2022 has had an incredibly eventful start in our local real estate market. In January, the average list-to-sale price ratio (the percentage a house sells for in comparison to the list price) in King County was 105% and in Snohomish County it was 106%. This is in conjunction with complete year-over-year median price appreciation (the last 12 months of price growth averaged and compared to the previous 12 months of price growth) of 15% in King County and 23% in Snohomish County. In fact, 59% of homeowners in King County have more than 50% home equity and 55% of homeowners in Snohomish County have over 50% home equity.

With that said, how does one navigate successfully transitioning that equity to their next move, and who do they choose to help them with the job? With inventory at an all-time low and interest rates still hovering around 4%, buyer demand is high. There is no denying that homes sell quickly in this environment and oftentimes for over list price due to multiple offers. There are many different business models available to consumers when selecting who they align with to help them make this very important move. There are brokerages that will offer an up-front rebate on the commission and there are full-service brokerages, with a lot in between.

Before I highlight what a full-service brokerage, like Windermere North, has to offer a seller I want to show you some numbers rooted in seller results. In 2021, my office, Windermere North, outperformed the market – we sold homes faster and at a higher return!

Even as we track our statistics so far in 2022, according to NWMLS data, my office’s average list-to-sale price ratio for King and Snohomish Counties combined, including both residential and condo sales, was 114% and 4 days on the market. This compares to the average market results of 105% and 19 days on the market.

Our approach involves a strategic home preparation process, detailed price analysis, and keen negotiations. You might ask what type of negotiations happen when a seller is reviewing a stack of offers; actually, more than you know. Sifting through the terms of offers and vetting the buyers through rapport-building with their broker and lender helps us unearth who the most qualified buyer is to get into contract with. This takes extra time and skilled communication, but as you can see, these extra steps pay off for our sellers.

We also understand that getting a home ready for market can be a daunting task, but the upside is too measurable to ignore. We help our clients identify a punch-list of prep items and match them up with concierge-level service providers to help complete the work. Even if our sellers are limited in funds to prep their home, we have funds available for no up-front costs. Please reach out if you think this would be helpful.

Then the merchandising comes in (depending on the house): staging, professional photography, video, floorplans, print materials, and public exposure is planned and executed. Our listings hit the market perfectly positioned for buyers to see themselves living there and we invest in this on behalf of our sellers. We help connect the emotional dots that invoke buyers’ lifestyle goals resulting in high returns for our sellers.

Lastly, perspective is key! Markets shift, ebbing and flowing. Pricing a home is strategic and requires analysis of the recent sales, historical seasonality, and current market trends. This research is done sifting through data, but also with intangible outreach to fellow brokers inquiring about their experiences and gleaning conclusions. Also, physically touring the inventory, whether I’m showing buyers or walking through to see for myself, helps me understand how a home measures up and what buyers are looking for. All of these steps are over-and-above the norm and help contribute to the results my office is producing.

If you are considering a move, make sure you align yourself with a trusted advisor who is willing to put in the extra work to get you the best possible results. Navigating an extreme sellers’ market takes great skill and care to garner the best results. If done right, that skill and care will beat out any upfront discount a less-engaged broker will offer to win a listing. Make sure you consider the big picture, not just an immediate reward. Understand that who you choose to partner with to assist you with one of the biggest financial decisions a person ever makes is a very big deal. It is always my goal to help keep my clients well-informed and empower strong decisions. Please reach out if you think I can help you or someone you know, whether you are just curious about the market or you’re ready to make a move.

Cheers to 50 Years!
Fifty years of relationships, 50 years of giving back to our communities, and 50 years of growth. In 1972, Windermere Real Estate was founded by John Jacobi in the Sand Point neighborhood of Seattle, WA. Since then, Windermere has expanded to 10 states including Washington, Idaho, Oregon, Montana, California, Arizona, Nevada, Utah, Hawaii, and Colorado. Our network reaches over 300+ offices and 7,000+ brokers.  I can tap into our network of offices in the states above and I can also access Leading Real Estate Companies of the World beyond our Windermere network to help you find a like-minded broker for your out-of-area needs.

Even better, Windermere has donated just over $46 Million through the Windermere Foundation, giving funds back to the communities in which we serve. Windermere’s collective goal in 2022, is to get the Windermere Foundation to the $50 Million mark to help commemorate this monumental anniversary. Here’s to another impactful 50 years serving our communities through relationships, homeownership, and community outreach.

Last week, my office hosted our 14th annual Economic Forecast Event with Matthew Gardner, Windermere’s Chief Economist. It was an hour-long presentation followed by lively Q & A that was packed with useful information to help guide us as we start the new year. Matthew journeyed the audience through a macro to micro approach, reflecting on all of the activity in 2021 and also analyzing future trends.

He started with a national overview of the economy overall and ended with a detailed accounting for King and Snohomish County housing markets, including some predictions. Below are some highlighted bullet points. Please reach out if you would like a digital copy of his PowerPoint and/or the link to the recording of his presentation.

National Economy:
The GDP (Gross Domestic Product) growth in 2021 was 3.9%, well above the long-term average of 2%. This indicates we are not in a recession and have recovered from the brief recession we experienced in the spring of 2020. A recession is defined by two consecutive quarters with declining GDP.

Matthew anticipates the U.S. to be back to full employment by the end 2022 after the fall-out of 2020 due to the pandemic shut-down.

Inflation:
Inflation peaked in Q4 of 2021 and is projected to start to slow as supply chain issues improve.  Certain industries such as used cars which are costing 25% more since February 2020 are having a huge influence on overall numbers. Food and energy prices are also volatile and affecting overall numbers.

U.S. Housing Market:
Improved supply chain and labor forces will increase the number of new builds, increasing inventory to help quench buyer demand. This will slow national year-over-year price growth to 6.5% in 2022.

Regional Economy:
Jobs are increasing and will recover from the spring 2020 fall-out twice as fast as the job losses we saw during the Great Recession of 2008. In fact, he expects local jobs to fully return by the end of 2022!

Our diverse economy which includes tech, aerospace, biotech, and manufacturing will help our overall economy thrive as we are not dependent on just one industry for a full recovery.

Mortgage Rates:
Mortgage rates are predicted to slowly rise in 2022. Matthew along with the National Mortgage Brokers Association, Fannie Mae, and the National Association of Realtors expect rates to end the year just under 4%. This is well below the long-term average of 7.5%!

Prices:
In 2021, prices were up 14% year-over-year in King County and 24% in Snohomish County. He predicts housing prices to rise 13% in King County and 14% in Snohomish County in 2022. This is well above the long-term average of 5.5% year-over-year!

The Work from Home phenomenon has had a huge influence on price growth in the suburbs. Many buyers have eliminated long commutes or are only having to drive into work a handful of days a month. This has driven many buyers to consider the suburban markets which is why the price growth in Snohomish County was much higher than King. Seattle saw a bit of a correction as this new lifestyle shift came to be. He anticipates 2022 to be kind to urban markets and a continued attraction to the suburbs.

In 2021, net in-migration in both King and Snohomish Counties was up, which is continuing to have a strong influence on buyer demand. In fact, new listings were up in 2021 over 2020; it was increased buyer demand that whittled down inventory levels and drove prices up.

Homeowner Equity:
Prices have been growing since 2012 and have had historic growth over the last two years. In King County, 59% of homeowners have 50% or more equity in their homes and in Snohomish County, 55% of homeowners have 50% or more home equity.

This uptick in home equity and the Work from Home shift has reduced the average tenure a homeowner spends living in their home to just shy of 7 years in 2021 from 10 years just two years ago. This is another indicator of buyer demand.

Are we Headed Towards a Housing Bubble?
Simply put, no!  Even with forbearance being a viable option to weather the fall-out from the pandemic, there will not be a wave of foreclosures on the horizon. Homeowners have too much equity to walk away, they will sell and take their profits in order to recover if need be.

Prices have made a big run, but if you take interest rates and inflation into consideration, monthly payments are only up 26% since 2000 in King County and 34% in Snohomish County. That is parallel to raw home prices being up 249% since 2000 in King County and 272% in Snohomish County.

Financial indicators such as recovering jobs, deep homeowner equity, stringent lending practices, strong buyer demand, and low interest rates combat any inkling of a housing bubble. There are 600k Millennials in King County and 171k in Snohomish County that are coming of age and will want to buy a house.

Condominiums:
Condo sales stalled when the pandemic hit as people decided if they wanted to live in such density, and the downtown core suffered due to the shutdown. Since then, the stall started to move forward and condo prices are up 7% year-over-year in King County and 23% in Snohomish County. Condos provide a more affordable option, especially for first-time buyers, and single-level, maintenance-free living for retirees. Condos are predicted to appreciate 4% in King County in 2022 and 7% in Snohomish County.

Luxury Market:
2021 was the year that the $1M home sale price became more common. In 2021 there we 11k sales over $1M in King County compared to 7k in 2020. In Snohomish County, there were just shy of 2k sales over $1M in compared to 590 in 2020. The $1M price point may not be synonymous with the definition of luxury any longer. It is more so a depiction of affordability in our region. With that said, homes in the very high-end have had brisk movement and marked appreciation.

Overview:
The Work from Home lifestyle is real and has created lots of movement in the marketplace, especially towards the suburbs. This has caused an upward trajectory on price appreciation along with continued low interest rates. New listings outpaced 2020, but buyer demand gobbled up the inventory leaving us at the lowest levels we have ever seen as we start 2022. Price appreciation will continue but is predicted to decelerate after record-breaking levels in 2021.  Interest rates will creep up by the end of 2022 and inflation will improve as the supply chain recovers. Homeowner equity is at an all-time high and jobs are recovering, offsetting any big crash to the housing market. Affordability is our biggest roadblock as the landscape of the PNW has changed with tech jobs the heart of our renewed economy.

If you attended our Virtual Economic Forecast Event last week with Matthew Gardner, did you see the mountain of socks?! Matthew is a bit of a sock aficionado, and we usually give him a gift of some fun or funny socks at our yearly event. This year, we decided to collect socks and donate them in Matthew’s name to Beautiful Soles for local kids in need. I am happy to report we collected 523 pairs of socks and $125 amongst our brokers.

Thank you to everyone who gave to our Healthcare Worker Meal Drive in December! We raised $4,360 which enabled us to deliver meals and snacks to frontline workers at Providence in Everett, Swedish Edmonds, and UW Medicine Northwest Hospital. We partnered with We Got This Seattle, who helped us coordinate the restaurants we ordered from and set up our contacts at the hospitals.  I am so grateful for ALL of our local frontline workers who have been working so long and hard under the most difficult circumstances.

How a home is prepared for the market has a direct economic effect on the results a seller will have in the marketplace. Making home updates to match today’s trends, repairing deferred maintenance items, deep cleaning, and home staging all help contribute to a higher return for home sellers and less time on the market. According to the National Association of Realtors, 82% of home buyers said that staging and proper home preparation helped them better visualize a property as their future home. Even in the brisk seller’s market we are currently experiencing, it has paid off for sellers to get their properties ready for market in order to reap the highest return in the quickest amount of time. This is why Windermere has partnered with Move Forward Financial and developed the Windermere Ready Loan.

The Windermere Ready Loan allows our home sellers to receive access to funds to make home improvements and merchandise their homes for the market with no upfront cost. Clients can borrow up to $50,000 as long as the Windermere Ready Loan and any other encumbrances on the property do not exceed 75% of the market value. With the majority of Puget Sound cities having experienced 15-25% in price appreciation over the last year or two, this loan-to-value ratio is very manageable.

Even better, this program does not require a costly appraisal, but just an approved Comparative Market Analysis (CMA) from their Windermere broker and their office manager. Once that is done, approval can happen as fast as 2 business days and the loan can fund in 10 business days. In comparison to a cash-out refinance or home equity line of credit which both can take up to 60 days, the turnaround time is minimal.

The loan fee is 4% (based on the loan amount) and is due only once the subject property closes and requires no interest payments. There is a nominal $20 credit reporting fee and a $20 administrative fee collected at closing as well. Loans must fund within 60 days of approval and are due within 6 months of funding.

Clients do not need to present bids, only a predetermined amount they want to borrow that does not eclipse the 75% loan-to-value amount. Clients can also choose their own contractors. I also have a list of preferred contractors that I can access to help concierge the home-preparation experience for my clients.

I understand that getting a home ready to sell is not always an easy feat, but one worth the effort to get the most optimal outcome. If you are interested in learning more about this program, please reach out. I am happy to answer more questions, assist you in the process and help you get your home Windermere Ready in 2022!

Please join me for a very special virtual live event:

AN ECONOMIC FORECAST FOR 2022 & BEYOND
with Matthew Gardner, Chief Economist for Windermere Real Estate

Wednesday, January 19, 2022
6:30pm – 8pm

Presentation from 6:30-7:30pm, Q&A to follow

Please RSVP by phone/text or email by January 14th, 2022
to receive an emailed event link prior to the event.

This holiday season, I invite you to join me in this tangible way of showing gratitude and support to our healthcare workers, who have worked so long and hard under the most difficult circumstances.

In tandem with The Windermere Foundation and local non-profit We Got This Seattle, my office is collecting donations that will be used to purchase meals from local restaurants. We will be personally delivering these meals over three weeks to a coordinated point person at Providence Hospital in Everett, Swedish Edmonds, and UW Medical Center-Northwest. Meals and treats will be distributed to frontline workers such as nurses, doctors, respiratory therapists, and cleaning staff.

We are still collecting donations for UW Medical Center – Northwest. You can donate here through December 27th.

Results so far:

• $1,345 donated for meals to Providence Everett, we delivered 150 meals on December 16th!!!
• $2,105 donated for meals to Swedish Edmonds!! We will deliver meals right around the Christmas holiday.

Thank you for your generous gifts in support of our community.

Happy Holidays!

At Windermere, we have the benefit of being expertly guided by our Chief Economist, Matthew Gardner. Every year he shares his predictions for the US Economy and Housing Market. I have included a list of highlights below along with a link to a video where he spells it all out.

Matthew’s Forecast for the US Economy:

• The US will still continue to feel the effects of the COVID-19 pandemic on the economy. He acknowledges that we are healing, but still experiencing drag due to supply chain delays and Covid-sensitive consumers. He expects this to improve as we head into spring and the second half of 2022.
• He predicts a 4% increase in GDP in 2022.
• Even though we are still experiencing supply chain delays and labor shortages he does not anticipate a recession.
• He predicts more robust job growth in 2022 and returning to pre-Covid employment in the second half of 2022.
• Inflation is still very much affected by supply chain issues and labor shortages, but he sees that settling out mid-2022.
• Interest rates will help to counteract inflation and will start to increase in 2022, but not crest 4%.

Matthew’s Forecast for the US Housing Market:

• There will be a modest reduction in home sales year-over-year, but realize this is coming off of a high volume of sales in 2021.
• After a record-breaking 16% increase in median price in 2021, he predicts a 7% increase in median price year-over-year in 2022. This slow down in appreciation will be due to increased interest rates, affordability, and a slight increase in supply.
• Housing starts will increase, but more importantly, construction completion will increase due to supply chain issues and labor shortages improving.
• Interest rates will increase towards 4% as we travel through 2022, but will still be well below the 30 year average of 7.5%.
• There will not be a housing bubble due to high demand for housing, job growth improving, and the overall recovery of the US economy.
• He is not concerned about forbearance, but more so affordability for the aging millennial generation who would like to purchase their first home.
• He sees the housing market moving towards more balance in 2022 after an incredible year of growth in 2021.

Look for Matthew’s local economy and housing market predictions from me in January.  My office is also hosting a virtual Economic Forecast event with Matthew on January 19th.  Stay tuned for more information.

Overall, this is a positive outlook weighted with some real challenges that we still face as we recover from the global pandemic. It is always my goal to help keep my clients well-informed and empower strong decisions. Please reach out if you are curious about how the housing market relates to your goals or if you’d like to attend the virtual economic forecast event with Matthew in January.

Thank you to everyone who donated to our Thanksgiving food drive! Because of your generosity, we were able to give The Volunteers of America Food Banks a check for $3,075 and 2,169 pounds of food! That will provide a total of 3,498 meals for our community.

Food insecurity is one of the most prevalent social issues of our time. VOA food banks, food pantries, and distribution center all exist to tackle hunger in our community and also serve as touchpoints to connect our neighbors with other basic needs.

Thank you!

This holiday season, I invite you to join me in this tangible way of showing gratitude and support to our healthcare workers, who have worked so long and hard under the most difficult circumstances.

In tandem with The Windermere Foundation and local non-profit We Got This Seattle, my office is collecting donations that will be used to purchase meals from local restaurants. We will be personally delivering these meals over three weeks to a coordinated point person at Providence Hospital in Everett, Swedish Edmonds, and UW Medical Center-Northwest. Meals and treats will be distributed to frontline workers such as nurses, doctors, respiratory therapists, and cleaning staff.

All funds collected through:
12/6-13 will provide meals to Providence Everett
12/14-20 will provide meals to Swedish Edmonds
12/21-27 will provide meals to UW Medical Center – Northwest

>> Click here to donate!

Thank you for your generous gifts in support of our community.

Happy Holidays!

I’ve said it before and I’ll say it again, the 2021 real estate market has been a head-turner! In the second half of 2020, once we started to emerge from the COVID lockdown, the real estate market started to bustle with activity. 2020 ended up being a robust real estate year driven by low interest rates and many COVID-influenced moves due to remote working and retirement. Who would have thought a global pandemic would have such a profound effect on the demand for real estate? Many people decided to retire and exit the state, many people entered our state and exited another, and a large portion of buyers who were no longer anchored by their commute followed their hearts to the suburbs and more rural locations.

When the calendar turned to 2021 the real estate market exploded! Inventory was depleted as 2020 did not provide the normal amount of new listings in tandem with a jump in demand. This combination created price escalations in 2021 that were beyond our wildest imagination. The price points for neighborhoods were re-established almost overnight with benchmark sales elevating the value proposition for the communities in which we live.

Seasonality has always had an effect on the market even in 2021. The first quarter of the year typically has the lowest amount of new listings as sellers make their way out of the short, dark days with soggy yards and projects on their to-do lists to prepare their properties for the spring market. The homes that sold in Q1 2021 saw above-normal gains over the list price. In fact, in Snohomish County, the average list-to-sale price ratio in March was 108%, and in King County 106%. As I mentioned earlier, almost overnight price appreciation established new home values for our communities.

Once the seasonal spring listings started to show themselves and buyers had additional selection, the price gains actually increased! The classic law of supply and demand relates the amount of supply against the amount of demand, and in turn provides a value. In the case of the 2021 spring market, the increase in supply actually was not enough to meet demand and put upward pressure on prices. Recorded sales from March to June saw the highest list-to-sale price ratios peaking at 110% on average in April in Snohomish County and at 108% in May in King County.

Since January the median price in Snohomish County has increased by 16% and in King County by 17%. Prices peaked in Snohomish County in June with the median price at $700,000 and in July in King County at $875,000. In August, both counties recorded prices 2% off the peak but were still sitting on top of a heap of price growth since the first of the year. Historically, markets will peak in the late spring, early summer as the ceiling of pricing starts to find itself. That appears to be where we are at. Although the figures this year have been intense and well above the norm, it is comforting to see typical seasonality still happening.

There is also this illusion that this type of market environment is easy. Yes, sales happen quickly and demand is high. I would be a fool to say that a sign in the yard and a feature on the internet couldn’t likely get a home sold. I must point out though that this market is nuanced and that obtaining the best results (top dollar and a smooth process) depends on how well all the steps are taken to prepare a property, price-position a property, and how carefully the negotiations and multiple offers are handled along the way by the broker. My office, Windermere North has continued to outperform the market in 2021 with shorter days on market and a higher list-to-sale price ratio than the market average. Check out our YTD comparison to the market averages to help understand how this elevated level of service makes a tangible difference for our clients.

As we head into fall and start to round out 2021, new homes that are coming to market are standing on the shoulders of the sales that took place earlier this year which created these increased home value levels. List-to-sale price ratios are starting to decrease as sellers are stair-stepping their pricing based on the freshly recorded home sales and the market is finding its peak for the year. Sellers that expect to stair-step and to escalate like homes did earlier in the year may find themselves disappointed and overpriced.

We are starting to see market times increase and expect a small surge in fall listings to help satisfy the buyer demand that remains. Low interest rates continue to provide buyers the flexibility to make moves with minimal debt service. As long as rates remain low, demand will continue. The good news is, not every home sale is a multiple-offer frenzy like we saw at the beginning of 2021. The new normal has established itself and buyers are becoming more savvy navigating this market. In my next newsletter, I will outline some expert buyer tools that have helped buyers succeed in this market.

The remainder of 2021 should complete a banner year in real estate. Sellers have made amazing returns and buyers are obtaining homes that better match their lifestyle goals with low debt service. COVID shook up how we value where we live. Remote work increased the value of our suburbs, retirees pushed prices in rural locations, and people having more time to reflect, shifted how they prioritize their homes’ features. Some folks even “got out” of Washington, but it wasn’t a mass exodus, as just as many are leaving other states for ours.

I see this last year and a half as a re-organization of our communities through housing, which comes with some positives and some negatives. Change can be uncomfortable, but change is certain. 2021 has been a year unlike any other! Seasonality, research, and relationships have been the stable markers that have helped me help my clients find success in this new environment and have helped me navigate some occasional choppy waters along the way. It is always my goal to help keep my clients well informed and empower strong decisions. Please reach out if you’d like to learn more about how the current market relates to your goals. If you know of anyone who needs real estate help, I would be honored to help take care of them as well.

All of us at Windermere Real Estate are proud to kick off another season as the “Official Real Estate Company of the Seattle Seahawks.” Since 2016, we’ve partnered with the Seahawks to #TackleHomelessness by donating $100 for every Seahawks defensive tackle made in a home game. And for the third season in a row, the money raised will go to Mary’s Place, a non-profit organization dedicated to supporting homeless families in the greater Seattle area. Mary’s Place works to provide safe and inclusive shelter and services that support women, children, and families through their journey out of homelessness.

Mary’s Place’s mission and the work of the Windermere Foundation go hand-in hand. At the last home game, we were able to donate $6,300, which brought our #TackleHomelessness total to $166,600 adding to our donations over the past five seasons. We look forward to raising even more this year!

Go Hawks!