Thriving Economy, Clean Air, and Chinese Film Draw Homebuyers to Seattle

Earlier this week, I attended the Pacific Rim Summit which was hosted by Seattle’s local chapter of the Asian Real Estate Association of America (AREAA). While the overarching discussion was about international home buyers, the main focus was on wealthy Chinese families seeking out cities that can offer their children better educational opportunities and cleaner air.

I learned that China is home to some of the most polluted cities in the world which has a huge impact on their quality of life and life expectancy rates.  So those with means are seeking refuge in cleaner Western cities, like Seattle and Vancouver B.C. The difference between these two cities, however, is that Chinese migration to Vancouver B.C. is nothing new, but for Seattle, the rapid growth of this demographic really only started a couple of years ago. In fact, real estate agents estimate that Chinese buyers now represent upwards of 40-50 percent of all real estate activity in the neighborhoods to the east of Seattle, like Bellevue, Medina, and Kirkland. Areas that are also home to some of Seattle’s most expensive real estate.

The keynote speaker at the Pacific Rim Summit was Mauricio Umansky, the CEO of The Agency, and the number three real estate agent in the nation. Mauricio is also a regular on several reality TV shows and cable news networks, and really seems to know his stuff when it comes to Chinese home buyers. He quoted some interesting figures, including one that states that there are 30,000 new millionaires in China every year, and 40 percent are expected to immigrate to Western countries like the U.S. Apparently in 2013, China had 2,378,000 millionaire households, a rise of 82% from the previous year, and the most of any country in the world.

Speaking alongside Mauricio was Windermere agent, Tere Foster, who has been in real estate for more than 30 years and says that the percentage of Asian Pacific buyers in her business has grown by over 90 percent during the past two years. Because of this, Tere made the decision to hire a mandarin-speaking agent-assistant to help with this clientele. Other speakers talked about similar efforts, including hiring translators, partnering with Chinese agents, and taking Mandarin lessons.

According to AREAA, Seattle is currently the sixth most popular destination for Chinese immigrants in the world, behind cities like Los Angeles, which is number one. Seattle is the closest mainland U.S. city to travel to from Beijing and offers things that really appeal to the Chinese, like clean air, quality education, and employment opportunities with several Fortune 500 companies.

One of the most curious things I learned is that an uber-popular Chinese film called "Beijing Meets Seattle” has been another big draw for the Chinese, some of whom are looking to realize the movie’s portrayal of Seattle. I wouldn’t have believed if I hadn’t been surrounded by several Chinese business professionals all nodding their heads in agreement. Ironically enough, the film was actually shot in Vancouver B.C. (here’s a trailer: https://www.youtube.com/watch?v=OFRIFJg_Bzg).  

Other interesting facts according to Pacific Rim Summit speakers:

  • Over the past year, international home buyers have spent more than $92 billion on buying homes in the U.S. – and 60 percent of them have purchased homes with cash.
  • At least 75 percent of home purchases by Chinese buyers in the Seattle area are cash.
  • Chinese homebuyers care most about three things: their children’s education, the air quality, and food safety.
  • Eleven percent of all incoming freshman at the University of Washington are foreign-born Chinese students.
  • The University of Washington is currently ranked #15 on Shang Hai’s academic ranking of world universities – just behind schools like Cornell and Oxford. 
  • Many Chinese families with means are purchasing homes for their children so that they may attend local schools like the University of Washington. Sometimes well before those children are of college age.
  • East/West Bank reported that 73% of their mortgages to Chinese buyers were on property located in neighborhood’s on Seattle’s eastside.

All in all, the Pacific Rim Summit was fascinating. I learned so much about this incredibly fast growing demographic that’s buying up homes left and right in Seattle and other West Coast cities. Now I have a better understanding of why they’re choosing to leave China for places like Seattle, and a keen appreciation for their driving desire to find a better quality of life for themselves and their children.  

Windermere Gives Back with 30th Annual Community Service Day

On Friday, October 17, Windermere offices in Arizona, California, Colorado, and Nevada will be closed for a very special reason. For the past 30 years, Windermere has dedicated the third Friday of October to our annual Community Service Day*. On that day, you will find our teams doing a variety of projects, like cleaning, landscaping, and painting at local community centers and schools, collecting coats for low-income and homeless families, and working with local nonprofit organizations to ensure that kids in our communities are getting the resources they need.

This year we want to do even more, and you can help. For each office that posts their Community Service Day photos and videos on the Windermere Real Estate Facebook page (www.facebook.com/WindermereRealEstate), the Windermere Foundation will donate $100 to that office’s Foundation fund, to benefit low-income and homeless families in their community. We encourage you to “like” your local office’s Facebook page, as well as your favorite Community Service Day photos. The office with the most photo/video “likes” and comments will receive a $1,000 donation for the local Windermere Foundation charity of their choice. The contest will end next Thursday, October 30th.

*Windermere’s Northwest offices hold their Community Service Day in June

Windermere Office Projects for October 2014:

 

Arizona

 

Prescott

"Warm for Winter Coat Drive"

Prescott Valley

"Warm for Winter Coat Drive"

Scottsdale

"Warm for Winter Coat Drive"

 

 

California

 

Brentwood

Food Bank of Contra Costa and Solano

Clayton

Food Bank of Contra Costa and Solano

El Sobrante

The El Sobrante Boys & Girls Club

Morgan Hill

Can Tree Food Bank

Redding

Make a Wish Foundation and Wings of Angels Fundraiser

Walnut Creek

Food Bank of Contra Costa and Solano

 

 

Colorado

 

Ft. Colins

United Way

 

 

Nevada

 

Henderson- Anthem Hills

Communities in Schools of Nevada

Lake Las Vegas

Communities in Schools of Nevada

Las Vegas- Henderson

Communities in Schools of Nevada

Perspectives – Standards of Practice

As you’ve probably heard, the housing market is a little crazy right now. Every day we hear stories from our agents about the competition among buyers and what it takes to secure the winning offer. Escalation clauses, love letters, waived contingencies, non-refundable earnest money. The list goes on and on. Navigating this type of market requires an agent with moxy. An agent who is highly trained. And an agent who is ethical and respected by other agents (you’d be surprised how important respect between agents is in these situations).

Windermere agents hold themselves to a very high standard. That’s why 30 years ago we decided to establish an internal code of conduct known as the Windermere Standards of Practice. Within these standards is an outline of how we believe our clients deserve and expect to be treated. They are intended to provide total transparency about how we do business, while letting our clients know that our agents practice the highest level of competence and accountability.

Call us old-fashioned, but we still believe that notions like integrity and respect should be taken seriously and practiced rigorously. So much so that from the first day an agent joins Windermere, he or she is asked to subscribe to the Windermere Standards of Practice. In turn, we hope this commitment to ethical conduct lets our clients – and our community – know that doing right by them is our highest priority.

Why should this matter to you? Because when you’re competing for a home with six other buyers and everyone is upping the ante in a highly charged, time-sensitive situation, it’s important to know that your agent is a full-time professional who takes the business of real estate very seriously. With this comes a deeper understanding of the market and a commitment to professionalism that other agents recognize and respect. We call it the winning formula, and when competition is fierce, it’s good to know that the cards are stacked in your favor.

 

In the market to buy a home? Make a list and check it twice.

Are you thinking of buying a home, and you aren’t sure exactly where to start? Here is a checklist to help you get ready to make your home dreams come true:

Decide where you want to live! Are you where you want to be? Generally, you will want to plan on staying in your home for at least 5-7 years in order for you investment to pay off, so it’s important to look at homes in an area that will meet your needs over the long term. 

Explore the market. Once you know where you will be looking for homes, you can start to explore. Get to know the neighborhoods, the school districts, the local businesses, and community amenities.

Make a list of what you need and want. Create a list of the things in a home that are most important to you. Like the number of bedrooms/bathrooms, home features, commute times, etc. Then make a list of things that you would like to have, but aren’t as important, such as a fireplace, a large back yard, or a pool. It may help you to create a Pinterest board with your favorite home features that you can share with your agent when you’re ready to start looking.

Search for comparable houses in your market. Once you know where you’d like to buy and what type of house you’re looking for, you can start to realistically assess how much it will cost. Use an online search tool like windermere.com to see what’s for sale in your preferred neighborhood(s) and the value of the homes.

Take a good look at your finances. Once you have an idea of what homes cost, you can start figuring out how much money you need for a down payment, monthly mortgage payments, property taxes, etc. Make sure to check your credit score to ensure that everything is in order before applying for a home loan.

Develop your financial plan. Determine how much you need to save for your down payment and create a plan and timeline to achieve this goal. Outstanding debt can drag down your credit score, so make sure that paying down debt is a part of your plan.  

Find a real estate agent! Once you’ve met your financial goals, it’s time to find a real estate agent. The best place to start is by asking friends and family for a referral. You can also search on real estate websites, like windermere.com, to find an agent that specializes in the area you are looking to live.

Get pre-approved for your home loan. Your agent should be able to refer you to a mortgage representative who can assist with the financing of your new home. The first step is to get pre-approved so that you know exactly how much home you can afford. Not only does this allow you to refine your home search, but it can also give you a competitive advantage when there are multiple buyers bidding on the same property.  

Start shopping! This process involves everything from searching for homes online to visiting open houses on the weekends. But perhaps the most important part of this process is going on a good-old-fashioned home tour with your real estate agent. Looking for homes online lets you search more efficiently, but there’s nothing like seeing the home – and its surroundings – first hand.

The bidding process. The bidding process differs from region to region and season to season, but ultimately you should look to your agent to help you develop a plan based on your priorities and financial abilities. Depending on the market where you’re buying, there could be multiple buyers bidding for the same home, so it’s a good idea to have a well thought out strategy ahead of time.

Offer acceptance & earnest money. Once a seller accepts your offer you are required to put down an earnest money deposit to show that you are committed to purchasing the house. This money is held jointly by the seller and the buyer in a trust or escrow account. The earnest money goes towards your down payment and closing costs upon the closing of the home sale.

Home inspection. Most home sales are pending until a home inspection is completed. This is when a home inspector checks the condition of a home, such as the foundation, roof, windows, insulation, electrical, and heating components. If a home inspection turns up the need for repairs, it can end up being a tool for re-negotiations with the seller.  

Home appraisal. This is an all-important step to getting the financing you need for your new home. An appraisal is performed to assess the true value of a home, which in turn, determines how much a lender is willing to give you to buy it. Appraisals protect banks from getting stuck with property that's worth less than they've invested. And it protects you from paying too much for a house simply because it was love at first sight.

Purchase your home insurance. A standard homeowner’s insurance policy typically covers your home, your belongings, injury or property damage to others, and living expenses if you are unable to live in your home temporarily because of an insured disaster.

Closing! The closing marks the final step of the home purchase process. This is when the deed to a property is legally transferred from the seller to the buyer who then takes possession of the home. In simple terms, this is when you get the keys to your new home and you can officially move in.

If you have any additional questions about the home buying process, contact a local real estate agent

Selling Your Home? Go Through This Safety Checklist With Your Real Estate Agent

 

 

Selling your home can be stressful for many reasons. Not only are you trying to get the best financial return on your investment, but you might also be working on a tight deadline. There’s also the pressure to keep your home clean and organized at all times for prospective buyers.  One thing you can be sure of when selling your home is that there will be strangers entering your space, so it’s important for you and your agent to take certain safety precautions.

 

  • Go through your medicine cabinets and remove all prescription medications.
  • Remove or lock up precious belongings and personal information. You will want to store your jewelry, family air looms, and personal/financial information in a secure location to keep them from getting displaced or stolen.
  • Remove family photos. We recommend removing your family photos during the staging process so potential buyers can see themselves living in the home. It’s also a good way to protect your privacy.  
  • Check your windows and doors for secure closings before and after showings. If someone is looking to get back into your home following a showing or an open house, they will look for weak locks or they might unlock a window or door.
  • Consider extra security measures such as an alarm system or other monitoring tools like cameras.
  • Don’t show your own home! If someone you don’t know walks up to your home asking for a showing, don’t let them in. You want to have an agent present to show your home at all times. Agents should have screening precautions to keep you and them safe from potential danger.

Talk to your agent about the following safety precautions: 

  • Do a walk-through with your agent to make sure you have identified everything that needs to be removed or secured, such as medications, belongings, and photos.
  • Go over your agent’s screening process:
    • Phone screening prior to showing the home
    • Process for identifying and qualifying buyers for showings
    • Their personal safety during showings and open houses
  • Lock boxes to secure your keys for showings should be up to date. Electronic lockboxes actually track who has had access to your home.
  • Work with your agent on an open house checklist:
    • Do they collect contact information of everyone entering the home?
    • Do they work with a partner to ensure their personal safety?
  • Go through your home’s entrances and exits and share important household information so your agent can advise how to secure your property while it’s on the market.

Your safety, as well as that of your agent and your home, is of paramount importance when selling a property. For more information, visit:

http://www.mercurynews.com/los-gatos/ci_26509084/realtors-issue-safety-tips-folks-who-are-selling

http://realtormag.realtor.org/sales-and-marketing/feature/article/2014/09/safety-talk-you-need-have-clients

 

 

A Quick Guide to Understanding Real Estate Designations

What do those letters and acronyms mean at the end of your real estate agent’s name? We’re here to answer that question and explain why it might matter to you. Like other professionals, real estate agents have the ability to specialize in certain areas of the business by earning designations. Those acronyms signify that they have achieved a specific designation through extensive training and education. In simple terms, designations enable agents to increase their skills, proficiency, and knowledge in various real estate sectors. They can also provide agents with access to members-only marketing tools and resources which can be an added benefit to their clients.  

So why should real estate designations matter to you? Depending on what your specific real estate needs are, certain designations might mean more to you than others. For example, if you are in need of a real estate agent who can help you or your loved ones transition to a senior living facility, you may want to work with a Senior Real Estate Specialist (SRES), because they are trained to understand the unique needs of seniors and their families in this type of situation.  Or, perhaps you’re selling your LEED-certified home and you want an agent who specializes in marketing these types of properties, then you may want to work with a Certified Green Real Estate Professional (CG-REP).

The National Association of REALTORS® offers the largest number of professional designations, which are designed to provide real estate agents with specialized training in a variety of areas. Here is a list of those designations and how they benefit real estate consumers.

Accredited Staging Professional (ASP): By increasing a home’s appeal to a higher number of buyers, home staging is commonly considered one of the best ways to sell a property more swiftly and for more money. Agents with an ASP designation understand the art of home staging and use special marketing techniques to increase the market value of a home.   

Senior Real Estate Specialist (SRES): If you are considering retiring, downsizing or are trying to help an aging loved one transition to an assisted living facility, a SRES trained REALTOR is qualified to help support clients over the age of fifty with lifestyle transitions and major financial decisions. This includes knowing what to look for if you prefer to age in place, finding the resources to support a move from movers to financial advisors, and more.

NAR Green Designation (GREEN): If you are looking to buy or sell  a LEED Certified home, a GREEN REALTOR will have the expertise to help you. They are trained in sustainable and earth-friendly building trends, energy efficiency, and more.

Accredited Buyers Representative (ABR): If you are a first time homebuyer you may want to find an ABR designated agent. They are specially trained to work with buyers through every step of the home-buyer process from mortgage to closing.  

Accredited Land Consultant (ALC): Land experts have expert knowledge and experience in land auctioning, leasing, development, farm management, land investment analysis, and tax deferment. This type of designation is not needed for a general home purchase, but if you are looking at investment, development, or farming properties, an ALC can help.

Certified Commercial Investment Member (CCIM): Purchasing or leasing space for your business is different than finding a home for yourself or investment property. If you need a commercial space, a certified commercial agent can help you locate this type of property and negotiate the intricacies of the contracts.

Certified International Property Specialists (CIPS):  International real estate can differ greatly from domestic transactions. If you are looking to purchase a home abroad, consider working with an agent who has their CIPS and specializes in international real estate. They can provide tools for understanding the international process, access to a global referral network, and additional international resources.

Certified Property Managers (CMP): Managing a rental property can be a complicated, time-consuming process. There are specific laws you have to follow, resident screenings, 24 hour maintenance issues, and more. A CMP is specially trained to manage your residential or commercial property on your behalf.

Certified Real Estate Brokerage Manager (CRB): Managing a real estate business involves much more than overseeing an office with staff, marketing, and other resource needs. CRBs go through certification and extensive training for supervising a real estate brokerage, with essential business development and management requirements.  

Certified Residential Specialist (CRS): The prestigious CRS designation is awarded to experienced REALTORS who have completed advanced professional training and demonstrated outstanding professional achievement in residential real estate. This designation signifies one of the highest levels of success a REALTOR can achieve.

Seller Representative Specialist (SRS): Sometimes referred to as a “listing agent”, there are agents who specialize in working specifically with sellers. These agents have special training in all areas of the home selling process, providing increased professional standards and marketing expertise.

Certifications:

Military Relocation Professional Certificate (MRP): If you are a military service member or are relocating on behalf of the military, an MRP is specifically trained to address your relocation needs.  They can help you navigate through the financial process because they are aware of the benefits available to service members and can address the unique relocation needs of military clients.

Resort & Second-Home Property Specialist Certification (RSPS): If you have a destination property, consider working with a RSPS certified agent to manage the buying, selling, or management process. They have training specific to managing investment, retirement, resort, and vacation destination properties.

Short Sale & Foreclosure Certification (SFR®): Short sales are different than typical home sales because they deal directly with financial institutions. SRF certified agents are experienced at negotiating these types of transactions and are trained to work with finance, tax and legal professionals on behalf of distressed sellers.

Go here for a complete list of designations: http://www.realtor.org/designations-and-certifications

Here’s Your Fall Home Maintenance Checklist:

Fall is an ideal time to tackle maintenance projects both inside and outside. Here are a few ideas to get you started:

Gutters top to bottom: Water in the wrong spots can do a lot of damage. Start by ensuring that gutters and downspouts are doing their job. (Don’t attempt this task yourself if you have a two-story house with a steep roof; hire a professional instead.) If your home is surrounded by deciduous trees you may need to clean out your gutters a few times a year, especially in the fall. Check to make sure your gutters are flush with the roof and attached securely, repairing any areas that sag or where the water collects and overflows. Clean out the gutters and downspouts, checking that outlet strainers are in good shape, and are firmly in place. Finally, check that your downspouts direct water away from your house, not straight along the foundation.

If you haven’t already, you may want to consider installing gutter guards. Gutter guards create a barrier so water can get through to your gutters, but debris cannot, limiting gutter buildup (and the time you spend cleaning out your gutters). There are DIY installation kits available or you can always hire a professional to install a gutter guard system.

If you have a sump pump under your house, now is a good time to test it. Run a hose to be sure draining water travels directly to the pump (dig small trenches if needed), and that the pump removes the water efficiently and expels it well away from the foundation. For more information about how sump pumps work go to howstuffworks.com.

Check for leak: The best opportunity to catch leaks is the first heavy rain after a long dry spell, when roofing materials are contracted. Check the underside of the roof, looking for moisture on joints or insulation. Mark any spots that you find and then hire a roofing specialist to repair these leaks. What you don’t want to do is wait for leaks to show up on your ceiling. By then, insulation and sheet rock have been damaged and you could have a mold problem too.

Don’t forget the basement. Check your foundation for cracks, erosion, plants growing inside, broken windows, and gaps in window and door weathering.  Make sure to properly seal any leaks while the weather is nice. This will ensure materials dry properly.

Pest Prevention: Rodents are determined and opportunistic, and they can do tremendous amounts of property damage (and endanger your family’s health). As temperatures cool, take measures to prevent roof rats and other critters from moving in. Branches that touch your house and overhang your roof are convenient on-ramps for invaders, so trip back branches so they’re at least four feet from the house. If you do hear scuttling overhead or discover rodent droppings in your attic, crawl space or basement, take immediate action. The website http://www.thisoldhouse.com has several helpful articles on the topic.

Maintain your heating and cooling systems: Preventative maintenance is especially crucial for your home’s heating and air-conditioning systems. Fall is a smart time to have your systems checked and tuned up if necessary. Don’t wait for extreme temperatures to arrive, when service companies are slammed with emergency calls. Between tune-ups, keeps your system performing optimally by cleaning and/or replacing air filters as needed.

If you have a wood-burning fireplace, a professional inspection and cleaning will help prevent potentially lethal chimney fires and carbon monoxide poisoning. Even if you don’t use your fireplace often, always keep a supply of dry firewood or sawdust-composite logs so you have a backup heat source in an emergency.

Insulate & seal: Insulating your home is a cost-efficient investment, whether you’re trying to keep the interior warm in the winter or cool in the summer. Aside from more major improvements like energy-efficient windows and insulation, there are some quick fixes that do-it-yourselfers can tackle. If an exterior door doesn’t have a snug seal when closed, replace the weather stripping; self-adhesive foam stripping is much simpler to install than traditional vinyl stripping. If there is a gap under the door (which can happen over time as a house settles), you may need to realign the door and replace the vinyl door bottom and/or door sweep. Air also sneaks inside through electrical outlets and light switches on exterior walls. Dye-cut foam outlet seals placed behind the wall plates are a quick and inexpensive solution.

 

Oregon and Southwest Washington Real Estate Market Update

Windermere Real Estate is proud to partner with Gardner Economics on this analysis of the Oregon and Southwest Washington real estate market. This report is designed to offer insight into the realities of the housing market. Numbers alone do not always give an accurate picture of local economic conditions; therefore our goal is to provide an explanation of what the statistics mean and how they impact the Oregon and Southwest Washington housing economy. We hope that this information may assist you with making an informed real estate decision. For further information about the real estate market in your area, please contact your Windermere agent.

Regional Economics

Oregon job growth in the areas contained in this report slowed a little in the second quarter with the addition of 31,509 jobs, or an increase of 1.8%. That said, during the quarter, employment rose by 17,508 jobs (+1%) which is still not a bad figure.

When compared to the second quarter of 2013, growth was strongest in Klamath County, where employment grew by 4.9 percent (1,090 jobs). This was followed by Clark (+4.2%) and Deschutes (+3%) Counties.

Job losses were somewhat more widespread than those seen a year ago; however, the total losses amounted to only 1,030 positions. The largest declines were seen in the Medford market where there was a loss of 630 jobs.

At the end of 2013, I suggested that the region should add 35,000 jobs in 2014 and we appear to still be pretty much on track to achieve that figure.

In line with our last report, the unemployment rate continues to drop and now every county in the region has an unemployment rate below that seen a year ago. Additionally, the rate is also lower than seen at the end of the first quarter, which suggests that the market is improving in both the near- and longer-term.

It is also worth noting that all of the counties within this report can now say that their unemployment rate is below ten percent. This is a key psychological barrier and, as regular readers will be aware, I had worried that many counties appeared to be stuck above this threshold. This is now no longer the case.

If there is something that still concerns me it is that the state, after adding close to 44,000 jobs in 11-straight months of growth, saw payroll employment shrink by 4,300 jobs in June. And what’s even more disconcerting is that the construction industry dropped by 3,600 jobs at a time when, traditionally, employment should be growing.

Could this just be an anomaly? Maybe! However, because of this, I cannot raise my grade for the region’s economy above the “C+” that I gave it last quarter.

Regional Real Estate

Inventory constraints appear to be a major factor in the marketplace right now, with over half of the counties in this report showing a reduction in closed sales when compared to the first half of 2013.

For the most part the declines were rather modest, but it is not the direction that I was looking for. In my estimation, either the anticipated spring “bounce” did not appear or, as is more likely the case, sales in the first quarter were particularly slow, which is reflected in the decline in home sales for the first half of this year. I am not going to jump to judgment quite yet, but this is something that I will be keeping my eye on.

When compared to the first half of 2013, sales rose in eight counties with Clatsop and Cowlitz Counties up by an impressive 19.4 and 19.2 percent, respectively. The most substantial declines were seen in Columbia County where sales dropped by 13.3 percent. Other markets where sales dropped quite precipitously were Benton and Wasco Counties.

What is clear is that, while sales are getting harder to come by, prices are still moving higher with the average sale price growing from $275,100 to $291,200—an increase of 5.8 percent.

Looking at individual counties, a vast majority saw sale prices which were higher than those seen a year ago. The most impressive gains were seen in Klamath (+19.3%), Klickitat (+16.5%), and Columbia (+13.5%) Counties. A majority of counties saw prices rise by single digits, which is still respectable given inventory constraints.

There were three counties where prices fell, with Skamania County seeing the greatest drop in value versus a year ago (-24.3%). We attribute this to the fact that it is a very small market with less than 25 home sales on average every quarter. The two other markets where prices dropped very slightly were Lincoln (-2.3%), and Hood River (-1.0%) Counties.

Looking back a bit further, all but two counties in the region saw home prices exceed those shown in the second quarter of 2012. Additionally, 15 of 23 counties surveyed saw prices in the second quarter exceed those seen in the second quarter of 2009.

In all, the market is plodding along relatively well but, as is always the case, some areas are doing better than others. The lack of inventory is a concern and, purely because of this, I am maintaining a “C+” grade for now.

Conclusions

The unemployment rate in Oregon continues to trend lower but remains well above its pre-recession level; however, long-term unemployment (people who were unemployed for more than six-months) dropped to 40,700—the lowest number since 2008.

The markets covered by this report are seeing their labor forces grow, which is encouraging. More people are either looking for work or have obtained positions. I think that the temporary slowdown that was seen in June is just a blip and that the market will return to positive employment growth as we move through the rest of the summer.

The recovery in the housing markets in the region is certainly uneven. Price growth is at levels that I had expected, but the slowdown in home sales is not what I wanted to see. Interest rates remain at very low levels, but buyers continue to be frustrated by the lack of choice in the market.

I mentioned in my last report that I was hopeful that the region would start adding to its supply of homes for sale, but that has not yet happened. There is still time, but with the pre-school-year slowdown, the third quarter might not meet expectations in terms of inventory or sales. That said, it is clear that the market wants to grow. The question, given the clear supply constraints that exist, is can it? For now, that remains to be seen.

About Matthew Gardner

Mr. Gardner is a land use economist and principal with Gardner Economics and is considered by many to be one of the foremost real estate analysts in the Pacific Northwest.

In addition to managing his consulting practice, Mr. Gardner chairs the Board of Trustees at the Washington Center for Real Estate Research at the University of Washington; sits on the Urban Land Institutes Technical Assistance Panel; is an Advisory Board Member for the Runstad Center for Real Estate Studies at the University of Washington; and is the Editor of the Washington State University’s Central Puget Sound Real Estate Research Report.

He is also the retained economist for the Master Builders Association of King & Snohomish Counties. He has twenty-five years of professional experience in the U.K. and U.S.

He has appeared on CNN, NBC and NPR news services to discuss real estate issues, and is regularly cited in the Wall Street Journal and all local media.

Western Washington I 2014 Second Quarter Market Update

Windermere Real Estate is proud to partner with Gardner Economics on this analysis of the Western Washington real estate market. This report is designed to offer insight into the realities of the housing market. Numbers alone do not always give an accurate picture of local economic conditions; therefore our goal is to provide an explanation of what the statistics mean and how they impact the Western Washington housing economy. We hope that this information may assist you with making an informed real estate decision. For further information about the real estate market in your area, please contact your Windermere agent.

Regional Economics

The post-recession job recovery continues unabated in Western Washington, with all of the counties contained within this report either exceeding their pre-recession peak or approaching it. Washington State added just shy of 84,700 jobs over the past 12-month period, representing a very respectable annual growth rate of 2.8 percent. In total, all of the counties covered added 64,190 jobs (also a 2.8 percent increase over a year ago). If there was a spring bump, it certainly came in the second quarter, with the area adding 52,180 jobs.

The tri-county area of King, Snohomish, and Pierce Counties still dominates in terms of total growth, adding 42,400 jobs in second quarter—an increase of 60,300 jobs compared to a year ago. King County employment is now four percent higher than its pre-recession peak; Snohomish is one percent higher, and Pierce County now matches its 2008 peak employment numbers.

Looking more closely at the county figures, King County (+4.0%) maintains its top position in terms of employment growth; this is followed by Pierce County (+3.5%), and Cowlitz County which continues to outperform with the addition of 800 jobs (+2.2%).

In Western Washington, losses were seen only in Grays Harbor County which shed 180 jobs over the past year. That said, this county added 720 jobs in second quarter indicating a quite substantial turnaround. Employment in Jefferson and Kitsap Counties matched that seen a year ago but, again, both counties added jobs in the quarter.

Turning our attention to unemployment rates in the region, I am not surprised to see all counties showing improvement in total unemployment. This is particularly important because the labor force grew over the past year, albeit modestly. What this means is that the drop in the unemployment rate is a function of job creation and not a slowdown in people looking for work.

When compared to June of 2013, the greatest declines in the unemployment rate were in Cowlitz County where the rate dropped by 3.4 percent to 7.1 percent. This was followed by Grays Harbor County where the rate dropped from 11.8 to 8.5 percent. Unemployment dropped by 3.2 percent in Mason and Lewis Counties. The unemployment rate in counties throughout Western Washington also improved when compared to last quarter.

Thus far in 2014, employment growth has exceeded my expectations; however, the growth is still bifurcated with very solid expansion in the core central Puget Sound area, but not necessarily across the entire state. Because of this, I am maintaining the “B+” grade that I have given the employment situation for the past year.

Regional Real Estate

In my first quarter report, I suggested that I was disappointed with the number of homes for sale and hoped that we would see improvement in inventory levels as we moved further into the spring selling season. Well, I am happy to report that my hopes were met, with a 33 percent increase in housing inventory compared to last quarter—and a 7.7 percent increase over a year ago.

The greatest growth in listings year-over-year was seen in Snohomish County, registering a 36 percent increase in homes for sale. This was followed by Thurston County where the total number of homes for sale was 25 percent higher than a year ago, and Pierce County rounded out the top three with a 21 percent increase. Only three counties reported an annual decrease in listing activity during second quarter. The largest decline was seen in Jefferson County (-13%), while Island and Lewis Counties both dropped by 10 percent.

When comparing first and second quarters of this year, every county reported more homes for sale. The greatest increase was seen in Kittitas County where inventory levels grew by 50 percent. This was followed by Whatcom (+44%), King (+41%), and Thurston (+40%) Counties. The smallest increase was seen in Lewis County at a still respectable 14 percent increase over first quarter of this year.

When we look at sales activity, 29,885 homes sold in the first half of 2014—a modest increase of 1.3 percent over the first half of 2013. However, during second quarter, sales growth followed the rise in listings, reporting a substantial 51.8 percent increase compared to first quarter. In the second quarter, there were over 18,000 home sales—compared to 11,870 last quarter.

Year-to-date, home sales grew the fastest in San Juan County (+69.7%), possibly suggesting that the vacation home market may have recovered. This was followed by Grays Harbor County (+34.5%) and Mason County (+28.1%).

There were four counties where home sales fell compared to the first half of 2013: Clallam County (-2.7%), Whatcom County (-2.4%), King County (-2.3%), and Skagit County (-1.5%). I believe these numbers to be due to the low inventory levels.

As mentioned earlier, when compared to the first quarter of 2014, home sales were solidly higher. This growth was most pronounced in San Juan County where sales were up by a substantial 85 percent. This was followed by King County (+61%), Skagit County (+58%), and Mason County (+54%). The slowest sales growth was seen in Grays Harbor County (+9%).

The average home price in Western Washington in the first half of 2014 was $355,335—up by 4.6 percent over the first half of 2013. As is seen in the chart to the right, all but four counties saw average sales prices rise compared to a year ago. Price growth has been tapering over the past year, but remains generally positive.

When we look at individual counties, the strongest annual gains were in Lewis County where prices rose by 9.7 percent. There were also significant gains seen in Snohomish County (+7.9%), Island County (+7.3%), King County (+7.2%), and Clallam County (+7%).

Compared to the first quarter of 2014, home prices were also higher in all but one county. The greatest growth was seen in Jefferson County (+14.7%), followed by Mason County (+13.8%) and Cowlitz County (+12%). There were an additional three counties that saw double-digit gains in sale prices. Home prices fell in just one county, and this was the always-volatile San Juan County, where prices for the quarter were down by 3.9 percent.

Even though rising home prices slowed in the second quarter, I am very pleased to see the growth in listing activity. As such, it’s time to up the grade for the housing market to a “B+” from the “B” grade given last quarter.

Conclusions

The economy in our region continues to improve. The ongoing low-interest rate policy of the Federal Reserve has helped fuel a turnaround in the housing market. Even with the increases in mortgage rates last summer, financing costs remain well below historical averages, with the 30-year fixed-rate mortgage averaging 4.2 percent in the second quarter of this year. Rates have dropped through the quarter and I do not expect to see any form of rapid rise through the summer months. That said, I do anticipate that interest rates will start to climb modestly through the balance of this year and into 2015.

Shifting to the new construction housing market, I have a cautiously optimistic view for economic growth in the next few years. With the exception of multifamily rentals, the new home sector remains well below potential, and will likely persist in that state for a couple of years, but continue to doggedly improve. Interestingly, the lack of new home construction bodes well for the resale market, as I expect that we will start to see additional demand coming from new households moving out of rental housing and into homeownership. This will lead to additional demand for single-family homes.

The housing market is starting to get more balanced, thanks to slowing price growth combined with somewhat greater choices for buyers. That said, we still have a long way to go. To give you some perspective, there were 33,258 homes for sale in Western Washington in June of 2009, and in June of 2014, there were just 20,670!

I expect that the summer will continue to be good to us with higher levels of inventory leading to further increases in sales activity. Mortgage lending has started, at long last, to become modestly easier, which will also do its part to add to the continued improvement of the housing market and the overall economy.

About Matthew Gardner

Mr. Gardner is a land use economist and principal with Gardner Economics and is considered by many to be one of the foremost real estate analysts in the Pacific Northwest.

In addition to managing his consulting practice, Mr. Gardner chairs the Board of Trustees at the Washington Center for Real Estate Research at the University of Washington; sits on the Urban Land Institutes Technical Assistance Panel; is an Advisory Board Member for the Runstad Center for Real Estate Studies at the University of Washington; and is the Editor of the Washington State University’s Central Puget Sound Real Estate Research Report.

He is also the retained economist for the Master Builders Association of King & Snohomish Counties. He has twenty-five years of professional experience in the U.K. and U.S.

He has appeared on CNN, NBC and NPR news services to discuss real estate issues, and is regularly cited in the Wall Street Journal and all local media.

 

August Perspectives: Summer Splash at Green Lake

There’s nothing quite like Seattle in August – it’s our favorite time of the year. That’s because you can usually count on blue skies, warm temperatures, and minimal rain, making it the ideal place to do just about anything outdoors. It’s also the time of year when families start getting ready to send their kids back to school. Sadly, for some kids, going back to school represents a time of stress because they don’t have something that most of us take for granted – a pair of shoes.

Studies show that when kids feel good about their appearance, it improves both their self-esteem and their performance in school. We think every child deserves to start the school year on the right foot, so with your help, we’re determined to make that happen.    

 

 

On August 16, in partnership with Seattle Parks and Recreation and the George Pocock Rowing Foundation, Windermere is hosting a free family event at Green Lake called the Windermere Summer Splash. This day-long event kicks off first thing in the morning with a Junior Rowing Race and Corporate Cup Regatta that will see some iconic Seattle companies face off. Other highlights include food vendors, live entertainment, giveaways, and a whole host of kid-friendly activities. And if you’re game, you and your kids can also try your hand at rowing, canoeing, kayaking, and stand-up paddle boarding.

What does all of this have to do with kids who need shoes? Well, in addition to celebrating summer fun and healthy activities for families, we’re holding a sneaker drive for low-income youth called “Kicks for Kids”. Bring a pair of new or gently used sneakers (kids sizes 1-9) to the event and our friends at Gentle Giant Moving Company will make sure they’re delivered to the King County Boys and Girls Club, and Mary’s Place, in time for the first day of school. Can’t make it to the Summer Splash? No problem. Just drop off the sneakers at any local Windermere office between now and August 15.

We hope to see you (and your kicks) next Saturday. For more information about the Windermere Summer Splash event, please visit www.WindermereSummerSplash.com.