Gig Harbor Real Estate • June 6, 2022

Timelessly Elegant 4-Bedroom, 2.75-Bath Home in Convenient Puyallup Neighborhood

by Mark Bergman

Boasting a palatial 3,495-square-foot layout replete with impeccable style, this Puyallup masterpiece on a lovely cul-de-sac is absolutely not to be missed! Showing off captivating architectural features in generous living spaces along with versatility galore, this gem offers the very best in both comfort and convenience. In addition to indoor perfection, this property’s outdoor setting is ready for years of making memories whether you’re hosting a BBQ or simply enjoying the perks of this home-sweet-home in peace and quiet. Located at 2612 16th Avenue Ct SW Puyallup, WA 98371 and merely minutes to shopping, dining, top Puyallup attractions, commuting options and more, this home is listed for $869,950.

This home’s dialed-in exterior and gorgeous landscaping showcases the type of curb appeal that ensures those passing by do a double take! The picturesque exterior offers just a hint of the marvelous spaces that await inside, and as soon as you step in through the front door, stunning formal spaces are ready to impress. In the front living room, soaring ceilings, a stately fireplace, and custom details offer a sophisticated setting ready for entertaining, while the adjacent formal dining room is ready for gatherings large and small.

The kitchen is right alongside the dining room, and a large counter with an open archway makes it easy to serve up buffet-style meals and other refreshments. In the kitchen, rich blue accents rest alongside handsome cabinetry, and the countertops and backsplash gleam with style. Hang out around the kitchen island for casual get-togethers, and kick back and relax in the large and inviting living room—this haven is ready for all that life brings your way. Plus, direct access onto the back deck expands your living space even more, and ensures it’s a breeze to dine outside or grill up dinner!

A lofted area upstairs features another sunlit spot perfect for reading and a library, for example, and the rest of the home is brimming with flexibility as well. Use any extra space you might have as a den, home office, home gym, or hobby room! And of course, the primary suite is an absolute dream come true—on chilly winter nights, snuggle into bed while the fireplace keeps things cozy, and on warm summer nights, step out onto the private balcony to enjoy the fresh air. A walk-in closet and ensuite bath are here as well; double sinks promise convenience while a corner soaking tub is bathed in natural light and is ready for bubble baths!

When the sun comes out, this home’s backyard is especially wonderful. A spacious deck has the room to host a crowd—invite the whole neighborhood over for a BBQ! Or you can simply sunbathe in peace and quiet. Unwind in the hot tub while the sun goes down, and roast marshmallows around the fire pit. The lifestyle you’ve been envisioning for yourself awaits right here with this Puyallup gem!

Living in Puyallup

At 2612 16th Avenue Ct SW Puyallup, WA 98371, this home is in a central location that’s close to schools, shopping, dining, commuting options, local attractions, and more. Highway 512 is only 6 minutes from home, making it easy to connect to Highway 167 or Interstate-5 from here. South Hill shopping is only 6 minutes away as well; discover a huge variety of popular stores and eateries, entertainment, local services, etc. here. Downtown Puyallup amenities are no more than 10 minutes away as well; enjoy the charming downtown atmosphere, check out community events at Pioneer Park, and hop on the Sounder Train at the Puyallup Station.

Interested in learning more? Click here to view the full listing! You can contact REALTOR® Mark Bergman online here or give him a call/text at (253) 297-5520.

Tacoma Real Estate • May 24, 2022

Four Lot Short Plat in Tacoma’s Convenient McKinley Neighborhood

by Mark Bergman

Situated in a lush, residential setting that’s ready for transformation, this City of Tacoma-approved Four Lot Short Plat presents a rare opportunity! It’s not every day that lots this large become available in this area of Tacoma—those who need and want easy access to commuting options, local employers, and city amenities and attractions are sure to find this location especially desirable. Located at 3102 E M Street, Tacoma, WA 98404 in Tacoma’s thriving McKinley neighborhood on the Eastside, this Four Lot Short Plat is listed for $460,000.

As you enter the plat, you’ll first find lots 1 and 2. Turn left to find lots 3 and 4. The size of each of the lots is as follows:

Lot 1 = 7,799 sq ft
Lot 2 = 18,206 sq ft
Lot 3 = 9,755 sq ft
Lot 4 = 9,755 sq ft

Gas, sewer, and water are all in the street for your convenience. You’ll also find peek-a-boo water views along with mountain and territorial views on the horizon that stretch into the distance. Incredible potential awaits!

Living in Tacoma’s McKinley Neighborhood

At 3102 E M Street, Tacoma, WA 98404, you’re located on Tacoma’s Eastside in the McKinley neighborhood. This thriving neighborhood lets you live in close proximity to grocery stores, shopping, dining, parks, schools, and of course, some excellent commuting options.

Commuters are especially sure to appreciate this location; not only do you have great access to freeways, but there are some excellent public transit options as well. Connect to Interstate-5 in no more than 5 minutes via car, and from here you can head north toward Seattle or south toward JBLM and Olympia. I-5 also connects to Highway 16, providing easy access to much of Tacoma as well as Gig Harbor just across the Narrows Bridge. Destinations like Downtown Tacoma and the Port of Tacoma are in close proximity as well.

If you prefer a car-free commute, you can get the #41 bus just a few blocks away on Portland Ave, for example. This bus route will take you all the way into the heart of Downtown Tacoma, or all the way to the Tacoma Mall. And just less than 1 mile from home, you can reach the Tacoma Dome Station. This transit hub is served by Amtrak trains, the Sounder Train, Line T of the Link light rail, and many buses. You can take the Amtrak train to several cities between Vancouver B.C. and Eugene, Oregon; you can take the Sounder Train to many cities and stops between Everett and Lakewood; you can take Line T of the Link light rail throughout Downtown Tacoma; and there are a ton of bus routes to take advantage of, too! You’ll find 2,283 parking spaces at the Tacoma Dome Station and many bike storage options, making a car-free and traffic-free commute to somewhere like Downtown Seattle totally feasible.

There’s also plenty to do, see, and enjoy in the immediate neighborhood. Just down the street, Rogers Park, Rogers Park Dog Park, and Dometop Community Garden await, and just half a mile away, 26+ acre McKinley Park offers pathways through nature, a playground, and more.

McKinley Ave is also just a half mile away, and along here you’ll find popular local attractions including places like Dusty’s Hideaway, the Eastside Farmers Market, Fergie’s On the Ave, Top of Tacoma Bar & Cafe, Lux Perpetua Coffee, and more. As you head south toward South 38th Street, even more variety opens up!

Interested in learning more? Click here to view the full listing! You can contact REALTOR® Mark Bergman online here or give him a call/text at (253) 297-5520.

Gig Harbor Real Estate • March 24, 2022

Pristine & Picturesque 4-Bedroom, 2.75-Bath Home on Crescent Lake in Gig Harbor

by Mark Bergman

Nestled on 0.89 acres with a secluded, scenic setting, this pristine 3,576-square-foot residence offers lakefront perfection! Views of Crescent Lake offer a picturesque backdrop for all that life brings your way; entertain in style thanks to impeccably curated living spaces, relax and rejuvenate in the peaceful atmosphere, and enjoy incredible versatility. Located at 1918 State Game Access Road NW Gig Harbor, WA 98332 just down the street from the community boat launch and less than 10 minutes to top Gig Harbor city conveniences, this 4-bedroom, 2.75-bath home is listed for $1,050,000.

Situated at the end of a quiet road, each time you pull in the driveway is like arriving at a vacation-ready getaway. A large deck welcomes you home, and just in through the front door, stunning open-concept living beckons. In the main living room, a gorgeous accented fireplace meets breathtaking vaulted ceilings, showing off modern cabin vibes! Kick back and relax around the fire while admiring views of the lake through large gleaming sliding doors that offer excellent indoor-outdoor living.

The palatial layout seamlessly flows into the kitchen and dining area where on-trend design elements make the space look like it’s straight from the glossy pages of a home design magazine! From neatly accented cabinets and huge counters to stylish light fixtures and attractive hues at every turn, each detail has been carefully selected to offer a luxe experience. The huge kitchen island offers laid-back bar-style seating, and you’ll find more than enough space for a full-sized dining set where you can gather for mealtime.

The main level also includes 3 bedrooms, and an expansive finished basement with an additional bedroom provides incredible opportunity. The lower level living area is ideal for creating the ultimate hangout complete with an entertainment center and tabletop games, and you could also create a home office, hobby room, play room, home gym, and more with any extra square footage—you’ve got the space to make all of your dreams come true!

The primary suite is especially not to be missed; this indulgent haven includes deck access and an impressive ensuite bath. Showcasing spa-like finishes in the bath, wellness routines are even more enjoyable thanks to the sundrenched shower and the resort-worthy bathtub with a skylight overhead!

Outdoor amenities are aplenty, and dynamic offerings boast more than enough space for entertaining, gardening, play, projects, etc. The expansive upper deck and lower covered patio are ready for your next BBQ and party no matter rain or shine, and guests can have fun with lawn games and lake activities. An attached garage, a huge shop, and an outbuilding all offer storage, parking, and room for hobbies and projects, and you’ll find RV parking as well. This home really does have it all, and the lifestyle you’ve been envisioning is within reach!

Living on Crescent Lake in Gig Harbor

At 1918 State Game Access Road NW Gig Harbor, WA 98332, you’re just down the road from the community boat launch, making it as easy as possible to take advantage of the lake. Imagine feeling like you’re miles and miles away from city life, all while being less than 10 minutes from shopping, dining, Highway 16 access, and much more. When you need to run errands, Borgen Boulevard is only 7 minutes away, and along here you’ll find almost anything you might need! For example, places like Target, Costco, Albertsons, Walgreens, The Home Depot, PetCo, and several other shops and restaurants are all right there. You’re also only a 9-minute drive to the Downtown Gig Harbor waterfront.

Interested in learning more? Click here to view the full listing! You can contact REALTOR® Mark Bergman online here or give him a call/text at (253) 297-5520.

Milton Real Estate • January 7, 2022

Easy & Efficient 2-Bedroom, 2.5-Bath Condo in Central, Convenient Milton Location

by Mark Bergman

Situated just blocks to grocery stores, eateries, and shopping and less than 10 minutes to both Highway 167 and Interstate-5, this move-in ready condo offers the convenient, low-maintenance lifestyle you’ve been dreaming about! Featuring a spacious 1,379-square-foot layout that spans 2 floors and includes 2 bedrooms and 2.5 baths, you’ll find that this gem lives like a single-family home in many ways. Plus, the HOA includes common area maintenance and lawn service so you have more time to spend on the things you love! Located at 2763 Diamond Loop #1-C, Unit 1-C Milton, WA 98354, this Milton condo is listed for $360,000.

One of this home’s big benefits is the fact that it is a beautifully blank canvas and ready for your unique vision of home-sweet-home to be brought to life. While it is completely ready for you to move right in, pristine white and tasteful neutrals await fresh paint in your favorite hues, wallpapered accent walls, and gallery walls featuring your favorite art and framed photos. From the entryway to the living room and each versatile bedroom, limitless potential is yours

In this Milton condo’s main living area, the open kitchen is one of the top highlights. Here, a smart layout makes the most of the space, promising an abundance of cabinet storage and counter space. The open design lets you look into the living room, letting the space feel large and airy. Potential for a dining area is adjacent to the kitchen, and from here the floor plan seamlessly unfolds into the flexible living area.

Gather around the cozy fireplace on chilly winter nights, and when the weather warms up, your living space expands thanks to the covered patio that’s right at your fingertips. Whether hosting a gathering or simply relaxing in peace and quiet, enjoy the effortless flow of indoor-outdoor living that this condo affords.

Discover this condo’s 2 bedrooms upstairs where ample versatility awaits. If you have an extra bedroom, it could be transformed into a home office, a home gym, or that hobby room you’ve been wanting! You’ll also find tons of storage space in walk-in closets, a rarity in many condos. Plus, laundry amenities are upstairs, meaning you don’t have to leave your condo or haul baskets of laundry up and down the stairs!

Living in Milton

At 2763 Diamond Loop #1-C, Unit 1-C Milton, WA 98354 you’re in a fantastic location surrounded by convenience, and you’re especially in a great location for commuters. You’re equidistant from both Highway 167 and Interstate-5; both are less than 10 minutes from home. You’re also just 5 minutes to Federal Way, less than 15 minutes to the Port of Tacoma and Downtown Tacoma, 25 minutes to SeaTac International Airport, and 35 minutes to Downtown Seattle, for example.

This condo is also wonderfully close to more local amenities as well. Places like Safeway, Rite Aid, Walgreens, Planet Fitness, and several other shops, eateries, and services are all no more than 5 minutes away from home. You’re also just 0.6 miles to the Interurban Trail where you can enjoy staying active and explore miles and miles of scenic biking.

Interested in learning more? Click here to view the full listing! You can contact REALTOR® Mark Bergman online here or give him a call/text at (253) 297-5520.

Tacoma Real Estate • November 15, 2021

Sunlit & Spacious 4-Bedroom, 3-Bath Home Brimming with Versatility on Tacoma’s Eastside

by Mark Bergman

Situated in a prime location where you’re close to both outdoor adventure and city convenience, this 1,840-square-foot home on Tacoma’s Eastside is move-in ready! In addition to 4 bedrooms and 3 baths, this residence offers light-filled living spaces ready for gatherings and spending quality time with loved ones. There’s even a lovely yard where there’s more than enough room for entertaining, gardening, playing, and relaxing out in the fresh air. Located at 6405 E Roosevelt Avenue Tacoma, WA 98404 on Tacoma’s Eastside, this home is listed for $450,000.

A split-level entryway welcomes you home, and just upstairs, open-concept living spaces await. This sunlit space is sure to become the heart of the home, and the main living area features a fireplace that’s ready for cozy evenings spent at home this winter. Vaulted ceilings let the space feel even larger, and the layout effortlessly flows into the dining area and open kitchen.

The beautifully curated kitchen shows off a smart layout and a cohesive aesthetic. Everything you need is easily within reach, whether you’re whipping up something quick for dinner, meal prepping for the week ahead, or having a baking marathon. Ample storage, stylish counters, strategically placed electrical outlets ready for countertop appliances, and eye-catching jet-black appliances are all in the dynamic mix.

The upper level features 3 bedrooms, and on the lower level you’ll discover another bedroom in addition to another living area. With a total of 4 bedrooms and 3 baths, this home offers incredible possibilities. Of course, there is space for loved ones to have comfortable, private retreats all to themselves. And with the room you have left over you can transform into home offices, a home gym, a hobby room, a study space, a play or rec area, an entertainment or theatre room… and the list of possibilities goes on and on. This home is ready to evolve as your wants and needs change in the years to come! And don’t miss the laundry room—in addition to laundry amenities, you’ll find room for organizing household essentials so you can keep the home running as smoothly as possible.

In the backyard, your very own outdoor getaway is ready for your unique vision to be brought to life. A deck and patio are ready for grilling up dinner and hosting weekend barbecues all summer long, and the lawn is perfect for letting pets and little ones play. Simple landscaping features mature greenery, and there’s still plenty of room for you to put your imagination and green thumb to work if you’d like to plant your favorite blossoms and blooms to enjoy when spring arrives.

Living in Tacoma’s Eastside Community

At 6405 E Roosevelt Avenue Tacoma, WA 98404, you’re wonderfully close to outdoor opportunities and city amenities. You’re located right alongside the Tacoma Pipeline Trail, a 4.3-mile long paved trail that makes it easy to stay active. Swan Creek Park is right across the street, and this 373-acre park is perfect for exploring when you’d like to feel like you’re lost in nature, yet don’t want to drive into the mountains!

Several community amenities are also close by; you’re just 0.6 miles to Eastside Community Center, and you’re just 1 mile to Safeway and several eateries, shops, and local services. Those who commute are also sure to appreciate this location; Highway 512 is 7 minutes away, Interstate-5 is 9 minutes away, and the Tacoma Dome Station where you can hop on the Sounder Train or a bus to Downtown Tacoma is only 10 minutes away.

Interested in learning more? Click here to view the full listing! You can contact REALTOR® Mark Bergman online here or give him a call/text at (253) 297-5520.

The Gardner Report • July 30, 2021

Q2 2021 Western Washington Real Estate Market Update

by Mark Bergman

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 your Windermere Real Estate agent.

REGIONAL ECONOMIC OVERVIEW

Employment levels in Western Washington picked up in the late spring and early summer months. The region has now recovered 168,800 of the 297,210 jobs that were lost due to the pandemic. Although the recovery is palpable, there are still 128,000 fewer jobs than there were at the pre-COVID peak in February 2020. The most recent data (May) shows the region’s unemployment rate at a respectable 5.2%. This is significantly lower than the April 2020 high of 16.8%, but still not close to the 2020 low of 3.7%. The jobless rate was lowest in King County (4.8%) and highest in Grays Harbor County (7.6%). Although unemployment levels continue to drop, we cannot attribute all the improvement to job creation: a shrinking labor force also lowers the jobless rate. In short, job recovery continues but we still have a way to go.

WESTERN WASHINGTON HOME SALES

❱ Regardless of low levels of supply, sales in the second quarter rose 45.6% year-over year, with a total of 25,640 homes sold. Although comparisons to the same quarter a year ago are not informative due to the pandemic, I was pleased to see sales increase 61.3% from the first quarter of this year.

❱ Listing activity was 42.8% higher than in the first quarter, which was a pleasant surprise. Listings rose the most in Kitsap, Clallam, Island, and Mason counties, but there were solid increases across the region.

❱ Sales were up across the board, with sizable increases in San Juan, King, Whatcom, and Snohomish counties. Only Mason County experienced sales growth below 10%.

❱ Pending sales (demand) outpaced active listings (supply) by a factor of 6. Even with the increase in the number of homes for sale, the market is far from being balanced.

A bar graph showing the annual change in home sales for various counties in Western Washington.

WESTERN WASHINGTON HOME PRICES

A map showing the real estate market percentage changes in various counties in Western Washington.

❱ Home prices rose 31.4% compared to a year ago. The average sale price was $734,567—another all-time record.

❱ Year-over-year price growth was strongest in San Juan and Jefferson counties, but all markets saw prices rise more than 23% from a year ago.

❱ Home prices were a remarkable 15.7% higher than in the first quarter of this year, possibly due in part to the drop in 30-year fixed mortgage rates between the end of the first and second quarters. That said, the modest decline in mortgage rates is certainly not the primary driver of price growth; the culprit remains inadequate supply.

❱ Relative to the first quarter of the year, San Juan (+33%), Jefferson (+24.7%), and Island (+20.5%) counties saw the fastest rate of home-price appreciation.

A bar graph showing the annual change in home sale prices for various counties in Western Washington.

DAYS ON MARKET

❱ It took an average of only 18 days for a listed home to go pending. This was 22 fewer days than a year ago, and 11 fewer days than in the first quarter of 2021.

❱ Snohomish, Kitsap, Thurston, and Pierce counties were the tightest markets in Western Washington, with homes taking an average of only 7 days to sell in Snohomish County and 9 days in the other three counties. The greatest drop in market time compared to a year ago was in San Juan County, where it took 84 fewer days to sell a home.

❱ All counties contained in this report saw the average time on market drop from the same period a year ago. The same can be said when comparing market time in the current quarter with the first quarter.

❱ It’s widely known that the area’s housing market is very tight and unfortunately, I don’t expect the number of listings to increase enough to satisfy demand in the near term. Furthermore, I’m seeing rapid growth in demand in the counties surrounding King County which is likely proof that buyers are willing to move further out given the work-from-home paradigm shift.

A bar graph showing the average days on market for homes in various counties in Western Washington.

CONCLUSIONS

A speedometer graph indicating a seller's market in Western Washington.

This speedometer reflects the state of the region’s real estate market using housing inventory, price gains, home sales, interest rates, and larger economic factors.

Demand is maintaining its momentum, and, even with supply levels modestly improving, the market remains extraordinarily tight.

Mortgage rates are still hovering around 3%, but the specter of them starting to rise at some point is clearly motivating buyers. I am very interested to see significant interest outside of the Seattle metro area, although King County is certainly still performing well. I will be monitoring whether this “move to the ‘burbs” is endemic, or a temporary phenomenon. My gut tells me that it is the former.

At some point, the remarkable run up in home values will slow. Affordability constraints are becoming more widespread, and even a modest uptick in mortgage rates will start to slow down price increases. It’s worth noting that list-price growth is starting to taper in some markets. This is a leading indicator that may point to a market that is starting to lose a little momentum.

The bottom line is that the market still heavily favors sellers and, as such, I am moving the needle even more in their favor.

ABOUT MATTHEW GARDNER

Matthew Gardner - Chief Economist for Windermere Real Estate

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.

This post originally appeared on the Windermere.com Blog

Tacoma Real Estate • July 14, 2021

Historic 4-Bedroom Reimagined Masterpiece w/Private Backyard Oasis in North Tacoma

by Mark Bergman

No expense has been spared in curating each and every detail of this stunning 3,882-square-foot North Tacoma home! This historic beauty was built in 1888, and you’ll find vintage elements alongside modern upgrades galore for the very best of both worlds. In addition to the pristine chef-ready kitchen and impressive formal spaces, this residence offers incredible versatility—discover 4 bedrooms, 2 full baths, one ¾ bath, and one half bath, plus a home office, a home gym, and flexible square footage ready to transform with your evolving wants and needs. And just wait until you see the secluded backyard getaway—this lush oasis provides a vacation-inspired atmosphere ready for entertaining, relaxation, and play! Located at 602 N G St Tacoma, WA 98403 and just blocks from Annie Wright Schools, a medical campus, Stadium District dining and more, this North Tacoma home is listed for $1,295,000.

This home-sweet-home has the kind of curb appeal that makes you do a double take as you pass by—manicured, established greenery surrounds this home’s captivating, expertly designed exterior. The interior is just as alluring, and as soon as you step inside, the entryway with its crisp white trim, gorgeous staircase, and warm color palette greet you.

In the main living room, a fireplace serves as the focal point, while built-in shelving on either side shows off an easy way to instantly infuse this space with your own unique style! Charming window bench seating, abundant natural light, and gleaming hardwoods all delight, and from here you also have access to an adjacent window-wrapped space that would make a perfect home office!

The chef-ready kitchen is a dream come true for those who love to cook, bake, and entertain. Staying organized here is easy thanks to gorgeous cabinetry that offers tons of storage, and generous counter space is ready for meal prep, projects, and homework! Laid-back seating awaits at the kitchen island, and the adjacent dining area offers a casual sunny spot to gather. Here, doors swing wide open, extending your living space out into the backyard getaway. Formal occasions are at home as well—the dining room boasts more than enough space for a full-sized dining set so you can host special occasions and holiday get-togethers with ease and sophistication.

Upstairs, 4 bedrooms await, and the master suite is its own sumptuous haven with an ensuite bath and a spectacular walk-in closet complete with a luxe, custom built-in storage system. On the lower level, another inviting living area is ready for movie marathons and game nights; a fireplace keeps things cozy and rests alongside the gorgeous built-in entertainment center.

Even more indulgent space for relaxation can be found in the private backyard! Idyllic greenery and immaculate landscaping encompass the entire yard, and this secluded sanctuary was designed to inspire vacation-like hangouts without even having to leave the wonderful comfort of home. Relax and sunbathe on the couch, host dinners out in the fresh air, and unwind in the hot tub while the sun goes down. Pure bliss awaits!

Living in North Tacoma

At 602 N G St Tacoma, WA 98403, you’re in a picturesque residential setting yet in close proximity to some of Tacoma’s top attractions. Tacoma Lawn Tennis Club, Annie Wright Schools, and Garfield Park are just a couple blocks away, and in the opposite direction you’re just a few blocks from Stadium District conveniences. Places like Shake Shake Shake, Rhein Haus Tacoma, Parkway Tavern, Indo Asian Street Eatery, Art House Cafe, Stadium Thriftway (for excellent grocery shopping!), and more are all right there. You’re also only half a mile to a medical campus, and only 1 mile to the Ruston Way Waterfront!

Interested in learning more? Click here to view the full listing! You can contact REALTOR® Mark Bergman online here or give him a call/text at (253) 297-5520.

Real Estate News • July 6, 2021

Is Pierce County in a Housing Bubble? Not This Time (& Here’s Why)

by Mark Bergman

Because of the rapid rise in home prices in the Pierce County area and throughout much of the United States, many people are assuming that we must be in a housing bubble.

Since May of 2019, here’s how much local median home prices are up in Pierce County and in neighboring counties:

Pierce County +37%*
King County +25%**
Thurston County +31%*
Kitsap County +27%*
*median price of residential/condo

**median price of residential only

Nationally since 2012, the increase in housing values is at 126%.

Someone who lived through the housing crisis of 2007-2009 might be experiencing some “déjà vu” with our current real estate market. However, there are many differences between what is happening now and what happened back in 2007-2009.

One of the major reasons that we’re not currently in a housing bubble is because the quality of home buyer’s credit along with the types of loans they are utilizing is vastly different from the pre-bubble buyer.

Another reason we are not in a housing bubble is because today we have a classic supply and demand scenario that does not compare to what happened in the mid-2000s.

The previous housing crisis would be better described as a crisis that resulted from political and lending policies and how these policies affected the housing market. We often describe it as a housing crisis, but that is not the whole story.

Financing Differences Between Now & Then

To be a bubble, we need a large percentage of speculative buying.

The buyers in this market are largely owner occupied, and their down payment and the quality of their credit is much higher than pre-bubble days. The average FICO score in 2005 leading up to the bubble was 715 compared to 788 today.

In 2005, 39.4% of ALL mortgages were some type of the subprime variety and 90% of those were ARM or Adjustable Rate Mortgages. 29% were negative amortization, and 28% were -0- down. Today, only 3.1% of mortgages have an ARM component. Lenders today have very little appetite for risky loans, and credit requirements are much tighter due to government and banking policies.

The Millennial Generation = The Largest Group of Home Buyers Today

The largest cohort of buyers today are from the Millennial generation, which, by the way, is the largest generation to move through our economy since the Baby Boomers. Millennials are entering the prime age for home buying; in fact, 9.6 million of Millennials will turn 30 in the next 2 years. These young people are forming new households and want to participate in the age-old American dream of owning a home. For years after the last housing crash, many said this generation would be a generation of renters. Turns out that is not true as they get married, start families, etc.

Investors Are Feeling Confident

That said, there are “investors” in the market alongside owner occupants for sure. These investors, some of which are large institutional hedge funds and the like, have a strong conviction of the future of U.S. home values. This, along with the precipitous rise in rents has helped fuel the investor demand, but they are not speculators in the sense that their business model relies solely on appreciation.

How Much Has COVID-19 Affected the Demand for Housing?

The current demand is not due to COVID-19 either, although it did serve as an additional catalyst to trends that were already in play. As COVID-19 locked us down, it highlighted the importance of “home.” Since we had to spend so much more time at home, a simple crash pad in an urban setting was not proving to be enough for many. Plus, if other members of the family are home all at the same time, the need to simultaneously accommodate Zoom meetings, school sessions, etc., meant that many people could really use a larger space… and it had many people feeling like a big backyard sure would be nice, too!

There’s a Housing Shortage

Despite our growth in population and changing demographics resulting in high demand, there are simply not enough houses for sale. In fact, nationally we see 36% fewer houses for sale today than we had in 2005. In Pierce County during May of 2006 vs May of 2021, there are 84% fewer homes for sale.

Not enough homes are being built, and this has been going on for some time. In 2007 the nation saw 1.7 million residential permits applied for compared to under 1 million in 2020. The NAR says that based on the historical average, 1 permit is issued for every 2 new jobs. For the period ending in December 2019 in the Seattle-Tacoma/Bellevue area, 28,508 single family permits were issued with 136,000 new jobs.

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Whether you are buying or selling a home in this market (or both), you need an experienced Pierce County real estate expert to guide you through the process. Reach out if you’d like to connect!

This post originally appeared on windermerepc.com by Michael Robinson

Real Estate News • June 29, 2021

Matthew Gardner on Post-Pandemic Recovery

by Mark Bergman

The “demise of downtown” has been greatly exaggerated, according to Windermere’s Chief Economist, Matthew Gardner. That’s one assessment Gardner made recently, along with other observations about the current housing and job markets in the Seattle area.

According to Gardner, those who keep tabs on the real estate market should be careful about reading too much into year-over-year price changes in the housing market. While King County is up 23.5% and Snohomish County is up by almost 33%, Gardner reminds us that the housing market was in a very different place a year ago than it is today. The early days of pandemic shutdowns basically put last spring’s real estate market on hold. So while this year’s price increases certainly indicate a level of economic recovery has taken place, the data needs to be viewed in context for it to be truly useful.

Overall, Gardner advises a cautious optimism regarding the regional economy. He observes that things are improving, but he says it’s important not to get carried away. While Gardner predicts a period of aggressive growth for the next year, he reminds us that many people were spending their money very cautiously this time last year, so naturally as the economy opens back up there will be built-in growth ahead.

On the subject of inflation, many economists caution about rates akin to those of the 1970s and 80s. Gardner, however, predicts a more moderate outcome. Although he thinks it’s likely we’ll have higher interest rates than we’ve seen in the last 30 years, he doesn’t believe we’ll see the same growth in the inflation rate. Gardner predicts that by 2022 things are likely to have settled down into a more typical pattern.

Finally, Gardner addresses the current levels of job loss caused by the pandemic. In total, the Puget Sound region lost about 216,000 jobs during the initial stages of the pandemic, but has since recovered about 103,000 of these. However, that recovery is not evenly distributed across industries. According to Gardner, construction has seen a full recovery of its jobs, and tech and information jobs were minimally impacted by the pandemic. On the other hand, the leisure and hospitality sectors have experienced much slower recovery, having lost about 79,000 jobs but adding back only about 29,000 of those.

As the leisure and hospitality sectors slowly recover from the pandemic, Gardner points out that there is another sign that the local economy is heading in the right direction: the growing demand for in-person entertainment and events. Though many large-scale events like conventions and concerts are still being planned out years in advance, the enthusiastic demand for these events and the easing of government restrictions preventing them is reason for optimism indeed.

This article was originally posted on MyNorthwest and GettheWReport.com

The Gardner Report • May 13, 2021

The Gardner Report – Q1 2021

by Mark Bergman

REGIONAL ECONOMIC OVERVIEW

In the summer and fall of 2020, Western Washington regained some of the jobs lost due to COVID-19, but employment levels in the region have been in a holding pattern ever since. As of February, the region had recovered 132,000 of the 297,000 jobs that were lost, but that still leaves the area down by 165,000 positions. Given the announcement that several counties may have to roll back to phase 2 of reopening, I would not be surprised to see businesses hold off on plans to add to their payrolls until the picture becomes clearer. Even with this “pause” in the job recovery, the region’s unemployment rate ticked down to 6.1% from the December rate of 6.4% (re-benchmarking in 2020 showed the December rate was higher than the originally reported 5.5%). The lowest rate was in King County (5.3%) and the highest rate was in Grays Harbor County, which registered at 9.2%. Despite the adjustment to the 2020 numbers, my forecast still calls for employment levels to increase as we move through the year, though the recovery will be slower in areas where COVID-19 infection rates remain elevated.

WESTERN WASHINGTON HOME SALES

❱ Sales in the first quarter were impressive, with 15,893 home sales. This is an increase of 17.5% from the same period in 2020, but 32% lower than in the final quarter of last year—a function of low levels of inventory.

❱ Listing activity continues to be well below normal levels, with total available inventory 40.7% lower than a year ago, and 35.5% lower than in the fourth quarter of 2020.

❱ Sales rose in all counties other than Jefferson, though the drop there was only one unit. There were significant increases in almost every other county, but sales growth was more muted in Cowlitz and Thurston counties. San Juan County again led the way, likely due to ongoing interest from second-home buyers.

❱ The ratio of pending sales (demand) to active listings (supply) shows how competitive the market is. Western Washington is showing pendings outpacing new listings by a factor of almost six to one. The housing market is as tight now as I have ever seen it.

A bar graph showing the annual change in home sales for various counties in Western Washington

WESTERN WASHINGTON HOME PRICES

A map showing the real estate market percentage changes in various Western Washington counties

❱ Home price growth in Western Washington continues to trend well above the long-term average, with prices 21.3% higher than a year ago. The average home sale price was $635,079.

❱ Compared to the same period a year ago, price growth was strongest in Grays Harbor and Mason counties, but all markets saw double-digit price growth compared to a year ago.

❱ Home prices were also 2.9% higher than in the final quarter of 2020, which was good to see given that 30-year mortgage rates rose .4% in the quarter.

❱ I expect to see mortgage rates continue to trend higher as we move through the year, but they will remain significantly lower than the long-term average. Any increase in rates can act as a headwind to home-price growth, but excessive demand will likely cause prices to continue to rise.

A bar graph showing the annual change in home sale prices for various counties in Western Washington

DAYS ON MARKET

❱ The market in early 2021 continued to show far more demand than supply, which pushed the average time it took to sell a home down 25 days compared to a year ago. It took 2 fewer days to sell a home than it did in the final quarter of 2020.

❱ Snohomish and Thurston counties were the tightest markets in Western Washington, with homes taking an average of only 15 days to sell. The greatest drop in market time was in San Juan County, where it took 52 fewer days to sell a home than it did a year ago.

❱ Across the region, it took an average of only 29 days to sell a home in the quarter. All counties saw market time decrease from the first quarter of 2020.

❱ Very significant demand, in concert with woefully low levels of supply, continues to make the region’s housing market very competitive. This will continue to be a frustration for buyers.

A bar graph showing the average days on market for homes in various counties in Western Washington

CONCLUSIONS

A speedometer graph indicating a seller's market in Western Washington

This speedometer reflects the state of the region’s real estate market using housing inventory, price gains, home sales, interest rates, and larger economic factors.

Demand is very strong and, even in the face of rising mortgage rates, buyers are still out in force. With supply still lagging significantly, it staunchly remains a seller’s market. As such, I am moving the needle even further in their favor.

As I mentioned in last quarter’s Gardner Report, 2021 will likely see more homeowners make the choice to sell and move if they’re allowed to continue working remotely. On the one hand, this is good for buyers because it means more listings to choose from. However, if those sellers move away from the more expensive core markets into areas where housing is cheaper, it could lead to increased competition and affordability issues for the local buyers in those markets.

ABOUT MATTHEW GARDNER

Matthew Gardner - Chief Economist for Windermere Real Estate

This post originally appeared on the Windermere.com blog