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Market Stats • Windermere Bellevue Commons News • November 2, 2017

Greater Seattle Area Real Estate Market – 3rd Quarter 2017

by Bellevue Commons

The Gardner Report – Third Quarter 2017

 

ECONOMIC OVERVIEW

The Washington State economy added 79,600 new jobs over the past 12 months—an impressive growth rate of 2.4%, and well above the national growth rate of 1.2%. However, as we anticipated in last quarter’s report, we continue to see a modest slowdown in the growth rate as the state grows closer to full employment. Growth has been broad-based, with expansion in all major job sectors other than Aerospace (a function of a slowdown at Boeing). Given the current rate of expansion, I am raising my employment forecast and now predict that Washington will add 81,000 new jobs in 2017.

Given the robust job market, it is unsurprising that the state unemployment rate continues to fall. The current unemployment rate in Washington State is 4.6% and we are essentially at full employment. Additionally, all counties contained within this report reported either a drop or stability in their unemployment rate from a year ago. I maintain my belief that the Washington State economy will continue to outperform the U.S. as a whole. Given such a strong expansion, we should also expect solid income growth across Western Washington.

 

HOME SALES ACTIVITY

  • There were 25,312 home sales during the third quarter of 2017. This is an increase of 3.6% over the same period in 2016.
  • Clallam County maintains its number one position for sales growth over the past 12 months. Only four other counties saw double-digit gains in sales. This demonstrates continuing issues with the low supply of listings. There were modest declines in sales activity in six counties.
  • The market remains remarkably tight with listing inventory down by 14.2% when compared to the third quarter of 2016. But inventory is up a significant 32% compared to the second quarter of this year. Pending sales rose by 5.2% over the same quarter a year ago, which suggests that closings in Q4 will still be robust.
  • The key takeaway from this data is that inventory is still very low, and the situation is unlikely to improve through the balance of the year.

 

 

HOME PRICES

  • Given tight supply levels, it is unsurprising to see very solid price growth across the Western Washington counties. Year-over-year, average prices rose 12.3% to $474,184. This is 0.9% higher than seen in the second quarter of this year.
  • With demand far exceeding supply, price growth in Western Washington continues to trend well above the longterm average. As I do not expect to see the new home market expand at any significant pace, there will be continued pressure on the resale market, which will cause home prices to continue to rise at above-average rates.
  • When compared to the same period a year ago, price growth was most pronounced in Grays Harbor County where sale prices were 20.1% higher than the third quarter of 2016. Nine additional counties experienced double-digit price growth.
  • Mortgage rates in the quarter continue to test the lows of 2017, and this is unlikely to change in the near-term. This will allow home prices to escalate further but I expect we will see rates start to rise fairly modestly in 2018, which could slow price growth.

 

 

 

 

 

 

 

 

DAYS ON MARKET

  • The average number of days it took to sell a home in the quarter dropped by eight days when compared to the same quarter of 2016.
  • King County continues to be the tightest market, with homes taking an average of 17 days to sell. Every county except San Juan saw the days on market drop from the same period a year ago.
  • This quarter, it took an average of 43 days to sell a home. This is down from the 51 days it took in the second quarter of 2016 and down by 8 days from the second quarter of this year.
  • At some point, inventory will start to grow and this will lead to an increase in the average time it takes to sell a house. However, I do not expect that to happen at any time soon. So we remain in a seller’s market.

 

CONCLUSIONS

This speedometer reflects the state of the region’s housing market using housing inventory, price gains, home sales, interest rates, and larger economic factors. For the third quarter of 2017, I have left the needle at the same point as the second quarter. Though price growth remains robust, sales activity has slowed very slightly and listings jumped relative to the second quarter. That said, the market is very strong and buyers will continue to find significant competition for accurately priced and well-located homes.

 

 

 

 

ABOUT MATTHEW GARDNER

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

 

 

 

Market Stats • Windermere Bellevue Commons News • July 26, 2017

The Gardner Report – 2nd Quarter 2017

by Bellevue Commons
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The Gardner Report | Western Washington Q2 2017

 

The following analysis of the Western Washington real estate market is provided by Windermere Real Estate Chief Economist Matthew Gardner. We hope that this information may assist you with making better-informed real estate decisions. For further information about the housing market in your area, please don’t hesitate to contact me.

ECONOMIC OVERVIEW

The Washington State economy has been expanding at a rapid pace but we are seeing a slowdown as the state grows closer to full employment. Given the solid growth, I would expect to see income growth move markedly higher, though this has yet to materialize. I anticipate that we will see faster income growth in the second half of the year. I still believe that the state will add around 70,000 jobs in 2017.

Washington State, as well as the markets that make up Western Washington, continue to see unemployment fall. The latest state-wide report now shows a rate of 4.5%—the lowest rate since data started to be collected in 1976.

I believe that growth in the state will continue to outperform the U.S. as a whole and, with such robust expansion, I would not be surprised to see more people relocate here as they see Washington as a market that offers substantial opportunity.

HOME SALES ACTIVITY

  • There were 23,349 home sales during the second quarter of 2017. This is an increase of 1.1% from the same period in 2016.
  • Clallam County maintains its position as number one for sales growth over the past 12 months. Double-digit gains in sales were seen in just three other counties, which is a sharp drop from prior reports. I attribute this to inventory constraints rather than any tangible drop in demand. The only modest decline in sales last quarter was seen in Grays Harbor County.
  • The number of homes for sale, unfortunately, showed no improvement, with an average of just 9,279 listings in the quarter, a decline of 20.4% from the second quarter of 2016. Pending sales rose by 3.6% relative to the same quarter a year ago.
  • The key takeaway from this data is that it is unlikely we will see a significant increase in the number of homes for sale for the rest of 2017.
Annual Change in Home Sales

HOME PRICES

  • Along with the expanding economy, home prices continue to rise at very robust rates. Year-over-year, average prices rose 14.9%. The region’s average sales price is now $470,187.
  • Price growth in Western Washington continues to impress as competition for the limited number of homes for sale remains very strong. With little easing in supply, we anticipate that prices will continue to rise at above long-term averages.
  • When compared to the same period a year ago, price growth was most pronounced in San Juan County where sale prices were 29.2% higher than second quarter of 2016. Eight additional counties experienced double-digit price growth.
  • The specter of rising interest rates failed to materialize last quarter, but this actually functioned to get more would-be buyers off the fence and into the market. This led to even more demand which translated into rising home prices.
Western Washington Heat Map
Annual Change in Home Sale Prices

DAYS ON MARKET

  • The average number of days it took to sell a home in the quarter dropped by 18 days when compared to the same quarter of 2016.
  • King County remains the tightest market; homes, on average, sold in a remarkable 15 days. Every county in this report saw the length of time it took to sell a home drop from the same period a year ago.
  • Last quarter, it took an average of 48 days to sell a home. This is down from the 66 days it took in the second quarter of 2016.
  • Given the marked lack of inventory, I would not be surprised to see the length of time it takes to sell a home drop further before the end of the year.
Average Days on Market

CONCLUSIONS
Market Speedometer
This speedometer reflects the state of the region’s housing market using housing inventory, price gains, home sales, interest rates, and larger economic factors. For the second quarter of 2017, I moved the needle a little more in favor of sellers. To define the Western Washington market as “tight” is somewhat of an understatement. Inventory is short and buyers are plentiful. Something must give, but unless we see builders delivering substantially more units than they have been, it will remain staunchly a sellers’ market for the balance of the year. Furthermore, increasing mortgage rates have failed to materialize and, with employment and income growth on the rise, the regional housing market will continue to be very robust.

ABOUT MATTHEW GARDNER

Matthew Gardner is the Chief Economist for Windermere Real Estate, specializing in residential market analysis, commercial/industrial market analysis, financial analysis, and land use and regional economics. He is the former Principal of Gardner Economics, and has more than 30 years of professional experience both in the U.S. and U.K.
Market Stats • Windermere Bellevue Commons News • May 24, 2017

King & Snohomish County Market Stats – May 2017

by Bellevue Commons

What’s Happening in the Market

Eastside (based on Residential and Condominium report):

  • Closed median price at an all-time high of $748,944, up 20% from a year ago

 

  • Price appreciation is being driven by low supply and high demand.  Eastside months’ supply of inventory is less than three weeks, the lowest ever!

 

  • 748 active listings as of 4/30/17.  Down 33% from the year before and 48% from two years before.

 

  • Scarcity has buyers paying above list price on 65% of the sales that closed in April.

 

  • What was the cost of waiting on year (April 2016 vs April 2017) to buy?  $123,944 in median price.  $9,026 per year in payment.

Market Stats • Windermere Bellevue Commons News • May 18, 2017

The Gardner Report – First Quarter 2017

by Bellevue Commons

The Gardner Report – First Quarter 2017

Economic Overview

I’m happy to report that Washington State continues to add jobs at a steady rate. While the rate of growth is tapering, this is because many markets are getting close to “full employment”, during which time growth naturally slows. That said, I believe that the state will add around 70,000 jobs in 2017. Washington State, as well as the markets that make up Western Washington, continues to see unemployment fall and I anticipate that we will see this rate drop further as we move through the year. In all, the economy continues to perform at or above average levels and 2017 will be another growth year.

Home Sales

  • There were 15,652 home sales during the first quarter of 2017. This is an increase of 9.5% from the same period in 2016, but 20.7% below the total number of sales in the final quarter of 2016.
  • With an increase of 45.5%, sales in Clallam County grew at the fastest rate over the past 12 months. There were double-digit gains seen in an additional 10 counties, suggesting that demand remains very robust. The only modest decline in sales was seen in Grays Harbor County.
  • The number of homes for sale showed no improvement at all, with an average of just 6,893 homes for sale in the quarter, a decline of 33% from the previous quarter and 25% from the first quarter of 2016. Pending sales rose by 2% relative to the same quarter a year ago.
  • The key takeaway from this data is that 2017 will offer little relief to would-be home buyers as the housing supply remains severely constrained.

Home Prices

  • With demand continuing to exceed supply, home prices continued to rise at above-average rates. Year-over-year, average prices rose by 9.5% but were 1.1% lower than in the final quarter of 2016. The region’s average sales price is now $409,351.
  • Price growth in Western Washington is unlikely to taper dramatically in 2017 and many counties will continue to see prices appreciate well above their long-term averages.
  • When compared to the same period a year ago, price growth was most pronounced in Kittitas County, which rose by 19.6%. Double-digit price growth was seen in an additional 10 counties. The only market where the average price fell was in the ever-volatile San Juan County.
  • It is clear that rising interest rates have not taken much of a sheen off the market.

Days on Market

  • The average number of days it took to sell a home in the first quarter dropped by 16 days when compared to the first quarter of 2016.
  • King County remained the tightest market, with the average time to sell a home at just 31 days. Island County was the only area where it took longer to sell a home than seen a year ago; however, the increase was just one day.
  • In the first quarter of the year, it took an average of 70 days to sell a home. This is down from the 86 days it took in the first quarter of 2016, but up from the 64 days it took in the final quarter of last year.
  • Given woefully low levels of inventory in all Western Washington markets, I do not expect to see the length of time that it takes to sell a home rising in 2017. In fact, it is likely that it will continue to drop.

Conclusions

This speedometer reflects the state of the region’s housing market using housing inventory, price gains, home sales, interest rates, and larger economic factors. For the first quarter of 2017, I moved the needle a little more in favor of sellers. The rapid increase in mortgage rates during the fourth quarter of 2016 has slowed and buyers are clearly out in force.

This article originally appeared on the Windermere.com blog.

Home Selling • Windermere Bellevue Commons News • April 26, 2017

3 Charts That Shout, ‘List Your Home Today!’

by Bellevue Commons
facebook.jpg

3 Charts That Shout, ‘List Your Home Today!’ | MyKCM

In school, we all learned the theory of supply and demand. When the demand for an item is greater than the supply of that item, the price will surely rise.

SUPPLY

The National Association of Realtors (NAR) recently reported that the inventory of homes for sale stands at a 3.8-month supply. This is considerably lower than the 6-month supply necessary for a normal market.

3 Charts That Shout, ‘List Your Home Today!’ | MyKCM

 

DEMAND

Every month NAR reports on the number of buyers out in the market looking for homes, which is also known as buyer traffic. As seen on the map below, buyer demand in March was strong or very strong in 45 out of 50 states nationwide, and Washington, DC.

3 Charts That Shout, ‘List Your Home Today!’ | MyKCM

Many buyers are being confronted with a very competitive market in which they must compete with other buyers for their dream homes (if they are even able to find a home they wish to purchase).

Listing your house for sale now will allow you to capitalize on the shortage of homes for sale in the market, which will translate into a better pricing situation.

HOME EQUITY

Many homeowners underestimate the amount of equity they currently have in their homes. According to a recent Fannie Mae study, 37% of homeowners believe that they have more than 20% equity in their homes. In reality, CoreLogic’s latest Equity Report tells us that 78.9% actually do!

3 Charts That Shout, ‘List Your Home Today!’ | MyKCM

Many homeowners who are undervaluing the equity they have in their homes may feel trapped, which may be contributing to the lack of inventory in the market.

Market Stats • Windermere Bellevue Commons News • April 12, 2017

King & Snohomish County Market Stats – March 2017

by Bellevue Commons

What’s Happening in the Market

  • Closed median price at an all-time high of $736,500, up 20% from a year ago.

 

  • Price appreciation is being driven by low supply and high demand.  Eastside month’s supply of inventory is less than three weeks (0.7 months), the lowest ever.

 

  • 737 active listings as of 3/31/17.  Down 21% from last year and 42% from the year before.

 

  • Scarcity has buyers paying above list price on 61% of the sales that closed in March.

 

  • What was the cost of waiting on year (March 2016 vs March 2017) to buy?  $120,400 more in median price. Interest rates up .51%.  $769 a month more for the same home.

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