The Q1 2019 Western Washington Gardner Report

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As Chief Economist for Windermere Real Estate, Matthew Gardner is responsible for analyzing and interpreting economic data and its impact on the real estate market on both a local and national level. Matthew has over 30 years of professional experience both in the U.S. and U.K.

In addition to his day-to-day responsibilities, Matthew sits on the Washington State Governors Council of Economic Advisors; chairs the Board of Trustees at the Washington Center for Real Estate Research at the University of Washington; and is an Advisory Board Member at the Runstad Center for Real Estate Studies at the University of Washington where he also lectures in real estate economics.


Posted on April 25, 2019 at 7:00 pm
Denni Shefrin | Posted in Matthew Gardner Reports | Tagged , , , , ,

Eastside Market Report | April 2019 | Provided by Denni Shefrin

 


After months of softening, home prices began to rise in February. That trend continued in March. While prices in most areas were down from the same time last year, they increased over the prior month. New listings rose as well, offering buyers more options and more time to make the right choice. Despite the uptick in listings, inventory is still under two months of supply, far short of the three to six months that is considered balanced.

Here are the full reports for Eastside Market Report, Seattle Market Report, Snohomish Market Report and King County Market Report!

 

 

 


Posted on April 16, 2019 at 3:03 pm
Denni Shefrin | Posted in Local Market Update | Tagged , , ,

Find a New Home in Four Steps

Whether you’re a first-time homebuyer or a current owner looking for a bigger home, the ideas below will help you better navigate that all-important first step: Finding a property that you like (and can afford).

The search for a new home always starts out with a lot of excitement. But if you haven’t prepared, frustration can soon set in, especially in a competitive real estate market. The biggest mistake is jumping into a search unfocused, just hoping to “see what’s available.” Instead, we recommend you first take some time to work through the four steps below.

Step 1: Talk to your agent

Even if you’re just thinking about buying or selling a house, start by consulting your real estate agent. An agent can give you an up-to-the-minute summary of the current real estate market, as well as mortgage industry trends. They can also put you in touch with all the best resources and educate you about next steps, plus much more.

Step 2: Decide how much home you can afford

It may sound like a drag to start your home search with a boring financial review, but when all is said and done, you’ll be glad you did. With so few homes on the market now in many areas, and so many people competing to buy what is available, it’s far more efficient to focus your search on only the properties you can afford. A meeting or two with a reputable mortgage agent should tell you everything you need to know.

Step 3: Envision your future

Typically, it takes at least five years for a home purchase to start paying off financially, which means, the better your new home suits you, the longer you’ll most likely remain living there.

Will you be having children in the next five or six years? Where do you see your career heading? Are you interested in working from home, or making extra money by renting a portion of your home to others? Do you anticipate a relative coming to live with you? Share this information with your real estate agent, who can then help you evaluate school districts, work commutes, rental opportunities, and more as you search for homes together.

Step 4: Document your ideal home

When it comes to this step, be realistic. It’s easy to get carried away dreaming about all the home features you want. Try listing everything on a piece of paper, then choose the five “must-haves,” and the five “really-wants.”

For more tips, as well as advice geared specifically to your situation, contact me anytime!


Posted on April 8, 2019 at 8:09 pm
Denni Shefrin | Posted in Buying | Tagged , , , ,

Matthew Gardner 2019 Housing Forecast


Posted on March 31, 2019 at 11:42 am
Denni Shefrin | Posted in Matthew Gardner Reports | Tagged , , , ,

British chaos means interest rates will stay low for longer

FRANKFURT, Germany (AP) — Savers will suffer longer with zero returns on their accounts. Home buyers, companies and governments will keep on borrowing cheaply. And questions will grow further about whether central banks are creating bubbles in financial markets by keeping interest rates near or below zero.

The British vote to leave the European Union shook up markets and lowered growth forecasts for Britain and, to a lesser degree, the other 27 members of the European Union. Economists say that means central banks are likely to have to keep in place for even longer their massive, extraordinary stimulus efforts that have helped keep the global economy afloat in the wake of the 2008-9 financial crisis. Some central banks might even have to unveil new stimulus or rate cuts.


Posted on June 30, 2016 at 7:15 pm
Denni Shefrin | Posted in Buying, Homeownership Trends, Mortgages, Selling |

Seattle housing: Is it a bubble?

Seattle area single-family home prices in March were up 10.8 percent from a year ago, behind only Portland, where prices have shot up 12.3 percent, according to the latest S&P/Case-Shiller data. (Greg Gilbert/The Seattle Times)

Seattle area single-family home prices in March were up 10.8 percent from a year ago, behind only Portland, where prices have shot up 12.3 percent, according to the latest S&P/Case-Shiller data. (Greg Gilbert/The Seattle Times)

Single-family house values in Seattle shot up 10.8 percent year-over-year in March, the second highest in the nation after Portland, according to the latest S&P/Case-Shiller index.

It’s a new record, surpassing the previous peak in the summer of 2007 — and we saw how that turned out. Nationally, the increase was 5.2 percent. Here, it’s especially good news for homeowners and bad for buyers.

Perhaps, but probably not.

The old bubble was a nationwide phenomenon, stoked by subprime mortgages, Wall Street hustles, high leverage, and compromised regulators. While the latter two always bear watching, the same dangerous confluence of factors from 2007 don’t apply to today. The Case-Shiller 20-city index remains below its 2007 levels.

Instead, the biggest price increases are tied to low supply, high demand and strong economies in certain very desirable cities, such as Seattle, Portland and Denver. Elsewhere, it is a natural consequence of the recovery.

Black swans do appear. So, for example, an economic meltdown in China, a trade war under President [real-estate developer], earthquake or volcano eruption could ruin your whole day. The more likely outcome is a slow moderation caused by higher interest rates, deflation of a tech bubble, slowed jobs growth or, in some places, new inventory of housing coming online.

Even then, if San Francisco is an example, prices will soon begin marching up again.

The issue of high prices doesn’t exist in a vacuum. There’s not a linear connection between housing costs and the very diverse problems lumped under the sometimes-misleading term homelessness. But economists have found that less affordable housing is a factor behind rising inequality.

House prices have been disconnected from median incomes since the early 2000s. So the issue is not merely housing affordability but stagnant or falling incomes. And bubble pops only make this worse.

This article originally appeared on The Seattle Times website.


Posted on June 9, 2016 at 1:40 pm
Denni Shefrin | Posted in Buying, Homeownership Trends, Local Market Update, Selling |

Multigenerational homes are back in style, with more breathing room

Bob and Myrna Conrad, both 65, share a house with their son Wade, 41, his wife, Dana, 42, and their grandson Bryce, 21. Isn’t it crowded? Don’t they cramp one another’s style? Actually, no.

“We just set some ground rules, and it’s been working great,” said Wade Conrad, who has been living with his extended family since late 2013 in a NextGen multigenerational home, built by Lennar in Spanaway.

The number of Americans living in multigenerational households — defined, generally, as homes with more than one adult generation — rose to 56.8 million in 2012, about 18 percent of the total population, from 46.6 million, or 15.5 percent of the population, in 2007, according to Pew Research. By comparison, an estimated 28 million, or 12 percent, lived in such households in 1980.

“People lost jobs, and with tighter household budgets, a lot of homes consolidated,” said Aaron Terrazas, a senior economist at Seattle-based housing website Zillow. “We’re seeing more children living with their parents, and elderly parents moving in with their adult children.”

Most multigenerational families live in ordinary houses, but the homebuilding industry is responding quickly to this shifting demand by creating homes specifically for such families.

The Lennar homes don’t offer just a spare bedroom suite or a “granny hut” that sits separately on the property or a room above a garage. The NextGen designs provide a separate entranceway, bedroom, living space, bathroom, kitchenette, laundry facilities and, in some cases, even separate temperature controls and separate garages with lockable entrances to the main house.

Family members can live under the same roof and not see one another for days if they so choose.

Wade Conrad acknowledged he was initially skeptical when his father suggested they buy a home together. Conrad, along with his wife and two children, had twice moved back home with his parents during job transitions — the most recent lasting a year in 2007 — and it did not go well, he said.

Back then, they butted heads over everything: food, parenting decisions, furniture choices and even TV programs. All these irritating memories came rushing back as Conrad pondered his father’s suggestion.

But once he saw the NextGen home, he was sold. Conrad moved his family from their crowded 1,000-square-foot town home into the 5,000-square-foot NextGen home.

They set some rules: No TV in the large common area, food is bought separately, all other expenses are split down the middle.

For the grandparents, who had been living in St. Louis, the spacious new home was an ideal way to reconnect with family. “It ended up being the best decision we could ever envision,” the elder Conrad said. “And my son can watch all the ‘Walking Dead’ episodes he wants.”

So what’s driving this trend?

The 2008 recession, high student-loan debt, rising rents and a tough job market for millennials caused many people ages 18 to 34 to delay leaving home, said Alex Barron, founder of the Housing Research Center. And then there are boomerang children, who return to their parents’ home because of a job loss, divorce or other reason.

On the flip side, baby boomers are living longer than previous generations. Many are planning ahead in hopes they can devote more attention to their children and grandchildren — and spend little, if any, time in a nursing home. Multigenerational living is “growing in popularity,” said Robert Curran, a managing director at Fitch Ratings. With roughly 10,000 baby boomers turning 65 each day for the next 17 years, interest in such arrangements is unlikely to wane anytime soon.

 

This article originally appeared in the Seattle Times. To read more, click the link.


Posted on April 24, 2016 at 7:42 pm
Denni Shefrin | Posted in Uncategorized |

6 Deck Renovations That Really Pay Off—and 1 That Doesn’t

nice deck

Charles Schmidt/iStock

 

If there’s one thing that unites this great country—especially once the weather starts getting warmer and barbecue season gets ever so tantalizingly closer—it is our passionate, even obsessive love for our outdoor decks. Truth be told, just about all of us desire a perch from which to survey our backyard (or rooftop) kingdom, lazily hang out, or busily entertain.

One story behind the origin of decks is that they were inspired by boat decking. But unlike new yawls or yachts—which will depreciate in value by an average of 24% in just three years—a brand-new wooden deck addition to your home will net you a 75% return on investment when you decide to sell, according to Remodeling Magazine’s 2016 Cost vs. Value Report.

That’s why in honor of summer’s sweet approach, we take a look at the ROI for decks in our latest installment of Renovations That Really Pay Off. Whether you are building one from scratch or just want to make the one you have bigger and better, here’s how to get your deck on this summer in ways that will pay off awesomely down the road.

Gratis guidance

Before you pick up a hammer, review the wildly useful free deck guide from the American Wood Council. Did we mention it’s free? Here you’ll find safe construction specs so you can get your rim joists and ledger boards just so. This should also be when you decide on deck size—a 200-square-foot deck will run you about $4,836—keeping in mind an addition could jack up your property taxes and insurance. Getting those hard numbers will help you figure out your overall budget (handy deck cost calculator here).

Getting started

The average contractor charges $35 per square foot to build a deck, but where the cost can vary enormously is in the material. Hollow-core PVC can cost as little as $7.50 per square foot, cedar even less at $3.50—while the Brazilian hardwood ipe goes for a nosebleed-inducing $22 or more  (compare prices here).

A great way to save money? “Design your deck for standard lengths of lumber: 6-, 8-, 10-, or 12-foot boards,” says Chris Peterson, author of “Deck Ideas You Can Use.” This will eliminate any wasted wood from cutoffs. Peterson also suggests buying secondhand. “Organizations like Habitat for Humanity sell reclaimed wood from demos, as do some local salvage shops.” In addition to possibly scoring unique hardwoods, “the savings can be significant.”

Protect your investment

Your deck is constantly exposed to sun, rain, snow, and the occasional melted Creamsicle. Peterson advises “waterproofing wood decks regularly to ensure longevity … even if you’re letting the cedar or redwood age naturally. Water can cause direct damage in the form of rot and indirect damage like mold.”

Harry Adler of Adler’s Design Center & Hardware in Providence, RI, recommends protecting vulnerable surfaces with a product such as C2 Guard, a nontoxic waterproofer designed for use on unsealed wood and concrete surfaces.

Beyond wood

Pure, quality wood is the gold standard for decks. But there are other options, according to Bill Leys, aka The Deck Expert.

“Wood decks need yearly maintenance, and those costs can rapidly add up over the 20 years they’re expected to last,” Leys says.

James Brueton of EnviroBuild recommends using a quality wood composite, “which initially has a slightly higher cost. But without the need to treat the deck every year, you’re soon saving money over traditional wood.”

TimberTech is the only premium wood composite decking that is capped with a protective polymer on all four sides. Better yet, all TimberTech decking comes with a 25-year limited residential warranty.

Eye on entertaining

Outdoor entertaining should be the key focus of any deck design, Brueton says.

“Especially when reselling your home, any new buyer will immediately see the appeal of barbecue days and summer nights” on a deck, he says. Since all these revelers will need a place to sit, one easy way to add that is a built-in bench made out of the same wood as the deck itself. It generally offers a strong ROI.

This look is not only streamlined but also relatively budget-friendly, costing $500 to $1,500, says J.B. Sassano, president of Mr. Handyman, a national home improvement franchise. Best of all, such seats will withstand the elements as well as the flooring underneath.

That said, don’t throw style and comfort under the bus. Make sure to add cushions and choose at least one statement piece of furniture with a “pop of color to reflect your personality and design taste,” suggests Sassano. Like this bright yellow chair for $140.

Light the way

If you plan to hang out on your deck well after sunset, fireflies aren’t going to cut it as a light source. Modernize—a website that empowers homeowners to get home improvement projects done—suggests simple ground lights ($28 each) to stringing fairy lights (starting at $15) to solar lights.

Don’t play with fire

Built-in or portable fire pits are warm, cozy, and “the source of deck fires. Whether embers blow out of the pit or the heat from the pit ignites the wood deck, the result is often tragic, with homes burned to the ground,” says Leys. Er, not such a great ROI. Place your fire pit in the backyard far from anything flammable. And to safely heat things up on your deck, buy a patio warmer ($150 to $400) says Sassano.

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This article originally appeared on Realtor.com


Posted on April 10, 2016 at 11:18 pm
Denni Shefrin | Posted in Home Maintenance, Homeownership Trends |

Scarce listings drive King County home prices to new highs

 

The median price of single-family homes sold in King County hit a new all-time high last month — $514,975 — amid record-low inventory, heralding even more intense bidding wars ahead in the typically busy spring home-buying season.

Ominously, the more affordable Snohomish and Pierce counties also face a historically low inventory level, according to a Seattle Times analysis of data from the Northwest Multiple Listing Service.

 

 

 

One widely-watched gauge of supply — the ratio of active listings to pending sales — hit its lowest level since at least 2003 in all three counties in February, according to the Times’ analysis. King and Snohomish counties each had less than a month’s supply, while Pierce had just over a month’s supply.

The historic shortage of homes for sale, combined with a recent drop in interest rates, has caused the dramatic run-up in prices, experts say. In February, King County had 1,923 homes listed for sale, the MLS reported, but a greater number of pending sales that hadn’t yet closed: 2,299.

“We cannot continue to sell more homes than we list,” said Matthew Gardner, chief economist at Windermere Real Estate. “When are we going to start seeing some listings? That scares me more than anything else.”

Single-family home prices in the city of Seattle jumped 24 percent over the year to a median $644,950. Despite an older housing stock, Seattle is ground-zero for the region’s job growth.

Expedia and Weyerhaeuser are moving their suburban headquarters to Seattle. Amazon.com recently opened its new high-rise campus in South Lake Union. And Silicon Valley titans like Facebook and Apple have established satellite offices here.

This article originally appeared in the Seattle Times. To read more, click here.


Posted on March 24, 2016 at 3:51 pm
Denni Shefrin | Posted in Uncategorized |

Seattle metro-area home prices up nearly 10 percent in a year

Seattle-area home prices surged in December, posting the fourth-highest annual gain among 20 metros, according to the S&P/Case-Shiller 20-city index released Tuesday.

The average price of existing single-family homes sold in King, Snohomish and Pierce counties climbed 9.9 percent over the year in December, its fastest pace in 2015. In the 20-city index, Seattle trailed only Portland (11.4 percent), San Francisco (10.3) and Denver (10.2) in annual price increases.

Nationally, prices in the 20-city index climbed 0.8 percent over the month in December, slowing a bit from a 1 percent increase in November. The index recorded a 5.7 percent annual gain.

Home prices in all but one city are rising faster than inflation, said David Blitzer, chairman of S&P’s index committee. Some might take that as a sign of trouble, especially given the stock market’s turmoil this year and the current age of this economic expansion.

“The recovery is 6 years old, but recoveries do not typically die of old age,” Blitzer said in a statement.

Higher home prices are encouraging builders: “Housing construction, like much of the economy, got off to a slow start in 2009-2010 and is only now beginning to show some serious strength,” he said.

Average prices in the Seattle metro area in December were less than 3 percent below the peak set in summer 2007, according to Case-Shiller data. The 20-city index is still about 12 percent off its 2006 peak.

Svenja Gudell, chief economist at Seattle-based Zillow, the real-estate website, said in a statement that the nation’s housing market faces a few challenges this spring: Low housing inventory is a factor in nearly every market now. Low oil prices are a drag on job growth in the Dakotas, Alaska and Texas. And the stronger U.S. dollar will affect demand from foreign buyers, while keeping mortgage-interest rates low.

This article originally appeared in the Seattle Times.


Posted on March 3, 2016 at 9:29 pm
Denni Shefrin | Posted in Buying, Homeownership Trends, Local Market Update, Selling |