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.

The Urbanization of Downtown Bellevue

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When you hear of a city that is “something between an urban jungle and the classic picture of suburbia,” Bellevue may not be the first place that comes to mind. However, that’s exactly how one young couple describes downtown Bellevue in a recent article from The Seattle Times – and they aren’t the only ones.

When and how did downtown Bellevue transform into a dense, urban, mini-Seattle?

According to the article, downtown Bellevue is the fastest-growing neighborhood in the city, so much like the growth in Seattle it happened fairly quickly. Most of it has occurred over the past four years as developers have built more than a dozen new apartment projects in the neighborhood – and more are in the works. Permit data from the city shows that since the latest development cycle began in 2013, downtown has seen $800 million worth of new projects come up and $100 million more about to begin.

The current wave of projects is a little different than the last. This time the surge is mostly apartments, which are seen as a safer investment, but at least two companies are planning the city’s first new condos in a decade. Additionally, office construction in this current development cycle has added 1.5 million square feet of office space to downtown, most of which has already been leased.

Residents of downtown have been experiencing the effects of this growth and they are welcoming some changes more than others. Millennials are starting to think of downtown Bellevue as a lively, energetic, interesting neighborhood and residents and visitors have given the area high marks for safety and cleanliness. Less welcome changes include added gridlock on the roads and an increase in housing costs.

Luckily, our region is no stranger to adjusting to expansion so the future of Bellevue looks bright.

Read the full article from The Seattle Times.

How to Avoid the Most Common Buying and Selling Mistakes

There’s nothing more exciting, rewarding, and fulfilling than buying a home. However, it’s a complex transaction, and there are a number of steps along the path that can confuse, betwixt, and befuddle even the most seasoned buyers and sellers.

How can you avoid those potential pitfalls and common mistakes? Look to your real estate professional for advice and keep these guidelines in mind:

BUYERS:

#1 Review your credit reports ahead of time

Review your credit report a few months before you begin your house hunt, and you’ll have time to ensure the facts are correct, and be able to dispute mistakes before a mortgage lender checks your credit. Get a copy of your credit report from Experian, Equifax, and TransUnion. Why all three? Because, if the scores differ, the bank will typically use the lowest one. Alert the credit bureaus if you see any mistakes, fix any problems you discover, and don’t apply for any new credit until after your home loan closes.

#2 Get pre-approved

Before getting serious about your hunt for a new house, you’ll want to choose a lender and get pre-approved for a mortgage (not just pre-qualified—which is a cursory review of your finances—but pre-approved for a loan of a specific amount). Pre-approval lets sellers know you’re serious. Most importantly, pre-approval will help you determine exactly how much you can comfortably afford to spend.

#3 Know what you want

You and your real estate agent should both be clear about the house you want to buy. Put it in writing. First, make a list of all the features and amenities you really want. Then, number each item and prioritize them. Now, divide the list into must-haves and really-wants. A good place to start is the “HUD Wish List,” which is available online for free at http://www.hud.gov/buying/wishlist.pdf

#4 Account for hidden costs

In addition to the purchase price of the home, there are additional costs you need to take into consideration, such as closing costs, appraisal fees, and escrow fees. Once you find a prospective home, you’ll want to:

  • Get estimates for any repairs or remodeling it may need.
  • Estimate how much it will cost to maintain (gas, electric, utilities, etc.).
  • Determine how much you’ll pay in taxes monthly and/or annually.
  • Learn whether there are any homeowner or development dues associated with the property.

#5 Get an inspection

Buying a home is emotionally charged—which can make it difficult for buyers to see the house for what it truly is. That’s why you need impartial third parties who can help you logically analyze the condition of the property. Your agent is there to advise you, but you also need a home inspector to assess any hidden flaws, structural damage or faulty systems.

#6 Evaluate the neighborhood and location

When house hunting, it’s easy to become overly focused on the number of bedrooms and bathrooms, the condition of the home and its amenities while overlooking the subtleties of the surrounding neighborhood. Take time to check crime reports, school options, churches and shopping. If schools are a key factor, do more than simply research the statistics; speak with the principal(s) and chat with the parents waiting outside.

SELLERS:

#1 Avoid becoming emotional or sentimental about the sale

Once you decide to sell your house, it’s time to strip out the emotion and look at it as a commodity in a business transaction. If you start reminiscing about all the good times you had and the hard work you invested, it will only make it that much harder to successfully price, prepare, and market the home.

#2 Fix problems (or price accordingly)

Homes with deferred maintenance and repair issues can take far longer to sell and can be subject to last-minute sale-cancellations. These homes also often sell for less than their legitimate market value. If you simply can’t afford to address critical issues, be prepared to work with your agent to price and market your home accordingly.

#3 Don’t overprice your home (and/or refuse to negotiate)

Getting top dollar is the dream of every seller. But it’s essential that you let the market dictate that price, not your emotions or financial situation. Allow your agent to research and prepare a market analysis that factors in the value of similar homes in the area, and trust those results.

#4 Use quality photos

The vast majority of prospective buyers today search for homes online first. In order to make a good first impression, you need a wealth of high-quality photos of your home and surrounding grounds. You may also need to consider professional staging in order to position your home in the best possible light for prospective buyers.

The process of buying or selling a home can have plenty of twists and turns, but with some smart decision making, you can avoid the most common mistakes and pitfalls.

This post originally appeared on the Windermere.com blog.

Top 5 Seattle-Area Superlatives From 2016

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2016 has been quite a year to live in the Pacific Northwest, especially if you spent some or most of it in the housing market. This year’s market was truly unique, record-breaking, and game-changing (see: Windermere’s W Collection). To close out the year here are a few of the most noteworthy Seattle-area superlatives related to real estate – and a few confirming just how lucky we are to live in this beautiful pocket of the world.

Nation’s Hottest Housing Market

Let’s get straight to the point – this year Seattle was named the hottest housing market in the nation! According to Geekwire home prices in our region rose 11 percent between September 2015 and 2016, putting us ahead of Portland for year-over-year growth.

We owe much of this recognition to our booming tech industry, which has been bringing people to the Seattle area in droves. “Droves” refers to the 86,320 residents (and counting) who moved to Greater Seattle between April 2015 and 2016, marking the region’s biggest population gain this century.

Many of these thousands of people who flocked here for tech jobs were probably also considering other tech hubs, but we were more alluring because tech salaries in the Seattle area are among the highest in the U.S. after cost of living adjustments. That means their salaries go much farther here than other tech towns, such as San Francisco, enabling them to have a better quality of life.

The Region’s Largest Property Sale

Of all of the multi-million dollar property sales in our region the largest was the 50-story Safeco Plaza in Seattle, which sold for $387 million. The buyer was a Munich-based company that had previously acquired an Amazon-occupied property in the thriving South Lake Union neighborhood.

Eastside’s Biggest Property Sale

The Seattle Times recently reported a pair of investors from the United States and China bought a major office complex in Bellevue for $202.2 million, making it the biggest transaction on the Eastside this year. The three-building, 480,000 sq. foot complex is fully leased and will be home to tenants such as BitTitan and CenturyLink.

Seattle No. 1 Choice for Foreign Investors

What’s one important thing buyers of both of these properties had in common? They were foreign investors. This year Seattle became the No. 1 choice for foreign investors after British Columbia enacted a 15 percent tax on foreign buyers in August, causing them to redirect their real estate searches to the Seattle area. To quantify this impact, as of November, Chinese money accounted for about 55 percent of all homes purchased by foreign investors in Washington.

Seattle No. 1 Place to Live If You Love Spending Time Outdoors

While this last ranking isn’t directly related to real estate, it’s definitely worth boasting about! Six Washington cities made Business Insider’s list of “25 beautiful US cities to live in if you love spending time outdoors.” Seattle topped the list and Bellevue came in at No. 5. Every day we are surrounded by the beauty of trees, mountains, and water with endless opportunities and ways to enjoy them.

Windermere Launches New Ultra-Luxury Brand: W Collection

I’m so honored to be part of Windermere’s W Collection, a new brand in ultra-luxury! I’m happy to be able to help people reach their real estate dreams in an area with so much to offer, and that continues to grow. Read more about this unique program below and check out W by Windermere to see my profile!

W Collection

Anyone who has spent time in the Seattle area in recent years has likely seen for themselves how much the city has changed. Thanks in large part to the booming economy, growing tech sector, and increasing international appeal, Seattle is no longer a sleepy little city tucked away in the far corner of the United States. With this changing landscape has come an infusion of wealth that has seen the area’s high-net-worth population explode. And with it, so too has the ultra-high-end real estate market.

In order to meet the specialized needs of this burgeoning market, Windermere has launched W Collection, a new ultra-luxury brand specifically designed for homes priced at $3 million and above in Western Washington. OB Jacobi, President of Windermere Real Estate, says that Seattle’s population of “global affluent” is on the rise and they greatly value real estate. The proof is in the numbers.

Over the past five years there has been a significant increase in the number of home sales in the $3 million+ market. In 2011 there were only 45 such sales in King County, while in 2015 there were 131. “Windermere agents represent anywhere from 40-60 percent of the $3 million+ sales in the Seattle area, so we felt we were in the ideal position to build a brand that could provide enhanced marketing support to the growing number of ultra-luxury homes,” said Jacobi.

W Collection is its own standalone brand with a separate website, WByWindermere.com, signage, presentation materials, and specialized advertising opportunities. When developing W Collection, Jacobi said that the goal was to create a sophisticated, yet humble, brand that evokes the understated expression of wealth that is unique to the Pacific Northwest. “Our clients are not largely drawn to the shows of excessive wealth that you see at other companies and in other parts of the country. This is reflected in the W Collection brand,” said Jacobi.

The development of W Collection began a little over a year ago, and according to Jacobi, was a highly collaborative process with Windermere agents playing an integral role in every step, “Over the past 44 years some of Windermere’s best ideas have come from our agents who are totally in tune with the needs of their clients and the shifting demands of the market; W Collection was born from this same agent ingenuity.”

This article originally appeared on the Windermere.com blog.