Windermere Hosts Third-Annual Washington Waterfront Home Tour

When you picture your best life, does it include entertaining shore-side? Launching a boat from your back steps? Or fishing in your pajamas? If you dream of a waterfront life then you’re in luck! That’s because  on June 24-25 we are hosting the third-annual Washington Waterfront Home Tour. More than 80 homes from the San Juan Islands to Lake Sammamish are available to tour by boat, bike, or car. Properties are priced from $595,000 to $20 million. While you might think a waterfront home is out of your budget, there are actually properties that fit a wide variety of needs, styles, and budgets.

Here are a few examples of what you can expect to see this weekend on the tour:

Oak Harbor Charmer:content_OakHarborhttps://www.windermere.com/listing/54079653

Spectacular in Seward Park:    

SewardParkhttps://www.windermere.com/listing/54556875

Enchanted Estate in Friday Harbor:content_Friday_Harborhttps://www.windermere.com/listing/54552772

A map of the homes and their open house hours can be found on the Washington Waterfront Home Tour website. Most will be held open from 1 p.m.-4 p.m. on June 24 and 25. The listing details will note the availability; for those listed as “by appointment only”, you can contact the agent for a private tour.

Follow the fun on the Windermere Real Estate Facebook page, and share your own photos while you tour these beautiful homes by tagging your pictures on Instagram and Twitter with #WAWaterfront.

In addition to Windermere, the Washington Waterfront Home Tour is being sponsored by Penrith Home Loans.

 

Originally posted on the Windermere Blog by Tara Sharp

 

Windermere Luxury Breakfast March 2017

This week, more than 100 Windermere brokers from all over the Puget Sound area came together to discuss the local luxury real estate market, premier their newest luxury listings, and hear from featured speaker, Matthew Gardner, Chief Economist for Windermere Real Estate.

Matthew Gardner gave a lively and engaging presentation on the regional economy and housing market, and how they compare nationally. He spoke of the impact that the technology sector is having on Seattle area housing, as well as King County’s population, which has grown by more than 50,000 since 2011. He said that more and more Silicon Valley-based tech companies are looking at Seattle in order to keep their employees happy, including Apple, Facebook, Google, and others. For some, the lifestyle and relative affordability is seen as a much better choice than cities like San Francisco where even the highest paid employees simply cannot afford to buy a home.

Matthew also discussed the Millennials who he says are incorrectly described as being the “renter generation”.  Instead, he said that many of them are delaying their home purchases because of student debt and lack of choice in the current market. But 2016 saw a significant increase in the number of Millennial buyers in Seattle, and he expects to see even more in 2017.

In terms of what to expect in the luxury housing market in the coming year, Matthew says it will generally parallel what we’re seeing in the rest of the market. Competition from Seattle’s growing wealthy population is causing homes to sell quickly and driving up prices. Furthermore, interest rates for jumbo loans remain historically low, making it more accessible for buyers to access large sums of money to purchase higher end homes.

 

 

Western Washington Real Estate Market Update

ECONOMIC OVERVIEW

Washington State finished the year on a high with jobs continuing to be added across the market. Additionally, we are seeing decent growth in the area’s smaller markets, which have not benefitted from the same robust growth as the larger metropolitan markets.

Unemployment rates throughout the region continue to drop and the levels in the central Puget Sound region suggest that we are at full employment. In the coming year, I anticipate that we will see substantial income growth as companies look to recruit new talent and keep existing employees happy.

HOME SALES ACTIVITY

  • There were 19,745 home sales during the fourth quarter of 2016—up by a very impressive 13.4% from the same period in 2015, but 18.7% below the total number of sales seen in the third quarter of the year. (This is a function of seasonality and no cause for concern.)
  • Sales in Clallam County grew at the fastest rate over the past 12 months, with home sales up by 47%. There were also impressive sales increases in Grays Harbor and Thurston Counties. Jefferson County had a fairly modest decrease in sales.
  • The number of available listings continues to remain well below historic averages. The total number of homes for sale in the fourth quarter was down by 13.7% compared to the same period a year ago.
  • The key takeaway from this data is that 2017 will continue to be a seller’s market. We should see some improvement in listing activity, but it is highly likely that demand will exceed supply for another year.

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HOME PRICES

  • Demand continued to exceed supply in the final three months of 2016 and this caused home prices to continue to rise. In the fourth quarter, average prices rose by 7.1% but were 0.4% higher than the third quarter of the year. The region’s average sales price is now $414,110.
  • In most parts of the region, home prices are well above historic highs and continue to trend upward.
  • When compared to the fourth quarter of 2015, price growth was most pronounced in Kittitas County. In total, there were eight counties where annual price growth exceeded 10%. We saw a drop in sales prices in the notoriously volatile San Juan County.
  • The aggressive home price growth that we’ve experienced in recent years should start to taper in 2017, but prices will continue to increase at rates that are higher than historic averages.

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16320_wwa_gardnerreportq4_prices

DAYS ON MARKET

  • The average number of days it took to sell a home in the fourth quarter dropped by 15 days when compared to the fourth quarter of 2015.
  • King County was the only area where it took less than a month to sell a home, but all markets saw decent improvement in the time it took to sell a home when compared to a year ago.
  • In the final quarter of the year, it took an average of 64 days to sell a home. This is down from the 78 days it took in the third quarter of 2015, but up from the 52 days it took in the third quarter of 2016. (This is due to seasonality and not a cause for concern.)
  • We may experience a modest increase in the time it takes to sell a home in 2017, but only if there is a rapid increase in listings, which is certainly not a given.

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CONCLUSIONS

16320_wwa_gardnerreportq4_speedometer

This speedometer reflects the state of the region’s housing market using housing inventory, price gains, sales velocities, interest rates, and larger economic factors. For the fourth quarter of 2016, I actually moved the needle a little more in favor of buyers, but this is purely a function of the increase in interest rates that was seen after the election. Higher borrowing costs mean that buyers can afford less, which could ultimately put some modest downward pressure on home prices in 2017. That said, the region will still strongly favor sellers in the coming year.

 

Tiny Houses – A Big Trend

If you are even a casual fan of TV channels like HGTV, you’re sure to have noticed our nation’s current real estate obsession: Tiny Houses. Tiny House living can offer more financial freedom, more mobility, a lower environmental footprint, and an emphasis on experience over stuff. People who have adopted this lifestyle typically want to live a simpler, more pared-down life, and the rest of us want to watch them do it.

These homes have come a long way in the past five years. Designs for them have gone from extremely simple structures that are more affordable than the average new car, to extensive thought and design – including “Smart” Tiny Homes that can live “off the grid” using solar power and water recycling.

To the contemporary Tiny House purist, the structure is very small and simple. This usually means less than 300 square feet and a loft for the bed.

The “Tiny Living” model (shown below) is offered by Tiny Home Builders. They offer everything from pre-built homes and basic shells to tiny house plans.

tiny-house-1

Keeping the home on wheels allows everything from moving whenever the mood strikes you, to overcoming issues with building codes that require permanent structures to have a larger square footage.

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Interiors are designed to be simple, providing basic needs and amenities without a lot of flourish or detail.

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Sleeping lofts are the norm, so if you have an issue with climbing stairs or ladders then a larger model with a main floor sleeping option is definitely a better choice.

A great example of how far they have come with regards to space and amenities is the Farallon model by the Tumbleweed Tinyhouse Company.

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They offer two sizes with a usable space option of 218 square feet or 246 square feet and the roof is just begging to have solar panels installed.

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Not only does this model provide what looks like a decent amount of counter space, it also has a main floor bed and bath, unlike many other tiny homes that only provide a sleeping loft.

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The cost for this kind of tiny living starts at $62,950 – $72,950.

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Many people who adopt the tiny house lifestyle say that communities are the key to a happy and successful living environment. Another trick to living large in small spaces is to have great public places to go to – preferably by foot or bike. Creating a micro-friendly community requires careful planning, walk-ability, and dedicated public spaces, but for those who achieve this trifecta of tiny living, the rewards can be anything but tiny.

 

What’s In Store For The 2017 Seattle Housing Market?

By Matthew Gardner, Chief Economist, Windermere Real Estate

2016 was another stellar year for the Seattle housing market, in which a surplus of buyers and a deficit of sellers drove home prices higher across the board. So, can we expect to see more of the same in 2017? Here are some of my thoughts on the Seattle/King County housing market for the coming year:

  1. Our market has benefited greatly from very healthy job growth, driven in no small part by our thriving technology companies. Economic vitality is the backbone of housing demand, so we should continue to see healthy employment growth in 2017; however, not quite as robust as 2016. Migration to Seattle from other states will also continue in the coming year, putting further pressure on our housing market.
  2. Are we building too many apartments?  The answer to this question is “maybe”. I believe we are fast approaching oversupply of apartments; however, this glut will only be seen in select sub-markets, such as South Lake Union and Capitol Hill. Developers have been adding apartments downtown at frantic rates with many projects garnering very impressive rents. In the coming year, look for rental rate growth to slow and for concessions to come back into play as we add several thousand more apartments to downtown Seattle.
  3. The Millennials are here! And they are ready to buy. 2016 saw a significant increase in the number of Millennial buyers in Seattle, and I expect to see even more in 2017. The only problem will be whether Millennials will be able to find – or afford – anything to buy.
  4. Home prices will continue to rise. But price growth will taper somewhat. The market has been on a tear since bottoming out in 2012, with median home prices up by a remarkable 79% from the 2012 low, and 14% above the pre-recession peak seen in 2007. Given the fact that interest rates are now likely to rise at a faster rate than previously forecasted, I believe price appreciation will slow somewhat, but values will still increase at rates that are well above the national average. Look for home prices to increase by an average of 7.5 – 8.5% in 2017.
  5. More homes for sale? I am optimistic that inventory levels around Seattle will increase, but it still won’t be enough to meet continued high demand.
  6. This is my biggest concern for the Seattle housing market. Home prices – specifically in areas with ready access to our job centers – are pulling way ahead of incomes, placing them out of reach for much of our population. This forces many buyers to move farther away from our job centers, putting additional stress on our limited infrastructure. We need to have an open discussion regarding zoning, as well as whether our state’s Growth Management Act is helping or hindering matters.
  7. New Home Starts/Sales. As much as I would love to say that we can expect a substantial increase in new homes in 2017, I am afraid this is not the case. Historically high land prices, combined with ever increasing construction and labor costs, slow housing development, as the price of the end product is increasingly expensive. This applies to single family development as well as condominiums. We should see a couple of towers break ground in 2017, but that’s about all. Vertical construction is still prohibitively expensive and developers are concerned that there will not be sufficient demand for such an expensive end product.
  8. Are we setting ourselves up for another housing crash? The simple answer to this question is no. While home price appreciation remains above the long-term average, and will continue to be so in 2017, credit requirements, down payments, and a growing economy will all act as protectors from a housing crash in Seattle.

The Trump effect. How will it impact the US economy and housing?

Posted in Market News by Matthew Gardner, Chief Economist, Windermere Real Estate 

The American people have spoken and they have elected Donald J. Trump as the 45th president of the United States. Change was clearly demanded, and change is what we will have.

The election was a shock for many, especially on the West Coast where we have not been overly affected by the long-term loss in US manufacturing or stagnant wage growth of the past decade. But the votes are in and a new era is ahead of us. So, what does this mean for the housing market?

First and foremost I would say that we should all take a deep breath. In a similar fashion to the UK’s “Brexit”, there will be a “whiplash” effect, as was seen in overnight trading across the globe. However, at least in the US, equity markets have calmed as they start to take a closer look at what a Trump presidency will mean.

On a macro level, I would start by stating that political rhetoric and hyperbole do not necessarily translate into policy. That is the most important message that I want to get across. I consider it highly unlikely that many of the statements regarding trade protectionism will actually go into effect. It will be very important for President Trump to tone down his platform on renegotiating trade agreements and imposing tariffs on China. I also deem it highly unlikely that a 1,000-mile wall will actually get built.

It is crucial that some of the more inflammatory statements that President-Elect Trump has made be toned down or markets will react negatively. However, what is of greater concern to me is that neither candidate really approached questions regarding housing with any granularity. There was little-to-no-discussion regarding housing finance reform, so I will be watching this topic very closely over the coming months.

As far as the housing market is concerned, it is really too early to make any definitive comment. That said, Trump ran on a platform of deregulation and this could actually bode well for real estate. It might allow banks the freedom to lend more, which in turn, could further energize the market as more buyers may qualify for home loans.

Concerns over rising interest rates may also be overstated. As history tells us, during times of uncertainty we tend to put more money into bonds. If this holds true, then we may see a longer-than-expected period of below-average rates. Today’s uptick in bond yields is likely just temporary.

Proposed infrastructure spending could boost employment and wages, which again, would be a positive for housing markets. Furthermore, easing land use regulations has the potential to begin addressing the problem of housing affordability across many of our nation’s housing markets – specifically on the West Coast.

Economies do not like uncertainty. In the near-term we may see a temporary lull in the US economy, as well as the housing market, as we analyze what a Trump presidency really means. But at the present time, I do not see any substantive cause for panic in the housing sector.

We are a resilient nation, and as long as we continue to have checks-and balances, I have confidence that we will endure any period of uncertainty and come out stronger.

 

 

 

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.

Market News from Matthew Gardner

Historically low inventory levels, how we got here, and what to expect in the coming year

The housing market is performing remarkably well, with the exception of incredibly low inventory levels in many areas throughout the country. Why is this happening? Windermere’s Chief Economist, Matthew Gardner, explains why and offers his predictions for what we can expect in the future.

Local Market Update – May 2016

The supply of homes for sale in April was up over March, indicating that more sellers are deciding to list their homes. But with less than a month of inventory available in the area, it’s still a seller’s market. While prices were up over last year, the increases aren’t as lofty as they were in the first quarter of this year. Buyers looking for affordable housing continue to push their search outside the more expensive urban cores.

King County

Click image to view full report.
Click image to view full report.

After breaking records for home prices in February and March, King County reached a new record-high in April. The median price of a single-family home was $540,000, a 12 percent increase over the same time last year. The more affordable areas in the south and north ends of the county saw the greatest increases, with home prices climbing almost 20 percent in these outlying areas.

Seattle

Click image to view full report.
Click image to view full report.

Seattle continues to have the tightest inventory of homes in King County. An influx of young, well-paid technology workers has fueled demand for homes close to the city. The median price of a single-family home increased 15 percent over a year ago to $637,250. But like the Eastside, that number was down slightly from February and March.

Eastside

Click image to view full report.
Click image to view full report.

At $730,000, the median price of a home on the Eastside was up 11 percent over last year. That figure was down slightly from February and March, suggesting that prices may be moderating. Competition for homes has not moderated. Brokers continue to report homes on the Eastside selling very quickly and often for over asking price.

What’s the Deal with Condos?

A question that I am being asked regularly these days is, “Why isn’t anyone building condominiums anymore?

Given the egregious lack of homes for sale – and considering that single family home builders have not done their part to satisfy substantial pent-up demand – one would expect to see developers raising condominium towers at a frenetic pace, but that is simply not happening.

Firstly, a bit of background on this: the Seattle real estate market saw a rapid rise in the development of condominiums starting in the late 1990’s and continuing through to the housing bubble burst of 2008. When the post-recession dust finally settled, what condominiums were left were either converted into apartments or returned to the lenders, who subsequently disposed of them via auction or at very favorable prices.

As the housing market recovered, shell-shocked developers remained wary of condominiums. However, even if there were any developers who had an appetite to build more towers, they were essentially blocked by banks who still perceived condo developments as an extremely risky land use.

Given this situation, it wasn’t surprising to see developers rapidly turn their attention to the apartment market. They were aware that demand had taken off and that banks were willing to lend on that product type. Paralleling the substantial demand from the rental market, the institutional investment community had started to snap up a large number of projects, but their appetite was not being satisfied.

So, with this veritable alignment of planets, many traditional condominium developers turned their attention to the development of rental projects. There was financing available, substantial demand, limited risk, and the potential for an earlier payout (if the developer sold to an institution).

This then became the path that many developers chose.

But these are not the only reasons why many developers stopped building condominiums; there were, and still are, additional hurdles that continue to hold them back.

Firstly, costs across the board continue to increase. Land values in downtown Seattle re-broke the $1,000 per-square-foot mark – a number not seen since well before the recession started. Additionally, almost all of the area’s contractors are busy building apartments (or Amazon.com office space), which has put additional upward pressure on labor costs. On top of this, material costs continue to escalate due to high demand from other development types.

Because of these factors, the prices for new condominiums have to be at a substantial premium, and developers were/are uncertain if the market can support these high price points.

There is also one last hurdle that is stopping developers in their tracks – the remarkably onerous construction defect laws that exist in our state. Current laws allow homeowners’ associations to file large group lawsuits for construction problems associated with new condominiums. Because of this factor alone, a vast majority of developers are not building condominiums for fear of exposure to litigation.

Several states, including Washington, are looking to make changes to the current construction defect laws, but until that happens, the insurance premiums that developers must pay, combined with the almost certainty that they will be sued regardless of the quality of their construction, is further stifling the development community.

Our region continues to grow its population base but not its land base. As such, density needs to be embraced. Condominiums play an important part of the equation, but until this segment of the market regains its footing, there will be further pressure on housing of all types to accommodate our region’s growth, and this will continue to put upward pressure on prices.

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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. 

 

 

Welcome Leigh Canlis!

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We are excited to announce the addition of Leigh Canlis to the Windermere Services team!

Leigh has been a well-known business and community leader in the Seattle area for more than 18 years. Her background includes managing sales, events, and VIP client relations for Dale Chihuly, 13 years as President of Canlis Glass, and Vice President-Private Banker at JP Morgan, as well as Vice President-Wealth Strategist for Northern Trust. Leigh is also well known for her extensive charitable work with several Seattle-area non-profits.

“I want to help Windermere push the traditional boundaries of luxury real estate and define a new, refined category within the marketplace,” she said in a statement. “I want it to make a mark and grab people’s attention with its grace and sophistication, to feel out of the box for the real estate world, while complimenting everything that Windermere stands for.”

Windermere already leads in luxury sales in the greater Seattle area, but we are excited for the creativity and fresh ideas Leigh brings with her. We know all too well how quickly our market can change, and we want to make sure Windermere stays ahead of the evolving needs of our clients.

Welcome to the Windermere family, Leigh!

This blog was originally posted on the Windermere Eastside.