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Is Co-Buying Right For You?

For some buyers, purchasing a home independently may be out of reach. Co-buying is an alternative approach to homeownership where two or more individuals purchase the property together and take on a joint mortgage. Get to know the benefits and drawbacks of co-buying before deciding whether it’s right for you.

How Does Co-Buying Work? 

Just like a traditional home purchase, lenders use the buyers’ debt-to-income ratios and credit scores to determine their mortgage eligibility and formulate the terms of their loan. The lender will use the lowest median credit score to determine whether the co-buyers qualify. Before you purchase with a co-buyer, work with a real estate attorney to flesh out the details of the agreement including the distribution of shares, the responsibility of each party for the down payment and subsequent mortgage payments, and the home’s title. There are two main options for taking title to a home with a co-buyer.

Tenancy in Common (TIC)

  • When co-buyers hold a title as tenants in common, shares of the property can be divided equally or unequally. You and a co-buyer can decide to split ownership to reflect the amount invested. However, even if these amounts are unequal, no one individual may claim sole ownership of the property. If a co-buyer dies, their ownership passes along to their designated heir. With Tenancy in Common, a co-owner may sell their shares of the property at any time, without the need for approval from other co-owners.

Joint Tenancy

  • Joint Tenancy—or Joint Tenancy with Right of Survivorship (JTWROS)—requires that all co-buyers hold an equal interest in the property and that they all come into ownership through the same title at the same time. If one co-owner dies, ownership passes to the other co-owner—this is known as Right of Survivorship. Unlike Tenancy in Common, co-owners must receive approval before selling any property shares.

Pros and Cons of Co-Buying

Pros of Co-Buying

For those who don’t have the buying power to purchase a home on their own, co-buying presents an opportunity to combine assets and enter the market. Since lenders will be factoring in both of your incomes, you and your co-buyer will increase your chances of being approved for a mortgage and securing a low interest rate. Both of you will build equity over time as you pay back your joint mortgage. Even after the down payment and mortgage payments, there are a handful of costs that come with being a homeowner. Co-buying allows you to split these costs, saving money on bills, utilities, maintenance costs, and the like.

Cons of Co-Buying

Co-buying a home means you are relinquishing some control over the homeownership costs. At the end of the day, you can’t control your co-buyer’s finances. If a sudden life change leaves them financially unstable, the burden will fall on your shoulders, and you’ll have to make up the difference. Similarly, your credit score could take a hit if your co-buyer is unable to make their mortgage payments, even if you’ve consistently made yours. 

 

Before entering a co-buying agreement, it’s important that you and your co-buyer are on the same page about the terms of ownership and your expectations as joint homeowners. Working closely together will help maintain the health of your finances, and most importantly, your relationship.

For more information on purchasing a home, visit the buying section on our blog:

Blog – Buying

To begin your home buying journey, connect with an experienced Windermere Real Estate agent on our website by clicking on the button below. 

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Windermere Foundation Surpasses $1 Million Raised in 2021

In the first six months of 2021, Windermere offices collectively raised over one million dollars through the Windermere Foundation. June, a month in which Windermere celebrated its 37th Community Service Day, saw an outpouring of donations from across our 10-state footprint, bringing in over $269,000 to push the year-to-date total over $1 million. These dollars go toward supporting low-income and homeless families in the communities where Windermere offices are located. Here are some examples of how our offices have been giving back this year.

Windermere Realty Trust / Lloyd Tower – Portland, OR

Windermere Lloyd Tower can’t speak highly enough about the work of Adelante Mujeres, a local organization committed to educating and uplifting the low-income Latina population in the Portland area. The organization has a variety of programs to support women from childhood to adulthood. Their Adult Education program helps Latina women complete their secondary education and empowers them to become leaders. Empresas, a small business development program, focuses on immigrant entrepreneurs, providing one-on-one coaching and technical assistance over the course of eleven weeks. Chicas Youth Development supports over 600 girls between the ages of eight and eighteen in weekly after-school classes, designed to develop their leadership and foster academic success. In April, the Lloyd Tower office donated $5,000 to support programs like these and the small business development services Adelante Mujeres has provided local entrepreneurs throughout the COVID-19 pandemic.

The Windermere Lloyd Tower office is part of the Windermere Realty Trust network of offices in Portland, Oregon.

Windermere / Coeur d’Alene Realty, Inc. – Coeur d’Alene, ID  

This past spring, Windermere Coeur d’Alene set out to make a difference in their community by helping fight food insecurity. They found the perfect partner in Second Harvest. Second Harvest brings community resources together to feed those in need and believes that nutritious food is the key ingredient for a healthy lifestyle. The office donated $2,000 to Second Harvest to set up their “Mobile Market,” a system for transporting food directly families, at the Kootenai County Fairgrounds in the heart of town. Windermere agents volunteered their time to staff the event, and the stage was set for a successful food drive. On the day of the drive, the donations poured in. Agents helped direct traffic, unloaded vehicles, distributed donations to families in the community, and cleaned up the fairgrounds afterward. Nearly 15,000 pounds of goods were donated, enough for Second Harvest to feed 209 families.

 

Pictured Left to Right: Amy Smock, Mark Whitt, Midge Smock, Larry Frisbie, Paulette Fabian, Kris Arnett, Andrew Steiner, Bob Zern, Joel Greiner, John Tindall, Morgan Keller, Ryan Keller

 

A man unpacks boxes during a food drive.

Pictured: Mark Whitt

 

Windermere Stanwood Camano – Stanwood, WA

Windermere Stanwood Camano and their local YMCA have formed a tight bond over the years, partnering together to create memorable events for the benefit of the community. Whether it was supporting the YMCA while teaching children water safety or rounding up donations on behalf of the Windermere Foundation, they’ve always found a way to make a positive impact in the Stanwood-Camano community. This past April, the office set a goal of raising $10,000 for the YMCA through donations made by staff and agents, which were matched by the office’s owners, Marla and Randy Heagle. The office hit their goal and in celebration, hosted a food truck from Seattle’s renowned burger joint, Dick’s Drive In. Attendees were encouraged to round up their purchases in support of the YMCA.

 

A man and a woman stand together in front of a food truck.

Pictured: Marla Heagle and Randy Heagle

 

An aerial shot of the Windermere Stanwood Camano building.

An aerial shot of Windermere Stanwood Camano during the event.

 

Windermere Spokane – Spokane, WA

In April 2021, over a year after the first days of the COVID-19 pandemic, Windermere Spokane felt a call to rally their community to donate blood. The pandemic had left local blood banks depleted and in desperate need of donations. Working with Vitalant, an independent, nonprofit blood services provider in the Spokane area that focuses on providing life-saving blood and comprehensive transfusion medicine services, Windermere Spokane hosted a donation site at their office. Spokanites came out in force to support the blood drive! After all donations had been tallied, the blood drive yielded 34 units of blood.

 

A man sits in a chair getting his blood drawn.

Pictured: Richard Stokes

 

To learn more about the Windermere Foundation, visit windermerefoundation.com. To help support programs in your community, click the donate button below.

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Windermere Partners with UW to Launch Internship Program

The University of Washington College of Built Environments (CBE) announced a new paid internship program, Aspire, that offers financial support, mentoring, and skill-building through academic and professional office settings to students, with a focus on those from historically underrepresented or marginalized groups. In partnership with Windermere Real Estate, this CBE-led internship will begin today, July 13, and will focus on the single and multi-family residential real estate market in the greater Seattle area. 

During the eight-week paid summer internship, the eight interns will work and study for 25 hours per week. They will interact with real estate industry and academic leaders, while learning about the important role homeownership plays in building thriving communities. The program participants will gain skills in financial principles, sales, marketing, intercultural fluency, and leadership. At the end of the internship period, interns will present their work to industry professionals and participate in tours showcasing a range of processes in the home buying sector. 

Students who complete the eight-week Aspire internship will also receive a $5,000 scholarship, funded by Windermere and awarded in Autumn 2021. This scholarship aims to help the next generation of real estate professionals lead and build our communities in inclusive and equitable ways. Windermere has committed to continuing to support this internship through the upcoming academic year and beyond.

Windermere president, OB Jacobi, stated that this partnership is a continuation of the more than three decades long relationship between Windermere and UW, which started with the first Windermere Cup Rowing Regatta in 1987, and has continued through ongoing financial gifts to both athletic and academic programs at the university. 

“After learning about Windermere’s commitment to increasing diversity within the real estate industry, Renee Cheng approached us with an opportunity to partner with the College of Built Environments on the Aspire internship program,” said Jacobi. “Our goal is to inspire interest and engage students of color in the wide variety of careers and leadership opportunities available to them in real estate.”

Renee Cheng, Dean of the College of Built Environments at the University of Washington, highlighted the Aspire program’s real world learning experiences: “It can be difficult for our students to appreciate the historical role of homeownership in building generational wealth, particularly if their own lived experience includes housing insecurity. This program equips students with the context and confidence to engage with the role of home in the built environment.”

Aspire program manager Alexis Wheeler agreed, saying that “in addition to building intergenerational wealth, homeownership cultivated a sense of belonging and stability, encouraging people to grow into the fullest version of themselves and fostering vibrant communities throughout our region. Through the Aspire program, students will also develop an appreciation for this aspect of ‘home’ and its role promoting a more inclusive and equitable society.” 

The Aspire internship specifically sought students from historically underrepresented or marginalized groups and/or those with lived experiences with housing insecurity. With a robust slate of over 40 applicants, the CBE and Windermere were able to select a strong inaugural cohort of Aspire interns, which includes students majoring in Real Estate and Community, Environment, & Planning (CEP), as well as majors beyond the CBE. 

The Aspire Internship will run from July 13-September 1, 2021. This is an ongoing internship opportunity for CBE and other UW students, offered in collaboration with our community partners.

To learn more about our DEI Initiatives like this one, visit Windermere.com/dei.

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Best Ways to Determine Home Value

Of all the questions that arise during the selling process, “What’s my home worth?” is the first for most sellers. By using home valuation tools and understanding local market conditions, sellers can educate themselves on how much their home could potentially fetch on the market, but that’s just the tip of the iceberg.

Best Ways to Determine Home Value

Windermere’s home value estimator is a great starting point for sellers. Free to use, it will provide you with an instant home value and an expected price range, a heat map of buyer interest near you, and recent home sales in your area. Click the link below to get started.

 

What Is My Home Worth?

 

Comparative Market Analysis (CMA)

Though tools like home value estimators provide some data on what sellers can expect when pricing their home, nothing compares to the expertise a professional real estate agent offers. Various factors influence home prices including seasonality, market conditions, and location, and agents have the means to account for these factors to accurately price your home  by conducting a Comparative Market Analysis (CMA).

A CMA compares your home to others in your area that have either recently sold, are currently on the market, or had previously listed but have since expired. Depending on the conditions of the market, an agent will gather data for the past three to six months. When conducting a CMA, they’ll take into account recent market trends, competing properties, your home’s amenities, and its overall marketability. The analysis also considers aspects of the home such as lot size, condition, age, square footage, bedrooms and bathrooms, and the terms of financing. A thorough CMA will provide information on what homes in your area are selling for, how long they were on the market, and the difference between their listed and sold price.

So why is a CMA important? A CMA helps price the home more accurately, keeping the property competitive in the current market. For example, in a seller’s market where demand is driving up home values, an agent will work with their seller to account for the elevated prices before listing their home. Doing so allows you to avoid overpricing which usually results in a longer sale period. CMAs can also help buyers negotiate their asking price by having a data-backed analysis of the home’s value based on current market trends.

 

The key to a successful sale begins with pricing your home correctly, and finding the right agent to conduct a Comparative Market Analysis is critical to this process. To connect with an experienced Windermere Real Estate agent today, click the button below.

 

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7 Vintage Design Elements That Are Still Popular Today

Adding the right touch of vintage décor to your home is a matter of balance. It brings that decades-old, well-traveled quality that gives the spaces in your home a special character. A common concern with vintage décor is that it will make a home feel outdated. Fortunately, certain design elements and trends have stood the test of time.

We tend to think of vintage décor in terms of well-known objects, like shag carpets and Eames chairs, but it is so much more than that. Some of the most iconic design concepts of eras past continue to influence how we design our homes today. From features to furniture, here are just a few that have maintained their popularity with homeowners and interior designers alike.

 

7 Vintage Design Elements That Are Still Popular Today

1. Built-Ins

The history of built-ins dates back to the Arts & Crafts movement of the late nineteenth century to the early twentieth century. In contrast to the Victorian period that preceded them, the Arts & Crafts designers looked to simplify home design by working features into the structure of the home itself. The clean aesthetic look of built ins, as well as their functionality and the storage they provide, have kept them relevant for decades.

2. Exposed Brick

Exposed brick has maintained its popularity through the years, sometimes used to compliment certain modern design trends, such as Industrial, a common design choice for open-concept, non-traditional living spaces such as lofts. Whether it’s stripping away a wall to reveal a chimney or using it as a backsplash for open shelving, exposed brick creates a vintage lived-in quality. Its natural pattern and textured surface work well as either a focal point or an accent piece in large and small spaces alike.

3. Crown Molding

With roots dating back to ancient Greece, crown molding is both decorative and functional. It provides a visual transition for the surfaces in a room by embellishing the space between the ceiling and wall. It can also be a decorative piece for architectural elements such as bookshelves, doorways, etc. Although crown molding is a small detail, it plays a significant role in tying a room together.

 

Image Source: Getty Images

 

4. Marble Countertops

From ancient Rome to the European Renaissance, marble has been widely used throughout history in countless homes throughout the world. Heat resistant and easy to clean, marble countertops have become a staple of kitchens and bathrooms. Due to their large surface area and durability, they are often the centerpiece of kitchen renovation projects. Because marble is porous, it’s best to seal them at the time of installation to prevent damage.

5. Wicker Style Furniture

With origins tracing back thousands of years, wicker-woven furniture is still ubiquitous today. Made from the sturdy and flexible material rattan, wicker furniture is lightweight and weather resistant. It makes for the ideal outdoor patio chair or lounge seat, or the perfect rocker by the fireplace in the living room. A combination of functionality and beauty, wicker furniture’s popularity has showed no signs of slowing down.

 

A wicker chair holding a book, a hat, and a blanket.

Image Source: Getty Images

 

6. Checkerboard Tile

Checkerboard tile is a classic element of vintage design, often used on kitchen floors and in bathroom tile work. Designers have always found a way to incorporate this eye-catching black and white pattern into the latest trends. In the home, it can be applied on a large or small scale. If a whole kitchen floor is a bit much for your taste, incorporate it in smaller areas, such as a bathroom backsplash or a backdrop for your shelves.

7. Mid-Century Modern Furniture

The evidence of the Mid-Century Modern (MCM) movement’s relevance is all around us, but in the home, it lives on in its signature furniture pieces. MCM designers took the concepts of modern design—clean lines, minimalism, multi-functionality—and created sleek, interesting furniture pieces that blend into a room and make a statement simultaneously. Common items such as teak desks, Eames chairs, Tulip chairs, credenzas, and raised-legged dressers skyrocketed in popularity during the fifties and sixties. MCM has proven to be timeless, and to this day, its influence can be seen in homes everywhere.

 

A living room decorated with mid-century modern furniture.

Image Source: Getty Images

 

For more information on home design styles, check out our Interior Design page on our website.

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The Best Indoor Plants for Every Room

With thousands of plant species, it can be hard to distinguish which plants are best suited for each room in your home, which greatly depends on sunlight exposure and temperature. A simple rule of thumb is to make higher maintenance plants more accessible to you. Some lower maintenance plants can go weeks without watering and require very low levels of sunlight.

Here’s a quick guide on indoor plants and where to place them in your home based on the level of care and management.

 

The Best Indoor Plants for Every Room

Living room

A monstera, a.k.a. Swiss cheese plant, works well in the living room due to its size and their natural inclination to climb. Providing a monstera with a stake or a trellis will bring about some decorative growth. Another large plant, the fiddle-leaf fig, works well in larger rooms. Fiddle-leaf figs tend to be more top-heavy with their large, floppy leaves. Both of these plants could work well next to a couch or sitting area where there is ample overhead space for the leaves. These large-leaved plants are typically happiest with indirect sunlight. Proper watering can be determined by observing the dryness of the soil. Once the top of the soil is dry to the touch, which is typically once a week for these plants, it’s time to give them a shower. 

 

Bedroom/Office

Spider or jade plants can be great to have on a desk, and also work well to fill up shelving space. Adding a plant to a bookshelf here and there adds texture and brings a sense of wellness to the space, which is especially important when you’re working long hours from home. You could even swap a bookend for a plant to liven things up. Both of these plants are low maintenance and thrive in partial sun or shade. These plants typically require watering every two weeks, but when in doubt, check the soil to see if it’s dry.

 

Bathroom

Plants that require low levels of sunlight and enjoy high humidity—like ferns or bamboo—are great for the bathroom. Place them on your shower shelves or on a countertop to give your bathroom a spa-like feel. Because they can absorb water from the shower steam, they can go up to three weeks without a proper watering. Pothos, or Devil’s Ivy, is another great houseplant for the bathroom. They like to grow downward in a draping manner, so you can get creative with a hanging basket display.

 

Kitchen

Two plants that work well in kitchen spaces, such as on windowsills or in corners, are the Snake Plant and Cast-Iron Plant. The snake plant is known for its resiliency, and its thick leaves can handle the occasional splash from the kitchen sink or accidental bump from pots and pans. The Cat-Iron Plant is one of the toughest houseplants you’ll find. Where another plant may wither and die, the Cast-Iron Plant survives. Both are low maintenance plants can last weeks without watering. No green thumb? Fear not. These plants will keep on keepin’ on through harsh conditions or neglect, and their bright green leaves will help give your kitchen a fresh look and feel.

 

As the seasons change, your plant care routine will need to adjust to climate conditions. Some plants are known to go dormant in the darker months and require less amounts of water and sunlight. During springtime, fertilization can be done by adding fertilizer to the top of the soil.

Before you bring a new plant home that could end up in the hands (or paws) of a child or pet, do some research to be sure it’s safe for everyone in your household. Organizations such as the APSCA and the National Poison Center offer online sources to research the plants you plan on bringing home.

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Should You Rent or Buy When Moving Away?

There are certain advantages to moving down the street or across town. You’ll likely have a basic understanding of the local market conditions, you’re familiar with the area, and the limited distance between the home you’re selling and the one you’re moving into makes the moving process a bit easier. But moving to a new city or state that you’re not as familiar with can lead to questions about whether you should buy a home right away or rent until you know the area better.

Weighing the pros and cons between the two options while factoring in your lifestyle, your plans for the future of your household, and your budget will help guide you toward your decision.

 

Pros and Cons of Renting

Pros

The word that comes to mind to make the case for renting when moving to a new place is flexibility. By renting, there is less pressure to take the plunge on buying a new home right away. It gives you a chance to land, get to know the area, and explore what’s available on the market. For example, if you’re moving to a new city for work but have never been there before, renting might be a fitting solution to get your feet under you until you have a better idea of where you’d want to live long-term. All in all, renting can simplify the relocation process. With renting, it’s easier to predict your monthly expenses. And, in the event that something breaks or needs repair, it’s your landlord’s responsibility to fix it.

Cons

If you previously owned a home, moving into a rental likely means you’ll have to downsize. This may put you in a situation where you have to put some of your belongings in storage, adding an expense to the moving process. If you eventually decide to buy a home, you’ll have to move again from your rental. Moving twice, especially if it’s in a short timeframe, may not be worth the stress. It’s also worth noting that as a renter, your payments help build the homeowner’s equity, not your own. Therefore, the longer you rent, the longer you delay building your own wealth. Finally, renters are at the mercy of their landlords. If they decide it’s time for a rent increase, or that they want to sell the property, you’ll have to adjust accordingly.

 

Image Source: Getty Images

 

Pros and Cons of Buying

Pros

Though buying a home right away is a larger financial commitment than renting, it allows you to quickly get settled in your new hometown. You won’t have to grapple with the challenges of downsizing to an apartment and you won’t have to worry about moving multiple times in the short term. Home ownership is also a gateway to building wealth over time.

Cons

If you’ve never visited your new hometown, it can be challenging to get a true feel for the area, which can lead to buyer’s remorse. Buying a home requires a significant financial commitment, especially if prices in the market you’re moving to are higher. Though the rewards of successfully buying a home are great, the process is full of intricacies and details that can add stress to the moving process, which you may not be up for right away. Furthermore, unlike renting, as a homeowner you are responsible for the maintenance of your property. Making repairs, tending to the yard, and keeping up the countless systems within the home requires time and money.

Ultimately, whether it’s best to rent or buy when moving to a new area depends on what’s right for you and your household. Are you looking to put down roots right away? Would you prefer to live in the area for a while before deciding where to live? Taking time to consider these factors and working closely with a real estate agent will help identify the right option for you.

 

To get started on finding the right home for you, connect with an experienced Windermere Real Estate agent on our website today:

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How to Rent Out Your Vacation Home this Summer

A second home can be more than an escape from daily living, it can be a source of income. For those who own a vacation home, summer is full of opportunities to open your doors to renters while still enjoying the benefits of having your own personal getaway. This approach to home ownership can be a balancing act, but with the right preparation and know-how, you can turn your vacation property into an income-producing investment.

 

Renting Out Your Vacation Home in Summer

Splitting the use of your vacation home with renters can oftentimes result in quick turnaround times between visits, so it’s important to avoid falling behind on your task list to keep each transition and visit as smooth as possible. To help with this process, consider hiring professional cleaners to ensure the home is presentable, clean, and fresh for each guest’s stay. Listing your property on short-term rental sites like AirBnB and VRBO help increase your property’s visibility and can be a useful tool for managing the rental process, especially if you’re having a difficult time attracting renters.

If you’ll be staying at your vacation home between renters, be sure to schedule those dates ahead of time so you can block them off from visitors. A mix-up in scheduling only creates added stress and will negatively impact your guests’ experience, and potentially the online reviews.

 

Pricing Your Vacation Rental

Get the best return on your investment by offering a competitive rate, including on popular weekends. It’s common for homeowners to increase prices for popular summer dates like the Fourth of July and Labor Day weekend. These are the times when people are flocking to vacation getaways and your prices should reflect the increase in demand. Because competition among renters is high during summer, making your home stand out amongst other properties in your area is a worthy investment. Boosting the curb appeal, replacing appliances, upgrading linens, installing high-speed Wi-Fi, and providing a workspace are all ways you can give your vacation home a competitive advantage.

 

Personalize Your Vacation Rental

As a host, it’s a good idea to add personal touches to improve your guests’ experience and make them feel at home. Add décor and treats tailored to your guests’ stay, especially if they’re celebrating a special occasion or life event. Little details like adding a personalized note, flowers, and treats from local hot spots will help make their experience one they won’t soon forget.

 

Image Source: Getty Images

 

Before Renting Out Your Vacation Home

The regulations of the short-term rental market vary by location. Before you rent out your vacation home this summer, understand the rules in your area. For instance, if you belong to a homeowners association, they may have by-laws in place that restrict your ability to rent your property.

Review your homeowners insurance policy to understand whether you are covered while guests are staying in your home. It is likely that you will need to obtain a landlord insurance policy to cover your property while it’s being rented. While some companies offer it as a rider policy that can be added onto your existing homeowners insurance, obtaining a separate policy may be required for adequate coverage. A typical landlord insurance policy will cover property damage, liability, and rental income loss. When shopping around for landlord insurance, find the policy that best fits the needs of your property.

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Windermere Celebrates 37 Years of Community Service Day

Every year in June, Windermere offices close for business in order to participate in Community Service Day. An annual tradition since 1984, our agents, staff, and franchise owners spend the day volunteering in their communities completing a variety of neighborhood improvement projects. Here are a few highlights from this year’s Community Service Day from around our network.

 

Windermere Rowland Realty – California

The Windermere Pinole and Diablo Realty offices joined together and volunteered for the Food Bank of Contra Costa & Solano Counties, working in their warehouse to bag produce for a food giveaway. After reaching out to their clients and peers, agents were able to gather $2,850 in donations for the food bank, an amount that will allow them to provide 5,700 meals to the local community.

 

Pictured: Scott Tuffnell, Denise Ramirez, Mike Rowland, Renee Rowland, Diane Cockrell, Mona Logasa, Dave Nardi, Ellen Osmundson, Jim Georgantes, Tina Rowland, Jacob Cardinale, Nicolars Ramirez, Luis Ramirez-Agudelo

 

A group of people hold up a check in a warehouse.

Pictured: Scott Tuffnell, Denise Ramirez, Mike Rowland, Renee Rowland, Diane Cockrell, Mona Logasa, Dave Nardi, Ellen Osmundson, Jim Georgantes, Tina Rowland, Jacob Cardinale, Nicolars Ramirez, Luis Ramirez-Agudelo

 

Windermere Fort Collins & Windsor – Colorado 

For CSD 2021, Windermere Fort Collins partnered with ChildSafe Colorado, an organization that provides therapy for victims of childhood abuse and seeks to “break the cycle and heal the trauma resulting from childhood abuse and neglect with specialized treatment, education, and community outreach.”

Windermere agents and staff completed a variety of indoor and outdoor projects including painting, planting flowers, landscaping, as well as supply collection and organization. In addition to their hands-on work, Fort Collins also set up an online portal for clients, friends, family, and community members to support their work through online donations to ChildSafe.

 

Two women and a boy work in the garden.

Pictured: Heather Patel, her son, and Jill Pino

 

The Windermere office in Windsor, Colorado partnered with the Weld RE-4 School District to host a school supply drive to provide supplies for children in low-income households for the 2021–2022 school year. In addition to the in-person event, they also had over fifteen local businesses volunteer by hosting a drop box in the weeks leading up to the event. Twenty-five boxes were donated by a local moving company, Johnson Moving & Storage. On the day of the supply drive, the boxes were filled with donations.

 

A group of women handle drop box donations.

Pictured: Suzanne Ekeler, Tammy Fisher, Angie Hoskins, Kelsey Vandemark, Angie Clauser, Karla Laferriere, and Anali Roath

 

Windermere Sandy Real Estate – Oregon

The Windermere Sandy Real Estate office organizes blood drives every year, so when it came time for this year’s Community Service Day, they knew exactly where to turn: The American Red Cross. With the help of Windermere agents, Red Cross volunteers set up in Windermere Sandy’s conference room, getting folks registered for the drive and handing out t-shirts. The Windermere Sandy staff greeted donors on the way in and during the afternoon, reception was handled by Windermere owners Alan and Therese Fleischman.

 

A white American Red Cross truck parked in a parking lot.

A white American Red Cross truck parked in a parking lot.

 

Windermere Real Estate Utah 

In communities throughout the state of Utah, Windermere agents were out in force for Community Service Day. The office in Layton, UT weeded and maintained playground areas and outdoor spaces at the Safe Harbor Crisis Center. Agents joined together to lay bark and install solar lights along the walkways on the property. The organization was also presented with a $5,000 check from the office’s Windermere Foundation funds.

Agents from the Park City office worked with local organization EATS Park City to package seeds and provide interview clips of stories relating to food and local culinary traditions. EATS Park City is dedicated to empowering and growing healthy communities with fun, food, and nutrition advocacy. Windermere Utah also made a $5,000 donation to the organization.

 

Windermere Real Estate Ellensburg – Washington

The agents and staff at Windermere Real Estate Ellensburg held a canned food drive, collecting donations at their office and dropping off grocery bags at three-hundred homes in the area for people to add non-perishable food items. They made the round on the final day of the drive, collecting 1,387 pounds of food for the Fish Community Food Bank. After they dropped off the donations, the Ellensburg team went to two different gardens owned by the food bank and spent the day weeding, cleaning up, and planting new foods.

 

A group of people posing for a photo in a garden.

Pictured: Caitlin Wable, Sally Vietzke, Danielle LaHaie, Erich Cross, Jennifer Savage, John Gardner, Cara Marrs, Genevieve Gillman, Casey Mills, Taylor Hull, Misti Sandnes

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6/28/21 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! I’m Matthew Gardner, Chief Economist for Windermere Real Estate and welcome to this latest edition of Mondays with Matthew.

Before I get going with this months’ discussion, I did want to thank you for all the very gracious comments I received following last month’s video when I offered my views regarding the rumor that’s circulating about a new housing bubble forming.

Well, today we’re going to stay inside the same broad topic, but this time we will be focusing on why home prices have been able to rise at such a significant pace over recent years but—more importantly—I’m going to share my analysis showing that, in reality, home prices are actually not as high as they appear on face value!

 

 

For context, let’s look at home prices over the past three decades and this chart shows the median sale price of existing homes—both single-family and multifamily—over time.

In the 1990’s – prices rose by over 45%.

 

And this was followed by a significantly faster pace of appreciation as the housing bubble was really getting inflated—with prices soaring by over 68% between the start of the decade and its ultimate peak in the summer of 2006.

 

Well, we all remember what happened then! The bubble burst, with prices dropping by almost 29% between July 2006 and early 2009.

This was followed by a brief period of relative stability—due to the introduction of the first-time homebuyer buyer tax credit—but, as the impacts of that stimulus wore off, prices dropped further, bottoming out in January of 2012—32.9% below the pre-bubble peak.

 

But, from 2012 until today, sale prices have shot up by more than 126%—a remarkable number—and I would add that prices are up by over 42% since the end of 2017; 37.5% since 2018; and 27.6% since the start of this decade.

 

Interestingly, well, interesting to me at least, the number of homes sold actually bottomed out in 2010—well before prices hit their low point. And this was because a lot of buyers got into the market for one primary reason: home prices were cheap!  So cheap, in fact, that back then you could actually buy a home in many markets for less than it would cost to build the very same home.

Now, given the pace of price growth that we have seen since the 2012 trough, I’m really not at all surprised to hear rumblings regarding bubbles. But is this really the case?

Let’s take a peek at what had been going on with mortgage rates over the same time period.

Slide title reads conforming 30-year mortgage rates. Line graph with y axis showing the monthly 30-year fixed conventional mortgage rates; ex points from 0% to 12% at the top. The X axis has years from 1990 to 2021. Overall the trend on the graph shows a decrease from 1990 to 2021. Data source is Freddie Mac.

 

As home prices were rising, what were mortgage rates doing? That’s right! They were falling. Of course, there were some periods where rates trended higher—most recently in 2018—but I really want you to look at the overall direction of rates over the last 30 years. They’ve been heading in one direction and that’s down.

So! What happens when we overlay sale prices with mortgage rates?

 

Slide title is Home Prices versus Mortgage rates. Line graph with 2 lines. On the y axis on the left, which is in light blue, is median sale price from $80,000 at the bottom and $380,000 at the top, the y axis on the right, which is in navy, is Average mortgage rates from 0% at the bottom and 12% at the top. The blue line shows that home prices increased by 268% since 1990. Meanwhile, the navy line shows that mortgage rates have decreased from 10.5% in 1990 to 3% in 2021. The Source is NAR Home Prices & Freddie Mac Mortgage Rates Existing single-family & multifamily units; nsa.

 

Here are the sale prices we looked at earlier.

And here are mortgage rates.

Prices are up by almost 270% over the past three decades.

But in the same time period, mortgage rates have fallen from over 10% to around 3%. And it is this massive drop in rates that, over the long-term, allowed buyers to finance more expensive homes and this, naturally, has led prices higher.

And this is a part—just a part mind you—of the reason why prices have been able to rise so significantly.

So! Prices have risen almost threefold as the cost to finance a home has dropped by 72%.

But that’s not the whole story.

You see, it’s not accurate to simply look at the change in home prices over time without considering inflation, and the impacts here are very significant.

Inflation plays a substantial part in understanding prices of any commodity, and that certainly includes housing.

But before we dig into this part of the discussion, I have to give a shout out to Bob Shiller—of the famed Case-Shiller Index—who I believe was the first person to have written about the relationship between housing and inflation in his book “Irrational Exuberance” and whose work I used as a foundation for these next few slides.

So, if you are wondering what inflation has to do with home prices, I will tell you. Just like other goods and services, the price of a house today is not directly comparable to the price of that same house 30 years ago, because of the long-run influence of inflation.

For example, in 2020, the median sales price of a home was almost $297,000. That is 14 times the average sales price in 1968 – which was just over $20,000!

That might sound terrible, but back in 1968, the median household income was $7,700 a year, a gallon of gas set you back around 33 cents, and you could buy a dozen eggs for 53 cents.

And it’s because of this that we need to look at inflation adjusted home prices simply because the value of money changes over time.

Slide title is Nominal & Inflation-Adjusted Home Prices. Two line graphs next to each other. On the left is Nominal U.S. Median Sale Prices. On the Y axis are prices from $80,000 to $380,000 at the top. The axis is dates from 1990 to 2021. The line shows that prices have increased by 268%. On the right is a line graph of the inflation adjusted U.S. median sale prices. The y axis is prices from $80,000 to $380,000 at the top. The x axis is dates from 1990 to 2021. The line graph shows that the “real” prices have increased by 83.6%. Data Source is Windermere Economics analysis of Fannie Mae; NAR and BLS data.

 

This slide shows nominal median sale price over time—its chart we started out with. And when I use the term “nominal”, it means that it’s not adjusted for inflation and therefore the value of each dollar spent on housing was actually depreciating over time because of inflation.

And we know that prices are up by 268% over the past 30+ years—a very significant increase. But what happens when you adjust sale prices to account for inflation?

That’s right! Real prices are certainly higher, but by a more modest 83.6%.

 

So, we know that prices are higher than they were three decades ago but, in reality, the real increase is significantly lower than most people are talking about today.

 

The compounded annual growth rate—unadjusted for inflation—was over 4%; but when you adjust for inflation, the REAL rate was just 2%.

But there’s another factor which we need to consider when we are thinking about home price growth, so now we need to bring mortgage rates back into the equation.

I know we’ve already discussed the fact that rates dropping helped prices to rise at well above the long-term average, but now we need to look at what happens to mortgage “payments” when we use inflation-adjusted home prices.

 

Slide title is Nominal & Real Monthly Payments. Two line graph next to each other. On the left is Nominal U.S. Monthly Mortgage Payment. On the y axis is prices from $500 to $1,700 at the top. The x axis is dates from 1990 to 2021. The graph’s trend line shows that mortgage payments have increased by 74.3%. On the right is Inflation Adjusted Monthly Mortgage Payment. The axes are the same as the graph to the left. The graph’s trend line shows that the “real” payments are 10.7% lower. Data Source is Windermere Economics analysis of Fannie Mae; NAR and BLS data.

 

For comparison purposes, you are looking at the monthly mortgage payment for a median priced home in the US—using the average conventional mortgage rate during that month and assuming a 20% down payment.

From 1990 until today, P&I (principal & interest) payments are up by a bit more than 74%.

Of course, I am sure that there are some of you out there again crying “foul” because I am using a high downpayment but, in reality, it really makes no difference to the percentage increase in payments. You see, whatever the downpayment a buyer uses, the percentage change is actually the same.

Anyway, monthly P&I payments—in nominal terms—have risen by 74.3% BUT, what happens when you use the same mortgage rates, but to buy a home where the value has been adjusted to account for inflation?

That’s right…. “Real”—or inflation-adjusted mortgage payments—are almost 11% LOWER today than they were back in 1990 and, as you can see, significantly lower than they were during the” bubble” days”.

 

Now I fully understand that this is not a perfect analysis.

Monthly housing costs don’t just include mortgage payments, but they also include property taxes and insurance, both of which—unfortunately—don’t fall even if mortgage rates do!

Additionally, it does not address prices changes due to over or undersupply in any one market, and it also can’t address the impacts of changing lending policies.

But, that said, I stand by my belief that prices have been able to rise so significantly because mortgage rates have dropped AND because inflation-adjusted house prices really haven’t skyrocketed—contrary to popular opinion.

But, of course, all real estate is local, and although the numbers I’ve shared with you today might be comforting when you read articles from the “bubble-heads” out there, I must tell you that there are some markets across the country where the picture isn’t quite as rosy.

In these areas prices have risen significantly more than the national average so, even when you adjust sale prices for inflation, mortgage payments are a lot higher today than they were three decades ago.

And it is these markets that will be impacted when mortgage rates start to trend higher—which they surely will—and growing affordability constraints further limit the number potential buyers.

The bottom line is, as far as I am concerned, there are quantifiable reasons to believe that we are not in a national housing bubble today, but some markets will experience a significant slowdown in price growth given where prices are today in concert with the specter of rising mortgage rates.

So! there you have it.

I certainly hope that you found this topic as interesting as I do!

As always, if you have any questions or comments about inflation and home values, I would love to hear from you but—in the meantime—stay safe out there, and I look forward to talking to you all again, next month.

Bye now.

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