Windermere Community • April 30, 2020

Coming Together For Our Neighbors in Need

by Don Weintraub

content_Neighbors-in-Need_Blog_vB_on-lite-blue_1080x1080.jpg

Every year for the past 35 years, Windermere Real Estate has closed its doors on the first Friday in June for its annual Community Service Day so that our 9,000-member team can head into our local neighborhoods and volunteer. This year, in light of COVID-19, we have made the decision to replace Community Service Day with an immediate fundraising challenge for our offices to help food banks whose operations, and the people they serve, have been heavily impacted by the virus.

Between now and Tuesday May 5, we are matching every dollar, up to $250,000, that our offices raise, with the goal of donating $500,000 to food banks in the communities across the Western U.S. where we operate. The public is also invited to participate by donating to the Windermere Foundation here. All donations will be directed to food banks with the greatest need.

Those who struggle with poverty and depend on food programs are having difficulty meeting their basic needs. Our mission is to help local food banks in our communities keep their shelves stocked and keep food on the tables of those families.

Due to COVID-19, food bank representatives expect the number of people they normally serve to double. The increased consumer demand on grocery stores has slowed the pipeline of food bank donations, which are crucial to their ability to serve their communities. With these complicating factors, every food bank has the same answer when it comes to their greatest need: dollars.

Neighbors in Need is the latest example of the Windermere family coming together in support of our local communities during the COVID-19 epidemic. The positive impact we have seen across our footprint thus far gives us confidence in our ability to meet our total donation goal of $500,000. If you would like to help, you can donate here:

Market Updates • April 18, 2020

THE GARDNER REPORT – FIRST QUARTER 2020

by Don Weintraub

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 contact me anytime.

A MESSAGE FROM MATTHEW GARDNER

Needless to say, any discussion about the U.S. economy, state economy, or housing markets in the first quarter of this year is almost meaningless given events surrounding the COVID-19 virus.

Although you will see below data regarding housing activity in the region, many markets came close to halting transactions in March and many remain in some level of paralysis. As such, drawing conclusions from the data is almost a futile effort. I would say, though, it is my belief that the national and state housing markets were in good shape before the virus hit and will be in good shape again, once we come out on the other side. In a similar fashion, I anticipate the national and regional economies will start to thaw, and that many of the jobs lost will return with relative speed. Of course, all of these statements are wholly dependent on the country seeing a peak in new infections in the relatively near future. I stand by my contention that the housing market will survive the current economic crisis and it is likely we will resume a more normalized pattern of home sales in the second half of the year.

HOME SALES

There were 13,378 home sales during the first quarter of 2020, a drop of only 0.2% from the same period in 2019, but 27% lower than in the final quarter of 2019.
The number of homes for sale was 32% lower than a year ago and was also 32% lower than in the fourth quarter of 2019.
When compared to the first quarter of 2019 sales rose in eight counties and dropped in seven. The greatest growth was in Cowlitz and Lewis counties. The largest declines were in Island and Snohomish counties.
Pending sales — a good gauge of future closings — rose 0.7% compared to the final quarter of 2019. We can be assured that closed sales in the second quarter of this year will be lower due to COVID-19.

HOME PRICES

Home-price growth in Western Washington rose compared to a year ago, with average prices up 8.7%. The average sale price in Western Washington was $524,392, and prices were 0.4% higher than in the fourth quarter of 2019.
Home prices were higher in every county except San Juan, which is prone to significant swings in average sale prices because of its size.
When compared to the same period a year ago, price growth was strongest in Clallam County, where home prices were up 21.7%. Double-digit price increases were also seen in Kitsap, Skagit, Mason, Thurston, and Snohomish counties.
Affordability issues remain and, even given the current uncertain environment, I believe it is highly unlikely we will see any form of downward price pressures once the region reopens.

DAYS ON MARKET

The average number of days it took to sell a home in the first quarter of this year dropped seven days compared to the first quarter of 2019.
Pierce County was the tightest market in Western Washington, with homes taking an average of only 29 days to sell. All but two counties — San Juan and Clallam — saw the length of time it took to sell a home drop compared to the same period a year ago.
Across the entire region, it took an average of 54 days to sell a home in the first quarter of the year — up 8 days compared to the fourth quarter of 2019.
Market time remains below the long-term average across the region. This is likely to change, albeit temporarily, in the second quarter due to COVID-19.

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.

Given the current economic environment, I have decided to freeze the needle in place until we see a restart in the economy. Once we have resumed “normal” economic activity, there will be a period of adjustment with regard to housing. Therefore, it is appropriate to wait until later in the year to offer my opinions about any quantitative impact the pandemic will have on the housing market.

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.

Buying • April 16, 2020

Saving to Buy A Home During COVID-19

by Don Weintraub

Image Source: Canva

The COVID-19 pandemic is changing the way people plan for their future. For those saving to buy a home, the landscape may seem daunting. However, this new world of social distancing and stay at home orders is an opportunity to rethink your spending and saving plans. Keeping the following suggestions for your budget and finances in mind can help make your dream of buying a home a reality.

Rethink your budget:

If there have been changes to your income amid COVID-19, adapting your budget is a logical and necessary step. If your income has gone unchanged, certain tweaks to your budget can yield significant savings. Knowing the leisure portion of your normal expenditure has been removed for the time being is a great starting point for reassessing your spending.

Begin with your income and assets
Determine your household’s new baseline and arrange your new budget accordingly
Divide your budget expenses out into Fixed and Variable
Adjust for changes in essential costs—Housing, Utilities, Insurance, Food
Put into savings what normally would have been your leisure spending money

As the stay-at-home lifestyle continues, take a look at your unnecessary costs for such things as memberships, subscriptions, and online shopping. Reach out to the subscription organizations and see if they are offering any options to delay your membership until a later date.

Categorize all active memberships as Cancel, Adjust, or Keep
For live entertainment, research how far out the venues have postponed shows
Adjust your online shopping needs for your current lifestyle
Reassess the must-haves of your new stay-at-home daily life

Review your finances:

If you’re planning on buying a home in the near future, you are likely already on your financial planning journey. With added uncertainty around COVID-19’s effective timeline, the more information you can gather, the better. In these unprecedented times, flexible solutions are being provided to customers. Exploring what options your banks and issuers are offering will keep you informed and prepared while keeping your finances in order.

Contact your credit card issuer to see if they are offering any of the following options to customers:

Payment deferral or forbearance
Flexible fee policies
Lowering your monthly payment or interest rate temporarily
Forgiveness or relief from late fees

Following the steps outlined above can go a long way towards helping you save for a home. As your finances are impacted by the COVID-19 pandemic, take time to adjust accordingly. Continuing to gather information and developing a strategy will help you steer your eventual home purchase in the right direction through these uncertain times.

Market Updates • April 13, 2020

LOCAL MARKET UPDATE – APRIL 2020

by Don Weintraub

Windermere is focused on keeping our clients and our community safe and connected. We’re all in this together. Since the early days of COVID-19, our philosophy has been “Go slow and do no harm.” While real estate has been deemed an “essential” business, we have adopted guidelines that prioritize everyone’s safety and wellness.

Like everything else in our world, real estate is not business as usual. While market statistics certainly aren’t our focus at this time, we’ve opted to include our usual monthly report for those who may be interested. A few key points:

The monthly statistics are based on closed sales. Since closing generally takes 30 days, the statistics for March are mostly reflective of contracts signed in February, a time period largely untouched by COVID-19. The market is different today.
We expect that inventory and sales will decline in April and May as a result of the governor’s Stay Home order.
Despite the effects of COVID-19, the market in March was hot through mid-month. It remains to be seen if that indicates the strong market will return once the Stay Home order is lifted, or if economic changes will soften demand.

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.

Stay healthy and be safe. We’ll get through this together.

VIEW FULL EASTSIDE REPORT

Market Updates • April 10, 2020

Matthew Gardner Weekly COVID-19 Housing & Economic Update

by Don Weintraub

Every Monday Windermere Chief Economist Matthew Gardner provides an update regarding the impact of COVID-19 on the US economy and housing market.

Update #1 – 3/23/2020

Update #2 – 3/30/2020

This week he discusses what it really means for the economy and housing to be in a COVID-19 induced recession (hint: it’s not all bad news).

Update #3 – 4/6/2020

In the latest episode of “Mondays with Matthew”, Windermere Chief Economist Matthew Gardner dives into part one of his two-part series analyzing the mortgage market. Today’s focus is on the substantial impact COVID-19 has had on jumbo mortgages. Check back next week when he’ll discuss conventional mortgages and provide his latest interest rate forecast.

Update #4 – 4/13/2020

This week on “Mondays with Matthew” Windermere Chief Economist Matthew Gardner discusses the impact of COVID-19 on 30-year-mortgages and gives an updated 2020 interest rate forecast.

Update #5 – 4/13/2020

This week on “Mondays with Matthew” Windermere Chief Economist Matthew Gardner analyzes the past two decades of the new home construction market and then discusses his predictions for this segment of the market going forward.

Update #6 – 4/27/2020

This week on “Mondays with Matthew”, Matthew Gardner addresses the growing concern that the housing market is heading towards a repeat of the 2008 meltdown. He uses data to illustrate how we are in a very different place than when the housing bubble burst.

Local News • March 26, 2020

Stay Home, Stay Healthy – The Impact on Real Estate

by Don Weintraub

Buying • March 17, 2020

Coronavirus Protections for Home Buyers

by Don Weintraub

As the situation develops with the COVID-19 pandemic, Windermere Real Estate is dedicated to taking steps to reduce the spread of the virus while continuing to work with home buyers.

To help with this process, here are some ways you as a home buyer can keep yourself and others safe during the buying process.

WHEN TOURING HOMES

❱ Only tour the property if you feel healthy.

❱ Ask your Windermere agent to show you the property instead of attending an open house.

❱ Drive separately from your agent to the property.

❱ Be considerate of the seller’s home and wash or sanitize your hands before entry, touching as little as necessary. While many sellers will likely provide it, bring your own hand sanitizer and use before and after you tour the home. You might also consider wearing disposable gloves for further safety.

❱ Ask your agent to confirm with the seller’s agent that they have not recently been sick or in contact with someone suspected of having COVID-19.

❱ Sellers often ask you to take off your shoes when you tour their home or wear protective booties that have been provided. Consider bringing your own booties and throwing them away when you’ve finished touring.

❱ Be mindful of how much you touch things in the home and minimize contact with doors and hand railings.

❱ Reduce the amount of time spent with other people in the same room. This “social distancing” practice can curb person-to-person spread.

DO NOT TOUR HOMES IF

❱ If you are currently self-quarantined because of illness or other reasons, you should not tour homes in person. Ask your Windermere agent to video chat with you while they tour the home so you can see it virtually.

❱ Do not view homes when you’re sick, feeling like you’re about to be sick, or getting over an illness.

❱ We do not recommend touring homes after returning from international travel or travel that exposed you to a large group of people in close quarters, like large events.

Market Updates • March 12, 2020

Eastside Market Report March 2020

by Don Weintraub

With all the events in the news people keep asking me if I am busy. The answers is…..yes! Rates are at all-time lows and helping drive the real estate market. We also have a sever shortage of inventory and a lot of demand. A lot of people are working from home and looking at property during the week instead of on weekends (ssshhhh…..don’t tell the boss!).

A few takeaways from the market data available through the end of February 2020:

• Median Price of 985k is up 9% from one year ago, but payment remain the same because interest rates are down over a percent

• 34% of the listings sold for more than asking price with multiple offers

• 51% of the listings sold for at or above listing price vs 37% in January of 2020 and 32% in February 2019.

• 55% of the listings sold in 15 days or less

So what about MARCH 2020? The market jitters really kicked in this month and the virus continues to spread:

• We continue to see hot new listings sell in just days with multiple offers over asking.

• New buyers are getting in the market because of the lowest interest rates of all time.

• Demand continues to be high and supply is extremely low with just 0.8 months of inventory.

This week I made three offers for buyers. All three properties had multiple offers and sold for over asking price. Two of them sold for more than 100k over list with all contingencies waived (no inspection, no appraisal contingency, released earnest money to seller immediately, etc).

This is a tremendous time to be a seller with so many buyers itching for a home while rates are low.

As always, please consider me a resource for your real estate questions.

Click here to read the full Eastside report

Market Updates • March 2, 2020

Current Market Takeaways from Premier Breakfast with Matthew Gardner

by Don Weintraub

Last week I attended a breakfast meeting with economist Matthew Gardner and he made some observations I thought you might be interested in. You may have seen Matthew on CNBC or at the event I hosted just a few weeks ago. In early 2021 Matthew will be my guest at our 5th annual market forecast…stay tuned for an invite! Until then, see some notes below:

Economy: We have been in a 10.5 year expansion as the last recession officially ended in June of 2009. “There has been 47 recessions and I remember all of them….and there will be 47 more!”. Hiring growth is slowing in this election year. Consumer are more thoughtful on what they are spending money on and there are some storm clouds, including Coronavirus. There is no doubt that the virus may have a big impact on growth this year, but it is simply too early to know. The virus will cause supply chain issues if it lingers on, and it may very well push up building costs even further along the way. Gardner expects unemployment may rise slightly in 2020, although we are at record lows currently and he is not concerned.

California: The growth in California is noticeably slowing in comparison to Washington State. California lost 250,000 residents in 2019 and affordability is a big reason. Washington gained many of the 250,000, no surprise! Compared to the Bay area, our housing is about 50% less expensive. Apartment rents are about half, and class A office space is also about half.

General Seattle area: We have more cranes than anywhere else in the United States. There are many investors and pension funds looking to put money into our area. 40,000 jobs are expected to be added around Seattle in 2020. Although Expedia recently announced 3,000 layoffs, that is really nothing compared to the growth taking place this year. The 3,000 should be able to find good jobs locally.

Millennials: They don’t want fixer-uppers…..they want turn-key move in ready homes. According to Matthew “they don’t do sweat equity and don’t like to sweat…..and they don’t know how to swing a hammer!”. Millennials want to move in and start living their lives. In the US we have 618,000 millennial millionaires and 92% of them own their own home. Many younger millennials are saving up money with two tech jobs, and making massive down payments when finally do buy.

Overseas Buyers: We are seeing slowing demand from buyers overseas. One reason is that the President of China has limited transfers out of the country to just $10,000 per year per person. That being said, some residents find a workaround through Hong Kong (and pay a fee of 5%) to get more money out of the country. A few years ago there were a lot of buyers from overseas investing in houses/condos for their children to live in while attending college. There are a lot less buyers like that today. All this being said, the US Dollar is a remarkably strong currency and so many foreigners want their money in the US.

Mortgage Rates: The recent stock market drops have really impacted interest mortgage rates in a positive way. Rates in the 3’s indeed easy to obtain, and that is a serious tool for increased buying power. Jumbo rates are similar to conforming, and sometimes even lower. Banks love jumbo loans and often do not sell them to investors, but service them and hold them longer term. Lower jumbo rates are indeed helping the luxury market. In 2019 about 56% of luxury homes were financed, while 44% were paid for in cash.

Boise, ID: This city comes up more and more. As the Bay area and Seattle have become more and more expensive, cities such as Boise are benefiting. Many companies are moving or growing in Boise as housing is about 1/3 of that in Seattle. Values in Boise were up about 14% in 2019. They have a good airport and infrastructure and Matthew expects growth to continue there among other cities.

Luxury homes: Luxury homes in the US have been selling the best in the Seattle area, Sacramento, and Colorado Springs according to Matthew’s numbers. In our area luxury sales are defined as 2 million and up. Ultra-luxury is defined as 5 million and up, and that market has been doing well around Seattle as well. Every week I see very expensive homes selling, and some of those same homes were not selling in 2019. He is spot on.

New Construction Condominiums: The cost to build a high rise condo is over $1,000/ft now. Developers have to sell for more than $1,200/ft to make it worthwhile. The Washington Condominium act was loosened to be a little more friendly to developers and encourage more building. Still, we are still not expecting affordable condos to be built because of the rising cost of materials/labor/land, along with high regulatory fees and long timelines. Many developers feel it is safer to build apartments when vacancy is low and the outlook is strong. Apartments typically fill up within 6 months and there are no concerns about homeowner lawsuits. Furthermore, conversions of existing apartments to condos is not expected despite the strong demand. The laws don’t allow the owner to start work on the conversion until the last tenant leaves. Why do it when rents are rising?

New Construction Houses: This is much of the same story as new condos. The margins simply do not exist for builders to build affordable houses. This is one of the reasons that resales (aka used houses) are selling so fast with many offers. That new square footage cannot be replicated for the same prices.

Outlook for housing inventory: Not good! Supply and demand, along with urban growth boundaries and rising costs will continue to limit our inventory. What about 5 or 10 years from now? Thing about it, if rates are 5% or 6% in 2026 will you give you up your 3.5% rate to move locally? There will be very little turnover and the only way is to build out of it. If you are thinking of selling let me know……now is an incredible time to be a seller.

Safe Haven: Real estate is indeed considered a safe haven compared to the stock market. A lot of wealth is expected to be passed down through real estate, and there are so many investors looking to get in on investments. I talk to potential investors every week and have been investing for 15 years myself. The Seattle area is indeed considered a safe haven by people around the country and the world.

Downsizing: Downsizing is not necessarily down-pricing around Seattle for so many people. It might mean less stairs, less maintenance, or more convenience though. Those that do want to scale down on price are moving to less expensive areas. Not everyone wants to give up their space and live in a small condo. The baby boomers have lots of stuff….”and the millennials don’t want grandma’s dresser”.

As always, if you have questions please consider me as a resource. I am always here to help and happy to chat with you and your friends!

Urban Development • February 27, 2020

Vulcan Breaks Ground on Mixed-Use Office Tower on 108th

by Don Weintraub

The City of Bellevue recently confirmed that Vulcan Real Estate has broken ground on their project located on 108th. The city lists the property as being under construction at 555 108th Avenue Northeast.

The tower will total 45 stories. The office space will be 839,500 square feet, retail space will be 11,680 square feet, and parking will include 1,056 parking spaces.

We reported in February 2019 that the application for design review had been submitted by Vulcan for approval to the City of Bellevue. The existing buildings have now been demolished. These include the previous tenants; Blazing Bagels, Ooba Tooba Mex Grill and Nibbana. Blazing Bagels has relocated to to 108th Ave NE and Main Street.

Vulcan Real Estate previously stated that they would not begin construction until they had a tenant. We’ve reached out to Vulcan to see if they have secured one.

SOURCE: DowntownBellevue.com