Move-in ready duplex in prime location close to all the amenities in popular Central District. 2bed+sunroom each unit. Historically significant early 1900’s details supported by modern updates for comfort & efficiency. Soaring ceilings, picture rails, 5 panel fir doors, classic orig. millwork, all carefully preserved. Durable plank flooring, dbl paned windws, versatile-use sunrooms with eastern morning light, and full-size W/D in each unit. Updated electric/plumbing/6yr roof. Ideal owner-to-occupy with instant income stream! Nearly 6000sqft. corner lot, RSL zoning, Buyer to investigate/verify future development potential. Basement area w/ separate entry ready for finishing/building out more living space. Opportunity spelled with capital O!
Information provided as a courtesy only, buyer to verify. For more, go here.
827 Hiawatha Place S #301 Seattle, WA 98144 $445,000
MLS #2031215
Beds: 2
Baths: 1
Days on Market: 20
First-prize in-city location! Vibrant & modern industrial exterior with a border of tall quiet trees is within easy reach of a full menu of urban amenities. Open design, floor-to-ceiling windows, abundant Western light, new LVP flooring, light maple millwork & efficient storage combine to help the spaces live large. In-unit W/D, recroom and expansive view deck for big parties on 2nd floor. Secure garage, bike storage and 2 EV charging stations. Coffee shop, gourmet food & gifts, eateries, brewpub, gym nearly at your door. 10 metro stops in 4 blocks, -1mi to future Judkins LightRail, hiking trails, art galleries & so much more. Strong HOA, FHA Approved. Affordability + convenience = more money and time for doing & being what you love most.
Information provided as a courtesy only, buyer to verify. For more, go here.
The right home is out there, you just have to find it. This may seem like an oversimplification of the home search process, especially for first-time home buyers who haven’t been through it before. But once you’ve figured out your budget and discussed your needs with your real estate agent, you’ll be off and running. Here is a quick guide to help you get started on your home buying journey.
How to Search for a Home
Which houses can I afford?
Before you go perusing pages and pages of listings online, you’ll want to know your budget. Remember that while a home’s listing price is the main character in the list of home buying expenses, it’s not the only cost you’ll encounter. Knowing the full spectrum of the costs associated with buying a home will help you paint a clear picture of what you can afford. Once you’re familiar with these costs, you can strategize ways to save money to buy a house and plan to make a down payment.
To get an idea of what’s affordable, use our free Home Monthly Payment Calculator by clicking the button below. With current rates based on national averages and customizable mortgage terms, you can experiment with different down payment amounts to get estimates of your monthly payment for any listing price.
Mortgage Pre-Approval
Another way you can supercharge your home search efforts is to get pre-approved for a mortgage. Pre-approval has several benefits for prospective home buyers. It helps you understand the different types of home loans available to you and what interest rate you can expect when the time comes to lock in your mortgage. It also streamlines the home buying process once you’ve found the property you’d like to pursue.
Understanding your needs as a homeowner will help you narrow your selection pool. Before you start your home search, make a list of must-have and nice-to-have home features. This will inform your discussions with your real estate agent. Once they know what you consider a dealbreaker, they can pinpoint the right candidate homes.
So, where can you find available homes? Yes, driving around your neighborhood looking for “For Sale” signs is one way to go about it, but a vast majority of home shopping occurs online. Real estate websites like Windermere.com have advanced home search tools that allow you to filter by location, price, number of bedrooms and bathrooms, etc., plus helpful features like virtual tours, professional photography, maps, and more. Use our online search tool to get started:
What are the different house styles?
Familiarizing yourself with the different architectural styles will help to inform your home search. Understanding the differences between a Craftsman home and a Cottage home can make a big difference when you’re house hunting. Each style has its own unique characteristics, perspective on space, and flair. Knowing what kind of architecture and home design you’re drawn to will also help your agent conduct more efficient home searches.
Working with a Real Estate Agent
Your real estate agent will be your greatest resource during your home search. They have access to the Multiple Listing Service (MLS), the largest network of homes on the market. Your agent will use the MLS to create customized searches for available listings and can easily connect with sellers’ agents to coordinate next steps.
For answers to your home buying questions, connect with an experienced, local Windermere agent today:
Your needs as a homeowner change over time, and you need the right home to fit those needs. Accordingly, it’s highly likely that at some point in your future you will experience another moving day. While moving can be challenging, the following moving tips will make it easier. If you are remaining in your current area, your Windermere agent can continue to be a valuable resource on schools, utilities, transportation, recreational opportunities, and more.
If you are moving out of the area, your agent can help you with a referral to another reputable agent in your new community. Many agents also have relationships with real estate-related service companies in their area whom they can call upon for information regarding title, escrow, mortgages, temporary housing while you sell your home, and moving services. They can also help guide you in your search as you learn more about new communities and relocation services.
Once you have decided to sell your home, it’s time to gather information and get organized. Begin by creating a “moving” file to keep track of your estimates, receipts, and other pertinent information. If you’re moving for a job, some expenses may be deductible, so you’ll want the paperwork when tax time comes.
If you are moving out of the area, start researching your new community and ask your agent for help in finding a referral agent. You’ll also want to determine whether you want to rent first or buy immediately. Your new agent should be able to help you with your decision. Once you know where you’re going, you’re also ready to get estimates from moving companies.
After you have chosen a moving date and either hired a moving company or reserved a rental truck, it’s time to wrap things up in your old neighborhood and start establishing relationships where your new home is located. This is particularly important if you are moving to a new town/city. You may want to ask your current doctors, dentists, etc. if they have any referrals on care providers in your new location. Be sure to check their recommendations on your insurance company’s online provider search list. Once you arrive, you may also want to ask new coworkers, friends, or the school nurse for their recommendations.
Contact your children’s school and/or day care and arrange for their records to be transferred. Call your insurance agent about homeowners insurance coverage. Remember to contact utility companies to disconnect, transfer or end service in your current home and turn on service in your new home.
You’ll want to file a change of address form with the U.S. Postal Service, either online or at your local office. If you don’t know your new address, have them hold your mail at the post office in your new locale. Don’t forget to cancel or transfer magazine and newspaper subscriptions as well.
If you belong to a health club or other association, contact them about ending or transferring your membership. Some clubs require written notice before cancellation. Finally, contact your bank or credit union to transfer or close accounts; if you have a safe-deposit box, don’t forget to clean it out before you leave.
Preparing for Moving Day
With moving day in sight, it’s time to get organized. Here are a few moving tips to check off your list before you start packing:
Tie up loose ends. Be sure to send out an email or change of address cards with your new contact information to family, friends, and associates. Return library books and any other borrowed items you may still have.
Triage your possessions. Determine what you are taking with you, what you are giving away to friends, family, or a favorite charity, and what is going to the dump or recycling center. If you have time, you can hold a garage sale or post items for sale online.
Clean up. Drain all gas and oil from your mower, other machinery, gas grills, kerosene stoves and lamps, etc., before loading them onto a moving truck. Empty, defrost, and clean your refrigerator at least 24 hours before your move, and prepare other appliances for moving as well.
Have your car serviced. This is especially important if you are driving to your new home.
Moving Tips: Packing Strategies
If you are doing your own packing, start collecting boxes and/or buy them from your movers. It may take a few days to do your packing, so be sure to pack non-essential items first and label them carefully. If you have any valuables, it’s recommended that you take them with you as opposed to packing them. You risk the chance of losing those items if they’re packed away in boxes. It’s also smart to take along a box of essentials, including items such as toilet paper, paper towels, tape, soap, scissors, pens, paper, and your toiletries. That way you won’t have to track these items down once you’ve arrived in your new home.
For more information on how to make your move easier, visit our Moving Checklist here:
Penthouses take the luxury lifestyle to new heights; they boast the best views in the city, offer unparalleled exclusivity, and often include outdoor spaces not typically found in other units throughout the same building. These perks, however, come at a cost. For those considering renting or purchasing a penthouse, the following information will help to inform your discussions with your real estate agent.
What is a penthouse?
At its core, a penthouse is a luxury apartment/condominium. Located on the top floor of an apartment building, condominium complex, hotel, or tower, its luxury features differentiate it from the building’s lower-level units. The living space of a penthouse is usually set back from the building’s outer edge and the remaining square footage of the roof deck is typically used as a yard, hot tub, pool, outdoor kitchen, etc.
Pros
The View: Even in a densely populated metropolitan area, living in a penthouse is your best chance at an unobstructed view of the city. Perched above the vast majority of other apartment and condominium buildings, a penthouse provides a bird’s eye view of your surroundings without being blocked by neighboring units.
Indoor and Outdoor Space: A penthouse is more than a luxury apartment; it’s your own private outdoor terrace. With access to the outdoors, you have more room for your favorite at-home activities, plus an array of entertaining opportunities. Penthouses are typically designed with open-concept floorplans which emphasize their extra square footage. For those looking to increase their living space while remaining in the city, a penthouse may be the perfect solution.
Privacy: Because penthouses only have neighbors below them, a penthouse floor sees fewer visitors than the lower floors in a building. Some penthouse floors have a separate, private entrance for added security.
Cons
High Price: Gaining access to this exclusive lifestyle is expensive. The high price tags reflect its unique characteristics: being far away from street noise, having more square footage and outdoor space, added privacy, etc. In some places, the costs to purchase or rent a penthouse can outpace the average monthly mortgage payment for a single-family home in the area, especially if you have Homeowners Association (HOA) fees tacked on.
Home Maintenance: Having more indoor and outdoor space means there’s more to maintain. Owning or renting one of these units comes with a longer to-do list than a smaller apartment or condominium. You’ll either have to carve out additional time for upkeep or consider hiring a professional to clean your home regularly.
Work closely with your real estate agent to determine whether renting or purchasing a penthouse is right for you. Learn more about other housing types and the differences between them here:
To be a homeowner is to understand that things can change at a moment’s notice. It’s only a matter of time before the systems in your home break and your appliances are on the fritz. But this inevitable truth isn’t meant to be all doom and gloom. Fortunately, you can protect yourself against these events with a home warranty.
A home warranty and homeowners insurance both protect homeowners against unexpected events. A standard homeowners insurance policy typically covers your home, your belongings, injury, or property damage to others, and living expenses if you are unable to live in your home temporarily because of an insured disaster.
The policy likely pays to repair or rebuild your home if it is damaged or destroyed by disasters, such as wildfires, a winter storm, or lightning. Your belongings, such as furniture and clothing, are also insured against these types of disasters, as well as theft. Some risks, such as your home flooding, are routinely excluded from homeowners insurance policies.
A home warranty picks up where homeowners insurance leaves off by covering some or all of your HVAC, electrical systems, plumbing, and major appliances. A home warranty contract pays for the repair costs associated with these household items. However, if something in your home has not been properly maintained, your home warranty likely won’t cover it. Clarify the specifics of your policy’s language regarding proper maintenance with your warranty provider to avoid potential disagreements. Most home warranties are good for one year with the ability to renew annually.
What does a home warranty cover?
Home warranty policies vary by provider and location. Different coverages offer different protections among your home’s systems and appliances, or a combination of the two. Fees vary as well, based on your plan’s coverages and applicable service fees.
Home warranties have several benefits both for buyers and sellers. For buyers, you can rest assured that your appliances are covered if and when they break down. This saves you from unexpected repair bills from having to hire a contractor. And when selling your home, a home warranty can serve as a way to differentiate your property over other listings. When buyers know a home is protected with a warranty, they can buy with confidence.
Finding the Right Home Warranty
As with anything in the home buying or selling process, it’s important to shop around when searching for the right home warranty policy. During your discovery process, ask questions about the policy’s costs, its dollar amount limit, which items it covers, and its applicable fees including service calls. Talk to your agent about trusted warranty providers in your area.
For more information on protecting your home, visit the Living section on our blog:
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
Although the job market in Western Washington continues to grow, the pace has started to slow. The region added over 91,000 new jobs during the past year, but the 12-month growth rate is now below 100,000, a level we have not seen since the start of the post-COVID job recovery. That said, all but three counties have recovered completely from their pandemic job losses and total regional employment is up more than 52,000 jobs. The regional unemployment rate in November was 3.8%, which was marginally above the 3.7% level of a year ago. Many business owners across the country are pondering whether we are likely to enter a recession this year. As a result, it’s very possible that they will start to slow their expansion in anticipation of an economic contraction.
Western Washington Home Sales
❱ In the final quarter of 2022, 12,711 homes sold, representing a drop of 42% from the same period in 2021. Sales were 34.7% lower than in the third quarter of 2022.
❱ Listing activity rose in every market year over year but fell more than 26% compared to the third quarter, which is expected given the time of year.
❱ Home sales fell across the board relative to the fourth quarter of 2021 and the third quarter of 2022.
❱ Pending sales (demand) outpaced listings (supply) by a factor of 1:2. This was down from 1:6 in the third quarter. That ratio has been trending lower for the past year, which suggests that buyers are being more cautious and may be waiting for mortgage rates to drop.
Western Washington Home Prices
❱ Sale prices fell an average of 2% compared to the same period the year prior and were 6.1% lower than in the third quarter of 2022. The average sale price was $702,653.
❱ The median listing price in the fourth quarter of 2022 was 5% lower than in the third quarter. Only Skagit County experienced higher asking prices. Clearly, sellers are starting to be more realistic about the shift in the market.
❱ Even though the region saw aggregate prices fall, prices rose in six counties year over year.
❱ Much will be said about the drop in prices, but I am not overly concerned. Like most of the country, the Western Washington market went through a period of artificially low borrowing costs, which caused home values to soar. But now prices are trending back to more normalized levels, which I believe is a good thing.
Mortgage Rates
Rates rose dramatically in 2022, but I believe that they have now peaked. Mortgage rates are primarily based on the prices and yields of bonds, and while bonds take cues from several places, they are always impacted by inflation and the economy at large. If inflation continues to fall, as I expect it will, rates will continue to drop.
My current forecast is that mortgage rates will trend lower as we move through the year. While this may be good news for home buyers, rates will still be higher than they have become accustomed to. Even as the cost of borrowing falls, home prices in expensive markets such as Western Washington will probably fall a bit more to compensate for rates that will likely hold above 6% until early summer.
Western Washington Days on Market
❱ It took an average of 41 days for homes to sell in the fourth quarter of 2022. This was 17 more days than in the same quarter of 2021, and 16 days more than in the third quarter of 2022.
❱ King County was again the tightest market in Western Washington, with homes taking an average of 31 days to find a buyer.
❱ All counties contained in this report saw the average time on market rise from the same period a year ago.
❱ Year over year, the greatest increase in market time was Snohomish County, where it took an average of 23 more days to find a buyer. Compared to the third quarter of 2022, San Juan County saw average market time rise the most (from 34 to 74 days).
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 regional economy is still growing, but it is showing signs of slowing. Although this is not an immediate concern, if employees start to worry about job security, they may decide to wait before making the decision to buy or sell a home. As we move through the spring I believe the market will be fairly soft, but I would caution buyers who think conditions are completely shifting in their direction. Due to the large number of homeowners who have a mortgage at 3% or lower, I simply don’t believe the market will become oversupplied with inventory, which will keep home values from dropping too significantly.
Ultimately, however, the market will benefit buyers more than sellers, at least for the time being. As such, I have moved the needle as close to the balance line as we have seen in a very long time.
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.
Sleek, sustainable design, open concept floor plans, minimalism, and eco-conscious thinking are defining characteristics of modern architecture. These concepts were formed in the early to mid-twentieth century as part of the modern art movement which encompassed art deco interior design and mid-century modern architecture among other styles. Here’s a breakdown of the features that define modern architecture.
6 Features of Modern Architecture
1. Clean Geometric Lines
At the heart of modernist values lies the simplification of form. Ornate decorations quickly became a thing of the past as designers became focused on taking a no-frills approach to home design. Modernist homes have a very linear feel with straight lines and exposed building materials, as opposed to more irregular shapes that were popular in the past.
2. Multifunctional Spaces
Multifunctional living spaces are a foundational element of modern homes. Built-in storage is commonly used to reflect this multi-purpose, space-saving feel. This gives added significance to the spaces in a home by upping each one’s utility. It creates an environment where everything has purpose.
3. Eco-Friendly
Modern homes are well suited for technological and eco-friendly home upgrades, as well as eco-friendly building materials and energy efficient practices, and flat roofs to accommodate solar power. A new trend is to decorate each room with plants for a calming, soothing effect. Large windows are abundant in modern architecture, allowing light to fill and expand the interior space, bringing the natural world indoors.
Exposed wood posts and ceiling beams are classic elements in modern architecture and modern offshoots like farmhouse interior design. Modern homes significantly emphasize the structure rather than hiding the bones behind drywall. In new modern homes the post-and-beam structure can be made of concrete, iron, or other materials. The visible horizontal and vertical beams reinforce the clean geometric lines of the space.
5. Open Concept
Modern design strives to “open” the space by eliminating enclosed rooms. A common design method is to open the kitchen and dining room into an open living space, allowing the spaces to flow into one another.
6. Minimalism
With open and connected modernist spaces, careful curation of furniture, décor, and household objects is paramount to incorporating the modernist aesthetic. Generally, modernist homes have art and furniture that reflects the clean geometric lines and the natural materials of the architecture, leaving less space for clutter. Minimalist philosophies encourage few household items that serve both form and function, which work well within this design and architectural style.
The terms “contemporary” and “modern” are thrown around interchangeably. They do possess a certain degree of overlapping qualities, but specifically in the design world, “modern” refers to styles influenced by the early to mid-twentieth century movement, while contemporary design is what is popular in the present. Whatever interior design trends are at the forefront can be said to be contemporary, while modern interior design is still influenced by a specific period in the past.
For more information on home design, read about how to keep up with trends while decorating your home colorfully:
Snuggly tucked into a private woodland setting, this light-filled modern cabin-esque retreat is just minutes from a full menu of urban amenities for easy living. Rich wood finishes, vaulted ceilings, skylites & big picture windws create warm relaxing living spaces with airy views of blue sky and lush greenery. Updated systems & designer touches inspire “show it off” and low maint. living. Swanky granite kitch w/ bar seating, dbl windws, wrap around deck, arboretum-like gardens & patios, 400amp electric service, copper plumbing, 2022 heat pump, A/C. Superb location, quick access to I-5, 405, 167, Renton, Georgetown, parks, forest trails, Lk WA & more. Relax. Unwind. Enjoy your very own nature preserve-let the birds do the entertaining.
14600 SE 176th Street #A5 Renton, WA 98058 $279,998
MLS #2027687
Beds: 2
Baths: 1
Days on Market: 1
Simply one of the best deals in the Renton Fairwood area! Large two bedroom one bath on one ground level condo. Corner unit with a large front yard, quiet, secluded with private access. Enjoin all the included amenities like a large swimming pool, athletes court, clubhouse, and more. Fully updated bath and kitchen, new engineering wood, ceramic tile flooring, newer water heater, insert heater, and all newer appliances. Low HOA fee, clean, and ready to move in.
When mortgage rates are up, prospective buyers can often feel like they’re at a disadvantage as they go about securing a home loan. Fortunately, there are ways to lower your interest rate to make your monthly mortgage payments more affordable.
What are mortgage buydowns?
A mortgage rate buydown is a form of financing that allows you to secure a lower interest rate on your mortgage by paying more money upfront in the form of discount points, also known as mortgage points, at closing. Each discount point is equal to one percent of your total loan amount. Especially attractive in times of high mortgage rates, buydowns are offered by sellers, builders, or lenders depending on the transaction. There are two main types of mortgage interest rate buydowns: permanent and temporary.
Permanent Mortgage Buydowns
With a permanent interest rate buydown, typically the borrower, seller, or builder will contribute to the cost of buying down the rate permanently. In this situation, the borrower qualifies at the bought-down rate for the life of the loan.
Temporary Mortgage Buydowns
A temporary interest rate buydown provides cash flow for the borrower during the temporary period, but they still qualify at the higher note rate. Typically, the seller or builder will contribute to the cost of buying the rate down temporarily.
Use our Home Monthly Payment Calculator to experiment with different down payments, principal amounts, interest rates, taxes, and more for any listing price.
How do temporary mortgage buydowns work?
Temporary mortgage interest rate buydowns have their own unique structure. Below are three common types:
1-0 Buydown Mortgage: The borrower gets a 1% discounted interest rate for the first year.
2-1 Buydown Mortgage: The borrower gets a discounted interest rate for the first two years of the loan. The first year, the interest rate is 2% lower, decreasing to 1% lower the second year.
3-2-1 Buydown Mortgage: The borrower gets a 3% discounted rate the first year, dropping to 2% in the second year and 1% in the third year.
Although they share certain characteristics with adjustable-rate mortgages (ARMs), temporary mortgage buydowns are slightly different. ARMs initially have a fixed interest rate period. Once the adjustable-rate period kicks in, both the interest rate and monthly payments are subject to change. With buydowns, the buyer’s interest rate doesn’t change; either the seller or lender covers part of the interest payments as outlined by the buydown’s structure.
Though buying down your mortgage interest rate permanently can make the payments more affordable, if you are contributing to this cost, make sure you can withstand the heavier financial load before proceeding. It also depends on how long you plan to live in the home. For example, if you plan to move shortly after buying, the short-term savings on your mortgage may not yet break even on your upfront costs by the time you’re ready to purchase again.
Here’s an example of the savings you could see with a 3-2-1 temporary mortgage buydown. Let’s say you qualify for a 30-year mortgage with a $400,000 loan amount at an interest rate of 7%. With a 3-2-1 buydown, you’d pay a 4% interest rate the first year, 5% the second year, and 6% the third year. From year four on, you’d pay 7%.
Purchase Price
Down Payment
Loan Amount
Interest Rate
APR
Loan Term
$500,000
$100,000
$400,000
7%
7.125%
30 years
3-2-1 Temporary Mortgage Interest Rate Buydown
Year 1
Year 2
Year 3
Years 4-30
Interest Rate
4%
5%
6%
7%
Number of Payments
12
12
12
336
Monthly P&I Payment
$1,909.66
$2,147.29
$2,398.20
$2,661.21
Total PITI Payment
$1,909.66
$2,147.29
$2,398.20
$2,661.21
Monthly Reduction
$751.55
$513.92
$263.01
–
Calculations provided by Penrith Home Loans
Temporary buydown cost as % of purchase price 3.67%
With this structure, you’d save $9,018.60 the first year, $6,167.04 the second, and $3,156.12 the third, for a total three-year savings of $18,341.76.
Thinking about buying a home? Connect with a local, experienced Windermere agent to begin your home buying journey:
This video is the latest in our Monday with Matthew series with Windermere Chief Economist Matthew Gardner. Each month, he analyzes the most up-to-date U.S. housing data to keep you well-informed about what’s going on in the real estate market.
Hello there, I’m Windermere’s Real Estate’s Chief Economist Matthew Gardner and welcome to the first episode of “Monday with Matthew” for 2023. As has become tradition, this first episode of the year will be dedicated to my real estate forecast for the U.S. housing market, so let’s get straight to it.
2023 Real Estate Forecast
Existing Home Sales & Forecast
Image Source: Matthew Gardner
U.S. home sales trended lower through all of 2022 and, although I believe that sales will still have held above five million, this certainly won’t be the case in 2023. Affordability and higher financing costs will continue to act as headwinds when it comes to sales, but I think that the bigger issue will be that listing activity will not rise significantly as we move through the year.
As I have been saying for several months now, I don’t see why many households who don’t have to move will move and lose the historically low interest rate that they currently benefit from. That said, sales will still occur this year but at just 4.8 million, sales will be lower than we have seen since 2014.
Annual Change in Median Sale Prices
Image Source: Matthew Gardner
Much has been said about the future of home prices, with some forecasters even suggesting that housing prices will collapse in a similar fashion to that seen following the bursting of the housing bubble back in 2008. Now, although price growth through the pandemic period was clearly excessive, fundamentally speaking, the two periods cannot be considered to be similar at all.
It’s my opinion that sale prices in 2023 will be very modestly lower than last year and I certainly don’t expect to see a collapse in home values.
But not all markets are created equal. The pandemic created what has become known as “Zoom-Towns.” These were cheap markets that affluent buyers flocked to because of their newly found ability to work from home and this led sale prices there to soar. It’s these locations that will likely see prices fall more significantly. Ultimately, expect to see prices fall through the first half of this year before starting to recover in the second half.
New Home Starts & Forecast (Single Family)
Image Source: Matthew Gardner
Looking now at the new construction market, housing starts fell last year as construction costs remained high and mortgage rates rose which lowered demand. And I’m afraid that I do not see 2023 as being one where builders will deliver more inventory, with starts pulling back to a level the country hasn’t seen since 2016. That said, I am expecting a recovery in 2024 when new home starts will break back above the 1,000,000 level.
New Home Sales Forecast
Image Source: Matthew Gardner
New home sales in 2023 will fall further coming in below 600,000 but there is some light at the end of the tunnel with sales picking up fairly significantly again in 2024. We all understand that the country has a significant undersupply of ownership housing, but the costs associated with building new homes is still making it remarkably hard for builders even though they understand that demand will be significant for at least the next decade and a half given current demographics.
But the problem they will continue to face is that demand will primarily come from entry level buyers and, simply put, the cost to build a home precludes many developers from being able to meet this demand.
Average 30-Year Mortgage Rate & Forecast
Image Source: Matthew Gardner
And finally, my forecast for mortgage rates in 2023. Although this might not look good at all, as they say, “the devil is in the details.” Rates skyrocketed last year as the Fed stopped buying treasuries and mortgage-backed securities and, although they are off the highs we saw toward the end of last year, they are still significantly higher today than the market has become used to seeing.
As you can see here, I’m anticipating the average 30-year conventional rate to average 6.1% in 2023, but my forecast is actually a bit better than this shows.
Average 30-Year Mortgage Rate Forecast 2023
Image Source: Matthew Gardner
You see, my quarterly forecast suggests that rates have actually already peaked, and that they will trend lower as we move through this year and break below 6% by the fourth quarter. I would add that if anything my forecast may be a little pessimistic, and rates may end 2023 a little lower than I am showing here.
But that will depend on the Fed, and how long they will continue raising rates, and how long it will take before they start to lower them if the US enters a recession this year, which many forecasters including myself believe will be the case.
So, there you have it, my 2023 U.S. housing forecast. I will leave you with this one last thought. 2023 will be a transition year when the housing market will come off the “high” we saw during the pandemic and borrowing costs were artificially low.
I don’t see any reason for buyers or sellers to panic though. By the end of 2023, most markets will have corrected themselves and I believe we will see prices and demand start to pick up again toward the end of this year, but at a far more normalized pace.
As always, I look forward to your comments on my forecasts and I’ll see you all again next month. Take care now.
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.
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402 20th Avenue
827 Hiawatha Place S #301
7633 S 134th Street
14600 SE 176th Street #A5
