It’s natural for sellers to want to get every step of the selling process right, but a successful home sale depends on an accurate listing price. Your agent will work closely with you to set the price, but in the meantime, you can use the following information to better understand what goes into this process.
Nothing can replace the professional knowledge and local expertise of a real estate agent, but automated valuation models (AVMs) can be a helpful first step in determining what your home is worth. Like comps, AVMs assess your home by comparing its information with the listings in your area. Windermere’s Home Worth Calculator evaluates your property and the surrounding market to give you an idea of how much it’s worth. Try it here:
What factors influence home prices?
Understanding what factors influence home prices will give you a deeper knowledge of the market, give clarity to the selling process, and help you work with your agent to accurately price your home.
Comparable Home Sales
Comparable home sales—or “comps”—have a major impact on the price of your home. Comps refer to the comparable homes in your area, both pending and sold, within the last six months. Your Windermere agent can provide you with a Comparative Market Analysis (CMA) to better determine the price of your home. CMAs factor in aspects such as square footage, age, and lot size compared to other homes in your area, to determine how your home should be priced among the competition.
Your Home’s Location
Naturally, your home’s location plays a significant role in its asking price. Depending on the market conditions in your area, whether you reside in a metropolitan, suburban, or rural location, and the home’s proximity to amenities, schools, and entertainment all contribute to the price.
If you have recently invested in upgrades or other remodeling projects for your home, they could increase your asking price. However, the price increase potential depends on the kind of renovation, its ROI, and how valuable it is to buyers in your area. If the home needs repair, it will likely generate less interest from buyers than better maintained homes at your price point. Any outstanding repairs or projects looming overhead will make the home less attractive to buyers and could lead to a low appraisal.
Seasonality
Any factors that impact market supply and demand are worth taking into consideration when preparing to price your home, and seasonality is one that cannot be overlooked. Typically, market activity slows in the winter and picks up during the spring and summer months. However, market seasonality varies region to region. Talk to your Windermere agent about the seasonality trends in your area and how they factor into your asking price.
Market Conditions
Naturally, all sellers want to price their home competitively, but what a competitive price looks like depends on the market conditions, such as whether it’s a buyer’s or seller’s market. Some sellers think that pricing their home over market value means they’ll sell for more money, but the opposite can often be true. Overpricing your home presents various dangers such as sitting on the market too long, which can result in selling for well below what it’s worth.
Periodic Price Adjustments
Pricing a home isn’t a set-it-and-forget-it proposal. As with any strategy, you need to be prepared to adapt to fast-changing market conditions, new competition, a lack of offers, and other outside factors.
These are the basic tenets for understanding what goes into the price of a home. When you’re ready, a Windermere agent will interpret and expand on this information, perform a CMA for your home, and guide you throughout your selling journey.
6329 17th Avenue SW Seattle, WA 98106 Listed at $599,000
MLS #1982739
Beds: 3
Baths: 2
1,060 sqft
Days on Market: 11
Charming 3 bedroom, 1.75 bath rambler in West Seattle! This tastefully updated home features new interior paint, laminate and tile flooring throughout, updated bathrooms, a wood burning fireplace, and a fully fenced backyard that includes a large deck – perfect for entertaining. The primary bedroom features a stylish updated ensuite bathroom. The updated kitchen boasts white cabinetry, SS appliances, quartz countertops, & loads of storage. Ample parking with one car garage, plus a covered carport. Near the South Seattle Campus Arboretum, the gorgeous Seattle Chinese Gardens, and the West Seattle Greenway for outdoor activities.
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.
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.
Pets make a house a home. But as much as you love your furry friends, they do add a few entries to your list of chores. Keeping your home clean requires a bit of extra work, and some methods of upkeep are more pet-friendly than others. The following tips will help you keep your house clean and your pets happy.
5 Pet-Friendly House Cleaning Tips
1. Safely Clean Up Accidents
When pet owners buy a home, they proceed knowing full well that pet accidents and messes are bound to happen. Cleaning up messes quickly is important for keeping your home clean, but it will also remove the scent, so your pets don’t come back to that same area with the same intentions. When shopping around, look for cleaning products that are safe for animals and don’t contain any toxic chemicals.
2. Deep Clean to Reduce Smells
Pets have a knack for leaving a scent behind. Every pet owner knows the feeling of going through their normal cleaning routine to extinguish the pet smell from their home, only for it to linger after they’re done. To really get your home smelling fresh again, you’ll need to target your pets’ favorite areas as well as the commonly missed cleaning spots throughout your home like underneath furniture, along the baseboards, etc. You’ll be surprised at how much dirt and fur you find in these places.
Image Source: Getty Images – Image Credit: Marco VDM
3. Clean Pet Toys Regularly
Your pets’ toys are magnets for dirt, fur, drool, and other unwanted substances. It’s a homeowner’s nightmare to imagine spending hours cleaning your home top to bottom, only for a muddy ball your pets have been chewing on to roll across the carpet. Cleaning toys regularly is also healthier for your pets as it helps to reduce the spread of germs. If your pets’ toys are dishwasher safe, pop them in the dishwasher every once in a while to get them squeaky clean.
4. Keep the Air Clean
Even after you’ve exhausted all your cleaning efforts on the surfaces throughout your home, pet fur and dander can still travel through the air. It’s important to clean the air in your home, especially if members of your household have allergies. Consider investing in an air purifier, which will filter air particles to remove dust and odors, giving everyone in your home—pets included—cleaner air to enjoy.
5. The Importance of Well-Groomed Pets
In the context of a clean, pet-friendly home, there’s one surface that’s more important than any—your pets themselves. Every pet owner has their routine; whether that’s regularly maintaining their cat’s litter box, wiping off the dog’s paws in the mudroom before letting them inside, regular baths and brushing, or keeping nails trimmed to avoid furniture and carpet damage, these are the boxes that must be checked to keep your home clean. For all your cleaning efforts, if your pets are still messy, then the spaces in your home will follow suit.
Read the following blog post for more information on maintaining a pet-friendly home as you look to sell:
It’s no secret that buying a home is a serious financial undertaking, but aspiring homeowners are often left wondering what the methods behind the process actually look like. One of the telltale signs that you’re ready to buy a home is having substantial savings to use toward the purchase. The following information goes under the hood of the buying process to explain how much you need to save and some useful methods of saving money.
Making a Down Payment on a Home
The down payment is a large payment made by the buyer upfront to help fund the purchase of a home. Although a down payment of 20 percent of the home’s purchase price will avoid the need to purchase private mortgage insurance (PMI), down payments of this size are not the norm. According to the National Association of REALTORS®, in 2021, the typical down payment was seven percent for first-time home buyers and 17 percent for repeat buyers (NAR)1.
So, how long does it take to save up for the down payment? The answer is unique to each buyer. It depends on your needs as a homeowner, whether you have a deadline, and what you’re able to afford. Your mortgage will factor into the equation, too. Different mortgage types have different down payment requirements, with certain loan products requiring as little as 3% down to qualify. Remember that in general, a higher down payment equates to a lower interest rate and lower monthly payments for your mortgage.
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.
No matter where your savings stand, these strategies can help to beef up your savings account as you prepare to buy a home.
Reduce Debt: Carrying extra debt can weigh you down throughout the home buying process. And even if you make progress on your savings, you’ll be stuck in limbo if you’re not able to qualify for a mortgage. Consider refinancing existing loans and explore ways to reduce credit card debt to set yourself up for success. This will also put you in a better position when you enter the pre-approval process for your mortgage.
Rethink Your Budget: Are your streaming subscriptions piling up? Is now the best time for that five-star vacation you had planned? Saving up to buy a home doesn’t mean you need to abandon all your leisurely expenses, but it is worth it to look at them from a new perspective to find ways you can save. It’s also a good time to examine your bills and self-audit your current living expenses.
Increase Your Savings: Once you go through your expenditures with a fine-toothed comb, you may find there’s ample opportunity to increase your savings. Regularly contributing to a high-yield savings account will put you on the fast track to pile up your extra funds and ensure that you’re setting them aside.
Additional Streams of Income: If you’ve ever thought of using your unique skills to generate some extra dollars, now is the time to act. Whether it’s teaching music lessons, offering tutoring classes, selling your handmade goodies at the local farmer’s market, etc., the extra revenue from a side hustle can help you purchase a home.
Budget for Additional Home Purchase Costs
Once you’ve got your head wrapped around the down payment and formed your saving strategy, you can shift your financial preparations toward the remaining costs of buying a home. Here are a few to keep in mind:
Closing Costs: Closing costs for buyers typically range anywhere between 2% and 6% of the home loan amount but vary by transaction.
Homeowners Insurance: Lenders will usually require that your purchase a homeowners insurance policy, which 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.
Repairs and Remodeling: The home you end up buying may very well be in need of repair, and you may have certain remodeling projects in mind. These costs can stack up quickly, so be sure to carve out ample room in your home buying budget accordingly.
Homeowners Association (HOA) Fees: If the home you’re purchasing is governed by a Homeowners Association (HOA), you will be required to pay monthly HOA fees on top of your existing mortgage monthly payment.
For more information on preparing to buy a house, visit our Guide to Buying a Home:
When you own your living space, it’s natural to feel attached to every square inch. But for renters, creating that sense of ownership is a unique challenge. Whatever limitations you face as a renter in how you’re able to make alterations, it’s no less important to your home life for your space to convey a sense of ownership and self. To make a rental unit feel a bit more like home, we collected a few ways to imbue your abode with your own spirit, without risking your security deposit.
Designing Your Rental to Feel Like Home
Storage
Sufficient storage space is a common shortcoming of rentals, leaving renters in a position where they either need to invest in a public storage space or get creative at home. But even getting creative at home can be tough, since most rental properties have limitations on what renovations and customizations renters are able to make, especially if the property is governed by a Homeowners Association (HOA).
Shop around for freestanding bookshelves, baskets, or use under-the-bed storage bins to free up additional space and declutter the areas of your home where items are stacking up. Search for furniture that doubles as storage, like an open-top ottoman or a side table with a drawer or shelf.
Blinds and Curtains
How you decorate your windows can greatly personalize your rental. Consider swapping out your blinds for curtains to add a splash of color and a more regal aesthetic to your living space. But don’t be too quick to throw away your blinds—you may not get your entire security deposit back! Before making these kinds of changes, or adding hardware like curtain rods, be sure to ask your landlord for permission.
When decorating, it’s the smaller things like pillows, throws, candles, and books that will really tie your home together and make it feel unique to you. If you’re able to change your light fixtures, it can make a world of difference. Find the right lighting by thinking about what temperature of light appeals to you, and whether you want accent, task, or ambient lighting.
Gallery Wall
Hanging up your art collection with hooks and nails can damage the walls, so be sure to use a stud finder to make the process of creating a gallery wall easier. And besides, when you’re preparing to move out, a few hanging holes from nails and screws is nothing that a little spackling paste, a putty knife, some sandpaper, and a new coat of paint can’t fix.
Again, ask your landlord before you add any holes in the home. When you’re touring, ask the landlord to keep the existing holes in the walls so you can use them, or ask if you can get the paint color information so you can patch and make touch ups yourself. Many landlords keep matching wall and trim paint on hand for such instances.
If your flooring is worn, cracked, or damaged in any way, there’s likely little you can do to replace it other than documenting the damage and running it up the flagpole. Fortunately, you have carte blanche to decorate with carpeting as you please. Carpets also serve as a protective layer to avoid further damage to your floors during your tenancy.
Bolder rug materials like shag, tufted cotton, and wool will automatically make your space cozier. If your choice in carpeting is more driven by style, consider vibrant colors, bold patterns, or geometric area rugs to spice things up.
Throughout the mid twentieth century, asbestos was commonly used throughout the homebuilding process. It was typically used as insulation, but would also pop up in vinyl flooring, cement siding, walls, pipes—you name it. After it was discovered that inhaling asbestos fibers has serious health effects, its domestic production slowed, and legislation was put forth to ban it altogether.
However, just like lead paint, homes that were built in the asbestos era still carry a dormant risk. If your home contains asbestos, you should be aware of its dangers, how to handle it, and how to go about removing it safely.
How to Handle Asbestos in Your Home
Having asbestos material in your home is not inherently hazardous if the material is left undisturbed. So, if your asbestos material is intact and in good condition, the best thing to do is to leave it be. However, the moment asbestos material becomes damaged—either from degrading over time or because of a sudden accident—it becomes dangerous. Once asbestos fibers are released, it can spell trouble for you and your household.
Testing for Asbestos
If you find damaged asbestos material, you should cordon off the area to the best of your ability to limit exposure. If restricting the area means you could disturb the asbestos, then it’s best to refrain from interacting with it and let a professional handle it.
DIY asbestos testing is possible, but it can be highly toxic if you don’t take the proper precautions. An asbestos inspector will conduct a thorough examination of your home to determine the extent of its presence and provide their recommended course of action. It is advised to test for asbestos before making an addition or a large-scale remodel to your home.
You can either repair existing asbestos exposure or have it removed. Repairs can be cheaper in the short term but may simply be prolonging the inevitable. Making repairs on your own is generally not recommended, since the slightest mishandling of the exposed asbestos can create a much bigger problem.
When it comes to removing asbestos, you’ll want to enlist the help of a professional. As with any contractor, ask for quotes and make comparisons before deciding who you’ll hire. Before the job is finalized, have your home tested to ensure that all asbestos has been safely removed from the premises.
For more tips on home safety, home maintenance, and avoiding dangers caused by the systems in your home, read our blog post on How to Prevent and Deal with Mold.
An integral part of the formula to successfully buying a home is securing the correct amount of financing. Once you’ve found the home you’d like to pursue, one of your primary tasks is exploring different loan products to see which best fits your situation. Eventually, you’ll come to a fork in the road where you’ll need to decide between a fixed-rate mortgage and an adjustable-rate mortgage (ARM). The following information will help you gain a better understanding of ARMs to help you decide whether they’re right for you.
What Is an Adjustable-Rate Mortgage (ARM)?
After your down payment, your mortgage will finance the remainder of your home purchase. Whereas fixed-rate mortgages allow you to lock in a specific interest rate and payment for the life of your loan, adjustable-rate mortgages’ interest rates will fluctuate over time, thus changing your loan payment. It’s typical for ARMs to begin with a low introductory interest rate, but once that first stage of the loan has passed, they will begin to shift up and down. ARMs generally have a cap that specifies the maximum rate that can occur for that loan.
Let’s say you secure an adjustable-rate mortgage with 30-year terms, the first five of which are at a fixed rate. When the variable interest portion of the loan kicks in, your mortgage’s fluctuations will be measured against an index. If the index is higher than when you secured the loan, your rate and loan payment will go up—and vice versa. How often your ARM rates change depends on your agreement with your lender. Talk to your mortgage broker to learn more about the characteristics of adjustable-rate mortgages.
Different Types of Adjustable-Rate Mortgages (ARMs)
Payment-Option ARM: You’ll have flexibility to choose your monthly payments with a payment-option ARM, including interest-only payments and minimum payments that don’t cover interest. These loan products can get home buyers into hot water quickly when rates increase.
Interest-Only ARM: With an interest-only ARM, you pay just the interest on the loan for a specified introductory period, then the principal payments kick in on top. The longer the introductory period, the higher your payments will be when the delayed principal payments enter the equation.
Hybrid ARM: As outlined above, a hybrid ARM begins with a fixed-rate introductory period followed by an adjustable-rate period. Typically, a hybrid ARM’s fixed-rate period lasts anywhere between three to 10 years, and its rates adjust at an agreed-upon frequency during the adjustable-rate period, such as once every six months or once a year.
Pros and Cons of an Adjustable-Rate Mortgage (ARM)
Pros
Cons
The low introductory rate allows you to save money and plan for when the adjustable-rate period kicks in.
If you plan to live in the home for a long time, a fixed-rate mortgage may be a better option.
If you plan on selling in a few years, you can use the proceeds to pay back your mortgage before the fixed-rate period ends.
Without knowing what will happen to interest rates, your monthly payments could become unaffordable.
If the index decreases over time, you could end up with a lower interest rate and monthly payments.
Financial planning is more difficult with an ARM, since there’s no telling what your monthly payments will be one year to the next.
Home Monthly Payment Calculator
To get an idea of how your mortgage payment will fit into your budget, 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 values to get an estimate of your monthly payment for any listing price.
For more information on financing your next home purchase, connect with an experienced, local Windermere agent.
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 Chief Economist Matthew Gardner and welcome to this month’s episode of Monday with Matthew. A little while ago, a housing analyst was being interviewed about the current state of the residential market and they suggested that the country is in a “housing recession.” Well, needless to say, this got a lot of attention from the media and the public at large—for obvious reasons.
Any time the word “recession” is mentioned we almost subliminally cast our minds back to 2007. And when the word “recession” is combined with the word “housing,” then panic starts to set in with flashbacks of headlines about burgeoning housing supply, plummeting home prices, and surging foreclosures.
As this is a topic being discussed by many across the country right now, I wanted to share with you my opinion as to whether the phrase “housing recession” is an appropriate one when describing today’s market.
So, what is a recession? To answer this, I will turn to my trusted Oxford English Dictionary, and this is how they describe that word.
Definition of a Recession
Image Source: Matthew Gardner
Recession:
a difficult time for the economy of a country, when there is less trade and industrial activity than usual, and more people are unemployed
the movement backward of something from a previous position
Well, how do we use these definitions when it comes to the ownership housing market?
I guess that “less trade” could mean lower sales and we have certainly seen sales pull back. “Movement backward” could be how someone might describe the fact that sale prices have been pulling back in many markets across the country.
But although some may say that we really are in a housing recession given the definition of the word, is it really accurate? Are we are inextricably headed down a road that leads to the bursting of some sort of bubble as we all remember from 2007? I don’t believe we are. To explain my thinking let’s start out by looking at housing supply.
Inventory of Homes for Sale
Image Source: Matthew Gardner
Yes, listing activity is up—can’t argue with that—with the number of resale homes for sale jumping by more than a third from the start of this year. But there’s more to it than that. You see, we have to look a little further back to better understand what’s really going on.
And to do this, let’s check out the number of homes for sale during the first seven months of this year and compare those numbers to the same periods in 2018 through 2021.
Active Listings By Month
Image Source: Matthew Gardner
I don’t know about you, but this doesn’t look like a chart showing a massively oversupplied market! The number of homes for sale in July of this year was almost exactly the same as we saw last July and is still well below the levels seen in 2018, 2019, or 2020.
Sure, listings are up. But are we at levels that will cause prices to tumble? Remember that it was a massive increase in the number of homes for sale that led to the housing bubble bursting back in 2007. Listings peaked at almost 3.9 million units in 2006; but today there are 2.6 million fewer units on the market than we saw back then. Now that we’ve seen that supply isn’t at concerning levels, let’s look at demand.
Existing Home Sales
Image Source: Matthew Gardner
This chart doesn’t look too good. On an annualized basis, sales have been pulling back since the start of the year but that’s not the full story. Let’s look at this in a slightly different way.
Year-to-Date Sales
Image Source: Matthew Gardner
The bars here show year-to-date sales through July—both adjusted and unadjusted for seasonality—and although unadjusted sales so far this year are lower than we saw during the first seven months of 2021, they are at about the same level as we saw in 2018 and are higher than in 2019 or 2020.
But when we adjust the monthly sales data for seasonality, year-to-date sales in 2022 were higher than all years shown here other than 2021.
So, although sales have fallen, it appears to me that we are heading back to a more realistic market rather than one that is hemorrhaging. Yet another indicator we need to consider when examining the market for evidence of some sort of recession are months of inventory , which shows how long it would take to sell every home for sale using the current monthly sales pace.
Months of Inventory
Image Source: Matthew Gardner
This graph shows that it would take three months to sell every home on the market given the sales we saw in July. That is quite a jump from the January pace but, again, perspective is everything.
Months of Inventory: Seller’s Market
Image Source: Matthew Gardner
At three months, it is still a seller’s market. It’s generally accepted that the definition of a seller’s market is any number below four months; a balanced market is four to six months of inventory, and a buyer’s market is when the month of inventory is above six.
And a simple bit of math shows us that, for the market to shift from favoring sellers to favoring buyers, the number of homes for sale must break above two million—which we haven’t seen since 2015—and monthly sales would have to drop to below 300,000. We’ve only seen that happen three times in history: November 2008, and again in July and August of 2010.
Yes, listings are up, and sales are down. There’s no denying it. But, again, does the data justify the term recession? My answer would be no. But, if you’re still not convinced, let’s turn our attention to sale prices. I think that might help make things even clearer.
Median U.S. Existing Home Price
Image Source: Matthew Gardner
The solid line represents the median sale prices of homes over time and the dotted line shows the trend. You can clearly see that we started breaking away from the trend line in early 2021 and that’s not at all surprising as it started the month after mortgage rates hit their historic all-time low.
But today’s financing costs are significantly higher, and prices have started to slide. Although I certainly expect that we will see sale prices fall further, it appears to me as if they are simply moving back to the long-term trend, and not collapsing.
Mortgage Rate Forecasts
Image Source: Matthew Gardner
With mortgage rates doubling from their 2021 lows, downward pressure on sale price was to be expected. But will they—as some think—rise to a level that will cause home prices to plummet? To answer that, here are the forecasts of several associations. You’ll see that all, bar the National Association of Realtors and Freddie Mac, see rates pulling back—albeit modestly—in 2023.
Of course, all these are annual averages and today’s rates are higher with the latest Freddie Mac data showing the average 30-year fixed rate above 6%—a level we haven’t seen since 2008.
However, economists including myself find it unlikely that rates will continue rising significantly from where they are today. The mortgage market is certainly in a bit of disarray right now with the yield curve inverting, but that should correct itself by early next year and that’s why we generally expect rates to start pulling back from their current levels by the start of 2023.
But if rising rates are triggering memories of 2008, you wouldn’t be alone. There are some expecting that the spike in rates will trigger a surge in foreclosures and that will doom the market. But as you see here, although foreclosure filings have certainly risen, they are still remarkably low compared to historic standards.
U.S. Foreclosure Filings
Image Source: Matthew Gardner
In the second quarter, newly delinquent mortgages represented just 1.9% of all mortgages outstanding1 and that’s the lowest share the market has seen since 2006. Although I do expect the number of homes being foreclosed on will rise as we move into 2023, I just don’t see it getting to the levels necessary to materially impact the market. And a big part of the reasoning behind my thinking is this:
Equity Rich Households (Q2 2022)
Image Source: Matthew Gardner
In the second quarter of 2022, over 48% of homeowners with a mortgage were sitting on more than 50% equity.
Simply put, for enough homeowners to be put in a negative equity situation that would lead them to enter foreclosure and materially damage the market, home prices across the country would have to fall by a percentage greater than we saw during the market crash. And I just don’t see this happening.
The word “recession” has many connotations, and when it’s used to describe the housing market, it can engender a significant level of panic. So, I will ask you all. Given the data I have showed you today, do you think that we are in a housing recession?
Yes, supply levels have risen. But they are still relatively low when compared to historic averages and with builders slowing construction activity to a crawl, it’s unlikely that housing supply will grow much organically. Over the longer term, I believe that the supply of resale homes for sale will remain below historic averages. I say this for one simple reason: mortgage rates.
In 2020, a record number of households refinanced their homes to take advantage of the mortgage rates that had been plummeting. And in 2021, over six million home buyers got mortgages with rates averaging below 3%.
I would suggest to you that we will not see the number of homes for sale even get back to normalized levels in the mid-term, as many potential sellers will decide not to sell, because if they did, they would lose the never seen before and likely never to be seen again mortgage rate that they currently have.
Of course, there will be sellers who have to move because of factors such as job relocation, death, or divorce, but I would contend that listing activity may well be tight for a long time. And if supply remains below the level of demand, the market is further protected.
And as far as demand goes, let’s not forget that the age makeup of the country suggests that we will see a lot more potential buyers as Millennials and Generation Z mature, with current numbers suggesting significant buyer demand for the next two decades.
As for sale prices, I still believe (as do almost all economists) that the median home price next year will be higher than we will see this year, but a very significant drop in the pace of sales growth is likely as we trend down to historic averages.
Of course, all real estate is local and there are markets across the country that will see prices drop in absolute terms. But even in the most highly susceptible markets, it will be a temporary phenomenon. By 2024, homeowners in these markets will see the value of their homes start to rise again.
I’m going to leave you with my quote to describe today’s market today and it’s that we are in a “housing reversion,” NOT a housing recession.
As always, I’d love to hear your comments on my thoughts so feel free to reach out. In the meantime, stay safe out there and I’ll see you all again next month.
1: New York Fed Quarterly Report on Household Debt and Credit
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.
6059 S Roxbury Street Seattle, WA 98118 $1,250,000
MLS #1974019
Beds: 4
Baths: 3
3,840 sqft
Days on Market: 4
Just WOW. Tucked away on a nearly- hidden lane above Lk WA is this private retreat with breathtaking 180+ degree views of Lake, sky, mountains & City skylines. Superb MidCentury daylite rambler on street-to-street lot in lush woodland setting with unobstructed views. Expansive rooms, walls of windows/French doors that seamlessly transition to 2 HUGE view decks and outdoor living spaces. Streamlined MCM engineering, built-to-last construction, hardwood flrs, sandstone firpl, period cabinetry & built-ins. Primary ensuite, posh natural stone & tile baths, steam shower, heated floors-top shelf! Updated plumbing/electric/Gas heat. Unparalleled value, all this privacy, personal space and protected views just min. from downtown, airport, & more.
9520 Palatine Avenue N Seattle, WA 98103 $639,000
MLS #1982788
Beds: 3
Baths: 2
1,220 sqft
Days on Market: 14
Classic 1940’s bungalow with a bonus room addition that adds surprising space to the typical design for this era. Fir floors, tall ceilings, cheerful sunny rooms, nice garden lot with alley access for easy extra off-street parking. Bonus room has soaring vaulted ceilings and cozy free-standing fireplace, lots of flexible uses:TV rm, Primary bedrm, friendly guest quarters or home business w/ sep entry. Hall stairway leads to finished attic space ideal for storing seasonal decorations, etc. Updated copper plumbing, gas furnace, new hi-end roof in 2012. House is located forward on the lot, future DADU? Walk to Greenwood area restaurants/ shops/brew pubs/parks and Northgate Light Rail approx. 1 mile. Lots of possibilities and upside potential!
3036 S Bradford Street Seattle, WA 98108 $849,000
MLS #1969790
Beds: 6
Baths: 4
2,310 sqft
Days on Market: 5
Excellent location – next door to Lake People Park, close to the Beacon Hill and Columbia City shopping areas, light rail access, neighborhood parks, transit and interstate access (Walk Score 81). Traditional style home, built in 1997, that features a spacious floor plan, upper and lower level kitchens, daylight walk-out lower level and a surprising 6 bedrooms and 4 baths with additional bonus spaces. Good size, partially fenced yard with mature trees. Plenty of off-street parking.
15210 Macadam Road S #D-207 Tukwila, WA 98188 $249,950
MLS #1993777
Beds: 1
Bath: 1
Days on Market: 7
Updated second floor condo, close to everything with two reserved parking spaces. Ample natural light throughout with spacious bedroom, dining, and living areas. Cozy up to the wood-burning fireplace in the winter time. Sliding door off living room leads to deck and is perfect for taking in the fresh air. One covered parking spot and one uncovered spot. Washer and Dryer are in unit. Homeowner’s dues include water, sewer and garbage collection. Building exterior recently redone with new windows, siding, and roof. Close to Westfield Southcenter, I-5, 405, SeaTac Airport, downtown Seattle, light rail station and more. No rental cap! Perfect for first-time homeowners or investors. Don’t miss out!
3525 S Oregon Street Seattle, WA 98118 $795,000
MLS #1944185
Beds: 3
Baths: 3
1,660 sqft
Days on Market: 86
An ideal property to use as 2 units, including ground floor commercial just blocks from the Columbia City core & Light Rail. Live in a beautiful 5-Star Built Green Dwell Live/Work loft home with an industrial vibe, volume & light. Oversized windows with expansive views. Rent the workspace or use it for your business and save on expenses. Other possibilities include an ADU, Airbnb & house share. Large kitchen including custom live-edge & steel island, solid wood floors, energy-efficient for utility savings, comfort, and a healthful indoor enviro. Solar ready, EV charging, secure gated courtyard for urban outdoor living. No dues or HOA. Affordable, practical, sustainable, low-maintenance, and fun! A smart investment & the way of the future.
Facebook
X
Pinterest
Copy Link
6329 17th Avenue SW
6059 S Roxbury Street
9520 Palatine Avenue N
3036 S Bradford Street
15210 Macadam Road S #D-207
3525 S Oregon Street