5 Green Upgrades that Increase Your Home Value

Selling a home begins with understanding how much it’s worth. After an initial assessment, you may want to make some updates to increase the value of your property. There are several ways to do that, including boosting your curb appeal or making renovations with significant ROI potential. As you research potential projects, keep in mind that making your home more sustainable can boost its value to potential buyers. Talk with your agent to identify which of these five upgrades makes sense for your home before it hits the market.

Five Green Upgrades that Increase Your Home Value

1. Energy-Efficient Appliances

It’s no secret that appliances use a significant amount of energy, which means there is plenty of opportunity to cut back on their output. Installing energy-efficient appliances can do wonders for creating a more eco-friendly home, while appealing to buyers who value sustainability. When shopping around, look for appliances with high-efficiency or Energy Star certifications. They may cost more to purchase, but their ability to generate long-term savings is a concrete selling point. 

2. Tankless Water Heater

As the shift toward eco-friendly appliances has picked up steamed, so too has the preference for tankless water heaters. Whereas standard storage tank water heaters keep a reservoir of hot water at the ready, tankless water heaters heat your home’s water supply on-demand. It’s similar to a new car that shuts off its engine when sitting idle, as opposed to an older car whose engine is running all the time. Tankless water heaters don’t come without their share of costs. An upfront investment will be required for purchase and installation, but it will deliver immediate savings on energy bills.

3. Solar Panels

There are many benefits to going solar, but for sellers, the positive effect solar energy has on home values is chief among them. A solar-capable home is a surefire way to drum up buyer interest. By taking care of the upfront installation costs, you allow the buyer to focus on the benefits of solar energy, i.e. the long-term energy savings, the reduced utility bills, and the reduction in the property’s carbon footprint. Work closely with your real estate agent to understand how solar energy has affected home prices in your area to get an idea of the project’s ROI potential.

 

Image Source: Getty Images

 

4. Water Filtration

Installing a home water filtration system is one of the best ways to cut down on your home’s waste while increasing its value. These filtration systems appeal to buyers for a variety of reasons. Of course, there are an array of health benefits to having filtered water running through the entire house. Buyers can be assured that the water is safe to drink, they will be bathing and showering in clean water, and there is a reduced risk of plumbing issues due to contaminated water. Beyond the personal health benefits, it can also cut down on bottled water costs and the amount of landfill waste produced within the home.

5. Energy-Efficient Windows

Alternatives to traditional windows have become more popular in recent years. Energy-efficient windows are better insulated, which helps to regulate temperatures inside the home and protects against harmful ultraviolet rays. Their ability to help regulate your home’s heating and cooling leads to energy savings and reduced carbon emissions. Energy-saving windows can be highly valuable to potential buyers, especially if you live in a climate with extreme temperatures.

For more tips on the selling process, visit the selling section of our blog.

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Q2 2021 Central Washington Real Estate Market Update

The following analysis of the Central Washington real estate market is provided by Windermere Real Estate Chief Economist Matthew Gardner. We hope that this information may assist you with making better-informed real estate decisions. For further information about the housing market in your area, please don’t hesitate to contact your Windermere Real Estate agent.

 

Regional Economic Overview

I am pleased to report that the Central Washington region has recovered all of the jobs that were lost due to the COVID-19 pandemic. Across the five counties that make up this report, total employment was 220,554, up more than 1,900 jobs from the pre-pandemic peak in March 2020. Given the recovery in the job market, it’s not surprising that the unemployment rate dropped to 6.1%, the lowest level since last October and well below the pandemic peak of 15.4%. The total labor force remains lower than a year ago but is starting to rise again, which may lead the contraction in the overall jobless rate to slow, but I do not anticipate it will rise again. I would add that the current jobless rate is actually lower now than it was before the pandemic appeared.

central washington Home Sales

❱ Home sales in Central Washington were 30.9% higher than a year ago. Given that the pandemic was starting to grip the region at that time, this statistic is not very informative. However, when comparing sales with the first quarter of this year, it was impressive to see an increase of 56.9%, with a total of 1,473 homes sold.

❱ Pending sales were up 54.5% from the first quarter, suggesting that closings in the third quarter will show further growth.

❱ Sales activity rose across the board, with significant increases in Kittitas County and sales in all other markets rising by double-digits.

❱ Inventory levels were down more than 17% compared to the first quarter and were 30% lower than a year ago. This is disappointing, as many other counties across the state are actually seeing the number of homes for sale start to rise. The local market remains very tight, and this will continue to favor home sellers.

central washington Home Prices

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

❱ With low levels of inventory and solid demand, the average home price in Central Washington continued to trend higher. Prices were up 26.8% year over year to $471,858 and were 14% higher than in the prior quarter.

❱ Mortgage rates rose modestly during the first quarter of this year before pulling back in second quarter. This likely nudged many buyers off the fence. Rising mortgage rates and low supply levels have driven prices up.

❱ All counties covered by this report experienced significant price increases, with double-digit gains across the board.

❱ Home-price growth in Central Washington remains well above the long-term average, but affordability is becoming an increasing concern. Douglas and Kittitas counties are now technically unaffordable. As we move through the balance of the year, I expect price growth to continue, but we should see a slowdown in the pace of appreciation.

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

Days on Market

❱ The average time it took to sell a home in Central Washington in the second quarter of 2021 was 36 days.

❱ During the second quarter, it took 28 fewer days to sell a home in Central Washington than it did a year ago.

❱ All counties saw the length of time it took to sell a home drop compared to a year ago, with noticeable improvement everywhere other than Yakima County, though market time there dropped by only 8 days.

❱ It took 21 fewer days to sell a home in the second quarter than it did in the first quarter of this year.

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

Conclusions

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

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

Listing activity has not yet risen to a level that meets buyer demand, and this is impacting home prices, which certainly favors sellers. Assuming the number of homes for sale will not rise significantly in the coming months, prices will continue their upward trajectory. At some point though, affordability will start to act as more of a headwind than is currently being experienced. As such, I am moving the needle a little more in favor of sellers.

About Matthew Gardner

Matthew Gardner - Chief Economist for Windermere Real Estate

As Chief Economist for Windermere Real Estate, Matthew Gardner is responsible for analyzing and interpreting economic data and its impact on the real estate market on both a local and national level. Matthew has over 30 years of professional experience both in the U.S. and U.K.

In addition to his day-to-day responsibilities, Matthew sits on the Washington State Governors Council of Economic Advisors; chairs the Board of Trustees at the Washington Center for Real Estate Research at the University of Washington; and is an Advisory Board Member at the Runstad Center for Real Estate Studies at the University of Washington where he also lectures in real estate economics.

The post Q2 2021 Central Washington Real Estate Market Update appeared first on Windermere Real Estate.

Q2 2021 Eastern Washington Real Estate Market Update

The following analysis of the Eastern Washington real estate market is provided by Windermere Real Estate Chief Economist Matthew Gardner. We hope that this information may assist you with making better-informed real estate decisions. For further information about the housing market in your area, please don’t hesitate to contact your Windermere Real Estate agent.

 

Regional Economic Overview

The Eastern Washington job market continues to recover following the loss of more than 47,000 jobs due to the pandemic. The latest numbers show that all but 6,300 of the jobs lost have returned, with solid numbers after the state reopened fully. It was interesting to note that the Benton/Franklin market has now recovered all of the jobs that were lost due to COVID-19, and Walla Walla and Lincoln counties have reached almost a full recovery. Spokane County is still down 3,500 jobs from its pre-pandemic peak, which is expected given its size. That said, I would not be surprised to see a full recovery there by the end of the summer, if not sooner. With jobs returning, the unemployment rate continues to decline. The latest data shows the region’s unemployment rate is down to 5.1% from 11.4% a year ago.

eastern washington Home Sales

❱ Home sales throughout Eastern Washington rose 15.4% compared to the same quarter in 2020. Given that the pandemic was in full swing at that time, these stats aren’t very informative. Of greater interest was that sales rose 47.9% from the first quarter of this year.

❱ Listing activity was up more than 26% from the first quarter, which explains the rapid growth in sales. That said, the number of homes for sale is still 52% lower than during the early pandemic period.

❱ Year-over-year, sales rose by double digits across the board. Of particular note was significant growth in Whitman, Spokane, Lincoln, and Walla Walla counties compared to the first quarter of this year.

❱ Pending home sales, which are an indicator of future closings, were 38.3% higher than in the first quarter. This suggests that closings in the third quarter will be positive.

eastern washington Home Prices

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

❱ Year-over-year, the average home price in Eastern Washington rose a very significant 28.8% to $410,242. Home prices were also 14.1% higher than in the first quarter of this year.

❱ Demand remains strong, and, even with greater inventory of homes for sale, prices continue to rise at well-above-average rates.

❱ Prices rose in every county, and all but one county saw double-digit increases. Lincoln, Walla Walla, and Spokane counties all experienced significant growth.

❱ Mortgage rates pulled back in the quarter, but I expect them to rise modestly as we move through the year. This will have some impact on the pace of home price growth, but a larger factor will be affordability. Spokane County is verging on becoming technically unaffordable for buyers, and all counties aside from Lincoln are now considered unaffordable for first-time buyers.

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

Days on Market

❱ The average time it took to sell a home in Eastern Washington in the second quarter of 2021 was 20 days.

❱ During the second quarter, it took 15 fewer days to sell a home in Eastern Washington than it did a year ago.

❱ All markets saw days-on-market drop compared to the second quarter of 2020, with significant declines in Walla Walla (-27 days), Whitman (-22 days), and Grant (-20 days) counties.

❱ It took 13 fewer days to sell a home in the second quarter than it did during the first quarter of last year.

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

Conclusions

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

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

Eastern Washington’s economy continues to recover, and rising mortgage rates in the first quarter nudged a lot of buyers off the fence. Even with rates pulling back in the second quarter, the belief that they will start to rise again has only increased buyer urgency, which has also been buoyed by growing levels of inventory.

The market will continue to perform strongly as we move through the balance of this year and, even though there are more homes for sale, conditions are still highly competitive. Because affordability issues are increasing, I am leaving the needle in the same place as last quarter, but it remains a seller’s market.

About Matthew Gardner

Matthew Gardner - Chief Economist for Windermere Real Estate

As Chief Economist for Windermere Real Estate, Matthew Gardner is responsible for analyzing and interpreting economic data and its impact on the real estate market on both a local and national level. Matthew has over 30 years of professional experience both in the U.S. and U.K.

In addition to his day-to-day responsibilities, Matthew sits on the Washington State Governors Council of Economic Advisors; chairs the Board of Trustees at the Washington Center for Real Estate Research at the University of Washington; and is an Advisory Board Member at the Runstad Center for Real Estate Studies at the University of Washington where he also lectures in real estate economics.

The post Q2 2021 Eastern Washington Real Estate Market Update appeared first on Windermere Real Estate.

Q2 2021 Colorado Real Estate Market Update

The following analysis of the Metro Denver & Northern Colorado real estate market is provided by Windermere Real Estate Chief Economist Matthew Gardner. We hope that this information may assist you with making better-informed real estate decisions. For further information about the housing market in your area, please don’t hesitate to contact your Windermere Real Estate agent.

 

Regional Economic Overview

Although the post COVID-19 job recovery took a step backward last winter, it has since picked up again, which is very pleasing to see. At the end of the second quarter, the state had recovered more than 276,000 of the 376,000+ jobs that were shed due to COVID-19. Even though employment levels are still almost 100,000 lower than the pre-pandemic peak, they are heading in the right direction. Looking at the markets contained in this report, current employment levels in Colorado Springs are only 2.2% below the pre-pandemic peak, followed by Denver and Fort Collins, which are both down 3.6% from the 2020 peak. I would add that all markets showed jobs continuing to return. With total employment levels rising, the unemployment rate stands at 6.2%, down from the pandemic peak of 12.1%. Regionally, unemployment levels range from a low of 4.8% in Boulder to a high of 6.3% in Grand Junction. COVID-19 infection rates dropped during the quarter, which is certain to lead to employment levels continuing to rise unless we see another significant increase in infection rates due to the rise of new variants across the country.

colorado Home Sales

❱ The late spring/early summer market was a good one for home sales, which were up 33.9% from a year ago. Comparing the current quarter to a period when COVID-19 was widespread is not that informative, but, with sales up more than 55% from the first quarter of this year, the market appears to be very buoyant.

❱ Sales were higher in all counties other than the very small Clear Creek County. Where sales rose, they did so at double-digit rates in all markets other than Weld.

❱ During the second quarter, 13,428 homes sold. This is very impressive but not overly surprising, given that the average number of homes for sale was up 45% from the first quarter.

❱ Another positive was that pending sales, which are an indicator of future closings, were 42.8% higher than in the first quarter. This suggests that closings next quarter should be positive as well.

colorado Home Prices

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

❱ Prices continue to appreciate at an impressive pace, recording an increase of 28.1% year over year to an average of $615,409. Home prices were also 10.7% higher than the first quarter of this year.

❱ Buyer demand remains very strong, likely exacerbated by the drop in mortgage rates in the second quarter and improving levels of inventory.

❱ Year-over-year, prices rose across all markets covered by this report, with the exception of Clear Creek County. Of the markets that saw prices rise, all did so by double digits, with very notable gains in Boulder, Gilpin, and Park counties.

❱ Affordability levels continue to trouble me, and the pace of price appreciation has to slow at some point. The market is clearly still out of balance, but as long as the credit quality of buyers remains high, I do not see any cause for concern.

A bar graph showing the annual change in home sale prices for various counties is Colorado.

Days on Market

❱ The average number of days it took to sell a home in the markets contained in this report dropped 14 days compared to the second quarter of 2020.

❱ The amount of time it took to sell a home dropped in every county contained in this report compared to the second quarter of 2020. The exception was Gilpin County, where it rose by only two days.

❱ It took an average of only 14 days to sell a home in the region, which is down 11 days compared to the first quarter of this year.

❱ The Colorado housing market remains very tight, as demonstrated by the fact that it took less than a month for homes to sell in every county other than one.

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

Conclusions

A speedometer graph indicating a seller's market in Colorado.

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.

Sales rose on the back of lower mortgage rates and higher levels of homes available to buy. Although this should signify a move back to a more balanced market, we are not there yet as price growth remains well above the long-term average.

With solid demand and favorable financing rates, the market is expected to remain active as we move through the balance of the year. That said, housing affordability is becoming an increasingly large concern. According to the Colorado Association of REALTORS®, statewide affordability for single-family homes has dropped almost 20% year-over-year and is down 17.8% for multi-family homes.

At some point, an affordability ceiling will be reached, which will slow home-price appreciation—but not yet. As such, I am moving the needle a little more in favor of home sellers, as they remain in the driver’s seat, for now.

About Matthew Gardner

Matthew Gardner - Chief Economist for Windermere Real Estate

As Chief Economist for Windermere Real Estate, Matthew Gardner is responsible for analyzing and interpreting economic data and its impact on the real estate market on both a local and national level. Matthew has over 30 years of professional experience both in the U.S. and U.K.

In addition to his day-to-day responsibilities, Matthew sits on the Washington State Governors Council of Economic Advisors; chairs the Board of Trustees at the Washington Center for Real Estate Research at the University of Washington; and is an Advisory Board Member at the Runstad Center for Real Estate Studies at the University of Washington where he also lectures in real estate economics.

The post Q2 2021 Colorado Real Estate Market Update appeared first on Windermere Real Estate.

Q2 2021 Southern California Real Estate Market Update

The following analysis of the Southern California real estate market is provided by Windermere Real Estate Chief Economist Matthew Gardner. We hope that this information may assist you with making better-informed real estate decisions. For further information about the housing market in your area, please don’t hesitate to contact your Windermere Real Estate agent.

 

Regional Economic Overview

Despite a decrease in employment levels last winter, Southern California saw a decent job recovery between May 2020 and February 2021. However, it appears we lost some momentum as COVID-19 cases started to rise again, specifically in Los Angeles County. Although the region has recovered 1.28 million of the 2.02 million jobs that were shed during the pandemic, the region is still more than 720,000 jobs shy of the pre-COVID peak. That said, the region’s unemployment rate in June was 8.8%, down significantly from 15.5% a year ago. Data at the end of the second quarter showed the lowest jobless rates were in Orange (6.4%) and San Diego (7%) counties. The highest rate was, unsurprisingly, in Los Angeles County, where it was 10.5%.

southern california Home Sales

❱ The housing market continued its upward swing, with 52,792 home sales closing in the second quarter, which was a year-over-year increase of 70.5%. However, I would caution not to read too much into this growth rate as COVID-19 heavily impacted sales in the second quarter of last year.

❱ Pending home sales, which are an indicator of future closings, were 10.9% higher than in the first quarter of this year, suggesting that closings in the third quarter will be positive.

❱ Home sales increased across the board, with closings rising in all markets by more than 40%. Sales in Orange and Los Angeles counties nearly doubled.

❱ Listing activity continues to lag, with an average of only 14,747 homes for sale in the quarter. This is 41.8% lower than a year ago, and 6.2% higher than in the first quarter of 2021.

southern california Home Prices

A map showing the real estate market percentage changes in various counties in Southern California.

❱ The average home sale price in the region was $984,959. This was 35.7% higher than a year ago and 13.2% higher than in the first quarter of this year.

❱ Mortgage rates rose modestly in the first quarter, which likely got some would-be buyers off the fence. This additional demand, in concert with persistently low supply levels, resulted in significant price appreciation.

❱ The region saw double-digit price growth across all counties contained in this report. Annual prices were up more than 30% in all counties except Riverside—but they only just missed out. On average, prices were up more than $100,000 from the prior quarter.

❱ I still anticipate mortgage rates to rise as we move through the year, but the increase will be very modest. Although prices are expected to rise further, affordability constraints continue to grow, which at some point will slow the remarkable gains we have seen.

A bar graph showing the annual change in home sale prices for various counties in Southern California.

Days on Market

❱ In the second quarter of the year, the average time it took to sell a home in the region was only 19 days, which is 20 fewer days than a year ago and 9 fewer days than in the first quarter of 2021.

❱ All markets contained in this report saw the time it took to sell a house drop compared to both the second quarter of 2020 and the first quarter of this year.

❱ Homes in San Diego County continue to sell at a faster rate than other markets in the region. In the second quarter, it took an average of only 13 days to sell a home there. This is 9 fewer days than it took a year ago.

❱ Comparing days on market to a year ago is not that informative given that the pandemic was in full force then. What is of greater interest is that market time dropped from the first quarter of this year, indicating that conditions are very tight.

A bar graph showing the average days on market for homes in various counties in Southern California.

Conclusions

A speedometer graph indicating a seller's market in Southern California.

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.

Home sales and prices were all higher than in the first quarter of 2021, while the number of homes available to buy remained significantly lower. With solid demand in place, it is staunchly a seller’s market. However, with mortgage rates likely to rise in the coming year, and affordability constraints starting to tighten all markets except perhaps San Bernadino, the pace of price growth must slow at some point.

Even with the headwinds mentioned above, I have still chosen to move the needle a little more in favor of home sellers.

About Matthew Gardner

Matthew Gardner - Chief Economist for Windermere Real Estate

As Chief Economist for Windermere Real Estate, Matthew Gardner is responsible for analyzing and interpreting economic data and its impact on the real estate market on both a local and national level. Matthew has over 30 years of professional experience both in the U.S. and U.K.

In addition to his day-to-day responsibilities, Matthew sits on the Washington State Governors Council of Economic Advisors; chairs the Board of Trustees at the Washington Center for Real Estate Research at the University of Washington; and is an Advisory Board Member at the Runstad Center for Real Estate Studies at the University of Washington where he also lectures in real estate economics.

The post Q2 2021 Southern California Real Estate Market Update appeared first on Windermere Real Estate.

Q2 2021 Oregon and Southwest Washington Real Estate Market Update

The following analysis of the Oregon and Southwest Washington real estate market is provided by Windermere Real Estate Chief Economist Matthew Gardner. We hope that this information may assist you with making better-informed real estate decisions. For further information about the housing market in your area, please don’t hesitate to contact your Windermere Real Estate agent.

 

Regional Economic Overview

The recovery of the jobs lost due to the pandemic continued in the second quarter, but at a significantly slower pace than in the first quarter. Of the more than 285,000 Oregon-based jobs shed during the pandemic, 181,800 have now returned. Though this is positive, state employment is still down more than 100,000 jobs. As I predicted last quarter, it is now clear that Oregon’s efforts to pull back on reopening due to rising COVID-19 cases slowed the velocity of the job recovery, but there was growth in the second quarter.

In Southwest Washington, 16,980 of the more than 22,000 jobs that were lost have returned, and they are returning more quickly than in Oregon.

More hiring has allowed the unemployment rate in Oregon to drop from 6% at the end of the first quarter to 5.6% in June. The jobless rate in Southwest Washington currently stands at 6%, its lowest level since the pandemic took hold.

oregon and southwest washington Home Sales

❱ In the second quarter of the year, 19,614 homes sold, an increase of 37% from the second quarter of 2020. Although an increase was certainly expected given where we were last year, I was also very pleased to see a 59% increase in sales from the first-quarter figure.

❱ The largest increase in sales from the first quarter was in the greater Portland metro area, but all counties contained in this report experienced more transactions.

❱ Sales rose in every county other than Tillamook compared to a year ago, but this is a very small market that regularly experiences extreme swings in the number of sales. In markets where sales rose, all but two of them saw double-digit gains.

❱ Demand remains strong but supply is still lagging. More buyers are getting off the fence after mortgage rates rose in the first quarter. Although rates have pulled back somewhat, the specter of them rising has generated a lot of competition for the homes that are available.

oregon and southwest washington Home Prices

A map showing the real estate market percentage changes in various counties in Oregon and Southwest Washington.

❱ The average home price in the region continues to soar. Prices were up 26.1% year over year to $532,397 and were 5.8% higher than in the first quarter of the year.

❱ Relative to a year ago, Tillamook County again led the market with the strongest annual price growth, but it is a very small market prone to significant swings. The most expensive market was Hood River County, where the average sale price was $728,700.

❱ All counties contained in this report saw prices rise more than 10%. Prices in Jackson, Klickitat, and Wasco counties were lower than in the first quarter, but I do not see this as being pervasive and I expect them to pick back up as we move through the rest of the year.

❱ Prices continue to rise at an astonishing pace, but many areas are hitting an affordability ceiling. This, in concert with modest increases in mortgage rates, is likely to temper price growth—but just not yet. This year, prices will continue to increase at well above the long-term average.

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

Days on Market

❱ The average number of days it took to sell a home in the region dropped 30 days compared to the second quarter of 2020. It took 16 fewer days to sell a home compared to the first quarter of this year.

❱ The average time it took to sell a home in the second quarter of 2021 was 35 days.

❱ With the exception of Benton County, which was up nine days, every county saw the length of time it took to sell a home drop compared to a year ago. Benton was also the only county that saw market time rise compared to the first quarter of 2021.

❱ Homes again sold the fastest in Washington County, where it took only 11 days for the average home to go under contract. An additional 16 counties saw the average market time drop to below a month.

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

Conclusions

A speedometer graph indicating a seller's market in Oregon and Southwest Washington.

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

Home sales continue to grow, and robust demand is causing prices to rise significantly, resulting in a market that strongly favors sellers. The additional supply of homes that I’m predicting for 2021, combined with modestly rising interest rates, may start to slow the momentum in price growth, but for now I have moved the needle further in favor of sellers.

About Matthew Gardner

Matthew Gardner - Chief Economist for Windermere Real Estate

As Chief Economist for Windermere Real Estate, Matthew Gardner is responsible for analyzing and interpreting economic data and its impact on the real estate market on both a local and national level. Matthew has over 30 years of professional experience both in the U.S. and U.K.

In addition to his day-to-day responsibilities, Matthew sits on the Washington State Governors Council of Economic Advisors; chairs the Board of Trustees at the Washington Center for Real Estate Research at the University of Washington; and is an Advisory Board Member at the Runstad Center for Real Estate Studies at the University of Washington where he also lectures in real estate economics.

The post Q2 2021 Oregon and Southwest Washington Real Estate Market Update appeared first on Windermere Real Estate.

Q2 2021 Western Washington Real Estate Market Update

The following analysis of the Western Washington real estate market is provided by Windermere Real Estate Chief Economist Matthew Gardner. We hope that this information may assist you with making better-informed real estate decisions. For further information about the housing market in your area, please don’t hesitate to contact your Windermere Real Estate agent.

 

Regional Economic Overview

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

western washington Home Sales

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

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

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

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

western washington Home Prices

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

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

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

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

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

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

Days on Market

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

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

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

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

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

Conclusions

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

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

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

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

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

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

About Matthew Gardner

Matthew Gardner - Chief Economist for Windermere Real Estate

As Chief Economist for Windermere Real Estate, Matthew Gardner is responsible for analyzing and interpreting economic data and its impact on the real estate market on both a local and national level. Matthew has over 30 years of professional experience both in the U.S. and U.K.

In addition to his day-to-day responsibilities, Matthew sits on the Washington State Governors Council of Economic Advisors; chairs the Board of Trustees at the Washington Center for Real Estate Research at the University of Washington; and is an Advisory Board Member at the Runstad Center for Real Estate Studies at the University of Washington where he also lectures in real estate economics.

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7/26/2021 Housing and Economic Update from Matthew Gardner

 

This video is the latest in our Monday with Matthew series with Windermere Chief Economist Matthew Gardner. Each month, he analyzes the most up-to-date U.S. housing data to keep you well-informed about what’s going on in the real estate market. 

 


 

Hello there!  I’m Windermere Real Estate’s Chief Economist, Matthew Gardner, and welcome to the latest episode of Mondays with Matthew.

This month, we are going to take another look at forbearance activity across the U.S.  Now I know that we have talked about this subject several times over the past year, but it is worthwhile to look at it again if only for the fact that the program stopped taking new applications for forbearance at the end of June.

So, let’s take a look at where we were when the forbearance program started and where we are today.

 

 

And as you can see from this first chart, the situation today is a vast improvement from where we were last May when there were more than 4.76 million homes in the program. For context, that meant that more than 9% of all homes with a mortgage were in the program last May – a huge number.

But the latest data from Black Knight Financial shows that – by mid-July of this year – the number had dropped to just over 1.86 million homes, or roughly 3.5% of houses with a mortgage.

This is certainly a pretty impressive recovery, as it means that 2.9 million homeowners left the program between May of 2020 and mid-July 2021.

 

Power point slide titled “Forbearance Plans by Lender” showing a graph of active forbearance plans. The x-axis shows the dates from April 16 2020 to July 6 2021 and the y-axis shows the number of active plans starting at 0 at the bottom and increasing by 500,000 each line with 2.5 million at the top. Three lines represent the different lenders, light blue is Fannie/Freddie, Orange is FHA/VA, and green is Other. They all follow a similar trend, peaking in May and June or 2020 and steadily decreasing until they reach their lowest in July 2021 to the far right of the graph. The source is Black Knight Financial.

 

And when we look at the makeup of mortgages in forbearance, the largest share came from loans backed by Fannie Mae and Freddie Mac – not surprising given the size of their mortgage portfolio – with, at the peak, just shy of two million homes in the program – roughly 7.2% of their total portfolio.

But that number has now dropped to 582,000 or just 2.1% of loans outstanding.

Loans backed by the FHA or VA also peaked last May at about 1.53 million or 12.6% of their portfolio.

But today that number has dropped to 755,000 or 6.2% of the mortgages they hold.

And finally, loans showed here as “other” represent private label securities or portfolio loans, and it’s interesting to see that their numbers didn’t peak until late June when just short of 1.25 million homes – or 9.6% of their portfolio – were in the program.

However, today that number had dropped to 524,000, or 4% of mortgages backed by these entities.

 

What I see from the slides that we have looked at is that the number of active forbearance plans continues to fall; however, the pace of the drop has certainly slowed over the last quarter or so.

After seeing a monthly drop of 12% in April – as a large volume all plans hit their 12-month review date – the pace of improvement has since slowed to just 5% over the past 30 days.

Although the number of homes in forbearance is still higher than I would like to see, fewer than 4% of all mortgages are in the program and we haven’t seen this level since April of 2020, just as the pandemic was kicking in.

 

Power point slide titled “Scheduled Forbearance Plan Expirations” with a bar graph. The x-axis of the bar graph shows months, starting with February 2021 and ending with December 2021. The bars show that a majority of the plans are expiring in June, July, August, September and October. The source is Black Knight Financial.

 

As we look forward, you can see that almost 600,000 homes currently in forbearance are coming up for review so the potential for a greater rate of improvement in the overall number of homes in the program is certainly possible – but not guaranteed.

 

Power point slide titled “Nominal & Inflation-Adjusted Home Prices” with a line graph that shows the Forbearance plans starts. The x-axis is labeled with dates from May 5, 2020 to June 15, 2021 and the y-axis has the number of plans starting at 0 and increasing by 50,000 until 300,000 at the top. There are three lines, the teal line shows the new starts, green shows the re-starts, and the light blue shows the Forbearance plans start. The teal and the light blue line closely match each other, with a peak in May 2020 and a slow decrease since then, while the green line starts low and matches the blue lines starting in September 2020 and then following the same trend from there. The source is Black Knight Financial.

 

Unsurprisingly the number of homes entering the program for the first time as well as repeat plan starts is lower than we saw last summer but again the pace of improvement has slowed. That said, overall starts are down by 3% on the month and when we combine new and repeat starts the number is 3 to 4% lower.

 

Power point slide titled “Nominal & Inflation-Adjusted Home Prices” with a line graph that shows forbearance plans removals and extensions. The x-axis shows the dates from April 21 2020 to June 15 2021, y-axis shows the number of plans starting at 0 at the bottom and increasing my 100,000 until 900,000 at the top. The blue line represents the forbearance plan removals and the green line shows the plan extensions. The green line has a clear spike in June/July of 2020 and the blue line has a clear spike in October 2020. The source of this information is from Black Knight Financial.

 

Of the roughly 460,000 homes in forbearance that were reviewed for either extension or removal from the program in the first two weeks of June, 33% left the program while 67% had the term extended.  This is a lower removal rate than we saw during the first two weeks of either April or May, but I expect to see more homeowners come out of the program, but only as long as the country continues to reopen, and that is not a certainty given the rise of the Delta and Lambda variants of the COVID-19 virus.

Power point slide titled “Nominal & Inflation-Adjusted Home Prices” with a line graph that shows the final expiration month of active forbearance plans that assumes the plans expire in 18 months. The x-axis is the plan final expiration month from May 2021 to July 2022 and the z-axis shows the number of plans from 0 to 450,000. The line spikes in September 2021 around 400,000 and then quickly goes down so that by November the line evens out in the 150,000 range. The source of this information is Black Knight Financial.

 

I actually found this chart to be very interesting. Of the more than two million active forbearance plans, approximately half are scheduled to reach their 18-month terminal expiration date in September and October of this year.

And if we take this data, and then project a fairly modest 3% monthly rate of homeowners leaving the forbearance program, it means that over 900,000 homes would exit the program in the third and fourth quarters of this year.

And with 575,000 thousand plans scheduled to expire in September and October alone – that means that mortgage services will be faced with the daunting task of having to process nearly 15,000 plans per business day during that time. It’s going to be a lot of work!

 

Power point slide titled “Nominal and Real Monthly Payment” with a pie graph that shows the current status of COVID-19 related forbearances as of June 15, 2021. 46% of the pie is orange, representing the total removed or expired plans. 26% of the pie is light blue representing the 1.863 million plans that are active because of a term extension. 18% of the pie is navy representing the 1.292 million who are paid off. 4% is green showing the removed/expired – delinquent and active loss mit. Another 3% is brown, showing the number of plans that were removed/expired because they were delinquent. And the last 3% is grey showing the plans that are active in their original term. The source of this information is Black Knight Financial.

 

Roughly 7.25 million borrowers have used the forbearance program at one time or another through the course of the pandemic and that represents roughly 14% of all homeowners in the country.

Of that 7.25 million, the chart here shows that 72% have left the plan, and 28% remain in active forbearance, but you can also see that loan performance remains pretty robust among homeowners who have left the program with 46% of them getting things squared away with their lenders in regard to missed payments, and 18% having paid off their loan in full – likely from selling or refinancing with a different lender.

You will also see that the number of borrowers in post forbearance loss mitigation is down a tad to 333,000, while those who have left forbearance but still remain delinquent and not in loss mitigation accounts for roughly 3% of total loans in the program or just 195,000.

 

So, the way I see it, although the number of homes leaving the program has certainly slowed which, quite frankly, doesn’t surprise me, I still expect further improvement as we move through the year not just because the economy continues to reopen and people are getting reestablished at work, but also because we won’t be seeing any new owners enter the program.

And finally, I want to show you what parts of the country have a high share of homes in forbearance.

 

Power point slide titled “Nominal and Real Monthly Payments” with a map of the United States of America. Each state is shaded in a color that represents how many homes are still in forbearance. Washington is green at 3.7%; Oregon is green at 3.2%; California is yellow at 4.6%; Idaho is green at 2.3%, Nevada is dark orange at 6.5%; Montana is green at 2.6%, Colorado is green-yellow at 4.3%; Utah is green at 3.9%; Hawaii is orange at 6.8%. Texas and Louisiana are the states with the most, sitting at 7% and 7.9% respectively. Note this data is from March, as State and County data suffer a 3 month delay before it’s released. The source of this is from Windermere Economics analysis of Atlanta Fed data.

 

I must tell you first off, that this data isn’t that timely – in fact these numbers are from March as the data I get at the State and County grain is subject to a three month lag.

Anyway, as you can see from this map, not all states are created equal, with the share of homes in forbearance still elevated in Louisiana, Texas and, to a lesser degree, New York State.

Out here in the West, the rate in Nevada is still high, and California and New Mexico are both somewhat higher than I would like to have seen but, as I just said, this data is a little old, and I believe that the share of homes in forbearance in both Nevada and California is lower today than you see here.

 

Given everything that we’ve looked at today, there are a couple of conclusions that can be drawn.

The first, and most obvious, is that anyone believing but there will be a flood of homes that will be foreclosed on either toward the end of this year or in 2022, is likely to be disappointed. Even if every home still in the program does enter foreclosure which, by the way, is basically impossible, the number of homes that would be foreclosed on would be minimal when compared to the fallout following the financial crisis of more than a decade ago.

And when I say that it’s virtually impossible to expect to see all homes will be foreclosed on, it’s mainly because of the remarkable run up in home values that the country has seen since 2012.

The buildup of equity that all homeowners have seen whether they bought before 2012, or even as recently as the past 2 or 3 years, suggests that if, for whatever circumstance, owners in forbearance can’t get their heads back above water, they will choose to sell their home – in order to keep the equity that they have accumulated.

A typical homeowner in forbearance has a sizeable equity in their home, with median equity of a homeowner in the program measured at just over $100,000. And this significant amount of cash in their homes would allow them to pay the bank back any missed payments, sell, and still walk away with a sizable amount of equity.

The bottom line is that have the forbearance program was needed and it can be said that it has been successful so far in warding off home foreclosures because of the remarkable impact of the pandemic.

Although it would be naïve to suggest that foreclosure rates won’t rise at all, as the forbearance program winds down, I do see them ticking higher but, given all the data that I’ve been looking at, I would be very surprised to see overall foreclosure rates rise to a level significantly above the long-term average.

Well, I hope that you have found this month’s discussion to be interesting. As always if you have any questions or comments about this topic, please do reach out to me but, in the meantime, stay safe out there and I look forward the visiting with you all again, next month.

Bye now

 

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What to Consider When Buying an Equestrian Property

Buying a horse property is not your typical home purchase, especially for first time buyers. If you’ve never shopped for a horse property before, there is much to learn on the road to finding the best property for your needs. Working with an experienced Equestrian Advisor will also help ensure your home search and purchase go as smoothly as possible.

Horse Property Acreage

Just because a property has plentiful acreage doesn’t mean it will be suitable for horse care. The land must be flat-to-gently-sloped for grazing and provide adequate access to your horses’ basic needs. You want to look for properties with usable land – meaning there are not acres of unusable gullies, steep edges, or too many bodies of water that could make it difficult for your animals to navigate the property. Pay attention to local regulations about how much acreage is required per horse.

Zoning Instructions

If the property currently has horses or has in the past, do not assume it is an approved horse property. Part of your Equestrian Advisor’s job will be to ensure the property is in line with the local city, county, and/or HOA regulations for agriculture and livestock. Neglecting to verify the property could mean a significant financial setback if your horse property were the source of future legal issues and penalties.

Stable Inspections

When conducting the primary home inspection, be sure to have the barn and stables inspected as well. This could lead to higher upfront costs but skipping it could cause a huge headache later. Having a professional evaluate the barn and stables can reveal structural issues, electrical issues, or other potential problems that you would want to know about before you sign any paperwork.

Amenities

Housing horses and livestock on your property can be done with much more ease with a few convenient amenities. When touring prospective properties, look for the following:

  • Frost-proof spigots in the pasture, arena, and turnouts
  • Heated waterers in the stalls
  • Sufficient hay storage area
  • Tack room with a fridge for medication and supplements
  • Wash bay
  • Arena or training round pen

Your Routine

Transitioning to an equestrian lifestyle is a big adjustment, especially if this is your first time. Make sure you are taking your daily routine into consideration when looking at properties. How close are you to the barn? Where is the main water source? Careful planning every step of the way will make adapting to your new property much smoother and easier.

To connect with an experienced Equestrian Advisor today, click the link below: 

Equestrian Advisor

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6 Commonly Missed Cleaning Spots

It’s easy to get into a routine when cleaning your home season after season, year after year. While simply going over the same spots may make your home feel cleaner, at the same time, it allows the neglected areas to become dirtier. Here are six commonly missed spots around the home that, once given the attention they deserve, will help make your home feel completely clean.

6 Commonly Missed Cleaning Spots

1. Underneath & Behind Furniture

Dirt and dust love to hide in tough-to-reach, tucked-away spots like behind your nightstand, under your bed frame, and on the underside of your tables, chairs, and couches. Cleaning these areas may require some heavy lifting and rearranging but it’s worth your while. If enough dust and grime have accumulated over the years that your vacuum can’t remove the buildup, try using a washcloth to loosen the sediment.

2. Vents and Fans

Vents and fans not only collect dust, but they also distribute it around your home. Ceiling fans are one of the hardest spots in your home to reach, so you may need to use a ladder and an extended duster to clean them. Clean your vent grates with a dusting brush or a wire brush depending on the thickness of the buildup. If your home has central air, remember to replace your air filters periodically. A clean ventilation system is key to protecting your home’s air quality.

3. Bathroom Surfaces

We all know the feeling of picking up a rarely used shampoo bottle in the shower to discover a grimy ring underneath it. Wipe off your bottles and surfaces in the shower to keep it sparkling clean. Scrub away the debris from your shower head and soak it in a mixture of water and white vinegar to cleanse the device and to prevent a buildup of mineral deposits. To reach behind the toilet, you may need knee pads and an extended cleaning tool. Use a disinfectant-water mixture to prevent the spread of germs. Tackling chores like these will help make your bathroom feel brand new in no time.

 

Image Source: Getty Images

 

4. Switches & Handles

Light switches, door handles, drawer pulls, and knobs are all hotbeds for germs and dirt and can easily be forgotten while cleaning your home. Take a two-step approach to cleaning these high-touch surfaces: first clean, then disinfect. Cleaning will get rid of contaminants, while disinfecting targets pathogens. The combination of the two will help make your home feel cleaner while reducing the spread of germs. Other high-touch surfaces such as keyboards, phones, tablets, and other devices require regular cleaning as well.

5. Appliances

It’s easy to think of your appliances strictly as devices that help your home stay clean and organized, but they are magnets for dirt and gunk, too. After cleaning out the refrigerator and scrubbing down the shelves, find the coils and clean them of debris with a vacuum or a brush. The floor underneath your refrigerator can be a seriously grimy spot, so a quick mop of that area is worth your while. Give your dishwasher a good cleanse to prevent mold buildup and bad odors. Remember to clean out the filter occasionally with soap and water. Cleaning your appliances routinely can help avoid repairs and can even extend their life expectancy.

6. Baseboards

Baseboards are the perfect settling point for dirt and dust. The space between your walls and floors is an easy trap for buildup, and upon closer inspection, you’ll find some combination of scuffs, dust, food remnants and scratch marks. To thoroughly clean your baseboards, you may need to move your furniture away from the walls but be careful not to scratch the floor or damage the baseboards. Wipe away the dust before cleaning the surface. Use either a mix of soap and water, water and vinegar, or the proper wood cleaner for wooden baseboards. 

For more information on cleaning your home, seasonal maintenance, and more, visit the Living section of our blog.

Windermere Blog – Living

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