spring “bounce” in listings has, thus far, failed to materialize.
  • The growth in sales was most pronounced in Grays Harbor County, which increased by 35% (but represented a real increase of just 63 units). Robust increases were also seen in Kittitas, Mason, Pierce, Snohomish and Island Counties. Sales declines were seen in San Juan, Jefferson, Cowlitz and King Counties.
  • Overall listing activity was down by 30.1% compared to the first quarter of 2015, and this continues to put upward pressure on home prices (discussed below).
  • Economic vitality in the region, combined with interest rates that continue to retest historic lows, is driving buyer demand that simply cannot be met. I hope that we will see more inventory come online as we move through the year, but believe that any reasonable growth in inventory will still be insufficient for the demand in the market.

 

HOME PRICES

  • Given the demand factors mentioned above, I am not surprised that prices are up by an average of 10.1% year-over-year. This is up from the 9.3% average growth in prices that was reported in the fourth quarter 2015 report.
  • When compared to the first quarter of 2015, price growth was most pronounced in Jefferson County, and all but three counties saw prices increase by double digits from the previous year.
  • Interestingly, there were eight counties that actually saw a drop in average sale prices between the last quarter of 2015 and the first quarter of 2016. I believe this was caused by seasonal factors, but will keep an eye on it.
  • Very straightforward supply and demand factors are pushing prices higher. While this certainly favors sellers, I believe that there are some buyers who are starting to suffer from “buyers’ fatigue”. Rampant growth in inventory would sort this out but it is unlikely to occur this year.

 

DAYS ON MARKET

  • The average number of days it took to sell a home dropped by sixteen days when compared to the first quarter of 2015.
  • As was seen in the Q4 2015 report, there were just two markets where the length of time it took to sell a home did rise, but again the increases were minimal. Skagit County saw an increase of three days while San Juan County rose by nine days.
  • It took an average of 86 days to sell a home in the first quarter of this year—up from the 78 days it took to sell a home in the last quarter but this is simply due to seasonality.
  • Sales activity remains most brisk in the Central Puget Sound counties. Given their proximity to the major job centers, this is not a surprise.

 

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 first quarter of 2016, I have moved the needle slightly more in favor of sellers. Inventory constraints persist and this is now starting to affect sales activity, with growth in pending as well as closed sales starting to trend down. However, price growth remains well above average and interest rates are still close to historic lows. 

 

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 over 25 years of professional experience both in the U.S. and U.K. 

Windermere Foundation Quarterly Report

 

Dear friends of the Foundation,

Thanks to you and the wonderful support that the Windermere Foundation has received so far this year, we have disbursed nearly $470,000 to non-profit organizations dedicated to providing services to low-income and homeless families throughout the Western U.S. Our amazing agents, brokers, staff and owners, along with public supporters, continue to contribute generously to the Foundation, making disbursements possible to organizations like Friends of the Children - Portland.

Friends of the Children provide Portland’s most vulnerable children with intensive and long-term mentors. Mentors are full-time, paid professionals that take a preventive, early intervention approach that breaks the cycle of poverty and abuse by helping children in need overcome the many obstacles in their lives. This year, Friends of the Children received a $100,000 grant from the Windermere Foundation, allowing their mentors to help many more children—children like Monty*.

Monty’s caseworker was concerned that his needs weren’t getting fully met at his current foster care home. She told his mentor, Carter*, that she would most likely be moving him to a new place before the end of the summer. For the last two years, Monty had been living with his grandmother who tends to be overprotective and had been reluctant to let him do after school and extracurricular activities. This limited his positive social development. Monty is very introverted, awkward and anxious, misses social cues, and intentionally avoids interacting with other youth. These are all things that Carter noticed right away while observing him in his kindergarten classroom during the foster care selection process.

Monty’s grandmother shared early on with Carter that Monty loved McDonalds and to go on the play structures. Carter used this as a place to build his relationship with Monty and help him grow socially. So a deal was struck—every time Monty came back with a kid’s name, he would get more time to play. After a number of these visits, Monty was learning more about the kids he had met, like the school they attended, how many siblings they had, and their favorite sport. 

They were making progress. So when Carter heard of the caseworker’s plan, he was troubled. He’d already established a rapport with Monty’s grandmother and felt that this was where his mentorship could really make an impact. He knew that it was imperative to get Monty involved in youth activities during the summer in order to keep him in a more permanent place.

After further discussions with Monty’s grandmother, she granted permission for him to attend the Tyron Creek Camp. The caseworker couldn’t believe it and remarked, “She said yes to that?” She had tried before to get Monty’s grandmother to enroll him in a camp for the summer, but had been unsuccessful. 

Monty attended camp, had a great time, and did really well. It was a period of growth for both Monty and his grandmother. Carter is now working with her to sign Monty up for the SUN after-school program and other extracurricular activities, like the Children’s Gym. Best of all, the caseworker no longer has plans to move Monty; he continues to stay at his home with his grandmother.

It is stories like this that make us thankful for your continued support of the Windermere Foundation. It’s also why we capped off the first quarter with a Windermere Week of Gratitude to celebrate Windermere owners, agents, and Foundation Representatives, who together helped make all this giving possible. The highlight of the week was the debut of the new Windermere Foundation video, which illustrates how donations from Windermere owners and agents are making a difference in the lives of low-income and homeless children and their families.

 

 

Thank you to everyone who supports the Windermere Foundation. Because of you, kids like Monty have the care they need to thrive. If you’d like to help support programs in your community, please click on the Donate button.

To learn more about the Windermere Foundation, visit http://www.windermere.com/foundation

 

*Names have been changed for this story.

#YourStoryIsOurStory: How Windermere Cup Changed Jenni Hogan’s Life

Since 1987, Windermere Real Estate has partnered with the University of Washington to put on a one-of-a-kind rowing event called the Windermere Cup. For the last thirty years, Windermere and UW have brought some of the best rowers from around the world to Seattle to compete in this premier sporting event, and in the process, changed the course of some of the athlete’s lives. 

Australian native, Jenni Hogan, is one of those athletes. 

In 1997, Jenni was eighteen and selected to row for Australia’s Olympic Crew Team. She was competing in pairs at the time, but at the start of the Australian National Championship, her partner’s knee gave out, dashing her hopes of a chance at the Olympics. 

But tragedy turned into opportunity when Jenni was asked to row with the Australian National Team at the 1997 Windermere Cup. She came to the University of Washington prepared to row, but the course of her life was changed forever. 

During her visit, Jenni was offered – and accepted – a scholarship to the University of Washington, and went on to row in four more Windermere Cups as a UW Husky. But her story doesn’t end there. Jenni’s choice to stay in Seattle led to her meeting her husband, a successful media career, and eventually a growing family. 

Jenni credits the Windermere Cup with changing the entire trajectory of her life. It also taught her that when one door closes, another one opens, and it could be even better than you planned. 

“That one phone call to come to the Windermere Cup changed my life. What I thought was the worst moment of my life turned into something that has made my life so great.” –Jenni Hogan 

#YourStoryIsOurStory

Throughout the year we will be posting some of our favorite #YourStoryIsOurStory videos, photos, and blog posts. Please take a minute to share your experiences, and follow #YourStoryIsOurStory on our blogFacebookTwitterInstagramYouTube, and Pinterest pages.