The Gardner Report • December 23, 2020

The Gardner Forecast for 2021

by Mark Bergman

Every Monday since the start of the pandemic, Windermere’s Chief Economist, Matthew Gardner, has provided insights into the current state of the housing market through his video series “Mondays with Matthew.” Gardner’s latest release represents the last of his videos for 2020, while offering his 2021 forecast in the US housing market.

Throughout 2020, mortgage rates hit historic lows, largely due to the impact COVID-19 had on the housing market. These low rates drove already high demand for housing even higher, and Gardner does not predict mortgage rates will rise significantly in 2021.

His current forecast sees mortgage rates dropping to their lowest rate in the current quarter at 2.83%, and rising to about 3.08% by the fourth quarter of 2021.

As far as home sales for 2021, Gardner is predicting a large increase in home sales (he covers new construction separately). His forecast puts home sales up by 6.9%, a level that hasn’t been seen since 2006.

In conjunction with this, Gardner predicts a rise in housing inventory, as people who can work remotely move farther away from their offices, or those whose homes aren’t conducive to remote work seek out a better living arrangement.

But Gardner also pragmatically points out that a “mass exodus” completely away from urban centers is unlikely, as many workers may find themselves with a flexible blended arrangement of remote work and a few days in the office per week.

In terms of home prices, Gardner predicts they will continue to rise, but slowly. His 2021 prediction caps out at a 4.1% increase, partially because prices have already risen so dramatically this year that it may become an issue of affordability.

With the rising demand for housing inventory, Gardner predicts that new construction starts for single-family homes will rise by a sizeable 16.4%. This is great news for builders, and also for buyers, as increased inventory may help to alleviate the incredible demand the market has been experiencing.

Along with increased starts, Gardner is anticipating an increase of 18.7% in new home sales for 2021—again reaching a level the market hasn’t seen since 2006.

Finally, Gardner touched on the number of homes in forbearance. As of the end of November 2020, 2.76 million homeowners are in forbearance—but that number is down almost 2 million since May 2020, a drop of 42%.

Gardner does predict that foreclosures will rise in 2021, but he cautions that brokers shouldn’t panic. Though there is temptation to compare this situation with the housing bubble collapse of 2008, Gardner predicts that the actual number of foreclosures will be very mild in comparison.

When the pandemic began in March, the housing market overall was in a much healthier place than it was prior to 2008. Additionally, lenders now are more likely to cooperate with homeowners to help them stay in their homes, and homeowners also have the option to sell and get the equity out of their homes if necessary.

While no one can predict the future with complete accuracy, Gardner’s predictions give us a road map to work from as we approach the new year.

Read the full article on Windermere.com.

This post originally appeared on GettheWReport.com

King & Snohomish County Real Estate • December 10, 2020

King & Snohomish County Market Update – December 2020

by Mark Bergman

Nothing about 2020 is normal, and that includes real estate trends. The housing market typically slows significantly during the holiday season, but that is not the case this year. Buyer interest is strong, sales are up, and prices have followed suit.

A recent report ranked our area as the most competitive real estate market in the country, with 71% of homes selling within two weeks. While the number of new listings in November were up compared to a year ago, there just wasn’t enough inventory to meet the current surge in demand.

In King County there were 37% fewer single-family homes on the market – 1,621 homes this November vs. 2,592 a year ago. Inventory in Snohomish County is even more strained. At the end of the month there were just 416 homes for sale as compared to 1,204 a year ago, a 65% drop. Both counties had about a two week supply of homes at the end of November. A four month supply of inventory is considered balanced. Buyers in the market for a condominium in King County had much more options. Condo inventory was up 39% over last year.

The inventory-starved market sent home prices higher. The median single-family home price in King County was up 10% over a year ago to $730,500. Home prices in Snohomish County rose 14% to $566,000. In a survey of homebuyers looking for a home during Covid-19, 82% said they would go over budget to get their ideal home. Record-low interest rates have helped soften the blow of soaring prices a bit. According to Freddie Mac, rates on a 30-year fixed-rate mortgage fell to their lowest level, at 2.71%, for the 14th time this year.

With low inventory and high demand, buyers need to be ready to compete. That means being pre-approved or willing to offer cash, and working with an agent on a plan that includes counter-offers, escalation clauses and other strategies to help win the sale. As many consider working remotely long-term, our home has become more important to us than ever.

The charts below provide a brief overview of market activity. If you are interested in more information, every Monday Windermere Chief Economist Matthew Gardner provides an update regarding the impact of COVID-19 on the US economy and housing market. You can get Matthew’s latest update here.

This post originally appeared on GetTheWReport.com

Real Estate News • December 10, 2020

Pre-Fabricated Homes are Gaining Popularity in the Pandemic

by Mark Bergman

Construction of new and modern modular house. Walls made from composite wooden sip panels with styrofoam insulation inside. Building new frame of energy efficient home concept.

Once a somewhat niche market that only appealed to certain kinds of buyers and builders, the market for pre-fabricated homes has seen an increase in popularity during the pandemic. The relative ease of construction, combined with lower costs and greater flexibility, has opened up a new demand for pre-fabricated spaces as homeowners search for solace in the midst of a prolonged era of social distancing.

According to Steve Glenn, CEO of the Santa Monica-based company Plant Prefab, the firm has seen a 50% increase in contracts over last year. This could be partially due to an uptick in buyers looking for more space outside of major cities, but there are several other benefits to pre-fabricated homes as well.

Unlike onsite construction, which is often costly and time-consuming, pre-fabricated construction has added certainty when it comes to the cost and time required to complete construction. Building the components in a factory means construction is not subject to the same external challenges of onsite construction, and factory work also allows workers to social distance more safely, as each worker can remain at their station.

Additionally, pre-fabricated structures can be modified more easily ahead of time, allowing buyers greater control over which features they’d like to see in the final product. Some of the most common requests of late, according to New York’s Resolution: 4 Architecture, include COVID-conscious design features like flexible living spaces, work-from-home spaces and home gyms. Other popular additions include mud rooms and even accessory dwelling units (ADUs) for those who want to add a separate office space or guest space where they can work uninterrupted.

But pre-fabricated homes are not just for the suburbs or plots of land in the countryside. With land in major cities becoming more affordable due to the changing demands of COVID-19, some pre-fabrication firms have also been developing modular and multi-family residences for use in denser urban areas. Pre-fabrication firm FullStack Modular has even developed modular medical units that can be used for the isolation and testing of COVID-19 patients.

With demand for pre-fabricated designs expanding to include modular restaurants and even socially-distant cabins for use in the hospitality industry, the possibilities for pre-fabricated structures are endless.

This article was originally posted on Architectural Digest by Sam Lubell and GettheWReport.com

Lakewood Real Estate • December 7, 2020

Timeless 2-Bedroom, 3.25-Bath Home in Tacoma Country & Golf Club in Lakewood

by Mark Bergman

Tucked away in a stunning park-like setting within the Tacoma Country & Golf Club, this 2,455-square-foot home offers a rare opportunity! Featuring 2 bedrooms, 3.25 baths, and light-filled living spaces replete with comfortable elegance, this residence is situated on a 0.59-acre property that’s brimming with opportunity for outdoor enjoyment. Additionally, being a part of the Tacoma Country & Golf Club certainly has its perks—the club offers an 18-hole golf course, tennis courts, a pool, a beach, a clubhouse and restaurant so you can enjoy vacation-worthy living right in your own community! Located at 8 Forest Glen Lane SW Lakewood, WA 98498, this home is listed for $619,950.

An extra-long driveway leads you past a manicured expanse of green grass, and mature emerald trees and gorgeous greenery frame this eye-catching home-sweet-home. In the front living area, the sundrenched setting offers a spacious layout, and a stone-accented fireplace is flanked by pristine built-ins. Relax and entertain in style here, with dreamy views of your lush property beckoning.

From here the layout effortlessly flows into the dining area, and the kitchen is conveniently right around the corner. Classic style, top-notch appliances, and smart design make up this space, and details like windowed cabinetry, open shelving, and an intricate tile backsplash add visual intrigue. A cute dining nook is easily within reach, and the open layout looks into another living area. Abundant natural light fills this inviting haven as well, and you’ll find it’s the perfect spot for catching up on the evening news or watching the big game!

Discover 2 large bedrooms that promise flexibility, and in the master suite you’ll find a sumptuous getaway. Snuggle up in bed while a cozy fire roars in the fireplace, and enjoy having 2 ensuite baths and a walk-in closet complete with neat built-ins. Additionally, a large office is perfect for working from home, or you could use the space as a home gym, a hobby room, an art studio (there’s such great natural light!), and more.

Of course, one of this home’s major perks is its storybook outdoor setting. In the backyard, a huge patio includes a covered area so you can take in the fresh air no matter rain or shine. There are even raised garden beds so you can try your hand at growing fresh fruits and veggies, and a covered storage area offers parking and plenty of room for organizing outdoor tools and toys!

Living in Tacoma Country & Golf Club in Lakewood

At 8 Forest Glen Lane SW Lakewood, WA 98498, you get to enjoy the “club life” and an 18-hole golf course, tennis courts, a pool, a beach, a clubhouse and restaurant are all part of Tacoma Country & Golf Club. In addition to the fantastic outdoor amenities that await right in your own neighborhood, Lakewood is filled with opportunities for outdoor adventure thanks to its many lakes and serene parks. Boating, fishing, water sports and more are all easily within reach! Yet at the same time, when you need to run errands, city convenience is close by as well. Lakewood Towne Center is a quick 5-minute drive away, and connecting to Interstate-5 is just a short 4-minute drive from home.

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.

King & Snohomish County Real Estate • Redmond Real Estate • November 19, 2020

King & Snohomish County Market Update – November 2020

by Mark Bergman

The number of people who can work remotely may be changing the way we view our homes, but one trend has not changed. The local housing market in October remained unseasonably hot. And that doesn’t show signs of changing any time soon.

October saw continued low inventory and record-level sales, with the number of sales exceeding that of 2019 year-to-date.

While new listings are on the rise, they are being snapped up quickly and many homes are selling in a matter of days. In King County there were 38% fewer single-family homes on the market as compared to a year ago. Snohomish County had 59% fewer listings. A four-month supply of homes for sale is considered a balanced market, but King and Snohomish counties currently have less than one month of supply.

With supply unable to keep up with demand, home prices are escalating at double-digit rates. The median single-family home price in King County rose 14% over a year ago to $745,000. Prices in Snohomish County jumped 17% year-over-year to a record high of $579,972. About half the homes that closed in October sold for over the asking price as compared to about a quarter of the homes the same time last year.

The real estate market here is uncommonly resilient. Growing employment in major tech industries and an enviable quality of life have made our region one of the fastest growing areas in the country. With interest rates remaining at record lows, we may well skip the traditional slowing in the winter market altogether.

EASTSIDE

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KING COUNTY

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SEATTLE

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SNOHOMISH COUNTY

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This post originally appeared on GetTheWReport.com

The Gardner Report • October 29, 2020

Western Washington Real Estate Market Update – Q3 2020

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 agent.

REGIONAL ECONOMIC OVERVIEW

Employment numbers in Western Washington continue to improve following the massive decline caused by COVID-19. For perspective, the area shed more than 373,000 jobs between February and April. However, the recovery has been fairly robust: almost 210,000 of those jobs have returned. Unemployment levels remain elevated; the current rate is 8.2%. That said, it is down from 16.6% in April. The rate, of course, varies across Western Washington counties, with a current low of 7.2% in King County and a high of 11.2% in Grays Harbor County. The economy is healing, but the pace of improvement has slowed somewhat, which is to be expected. That said, I anticipate that jobs will continue to return as long as we do not see another spike in new infections.

HOME SALES

Sales continued to improve following the COVID-19-related drop in the first quarter of the year. There were 25,477 transactions in the quarter, an increase of 11.6% from the same period in 2019, and 45.9% higher than in the second quarter of this year.
Listing activity remains woefully inadequate, with total available inventory 41.7% lower than a year ago, but 1.6% higher than in the second quarter of this year.
Sales rose in all but two counties, though the declines were minimal. The greatest increase in sales was in San Juan County, which leads one to wonder if buyers are actively looking in more isolated markets given ongoing COVID-19-related concerns.
Pending sales—a good gauge of future closings—rose 29% compared to the second quarter of the year, suggesting that fourth quarter closings will be positive.

HOME PRICES

Home-price growth in Western Washington rose a remarkable 17.1% compared to a year ago. The average sale price was $611,793.
When compared to the same period a year ago, price growth was strongest in Mason, Island, and San Juan counties. Only one county saw prices rise by less than ten percent.
It was even more impressive to see the region’s home prices up by a very significant 9.4% compared to the second quarter of 2020. It is clear that low mortgage rates, combined with limited inventory, are pushing prices up.
As long as mortgage rates stay low, and there isn’t an excessive spike in supply (which is highly unlikely), prices will continue to rise at above-average rates. That said, if this continues for too long, we will start to face affordability issues in many markets.

DAYS ON MARKET

The average number of days it took to sell a home in the third quarter of this year dropped two days compared to a year ago.
Snohomish County was the tightest market in Western Washington, with homes taking an average of only 16 days to sell. All but two counties—Lewis and San Juan—saw the length of time it took to sell a home rise compared to the same period a year ago.
Across the region, it took an average of 36 days to sell a home in the quarter. It is also worth noting that it took an average of 4 fewer days to sell a home than in the second quarter of this year.
The takeaway here is that significant increases in demand, in concert with remarkably low levels of inventory, continue to drive market time lower.

CONCLUSIONS

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.

High demand, favorable interest rates, and low supply clearly point to a seller’s market in Western Washington. As such, I am moving the needle even more in favor of sellers.

As I suggested earlier in this report, although the market is remarkably buoyant, I am starting to see affordability issues increase in many areas—not just in the central Puget Sound region—and this is concerning. Perhaps the winter will act to cool the market, but something is telling me we shouldn’t count on it.

ABOUT MATTHEW GARDNER

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

King & Snohomish County Real Estate • October 11, 2020

King & Snohomish County Update – October 2020

by Mark Bergman

While daily life may seem unpredictable, the local real estate market remains extremely stable. Activity in September acted more like the traditional peak spring market with home sales soaring and prices hitting record highs. Inventory remains very tight and new listings are selling quickly in every price range.

There just aren’t enough homes on the market to meet demand. King County had about half the inventory of a year ago. Snohomish County had 63% fewer available homes. On the other hand, the number of condos on the market in King County jumped by 24% over last September. Brokers attribute the flood of new inventory to COVID remote workers looking to trade their in-city condo for more living space. Despite the increase in inventory, condo prices rose 8% in September and pending sales — the best indicator of current demand — shot up 36% over the same period last year.

The slim supply of single-family homes means bidding wars and all-cash offers were the norm, driving prices to record highs. King County saw the third consecutive month of record-setting values. The median home price hit $753,600 in September, a 14% jump over last year. Prices in Snohomish County soared 16% from a year ago to $569,997, just shy of its all-time high of $575,000. For both counties, half the homes sold for over list price in September as compared with just a quarter of the homes a year ago.

The market doesn’t show signs of cooling off any time soon. In September the greater Northwest area saw the highest number of transactions since June 2018. Pending sales were up 32% in King County and 29% in Snohomish County. Interest rates continue to be at historic lows. With the area posting some of the fastest population growth in the country, expect the market to stay unseasonably hot.