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Q3 2022 Idaho Real Estate Market Update

The following analysis of select counties of the Idaho 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 in Idaho continues to grow, but the pace has started to taper. The addition of 22,400 jobs over the past 12 months represents a growth rate of 2.8%. Idaho’s third-quarter unemployment rate was 2.7%, down from 3.5% a year ago. This is higher than the all-time low in May and June of this year, but very impressive all the same. Although jobs are being added at a slower pace, I am not concerned given the current unemployment rate and the growing labor force.

Idaho Home Sales

In the third quarter of 2022, 5,243 homes sold, which was 28.7% lower than a year ago and 18.1% lower than in the second quarter of the year.

Listing activity was up 53% compared to a year ago. The average number of homes on the market was 9.1% higher than in the second quarter of 2022.

Compared to the same period a year ago, sales fell in the northern part of the state and were lower in all areas of Southern Idaho except Valley County. Compared to the second quarter, sales also fell across Northern Idaho, but rose in Valley, Payette, and Boise counties in the southern part of the state.

Pending sales were 19% lower than in the second quarter of this year. With more listings and fewer sales, the market is certainly slowing, much of which can be attributed to rising mortgage rates, which hit a level we have not seen since 2008.

Idaho Home Prices

The average home price in the region rose 4.3% year over year to $625,275 but was down 2.9% compared to the second quarter of the year.

Compared to the second quarter of 2022, prices rose in all Northern Idaho counties except Kootenai, where they were down 1.7%. In the southern part of the state, prices fell across the board.

Prices rose by double digits in Bonner and Boundary counties, while the balance of Northern Idaho counties saw single-digit growth. In the southern part of the state, prices rose in four of the counties, but fell in Boise, Valley, and Blaine counties.

Median listing prices in the second quarter were lower in all southern markets, but higher in all but Bonner County in the northern part of the state.

A map showing the real estate home prices percentage changes for various counties in Idaho. Different colors correspond to different tiers of percentage change. In the southern area of the state, Blaine, Boise, and Valley County have a percentage change in the -16% to -0.1% range. Ada is in the 0% to 5.9% change range, and Payette, Gem, and Canyon are in the 6% to 11.9% range. In the north, Kootenai is in the 0% to 5.9% range, while Shoshone is in the 6% to 11.9% rage and Bonner and Boundary are in the 18%+ range.

A bar graph showing the annual change in home sale prices for various counties in North and South Idaho from Q3 2021 to Q3 2022. In the north, Bonner County tops the list at 29.1%, followed by Boundary at 20.7%, Shoshone at 6.1%, and Kootenai at 1.1%. In the South, Payette leads off at 8.6%, followed by Gem at 7.8%, Canyon at 7.5%, Ada 5.5%, Boise -3.2%, Valley -12.4%, and Blaine at -15.3%.

Mortgage Rates

This remains an uncertain period for mortgage rates. When the Federal Reserve slowed bond purchases in 2013, investors were accused of having a “taper tantrum,” and we are seeing a similar reaction today. The Fed appears to be content to watch the housing market go through a period of pain as they throw all their tools at reducing inflation.

As a result, mortgage rates are out of sync with treasury yields, which not only continues to push rates much higher, but also creates violent swings in both directions. My current forecast calls for rates to peak in the fourth quarter of this year before starting to slowly pull back. That said, they will remain in the 6% range until the end of 2023.

A bar graph showing the mortgage rates from 2020 to the present, as well as Matthew Gardner's forecasted mortgage rates through Q4 2023. After the 5.62% figure in Q3 2022, he forecasts mortgage rates continuing to climb to 6.7% in Q4 2022, 6.55% in Q1 2023, 6.35% in Q2 2023, 6.15% in Q3 2023, and 5.60% in Q4 2023.

Idaho Days on Market

The average number of days it took to sell a home in the region rose five days compared to the same quarter of 2021 but fell six days compared to the second quarter of 2022.

In Northern Idaho, days on market rose in all counties other than Kootenai compared to a year ago. Market time rose in every county other than Blaine in Southern Idaho.

It took an average of 74 days to sell a home in Northern Idaho, and 37 days in the southern part of the state.

Homes sold the fastest in Ada County in the southern part of the state and in Shoshone County in Northern Idaho.

A bar graph showing the average days on market for homes in various counties in North and South Idaho for Q3 2022. In North Idaho, Shoshone County has the lowest DOM at 63, followed by Kootenai at 73, Bonner at 77, and Boundary at 81. In the South, Ada County has the lowest DOM at 30, then Gem at 31, Payette 33, Boise and Canyon 34, Valley 39, and Blaine at 59.

Conclusions

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

The third quarter appears to have been an inflection point: the impact of higher mortgage rates and lower affordability have now started to negatively affect home sales and prices. With mortgage rates likely to remain very high compared to recent years, the massive run-up in home values is at an end. Although the market will continue to be negatively impacted as we move through the winter and into the spring, I don’t see it falling in a manner similar to the Great Recession. Owners are sitting on significant equity. Even if prices fall in 2023, which I expect, the decline will be relatively modest.

A speedometer graph indicating a slight seller's market in Idaho in Q3 2022.

With a contracting market, I expect that many homeowners who were thinking about selling will decide to stay put and ride out the slowdown. This will mean the number of homes for sale is unlikely to grow significantly from current levels. Given all the data discussed here, I am moving the needle more toward balance, but we are still not in a typical buyer’s market at the present time.

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 Q3 2022 Idaho Real Estate Market Update appeared first on Windermere Real Estate.

Q3 2022 Colorado Real Estate Market Update

The following analysis of select counties of the 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

Though statewide job growth continues to taper in Colorado, more than 108,000 jobs have been added over the past 12 months, representing an annual growth rate of 3.9%. The unemployment rate in August stood at a healthy 3.4%. Regionally, unemployment rates ranged from a low of 2.6% in Boulder to a high of 3.7% in the Grand Junction and Greeley metropolitan areas.

Colorado Home Sales

In the third quarter, 10,749 homes were sold, which is a drop of 27.8% from a year ago. Sales were 16.3% lower than in the second quarter of 2022.

Year over year, sales rose in Gilpin County but fell in the balance of the region. Sales increased in Gilpin, Clear Creek, and El Paso counties over the second quarter.

Inventory levels jumped 73.1% in the third quarter, which is significant even though it is a slower pace of growth than occurred between the first and second quarters.

Pending sales, which are an indicator of future closings, dropped 22.3% from the second quarter. Placed alongside rising inventory levels and lower sales activity, this clearly suggests that the market is pulling back rather quickly following the remarkably buoyant period between 2020 and 2021.

Colorado Home Prices

The average home sale price rose 8.3% from the same period in 2021 to $654,425. However, prices were 6.6% lower than in the second quarter.

Compared to the second quarter, listing prices dropped in all counties except Clear Creek and Gilpin, suggesting that sellers are starting to realize that the market has shifted.

Year over year, prices rose by double digits in Clear Creek and Douglas counties and rose by single digits in the rest of the market areas.

Rising mortgage rates and inventory levels are now impacting the region’s housing market. As stated in the second quarter Gardner Report, any palpable drop in listing prices is an indication that the market is softening, which has proven to be the case.

A map showing the real estate home prices percentage changes for various counties in Colorado. Different colors correspond to different tiers of percentage change. El Paso and Gilpin County have a percentage change in the 0% to 5.4% range. Larimer, Weld, Boulder, Adams, Arapahoe, Jefferson, Denver, and Park are all in the 5.5% to 10.9% change range, Douglas is in the 11% to 16.4% range, and Clear Creek is in the 22%+ range.

A bar graph showing the annual change in home sale prices for various counties in Colorado from Q3 2021 to Q3 2022. Clear Creek County tops the list at 28.7%, followed by Douglas at 12.4%, Jefferson and Larimer at 8.5%, Arapahoe at 8.4%, Denver and Adams at 8.3%, Weld at 7.9%, Park at 7.3%, Boulder 6.5%, El Paso 4%, and Gilpin 1.3%.

Mortgage Rates

This remains an uncertain period for mortgage rates. When the Federal Reserve slowed bond purchases in 2013, investors were accused of having a “taper tantrum,” and we are seeing a similar reaction today. The Fed appears to be content to watch the housing market go through a period of pain as they throw all their tools at reducing inflation.

As a result, mortgage rates are out of sync with treasury yields, which not only continues to push rates much higher, but also creates violent swings in both directions. My current forecast calls for rates to peak in the fourth quarter of this year before starting to slowly pull back. That said, they will remain in the 6% range until the end of 2023.

A bar graph showing the mortgage rates from 2020 to the present, as well as Matthew Gardner's forecasted mortgage rates through Q4 2023. After the 5.62% figure in Q3 2022, he forecasts mortgage rates continuing to climb to 6.7% in Q4 2022, 6.55% in Q1 2023, 6.35% in Q2 2023, 6.15% in Q3 2023, and 5.60% in Q4 2023.

Colorado Days on Market

The average number of days it took to sell a home in the markets contained in this report rose eight days compared to the same period in 2021.

The length of time it took to sell a home rose across the board compared to the same quarter a year ago.

It took an average of 20 days to sell a home in the region, which is up 11 days compared to the second quarter of the year.

Although market time has risen significantly, it is worth noting that the average time it took for a home to sell in the quarter was still ten fewer days than in the third quarter of 2019.

A bar graph showing the average days on market for homes in various counties in Colorado for Q3 2022. Gilpin County has the lowest DOM at 16, followed by Weld at 17, Arapahoe, Larimer, Adams, Jefferson, and Denver at 18, El Paso at 20, Douglas at 22, Boulder at 23, Clear Creek at 28, and Park at 30.

Conclusions

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

Although all jobs that were lost during the pandemic have now returned and 54,700 new jobs have been added, this has not saved the housing market from cooling. Some are suggesting that we are heading into a period similar to the bursting of the housing bubble in the mid-2000s, but I don’t agree. Through the pandemic, the housing market was artificially inflated by historically low mortgage rates, not by underqualified buyers, but such favorable financing could not carry on forever.

A speedometer graph indicating a balanced market, leaning toward a seller's market in Colorado in Q3 2022.

I expect the market will continue to slow until it gets to a sustainable level of growth. Some markets will see annual price growth turn negative. Given that 57% of Colorado homeowners with a mortgage have more than 50% equity, a modest drop in values is nothing to be concerned about. With more supply and list prices pulling back, I am moving the needle more toward balance. This will favor buyers, but the market is still far from being totally 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.

The post Q3 2022 Colorado Real Estate Market Update appeared first on Windermere Real Estate.

Q3 2022 Southern California Real Estate Market Update

The following analysis of select counties 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

The employment market grew by 465,000 jobs over the past 12 months. However, the pace of job creation has been slowing and more recently the region has seen total employment levels drop. I am not overly concerned by this, as state data at the county level is not adjusted for seasonality, and I anticipate more jobs will be added as we move through the fall. Total employment in the counties covered by this report is now only 340,000 short of the pre-pandemic peak, having recovered 96.7% of the jobs that were lost. Los Angeles County still has the largest shortfall (-335,700), followed by Orange County (-41,500) and San Diego County (-15,400). Riverside and San Bernardino counties remain well above pre-pandemic employment levels. The region’s unemployment rate in August was 4.2%, down from 7.8% a year ago. The lowest rates were in Orange County (3%) and San Diego County (3.4%).

Southern California Home Sales

In the third quarter, 38,356 homes sold, which is down 31.8% from a year ago and 19.4% less than the second quarter of the year.

Pending home sales, which are an indicator of future closings, were down 16.2% from the second quarter, suggesting that closed sales in the final quarter of this year may disappoint.

Sales fell the most in San Diego County, but all markets saw significant declines. Relative to the second quarter, transactions were lower across the board, with Riverside County experiencing the greatest decline (-24.1%).

Listing activity rose an average of 41.6% compared to the second quarter. With more choice in the market and median list prices down 6.8% from the second quarter, it seems that many would-be buyers are sitting on the fence to see if prices will fall further.

Southern California Home Prices

Home sale prices in the quarter rose 4.6% from a year ago but were 7.1% lower than in the second quarter of this year.

Rising mortgage rates are clearly starting to impact the market. This, combined with higher inventory levels, will lead sale prices to continue pulling back.

The region saw double-digit price growth in Orange County, but the overall trend has shown price growth starting to slow. In fact, prices in Los Angeles County rose by only 1.2% year over year.

A period of reversion was inevitable, especially because artificially low mortgage rates could not continue forever. It’s worth remembering that owners saw home values skyrocket over the past few years. This adjustment to home values will only be temporary, and owners still have ample equity in their homes.

A map showing the real estate home prices percentage changes for various counties in Southern California. Different colors correspond to different tiers of percentage change. Los Angeles County has a percentage change in the 0% to 2.4% range. San Bernardino and San Diego are in the 5% to 7.4% change range, Riverside is in the 7.5% to 9.9% range, and Orange is in the 10%+ range.

A bar graph showing the annual change in home sale prices for various counties in Southern California from Q3 2021 to Q3 2022. Orange County tops the list at 10.8%, followed by Riverside at 8.6%, San Bernardino at 7%, San Diego at 5.7%, and Los Angeles at 1.2%.

Mortgage Rates

This remains an uncertain period for mortgage rates. When the Federal Reserve slowed bond purchases in 2013, investors were accused of having a “taper tantrum,” and we are seeing a similar reaction today. The Fed appears to be content to watch the housing market go through a period of pain as they throw all their tools at reducing inflation.

As a result, mortgage rates are out of sync with treasury yields, which not only continues to push rates much higher, but also creates violent swings in both directions. My current forecast calls for rates to peak in the fourth quarter of this year before starting to slowly pull back. That said, they will remain in the 6% range until the end of 2023.

A bar graph showing the mortgage rates from 2020 to the present, as well as Matthew Gardner's forecasted mortgage rates through Q4 2023. After the 5.62% figure in Q3 2022, he forecasts mortgage rates continuing to climb to 6.7% in Q4 2022, 6.55% in Q1 2023, 6.35% in Q2 2023, 6.15% in Q3 2023, and 5.60% in Q4 2023.

Southern California Days on Market

In the third quarter of 2022, the average time it took to sell a home in the region was 25 days, which is 7 more than a year ago and 9 more days than in the second quarter.

Compared to the second quarter of 2022, market time rose in all counties covered by this report.

Homes in San Diego County continue to sell at a faster rate than other markets in the region. All counties saw market time increase year over year.

More homes for sale and higher financing costs have led to increased days on market. That said, it’s important to put the data into perspective; in the third quarter of 2019, the average market time in the region was 42 days.

A bar graph showing the average days on market for homes in various counties in Southern California for Q3 2022. San Diego County has the lowest DOM at 21, followed by Orange at 23, Los Angeles at 25, San Bernardino at 28, and Riverside at 29.

Conclusions

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

The housing market has entered a period of transition following the overheated conditions in 2020-2021. Though the headline numbers are far from buoyant, it’s important to understand that the region is only reverting back to where it was before the pandemic. Any belief that the area is going to experience the same meltdown as it went through in the late 2000s is simply inaccurate. There will be an uncomfortable period, but a return to fundamentals is necessary.

A speedometer graph indicating a balanced market, leaning toward a seller's market in Southern California in Q3 2022.

As such, I have moved the needle more in favor of buyers as the region continues to trend back toward balance.

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 Q3 2022 Southern California Real Estate Market Update appeared first on Windermere Real Estate.

Q3 2022 Central and Southern Oregon Real Estate Market Update

The following analysis of select counties of the Central and Southern Oregon 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 Central and Southern Oregon counties covered by this report continue to see jobs return. The region is only 1,130 jobs shy of pre-pandemic peak employment. The Medford metropolitan statistical area (MSA) is still lagging, with employment levels 2,530 shy of the peak in January 2020. The other markets that have yet to see a full job recovery are Klamath County (-200 jobs) and Josephine County (-40 jobs). The area’s unemployment rate was 4.1%, down from 5.3% a year ago and .1% above the pre-pandemic low. By area, the lowest jobless rate was in Bend (3.6%) and the highest was in Klamath County, where 5.3% of the labor force is still without a job.

Central and Southern Oregon Home Sales

In the third quarter of 2022, 2,436 homes sold, which was a drop of 26.3% from the same period a year ago. Sales were .5% higher than in the second quarter of the year.

Compared to the second quarter of this year, sales fell in Crook, Jackson, and Josephine counties, but rose in the balance of the market areas covered by this report.

Home sales fell in all counties compared to a year ago, with significant declines in the Medford and Bend markets.

The growth in sales from the second quarter, while very small, was pleasing. The region is going through a transition, due in no small part to significantly higher financing costs, but I expect to see more stability come into play as mortgage rates start to even out.

Central and Southern Oregon Home Prices

The average home sale price in the region rose 4.8% year over year to $608,654. Prices were up .9% compared to the second quarter of 2022.

Compared to the second quarter of 2022, average prices rose in all counties other than Jackson, where prices dropped 1%.

Four out of the six counties contained in this report saw sale prices rise year over year. The two counties where prices dropped only experienced a modest decline.

Home prices don’t appear to have been significantly impacted by rising mortgage rates yet. Median list prices in the area rose in all counties other than Crook and Josephine, suggesting that home sellers are generally still confident.

A map showing the real estate home prices percentage changes for various counties in Central and Southern Oregon. Different colors correspond to different tiers of percentage change. Jefferson and Josephine County had a percentage change in the -6% to -0.1% range. Jackson is in the 0% to 4.9% change range and Klamath is in the 5% to 9.9% range. Deschutes is in the 10% to 14.9% change range, and Crook is in the 15%+ change range.

A bar graph showing the annual change in home sale prices for various counties in Central and Southern Oregon from Q3 2021 to Q3 2022. Crook county tops the list at 25.5%, followed by Deschutes at 10.6%, Klamath at 9.6%, Jackson at 4.4%, Josephine at -4.1%, and Jefferson at -5.8%.

Mortgage Rates

This remains an uncertain period for mortgage rates. When the Federal Reserve slowed bond purchases in 2013, investors were accused of having a “taper tantrum,” and we are seeing a similar reaction today. The Fed appears to be content to watch the housing market go through a period of pain as they throw all their tools at reducing inflation.

As a result, mortgage rates are out of sync with treasury yields, which not only continues to push rates much higher, but also creates violent swings in both directions. My current forecast calls for rates to peak in the fourth quarter of this year before starting to slowly pull back. That said, they will remain in the 6% range until the end of 2023.

A bar graph showing the mortgage rates from 2020 to the present, as well as Matthew Gardner's forecasted mortgage rates through Q4 2023. After the 5.62% figure in Q3 2022, he forecasts mortgage rates continuing to climb to 6.7% in Q4 2022, 6.55% in Q1 2023, 6.35% in Q2 2023, 6.15% in Q3 2023, and 5.60% in Q4 2023.

Central and Southern Oregon Days on Market

The average time it took to sell a home in the region rose 12 days compared to a year ago. It took 5 more days for a home to go under contract than it did in the second quarter of the year.

The average time it took to sell a home in the third quarter of 2022 was 33 days.

All counties saw market time rise compared to a year ago. Crook and Jefferson counties saw market time fall compared to the second quarter of this year.

Although rising, the time it took a home to sell in the third quarter remains well below the pre-pandemic average.

A bar graph showing the average days on market for homes in various counties in Central and Southern Oregon for Q3 2022. Deschutes and Jefferson County have the lowest DOM at 27, followed by Crook at 32, Jackson at 24, Josephine at 39, and Klamath at 40.

Conclusions

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

The labor market in Central and Southern Oregon continues to improve, but the housing market is starting to experience a period of uncertainty. I mentioned in the second quarter Gardner Report that buyers and sellers may believe the market is underperforming, but this isn’t actually the case. What we are seeing is a pullback from the overstimulated market of 2020 and 2021. The primary reason for this reversion is that mortgage rates have jumped from the all-time lows that were seen during that period.

A speedometer graph indicating a balanced market, bordering on a seller's market in Central and Southern Oregon in Q3 2022.

Homeowners may feel frustrated by this slowing of activity and may also be worried that prices will decline. Though some markets may experience a very modest drop in sale prices, homeowners have seen their property values leap since the pandemic started, and an average of 56% of owners with a mortgage in Central and Southern Oregon are sitting on at least 50% equity. The region will continue to shift back toward equilibrium. As such, I moved the needle closer to signifying a more balanced market than we have seen in over a decade.

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 Q3 2022 Central and Southern Oregon Real Estate Market Update appeared first on Windermere Real Estate.

Q3 2022 Northwest Oregon and Southwest Washington Real Estate Market Update

The following analysis of select counties of the Northwest 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 Oregon counties contained in this report continue to add jobs, but employment levels are still down 56,300 jobs from the pre-pandemic peak. As I mentioned in the second quarter Gardner Report, this is mainly due to the Portland market: Multnomah County employment levels are still down by over 83,000 jobs. Despite this, the unemployment rate within the Oregon counties in this report came in at a very healthy 3.4%, which is down from the pandemic peak of 12.8%.

Southwest Washington saw a full recovery by the summer of 2021, but the job market in that region is considerably smaller. That said, more jobs continue to be added, with employment levels now 12,800 positions higher than the pre-pandemic peak. During the third quarter, the unemployment rate was 4.6%, which is down from 14.2% at the start of the pandemic.

Northwest Oregon and Southwest Washington Home Sales

In the third quarter of 2022, 12,549 homes sold, which is 26.4% lower than a year ago and 13.8% lower than in the second quarter of 2022.

Listing activity has risen across the region, but the current level is still well below the long-term average. Lower sales can be attributed to higher financing costs and lower affordability.

Year over year, sales rose in three counties but fell in the balance of the market. Compared to the second quarter of this year, sales rose in Benton, Clatsop, Cowlitz, and Klickitat counties.

The region is acting like most across the country. More homes are becoming available, but many would-be buyers are waiting for mortgage rates to stabilize or drop, which is impacting sales.

Northwest Oregon and Southwest Washington Home Prices

The average home sale price in the region rose 5% year over year to $566,595. Prices were 3.9% lower than in the second quarter of this year.

Relative to the second quarter of 2022, average prices rose in Benton, Clatsop, Lincoln, and Wasco counties. They remained static in Marion County but fell in the balance of the markets.

All but five counties saw average sale prices rise compared to a year ago, but the pace of growth is certainly slowing.

Clearly, rising mortgage rates have started to impact home prices. Median list prices are still rising in almost all markets compared to the second quarter, which suggests that sellers continue to be confident. That said, I expect to see either list prices start to soften or sellers take their homes off the market until they see conditions improving.

A map showing the real estate home prices percentage changes for various counties in Northwest Oregon and Southwest Washington. Different colors correspond to different tiers of percentage change. Wasco County is the only county with a percentage change in the 12%+ range. Lincoln, Benton, Columbia, Washington, and Hood River counties are in the 8% to 11.9% change range, Lane, Marion, Polk, Clark, and Clatsop are in the 4% to 7.9% change range, Multnomah and Clackamas counties are in the 0% to 3.9% change range, and Cowlitz, Skamania, Klickitat, Yamhill, and Linn counties are in the -9% to -0.1% change range.

A bar graph showing the annual change in home sale prices for various counties in Northwest Oregon and Southwest Washington from Q3 2021 to Q3 2022. Wasco county tops the list at 33.1%, followed by Benton at 11.9%, Hood River at 9.5%, Lincoln at 9.4%, Washington at 9.1%, Columbia at 8.5%, Marion at 7.8%, Clatsop at 7.7%, Clark at 7.4%, Lane at 5.3%, Polk at 5.2%, Multnomah at 3.8%, Clackamas at 2%, Linn at -0.3%, Yamhill at -1%, Cowlitz at -1.2%, Klickitat at -5.5%, and Skamania at -8.4%.

Mortgage Rates

This remains an uncertain period for mortgage rates. When the Federal Reserve slowed bond purchases in 2013, investors were accused of having a “taper tantrum,” and we are seeing a similar reaction today. The Fed appears to be content to watch the housing market go through a period of pain as they throw all their tools at reducing inflation.

As a result, mortgage rates are out of sync with treasury yields, which not only continues to push rates much higher, but also creates violent swings in both directions. My current forecast calls for rates to peak in the fourth quarter of this year before starting to slowly pull back. That said, they will remain in the 6% range until the end of 2023.

A bar graph showing the mortgage rates from 2020 to the present, as well as Matthew Gardner's forecasted mortgage rates through Q4 2023. After the 5.62% figure in Q3 2022, he forecasts mortgage rates continuing to climb to 6.7% in Q4 2022, 6.55% in Q1 2023, 6.35% in Q2 2023, 6.15% in Q3 2023, and 5.60% in Q4 2023.

Northwest Oregon and Southwest Washington Days on Market

The average number of days it took to sell a home in the region rose eight days compared to the same period a year ago. It took five more days for homes to sell compared to the second quarter of this year.

The average time it took to sell a home in the third quarter of 2022 was 38 days.

Lincoln County was the only market where the length of time it took for a home to sell fell compared to the same period a year ago. Compared to the second quarter of 2022, market time fell in Hood River, Linn, and Skamania counties.

Although days on market have risen, they are still well below the pre-pandemic level. As mentioned earlier, uncertainty surrounding the housing market (mainly due to mortgage rates) is making buyers significantly more cautious. I expect this to change as we move into the new year.

A bar graph showing the average days on market for homes in various counties in Northwest Oregon and Southwest Washington for Q3 2022. Washington County has the lowest DOM at 19, followed by Columbia at 21, Yamhill and Clackamas at 22, Lane, Clark, and Multnomah at 23, Hood River at 24, Cowlitz at 27, Clatsop at 29, Skamania at 38, Wasco at 40, Klickitat at 45, Marion at 61, Linn and Lincoln at 62, Polk at 69, and Benton at 77.

Conclusions

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

Although the labor market is slowly recovering, the specter of an economic slowdown in 2023 is starting to weigh on the market. The rapid pace of home-price growth in 2020 and 2021 was never going to last forever. The market is currently going through a period of reversion, which will slow it to a more sustainable pace. Although this may be painful to watch for some, it is necessary. Sellers have seen the value of their homes skyrocket over the past two years, so even if we experience a modest downturn in home prices, they are still in a very good situation. I would add that 58% of homeowners with a mortgage in Northwest Oregon/ Southwest Washington have more than 50% equity in their homes.

A speedometer graph indicating what is barely a seller's market in Northwest Oregon and Southwest Washington in Q3 2022.

All that considered, I am moving the needle more toward balance, but until buyers and sellers start to feel more confident in the local and national economy, the market is likely to continue experiencing uncertainty. This will lead to lower sales activity and put downward pressure on prices.

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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Q3 2022 Western Washington Real Estate Market Update

The following analysis of select counties 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

The Western Washington labor market continues to expand. The addition of 110,000 jobs over the past 12 months represents an impressive increase of 4.9%. All but seven counties have recovered completely from their pandemic job losses. In total, the region has recovered all the jobs lost and has added an additional 30,000 new positions. The regional unemployment rate in August was 3.8%. This is .2% higher than at the end of the second quarter. That said, county data is not seasonally adjusted, which is likely the reason for the modest increase. The labor force has not expanded at its normal pace, which is starting to impact job growth. Although the likelihood of a recession starting at some point this winter has risen, I am not overly concerned at this point; however, I anticipate businesses may start to taper hiring if they feel demand for their goods and services is softening.

Western Washington Home Sales

In the third quarter, 19,455 homes traded hands, representing a drop of 29.2% from the same period a year ago. Sales were 15.4% lower than in the second quarter of this year.

Listing activity continues to increase, with the average number of homes for sale up 103% from a year ago and 61% higher than in the second quarter of 2022.

Year over year, sales fell across the board, but when compared to second quarter they were higher in Mason, Cowlitz, Jefferson, and Clallam counties.

Pending sales (demand) outpaced listings (supply) by a factor of 1:6. This ratio has been dropping for the past three quarters and indicates a market moving back toward balance. The only question is whether it will overshoot and turn into a buyer’s market.

Western Washington Home Prices

Higher financing costs and more choice in the market continue to impact home prices. Although prices rose an average of 3.6% compared to a year ago, they were down 9.9% from the prior quarter. The current average sale price of a home in Western Washington is $748,569.

The change in list prices is a good leading indicator and we have seen a change in the market. All but two counties (Island and Jefferson) saw median list prices either static or lower than in the second quarter of 2022.

Prices rose in all but two counties, and several counties saw price growth well above their long-term averages.

With the number of homes for sale rising and list prices starting to pull back, it’s not surprising to see price growth falter. We are going through a reversion following the overstimulated market of 2020 and 2021. There will be some ugly numbers in terms of sales and prices as we move through this period of adjustment, but the pain will be temporary.

A map showing the real estate home prices percentage changes for various counties in Western Washington. Different colors correspond to different tiers of percentage change. Skagit County is the only county with a percentage change in the 9%+ range, Whatcom, Snohomish, Pierce, Thurston, Mason, and Clallam counties are in the 6% to 8.9% change range, Lewis, Kitsap, and Jefferson are in the 3% to 5.9% change range, Grays Harbor and King counties are in the 0% to 2.9% change range, and San Juan and Island counties are in the -9.5% to -0.1% change range.

A bar graph showing the annual change in home sale prices for various counties in Western Washington from Q3 2021 to Q3 2022. Skagit county tops the list at 12.5%, followed by Mason, Whatcom, and Pierce counties at 8.6%, Thurston at 8.4%, Snohomish at 7.8%, Clallam at 7.6%, Jefferson at 5.8%, Kitsap at 4.8%, Lewis at 3.6%, Grays Harbor at 2.9%, King at 2.7%, Cowlitz at 0.7%, Island at -3.1%, and finally San Juan at -9.5%.

Mortgage Rates

This remains an uncertain period for mortgage rates. When the Federal Reserve slowed bond purchases in 2013, investors were accused of having a “taper tantrum,” and we are seeing a similar reaction today. The Fed appears to be content to watch the housing market go through a period of pain as they throw all their tools at reducing inflation.

As a result, mortgage rates are out of sync with treasury yields, which not only continues to push rates much higher, but also creates violent swings in both directions. My current forecast calls for rates to peak in the fourth quarter of this year before starting to slowly pull back. That said, they will remain in the 6% range until the end of 2023.

A bar graph showing the mortgage rates from 2020 to the present, as well as Matthew Gardner's forecasted mortgage rates through Q4 2023. After the 5.62% figure in Q3 2022, he forecasts mortgage rates continuing to climb to 6.7% in Q4 2022, 6.55% in Q1 2023, 6.35% in Q2 2023, 6.15% in Q3 2023, and 5.60% in Q4 2023.

Western Washington Days on Market

It took an average of 24 days for a home to sell in the third quarter of the year. This was seven more days than in the same quarter of 2021, and eight days more than in the second quarter.

King and Kitsap counties were the tightest markets in Western Washington, with homes taking an average of 19 days to sell.

Only one county (San Juan) saw the average time on market drop from the same period a year ago. San Juan was also the only county to see market time drop between the second and third quarters of this year.

The greatest increase in market time compared to a year ago was in Grays Harbor, where it took an average of 13 more days for homes to sell. Compared to the second quarter of 2022, Thurston County saw average market time rise the most (from 9 to 20 days).

A bar graph showing the average days on market for homes in various counties in Western Washington for Q3 2022. King and Kitsap counties have the lowest DOM at 19, followed by Thurston and Snohomish at 20, Island and Pierce at 21, Whatcom and Skagit at 23, Cowlitz at 24, Mason at 25, Lewis at 26, Clallam and Jefferson at 27, and Grays Harbor and San Juan at 34.

Conclusions

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

Listings are up, sales are down, and a shift toward buyers has started. After a decade of sellers dominating the market, it is far too early to say that the shift is enough to turn the market in favor of buyers, but the pendulum has started to swing in their direction. A belief that the housing market is on its way to collapsing will keep some buyers sidelined, while others may be waiting for mortgage rates to settle down. Whatever their reasons, I maintain that we will see a brief period where annual price growth will turn negative in several markets, but it is only because the market is normalizing. I certainly don’t see any systemic risk of home values falling like they did in the mid-to-late 2000s.

A speedometer graph indicating a slight seller's market in Western Washington for Q3 2022.

All things considered, I have moved the needle toward buyers, but it remains, for the time being, 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 Q3 2022 Western Washington Real Estate Market Update appeared first on Windermere Real Estate.

The Footing Needs of Different Equestrian Disciplines

Horses are athletes, and athletes need proper support when they train. Owning an equestrian property comes with a long list of responsibilities and maintenance tasks, but at the end of the day, the property exists to serve its horses. The following information is a short guide to understanding which materials are typically used in different equestrian disciplines so you can ensure your horses have the support they need to train their best.

The Footing Needs of Different Equestrian Disciplines

Jumping

To maximize your horses’ training, it’s pivotal that they feel traction when taking off, landing, accelerating, and making turns. Jumping footing needs to be soft enough to cushion landings but solid enough to support horses during takeoff. Materials commonly found in jumping footing include rubber, fibers, and sand. These durable materials fit the mold for what is a physically intense equestrian discipline.

Dressage

Having the proper dressage footing will help to prevent injury amongst your horses and improve their performance. If your surface is too hard, it can create instability when your horses land, which will increase strain on their ligaments and joints over time. If it’s too soft, your horses will have to work too hard to spring up from the ground, overexerting their muscles. Aim for footing that’s the right combination of soft-but-not-too-soft and durable. Sand and felt or sand and silica are typically used for dressage arenas.

Barrel Racing

Like other disciplines, the perfect footing for barrel racing is a combination of traction and cushion. With fast acceleration and explosiveness at every turn, horses competing in barrel racing need proper support for optimum performance. Many equestrian property owners will use mixtures of sand, clay, wax coating, and synthetic fibers to coat their barrel racing arenas, often two to four inches deep. Compacted stone dust is also a common choice for a base, which allows for proper water drainage.

Boarding

If your facility is a boarding facility, you may have several different disciplines being practiced in the same arena. If this is the case, you’ll want to go with a footing that can handle the variability while limiting dust and providing ample support. Footing blends comprised of angular sand plus short and long fibers will typically do the trick. As always, check that your footing is compatible with your local climate.

For more information on preparing your equestrian property and for answers to all your questions, connect with an Equestrian Advisor:

Windermere Equestrian Advisors

 


­­­­­­Featured Image Source: Getty Images – Image Credit: YinYang

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Remodeling Projects to Avoid When Selling Your Home

It’s common for homeowners to feel compelled to remodel their homes before they sell. Renovating the spaces in your home can increase its value and help you compete with comparable listings in your area. However, some remodeling projects are more beneficial than others as you prepare to sell your home. Always talk to your agent to determine which projects are most appealing to buyers in your area.

Remodeling Projects to Avoid When Selling Your Home

When preparing to sell your home, you want to strike the right balance of upgrades. Making repairs and executing renovations will attract buyer interest, but you don’t want to dump so much cash into remodeling that you won’t be able to recoup those expenses when your home sells.

So, how do you know where to focus your efforts? Your agent is a vital resource in understanding your specific situation and will offer guidance on your remodeling efforts to sell your home for the best price. Here are a few projects sellers will want to keep off their to-do lists for the best return on investment.

 

Image Source: Getty Images – Image Credit: skynesher

 

Minor Cosmetic Upgrades

Whether you’ve made small cosmetic upgrades throughout your home typically isn’t a make-or-break proposition for most buyers. Let’s say you’re questioning whether to invest in a new toilet, vanity, and shower for your primary bathroom before selling. Unless these appliances are damaged and you can repair them without spending too much, it’s okay to sell as is.

Major Upgrades with Long Timelines

For any remodeling project, your agent’s analysis will help you determine its risk/reward potential. This dynamic is heightened with major remodeling projects and home upgrades, due to their higher costs. Four of the six lowest ROI remodeling projects found in the Remodeling 2022 Cost vs. Value Report (www.costvsvalue.com)1 are upscale or major upgrades, all with roughly a 50% return on investment.

These projects come with hefty price tags and longer timelines than minor repairs and upgrades, which can complicate factors as you prepare to sell, especially if you have a deadline to get into your new home. They have the potential to temporarily displace you from the property, meaning you and your household may have to find somewhere else to stay until the project is complete.

  • The Bottom Line: To go through with a major home upgrade before you sell, its schedule must fit with your moving timeline. It should also align with buyer interest in your local market. If the project doesn’t meet these criteria, it should be avoided.

Building Code Violations

The rules dictating whether you can sell your home with building code violations vary region to region. It also depends on what the building code violation is and whether neglecting to update it is deemed a safety hazard. The buyer’s mortgage lender may also have stipulations saying that the loan may not be used to purchase a home with certain features that aren’t up to code, which could lead to them backing out of the deal.

If you’re selling an older home, you’re not obligated to update every feature that may be out of code to fit modern standards. These projects are often structural and require a significant investment. If the violation in question was built to code according to the regulations at the time, then a grandfather clause typically applies. However, you’ll need to disclose these features to the buyer.

Trendy Makeovers and Upgrades

Lastly, it’s best to avoid remodeling projects that target a specific trend in home design. Trends come and go. Timeless design is a hallmark of marketable homes because it appeals to the widest possible pool of buyers. Keep this in mind when staging your home as well. Creating an environment that’s universally appealing and depersonalized allows buyers to more easily imagine the home as their own.

Learn more about remodeling your home as you prepare to sell here:

Should I Remodel or Sell My Home As Is?

 


­­­­­­1: © 2022 Zonda Media, a Delaware Corporation. Complete data from the Remodeling 2022 Cost vs. Value Report can be downloaded free at www.costvsvalue.com.

Featured Image Source: Getty Images – Image Credit: eclipse_images

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What is Gothic Revival Architecture?

If you’ve ever seen a home like the one in the photo above, certain words like “romantic” or “medieval” may have come to mind. The architectural style shown here is Gothic Revival, a unique branch of design that grew popular in the mid-19th century. Though it fell out of fashion shortly thereafter, this signature architectural style has left a lasting impression on home design.

What is Gothic Revival Architecture?

The most defining characteristics of Gothic Revival architecture are its pointed arches, steeply pitched roofs, intricate wooden trim, and its preference for vertical elements. As opposed to the horizontal nature of the rambler home style, Gothic Revival architecture reaches skyward. Gothic Revival also borrows elements of castles, such as towers with parapets and/or spires.

The architectural style eventually took on other variants. Victorian Gothic borrowed from elements of the Victorian era, and the North American adaptation Carpenter Gothic used a Gothic influence as the basis for a new style of home design popularized in the late 19th century.

 

Image Source: Getty Images – Image Credit: glasslanguage

 

A low angle shot of a three-story brick Gothic Revival home on a corner lot with a colorful garden. The corner of the house has a round tower with a pointed roof, calling back to rounded tower castles, with a rounded wrap-around porch underneath.

Image Source: Getty Images – Image Credit: fotoVoyager

 

Although Gothic Revival most naturally translated to larger buildings such as churches, mansions, prisons, and schools, the Gothic Carpenter style maintained many of the key characteristics that define the unique style with slight twists to accommodate for residential home life.

Beyond the vertical visuals, steep roofs, and arched doorways, residential gothic architecture also incorporated elements like board and batten wood siding, roof gables, ornate crown molding, and slim porch columns. Gothic-style homes are easily identifiable and much rarer than ubiquitous home styles such as craftsman, cottage, and mid-century modern.

To learn more about the different architectural styles, visit our Architectural Styles page.

 


­­­­­­Featured Image Source: Getty Images – Image Credit: akaplummer

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Windermere-UW Aspire Internship Grows in Second Year

Written by: Samantha Enos – Vice President of Diversity, Equity, and Inclusion, Windermere Real Estate


Formed in partnership with the University of Washington College of Built Environments, Windermere’s Aspire internship program launched in July 2021. The internship 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.

2021 Aspire Internship

The inaugural Aspire internship began on July 13, 2021, with a class of eight interns. Over the course of the eight-week program, the interns learned about the role homeownership plays in building thriving communities while working side by side with real estate professionals and academic leaders. All eight interns completed the program and received a $5,000 scholarship. The interns’ hard work paid off beyond the classroom as well. One group’s presentation contributed to the creation of the WIN Scholarship Program and one alumnus was hired at a Windermere office in Seattle.

 

2022 Aspire Interns – Image Source: Windermere Services Company

 

The 2022 class of Windermere-UW College of Built Environment Aspire interns in a conference at Windermere Real Estate headquarters. Four interns are giving a presentation while the rest watch from the conference table.

2022 Aspire Interns – Image Source: Windermere Services Company

 

2022 Aspire Internship

The success of the inaugural Aspire internship propelled the second iteration to new heights. In the summer of 2022, 18 University of Washington students participated in the program, more than doubling the number from the year before. The interns were hosted by eight Windermere offices and three ancillary partners (CW Title, Penrith Home Loans, and HomeSight) over an eight-week period. This year, students received a $3,000 stipend in lieu of the previous year’s $5,000 scholarship, thus allowing the University of Washington to support more students through the program.

Striving for improved housing solutions, the students conducted five unique presentations showcasing their knowledge gained through the program. Curriculum covered how international affordable housing models could be applied in the U.S., how NIMBYism (Not In My Backyard) stifles the ability to combat other housing solutions for missing middle housing, redlined areas, and homelessness, and how prefabricated housing could lower costs, increase population density, and create more housing units. The final presentation consisted of students creating an apartment rental guide for clients to represent the housing lifecycle.

We are thankful for the Windermere owners and executive team members who hosted the students, making this year’s Aspire program a success. We look forward to working with a new class of Aspire interns in 2023.

 

The 2022 class of Windermere-UW College of Built Environment Aspire interns sit outside Windermere Real Estate headquarters in Seattle with Windermere Co-President Jill Jacobi Wood, Director of Professional Development Nick Maki, and Windermere Capitol Hill owner Pat Grimm.

2022 Aspire Interns, Jill Jacobi Wood, Nick Maki, & Pat Grimm – Image Source: Windermere Services Company

 

To learn more about our DEI Initiatives like the Aspire internship program, visit Windermere.com/dei.


Samantha Enos currently serves on the Seattle-King County REALTORS® Board of Directors, is a member of the National Association of REALTORS® Mentorship program and was recently appointed as the Chairperson of the Seattle-King County REALTORS® DEI committee. She also volunteers on the Juanita High School DEI committee.


­­­­­­Featured Image Credit: Windermere Services Company

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