WINDERMERE INSIGHTS: SECOND HOME PURCHASES ON SOME BUYERS’ MINDS

With COVID-related economic stressors mounting for those in the local hospitality and tourism industries among other impacted sectors, many area residents are wondering about the sustainability of their current rent or mortgage. In conjunction with this, mortgage brokers are experiencing a deluge of refinance applications for homeowners looking to lower their monthly overhead and take advantage of the pandemic’s preposterously low interest rates.

“It’s an interesting environment, with uncertain times causing people to seek opportunities to save money,” said Michael Press, a loan officer with Penrith Home Loans based out of Windermere’s Ballard office. “Borrowers are being cautious overall,” he observed, “and they’re seeking the lowest possible monthly payment.” By refinancing at historic rates, Press said, “many people are going to improve their situations.”

One of the oddities of COVID-19 is that while it has put many on their heels, it also seems to have motivated some Seattle-area homeowners to consider purchasing a second home outside the city. As remote work and online schooling have been the new reality for many area residents, some are looking to set up shop away from the city while they can. This has led to a trend that has affected Seattle-area real estate professionals. We spoke to a few leaders within the Windermere network about what they’re seeing in the second home market.

“This has been an unusual summer for sure,” said Patrick Chinn, owner and principal broker of Windermere Midtown’s six in-city offices. “On the one hand we have this massive economic upheaval legitimately impacting the livelihoods of many people in our region,” he observed. “COVID has put them in a hard place and we are doing everything we can to help prevent more housing insecurity in our region.”

“At the same time,” Chinn continued, “about 30% of my brokers have received requests from their clients to talk about a second home purchase.” He noted that areas within an hour and a half to two hours from Seattle — such as Suncadia, Seabrook and the islands (Whidbey, Camano and the San Juans) — are in buyers’ sights right now. “Every week I’m handling agent referral requests in these areas,” Chinn said.

D’Ann Jackson, manager of Windermere’s Bellevue office, said her brokers are assisting buyers in the same Washington hot spots. She pointed to the current popularity of the second-home markets that Chinn spotlighted — Seabrook, Suncadia and Island County.

“With folks not traveling on planes this summer,” Jackson commented, “some want to have a vacation spot they can drive to, and these markets all fit that.” She added that low interest rates may also be encouraging “people with the means and motivation to look into buying a vacation home.”

Penrith’s Michael Press agrees. “We are definitely seeing an uptick in people looking for second homes,” he observed. “At the same time that many people are seeking space and solitude, record-low rates are helping to make second homes more affordable.”

Larry Johnson, general manager of Windermere’s West Seattle office, is seeing movement to both the beach and the mountains. “Buyers are pursuing areas that allow for more open space, scenic views and access to water,” he observed. “They’re looking in Long Beach, Ocean Shores, Hood Canal, the islands, Winthrop, Mazama, Leavenworth, Cle Elem and Lake Chelan, to name a few.”

Johnson noted that with the added interest from buyers, some of these markets are getting quite competitive. “They are starting to heat up and brokers are experiencing multiple offers,” he said. “I suspect that we will continue to see this type of activity for months to come.”

Exactly how long this trend will last is the question.

“Time will tell,” D’Ann Jackson commented. “Someday in the future we’ll be back to a little more normal,” she said. “But for now and the immediate future people are being affected in ways we’ve not seen before, and they’re exploring their options for living, space and location.”

Noting that it comes with some privilege, Jackson understands the logic of her brokers’ clients who are looking at vacation homes. “They’re probably thinking ‘If I have to work from home, I might as well be somewhere I really want to be,’” she said. “And some of them have the economic latitude to make that happen.”

Posted on August 26, 2020 at 8:35 pm
Carlene Sandstrom | Category: Buyers, Homeowners | Tagged , , , ,

Your Guide to Going Solar

Image Source: Canva

For homeowners looking to reduce their home’s carbon footprint, increase its sustainability, and add value to their property, going solar is an obvious choice. Understanding how solar works and how to maximize its benefits are key first steps in your journey to becoming a solar energy-producing household.

How does solar work?

The technology that turns your house into a solar energy-harnessing hub is called photovoltaics, more commonly known as PV. PV works by fielding direct sunlight and absorbing its photons into the solar panels’ cells, which then creates electricity that provides energy for your home. This energy reduces your home’s output of carbon and other pollutants, which translates to cleaner air and water.

With the sun as the power source, the majority of the power generation occurs during the middle of the day, making summer the highest producing season. But don’t worry, it all evens out in the end.

Rooftop panels work best when they are exposed to sunlight, free of shade or shadow from nearby trees or structures. Given the sun’s east-to-west path, south-facing roofs are best-suited for maximizing your solar power. To see if your roof is set up for success, consult a mapping service or solar calculator to establish your roof’s suitability. If your roof isn’t up to standard, there are options such as ground mount solar installations and community solar gardens that you can explore.

Components

  • Solar panels: Capture the sun’s energy
  • Inverter: Converts the sun’s energy to a form that powers devices
  • Racking: The foundation that holds your solar system in place
  • Batteries: To store the energy generated
  • Charge controller: To control how quickly the batteries charge

What are the benefits of solar power?

  • Sustainability: Having a renewable source of energy coursing through your home reduces your household’s carbon footprint and increases your eco-friendliness.
  • Savings: How much money you save by going solar depends largely on how much energy your household consumes and the energy output of your solar panels. The cost of going solar has continued to decrease every year, so you are more likely to save as time goes on. For information on state incentives and tax breaks, explore what options apply to your home by visiting DSIRE(Database of State Incentives for Renewables & Efficiency).
  • Utilities: Whether your utility company charges a flat rate for electricity or charges variable rates throughout the day based on electricity production—i.e. higher rates in the afternoon, lower rates at night—solar power offsets the price you are charged for electricity. It becomes even more valuable during those higher-rate periods or during seasonal fluctuations in utilities costs.
  • Sell it back: Homeowners can sell their solar energy back to utilities through “Net-metering” plans. When your power generation rate is greater than your household’s consumption rate, the end result on your electric bill is a net energy consumption. Refer to DSIRE for region-specific regulations and policies.
  • Home value: A recent study by The Appraisal Journal found that homes with solar PV systems increased their sale price by an average of 3.74%, equaling a premium of $14,329.

Although the right solar solution looks different for each household, what remains true across the board are the environmental benefits and increased home values that solar power brings. Taking all this information into your research will improve your home’s renewable energy and reduce your carbon footprint.

Posted on August 13, 2020 at 10:00 pm
Carlene Sandstrom | Category: Homeowners, Living | Tagged , , , ,

LOCAL MARKET UPDATE – AUGUST 2020

While the pace of daily life may seem slow right now, the local real estate market has had an unusually busy summer. The number of new listings in July was up, sales increased, and home prices followed suit.

• While overall inventory is at historic lows, more sellers put their homes on
the market. New listings of single-family homes in King County jumped more than
25% from a year ago. Snohomish County saw a 7% increase in new listings.

• Pent-up buyer demand fueled sales activity in July.  The number of pending
sales was up 17% over a year ago in King County, and up 13% in Snohomish
County.

• With buyers snapping up new listings as soon as they hit the market, total
available inventory dropped to a 10-year low for the month.

• The lack of inventory is benefiting sellers, and multiple offers are now common
at every price point. As a result, single-family home prices rose 7% in King
County and 15% in Snohomish County.

The charts below provide a brief overview of market activity. If you are interested in more information, every Monday Windermere Chief Economist Matthew Gardner provides an update regarding the impact of COVID-19 on the US economy and housing market. You can get Matthew’s latest update here.

Posted on August 13, 2020 at 9:59 pm
Carlene Sandstrom | Category: Regional Market Updates | Tagged , , , ,

Setting Up Your Home Gym

Image Source: Canva

 

As the stay-at-home hours add up, setting up a home gym is not only physically beneficial, but can bring some added mental wellness to the new normal many of us find ourselves in. In comparison to a gym membership, even with the up-front investment of purchasing equipment, an at-home gym can deliver savings in the long run. With far-ranging fitness gear options online, there are more ways to save than ever before.

 

Location, location, location

Before the lunges, pushups, and weightlifting, the first step in setting up your at-home gym is deciding where to build it. You’ll want plenty of room for the activities and workouts you have in mind. Rooms with low ceilings or narrow walls are not well-suited for a gym. They will limit your ability to perform any kinds of jumping exercises or workouts with wide ranging movements. This space is dedicated to physical activity and the environment should support that. If extra space is hard to come by in your home, consider taking your gym outdoors to a patio, multipurpose space, or other less commonly used area.

 

A space with level, hard flooring, like wood, laminate, or tile, is the best fit for your gym, especially if you plan on establishing a workout plan based around lifting or cardio. Having spatial awareness at all times is important while working out, so you’ll want plenty of light in your home gym. Mirrors are a common fixture in gyms, consider adding one to your wall to analyze your technique.

 

Gear up

  • Strength training: Simple workout tools like kettlebells and dumbbells allow you to perform a variety of workouts without taking up much space. Kettlebells are a great tool for incorporating cardio workouts with added weight. Dumbbells at a lower weight are better for toning exercises, while those at heavier weights are better for low-repetition, bulk exercises.
  • Cardio training: Smaller workout tools such as jump ropes, wrist and ankle weights will add intensity to your cardio workouts. Yoga mats provide proper support while performing core exercises or other body weight circuit workouts during your cardio sessions.
  • Large equipment: To get the most out of large workout equipment like treadmills, stair climbers, and bikes in your home gym, plan for them to be a significant part of your workouts.
  • Additional: Applying a layer of gym flooring will help prevent damage and provide added support. If you prefer music and/or video to accompany your workouts, add speakers and a TV to get the motivational juices flowing.

 

Establish a routine

Your home gym is no good if it gets no use. With zero commute time to account for, arrange a workout routine that suits your daily schedule. Even if you have 30 minutes, getting into a routine of working out is the key to building up your healthy lifestyle in this new normal of home life.

 

Once your home gym is set up, it can be either your individual fitness sanctuary or an opportunity to work out with others. Invite a friend to exercise via video chat and schedule times to feel the burn together. With more virtual fitness classes available now than ever, surf the web to find the classes that best fit your schedule and desired workout intensity.

Posted on July 23, 2020 at 10:17 pm
Carlene Sandstrom | Category: Living | Tagged , , , ,

Western Washington Real Estate Market Update Q2

 

The following analysis of the Western Washington real estate market is provided by Windermere Real Estate Chief Economist Matthew Gardner. We hope that this information may assist you with making better-informed real estate decisions. For further information about the housing market in your area, please reach out anytime!

 

REGIONAL ECONOMIC OVERVIEW

It appears as if the massive COVID-19 induced contraction in employment that Washington State — along with the rest of the nation — experienced this spring is behind us (at least for now). Statewide employment started to drop in March, but April was the real shock: total employment dropped almost 460,000 between March and April, a decline of 13.1%. However, this turned around remarkably quickly, with a solid increase of 52,500 jobs in May. Worthy of note is that, in May alone, Western Washington recovered 43,500 of the 320,000 jobs that were lost in the region the prior month. Although it is certainly too early to categorically state that we are out of the woods, the direction is positive and, assuming we respect the state’s mandates regarding social distancing and mask wearing, I remain hopeful that Washington will not have to re-enter any form of lockdown.

 

HOME SALES

  • There were 17,465 home sales during the second quarter of 2020, representing a drop of 22.2% from the same period in 2019, but 30.6% higher than in the first quarter of this year.
  • The number of homes for sale was 37% lower than a year ago, but was up 32% compared to the first quarter of the year.
  • Given COVID-19’s impacts, it’s not surprising that sales declined across the board. The greatest drops were in Whatcom and King counties. The smallest declines were in Grays Harbor and Cowlitz counties.
  • Pending sales — a good gauge of future closings — rose 35.7% compared to the first quarter of the year, suggesting that third quarter closings will grow as well.

 

 

 

HOME PRICES

  • Home-price growth in Western Washington rose by a relatively modest 3.5% compared to a year ago. The average sale price in the second quarter was $559,194.
  • Compared to the same period a year ago, price growth was strongest in Grays Harbor County, where home prices were up 14.3%. Clallam County also saw a double-digit price increase.
  • It was interesting to note that prices were up a significant 6.6% compared to the first quarter. This suggests that any concern regarding negative impacts to home values as a function of ​    COVID-19 may be overblown.
  • I will be watching for significant price growth in less urbanized areas going forward. If there is, it may be an indication that      COVID-19 is affecting where buyers are choosing to live.

 

 

 

DAYS ON MARKET

  • The average number of days it took to sell a home in the second quarter of this year matched the second quarter of 2019.
  • Across the entire region, it took an average of 40 days to sell a home in the second quarter. I would also note that it took an average of 14 fewer days to sell a home than in the first quarter of this year.
  • Thurston, King, Pierce, and Snohomish counties were the tightest markets in Western Washington, with homes taking an average of only 17 days to sell. All but two counties, Grays Harbor and Cowlitz, saw the length of time it took to sell a home drop compared to the same period a year ago.
  • Market time remains well below the long-term average across the region. This is due to significant increases in demand along with the remarkably low level of inventory available.

 

 

 

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.

What a difference a quarter makes! Given that demand has reappeared remarkably quickly and interest rates remain historically low, it certainly remains a seller’s market and I don’t expect this to change in the foreseeable future.

The overall housing market has exhibited remarkable resilience and housing demand has rebounded faster than most would have expected. I anticipate demand to remain robust, but this will cause affordability issues to remain as long as the new construction housing market remains muted.

 

 

ABOUT MATTHEW GARDNER

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

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

Posted on July 23, 2020 at 10:14 pm
Carlene Sandstrom | Category: Matthew Gardner Report | Tagged , , , ,

LOCAL MARKET UPDATE – JULY 2020

While our lives are very different than they were a year ago, the local real estate market has recovered to 2019 levels. Record low interest rates are helping spur demand. Sales were up, home prices increased and multiple offers were common.

  • The number of pending sales, a measure of current demand, was higher in June than for the same period a year ago.
  • The supply of homes on the market remains very low, with just a month of available inventory.  When inventory is this low, quick sales over full price are common. That was the case in June when about 40% of homes sold for more than the asking price.
  • Home prices in King County rose 4% over a year ago. Snohomish County home prices increased 5%.
  • More sellers put their homes on the market. While total inventory remains low, the number of new listings in June was similar to the same time last year.

The monthly statistics below are based on closed sales. Since closing generally takes 30 days, the statistics for June are mostly reflective of sales in May.

Posted on July 13, 2020 at 10:45 pm
Carlene Sandstrom | Category: Market News, Market Report | Tagged , , , ,

WINDERMERE INSIGHTS: HOW LOW INVENTORY IS INFLUENCING THE MARKET

Although there was already ample concern about our region’s housing supply pre-pandemic, the inventory squeeze was exacerbated by the shutdown. Buyers never really stepped out of the market, despite the onset and risks of COVID-19, while sellers mostly stayed on the sidelines. The resulting demand-supply crunch creates a cycle in which buyers compete aggressively for fewer and fewer units, absorbing active inventory faster than the market can be resupplied.

“While we see more sellers getting ready to list,” observed Pat Grimm, owner of Windermere Capitol Hill, “every week that those homes don’t go on the market, we risk losing buyers to what I’d call a reasonable fatigue.”

Grimm pointed to Seattle’s imbalanced market activity in the first half of June. Pending sales of single family homes were up 21% from the same period last year, despite a 45% reduction in the number of active listings. By mid-month, there remained a paltry 0.8 months’ supply of homes for sale, based on pending sales. Low inventory led Seattle buyers to purchase homes and condos faster and for higher prices than in June 2019.

“Sellers should benefit from this dynamic,” Grimm said, “if they can undertake a move at this stage of the re-opening.”

On the Eastside, the market is undergoing a similar push-pull, according to Joe Deasy, co-owner of Windermere East Inc. “Active listings are being absorbed faster than we can get new For Sale signs up,” he observed. With month-to-date pending sales activity up 21% this June versus last, Deasy noted that the Eastside’s supply of homes is down to only 0.9 months.

Through the first half of June Eastside single family home listings were down 46% from the same period last year, while there were 28% fewer condo listings. “There’s a bottleneck happening, and we could see sales drop unless we bring more homes to market,” Deasy said. “But more listings will lead to more sales,” he added.

One community that has been keenly watching its real estate market dynamics is West Seattle. Hit by the double whammy of the shutdown and the bridge closure, brokers there were wondering how May and June numbers would stack up for this “small town” within the city.

It turns out that West Seattle is experiencing the same demand-supply issue as other local areas. In the first half of June, the supply of single family homes for sale was down 31% from last year. Based on a 9% increase in month-to-date pending sales, the supply of homes stands at just one month.

“Ours is still a seller’s market,” said Larry Johnson, general manager of Windermere’s West Seattle office. “June has seen faster market times and higher selling prices on the units that have gone pending.” The squeeze on West Seattle homes has also led buyers to move on condos, Johnson noted, with month-to-date pending sales up 56% over last year and average sold prices up by 22%.

Posted on July 2, 2020 at 10:42 pm
Carlene Sandstrom | Category: Market News | Tagged , , , ,

REOPENING REAL ESTATE, THE RIGHT WAY

As King County enters Phase 2 of reopening, residential real estate services providers must follow a strict set of rules. These control how brokers may conduct business inside and outside their offices and homes for sale (listings).

Windermere has developed protocols for reopening that meet or exceed all of the state requirements. From the beginning of the shutdown, we have lived by the mantra “Go slow, do no harm.” This philosophy remains firmly in place during the current reopening phase.

Staying Safe: Inside a Listing

Pete Richmond, owner of Windermere’s Greenwood office, discussed how brokers and their vendors must follow strict guidelines when inside a listed home. “For safety reasons, we can’t allow more than three people – including ourselves – inside a listing at once,” Richmond said. He noted that all visitors must observe social distancing guidelines and that all activities inside a listing must take place by appointment only. “So we can’t host open houses, other than by virtual means like live-streaming,” he added.

During Phase 2, brokers and their vendors must wear face coverings at all times when inside a listing. Richmond pointed out that Windermere brokers are encouraged to provide masks, gloves, booties and hand sanitizer to each vendor or client entering a listing.

“Normally we’re required to leave a business card in every home we preview,” Richmond said, explaining that this obligation has been suspended during COVID-19. “We’re also no longer traveling in the same car as clients or colleagues,” he added.

Staying Safe: In the Office

Windermere offices in King County have moved to reopen and are operating under a strict set of guidelines that brokers and staff must follow.

Deanne Wilson, co-owner of Windermere East Inc., and Laura Smith, co-owner of Windermere Co., used the state’s Safe Start guide to establish a reopening plan for their 12 offices. “We’re doing everything possible to keep everyone safe by following the protocols established by the state,” Wilson said.

Windermere’s reopened offices have implemented numerous rules, including restrictions on the amount of people allowed inside at any one time. While staff are permitted in the office to perform essential functions, employees rotate between being onsite and working from home. Total occupancy may not exceed 50% during Phase 2. Visitors must have appointments to enter the office and must limit visits to 30 minutes.

Brokers and staff must observe social distancing at all times. They also must wear face coverings when entering and leaving the office, while in common areas, and whenever not working alone. Windermere kitchens are closed, office entry is required through the primary entrance only, and smaller conference rooms where social distancing is not possible have been closed.

Windermere offices are providing masks, gloves and hand sanitizer to brokers, staff, and the limited number of guests who enter. Many offices have installed sneeze guards to protect front office personnel. They have also installed sanitizing stations at entry points and in common areas. “We’ve even rearranged furniture to encourage social distancing,” Wilson said.

Posted on June 30, 2020 at 7:09 pm
Carlene Sandstrom | Category: Market News | Tagged , , , ,

LOCAL MARKET UPDATE – JUNE 2020

  • The Stay Home order, as expected, continued to impact the number of sales. However, the market is starting to move its way towards more normal activity. Pending sales, a measure of current demand, have risen every week since April.
  • The slight drop in median closed sale price is a result of a proportionately larger number of lower priced homes selling than is normal. It should not be interpreted as a decrease in individual home value.
  • There were significantly fewer homes for sale in May than the same time last year. With less than a month of available inventory, competition among buyers was intense. Bidding wars and all-cash offers were common.

The monthly statistics below are based on closed sales. Since closing generally takes 30 days, the statistics for May are mostly reflective of sales in April. If you are interested in more information, every Monday Windermere Chief Economist Matthew Gardner provides an update regarding the impact of COVID-19 on the US economy and housing market. You can get Matthew’s latest update here.  As we adapt to new phases of reopening, know that the safety of everyone remains our top priority.

Posted on June 11, 2020 at 8:44 pm
Carlene Sandstrom | Category: Regional Market Updates | Tagged , , , ,

A Guide to Mortgage Assistance During COVID-19

Image Source: Shutterstock

 

For some homeowners who have been financially impacted by the COVID-19 pandemic, there is a high level of concern about paying their mortgage. Fortunately, there are options to aid struggling homeowners from governments, financial institutions, and loan providers. The following information is intended to provide clarity on which financial relief options are available to you during this time.

 

What are my mortgage relief options?

Newly placed into law, the Coronavirus Aid, Relief and Economic Security (CARES) Act, provides two protections for homeowners with federally backed mortgages:

 

  1. Your lender or loan servicer may not foreclose on you for 60 days following March 18, 2020. The CARES Act prohibits lenders and/or servicers from beginning a non-judicial foreclosure, or finalizing a foreclosure sale, against you within this time period. While 60 days has passed since this was put into place, it is still important to be aware of in the event that any of these actions were taken against you.
  2. You have a right to request a forbearance for up to 180 days if you experience financial hardship due to the COVID-19 pandemic. You can also apply for a 180-day extension beyond the forbearance period. This does not require submitting additional documentation beyond your claim, nor will you incur additional fees, penalties or interest beyond what has already been scheduled.

 

Forbearance is…

  • With forbearance, mortgage servicers and lenders allow you to pause or reduce your mortgage payments for a period of time while you get back on your feet financially.
  • Different types of loans beget different forbearance options, understanding the differences and which options apply to your loan is key to navigating the forbearance landscape.
  • Once your income is back to a normal level, contact your loan servicer and resume your payments.

 

Forbearance is not…

  • Forbearance is not a means to forgive or erase your payments. Any missed or reduced payments still require payment in the future.

 

Which relief options do I qualify for?

The first step in discovering your mortgage assistance qualifications is to contact your mortgage provider. If you are unsure of how to get in touch with them, look at your mortgage statement for contact information or see what contact options are available online.

After you have successfully made contact, find out if your mortgage is federally backed. To be eligible for assistance under the CARES act, your mortgage must either be backed federally, or by one of the entities in the list below. These links show the agencies’ current advise and related loan information:

 

For non-federally backed loans, contact your lender or servicer to learn more about their forbearance repayment options.

 

Today’s financial landscape can be stressful for homeowners, especially those that are struggling to keep up financially. Fortunately, these entities, institutions, and servicers have provided options to help lessen the burden. Knowing which options apply to you and your household will help you navigate through hardship as your finances recover.

Posted on June 11, 2020 at 8:42 pm
Carlene Sandstrom | Category: Market News | Tagged , , , ,