Amazon’s Housing Equity Fund came calling just in time to spur movement on Jaebadiah Gardner’s vision for an affordable housing project in the heart of Seattle’s Central District. Gardner Global, which seeks to create cycles of wealth for people who have previously been left out of these opportunities, is the recipient of a $4.5 million grant that will support a 122-unit project at 23rd Avenue and Union Street.  Amazon’s support will enable Gardner to go vertical with the project in mid-2025, in a neighborhood that has historically been one of Seattle’s most diverse.

In early 2021, the Seattle tech giant pledged $2 billion toward affordable housing. Since then, the Amazon Housing Equity Fund has focused on regions where its corporate workforce has grown or is planning to grow. As of November, the company has funded 1,300 housing units in Seattle.

Amazon has taken care to handpick developer and housing associations instead of just funding nonprofits or city housing offices in bulk. According to Alice Shobe, global director of Amazon in the Community, leaving the specific details to Gardner Global, in this case, was a conscious effort to allow those who know the community best to own strategy and outcomes.

Amazon has contributed to the development of affordable housing in our region through grants and low-rate loans. These have funded projects that account for almost 4,400 units so far. The company also contributed $25,000 in support of the Seattle Housing Levy, which voters approved in November.

Playing the role of a hands-off financier and partner, the Amazon Housing Equity Fund will help the Gardner Global project move along more quickly, avoiding the unpredictable timeline that developers often face. Ultimately, Amazon put the group in a position they would not otherwise be in: one step closer to decreasing the wealth gap with communities of color and creating a new wealth cycle instead.

This post was based on information found on Puget Sound Business Journal.  

By 2050, roughly 4,135 existing Seattle buildings larger than 20,000 square feet must cut their greenhouse gas emissions to zero. The Seattle City Council passed legislation on Tuesday, December 12th, enacting the Building Performance Emissions Performance Standard, or BEPS. 

BEPS will require skyscrapers, low- to high-rise buildings, multifamily residences, retail spaces, restaurants, churches, schools, universities and community centers that fit the criteria to meet the proposed bar. It’s a timely measure as buildings account for 37% of Seattle’s total core emissions, behind cars and aviation, according to city data.  

The standards, which will roll out gradually over time, will reduce existing structures’ dependence on greenhouse gas sources, primarily oil and natural gas, including fossil fuel-powered furnaces and water heaters. Several recent projects have already been upgraded to curb their climate impacts.  

A multifamily affordable housing unit cut its energy use by 35% and its fossil fuels by 100% with the installation of heat pump water heating, new roof insulation, heat pump cooling in the community  room, and an energy recovery system. Similarly, the Washington State Department of Services for the Blind replaced windows, upgraded lighting, and installed a heat pump water heater and heat pump heating and cooling, cutting energy use by 70% and fossil fuels by 100%.  

With this impactful legislation, Mayor Harrell hopes that other cities are inspired to follow suit in taking collective action to reduce urban zones’ heaviest contributions to climate change.  

This post was based on information found on GeekWire and Puget Sound Business Journal. 

Just like December temperature variations, our local real estate market continues to feel up and down. Interest rates, regional economic conditions and seasonal market shifts have meant rising home prices in some areas and drops in others. While the expected winter slowdown means overall lower inventory, buyers are still willing to compete for plum properties in a diminishing pool of available listings.

A slight decrease in interest rates has raised cautious optimism in our region. Interest rates fell to around 7.2% as of December 1, compared to 7.8% in October. A continued trend in this direction could signal some welcome positivity in the market as we move into the new year.

In King County, the expected decline in winter inventory is pushing up year-end home prices. The region saw a 7% year-over-year increase in the median residential sold price, from $827,000 in November 2022 to $885,500 last month. Buyers are still showing up: there’s steady demand and potential competition for each available home that’s in good condition and well-priced. King County condos also saw a year-over-year price increase, with the median sold price up 4% in November to $485,000.

Seattle saw a 5% increase in the median sold price of a single-family home, up from October’s $900,000 to $944,000 last month. The market kept some momentum in November, with 48% of Seattle homes selling at or above asking price and 79% going under contract in 30 days or less. Condo prices saw a 21% year-over-year jump, from $480,500 in November 2022 to $582,750 last month. This price growth flew in the face of significant supply, at 3.4 months of inventory.

The Eastside median residential sold price experienced a modest decline in November, down 1% from October’s $1,420,000 to $1,400,000 last month. However, the November price was still up 6% from November 2022, while 75% of sold listings went under contract in 30 days or less. Residential inventory remained fairly flat on the Eastside, increasing slightly from 1.5 months in October to 1.6 months in November. Eastside condo prices increased last month, with a median sold price of $620,000, up from $569,500 in November 2022.

Snohomish County saw a year-over-year bump in prices last month. The median sold price for a single-family home rose from $700,000 last November to $725,000 this November. Supply stood at just 1.3 months at the end of the month, down 32% from this time last year. Condo prices also rose, from $507,500 in November 2022 to $521,209 last month.

As winter unfolds, it’s crucial for buyers and sellers to work with a knowledgeable broker to navigate this churning real estate market. Together you can create a strategy that best supports your real estate goals for the new year.

Matthew Gardner’s Top 10 Predictions for 2024

1. Still no housing bubble

This was number one on my list last year and, so far, my forecast was spot on. The reason why I’m calling it out again is because the market performed better in 2023 than I expected. Continued price growth, combined with significantly higher mortgage rates, might suggest to some that the market will implode in 2024, but I find this implausible.

2. Mortgage rates will drop, but not quickly

The U.S. economy has been remarkably resilient, which has led the Federal Reserve to indicate that they will keep mortgage rates higher for longer to tame inflation. But data shows inflation and the broader economy are starting to slow, which should allow mortgage rates to ease in 2024. That said, I think rates will only fall to around 6% by the end of the year.

3. Listing activity will rise modestly

Although I expect a modest increase in listing activity in 2024, many homeowners will be hesitant to sell and lose their current mortgage rate. The latest data shows 80% of mortgaged homeowners in the U.S. have rates at or below 5%. Although they may not be inclined to sell right now, when rates fall to within 1.5% of their current rate, some will be motivated to move.

4.Home prices will rise, but not much

While many forecasters said home prices would fall in 2023, that was not the case, as the lack of inventory propped up home values. Given that it’s unlikely that there will be a significant increase in the number of homes for sale, I don’t expect prices to drop in 2024. However, growth will be a very modest 1%, which is the lowest pace seen for many years, but growth all the same.

5. Home values in markets that crashed will recover

During the pandemic there were a number of more affordable markets across the country that experienced significant price increases, followed by price declines post-pandemic. I expected home prices in those areas to take longer to recover than the rest of the nation, but I’m surprised by how quickly they have started to grow, with most markets having either matched their historic highs or getting close to it – even in the face of very high borrowing costs. In 2024, I expect prices to match or exceed their 2022 highs in the vast majority of metro areas across the country.

6. New construction will gain market share

Although new construction remains tepid, builders are benefiting from the lack of supply in the resale market and are taking a greater share of listings. While this might sound like a positive for builders, it’s coming at a cost through lower list prices and increased incentives such as mortgage rate buy downs. Although material costs have softened, it will remain very hard for builders to deliver enough housing to meet the demand.

7. Housing affordability will get worse

With home prices continuing to rise and the pace of borrowing costs far exceeding income growth, affordability will likely erode further in 2024. For affordability to improve, it would require either a significant drop in home values, a significant drop in mortgage rates, a significant increase in household incomes, or some combination of the three. But I’m afraid this is very unlikely. First-time home buyers will be the hardest hit by this continued lack of affordable housing.

8. Government needs to continue taking housing seriously

The government has started to take housing and affordability more seriously, with several states already having adopted new land use policies aimed at releasing developable land. In 2024, I hope cities and counties will continue to ease their restrictive land use policies. I also hope they’ll continue to streamline the permitting process and reduce the fees that are charged to builders, as these costs are passed directly onto the home buyer, which further impacts affordability.

9. Foreclosure activity won’t impact the market

Many expected that the end of forbearance would bring a veritable tsunami of homes to market, but that didn’t happen. At its peak, almost 1-in-10 homes in America were in the program, but that has fallen to below 1%. That said, foreclosure starts have picked up, but still remain well below pre-pandemic levels. Look for delinquency levels to continue rising in 2024, but they will only be returning to the long-term average and are not a cause for concern.

10. Sales will rise but remain the lowest in 15 years

2023 will likely be remembered as the year when home sales were the lowest since the housing bubble burst in 2008. I expect the number of homes for sale to improve modestly in 2024 which, combined with mortgage rates trending lower, should result in about 4.4 million home sales. Ultimately though, demand exceeding supply will mean that sellers will still have the upper hand.

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.

Despite the tendency to daydream about moving to a remote destination during the pandemic, new data reveals that a record percentage of Washington residents are choosing to stay where they are. This echoes a national trend, which indicates that between 2019 and 2022, the number of Americans who lived in the same house year over year increased by eight million.

This trend is more pronounced in Washington than in most states. In 2022, approximately 6.57 million Washingtonians – or 85% of the state’s population – lived in the same home that they occupied a year earlier. That’s up from a pre-pandemic rate of 83% staying in the same house between 2018 and 2019.

Moreover, the data shows that the number of people who made even a short-distance move (within the same county) dropped significantly. In 2019, approximately 750,000 Washington homeowners made a nearby move, whereas in 2022 that number fell by 24% to 605,000 homeowners deciding on a local change of address.

Why the tendency to stay put? The pandemic may have spurred the trend locally and nationally. As a point of reference, the Census Bureau’s Current Population Survey in 2000 showed that only about 76% of Washington residents were living in the same house as the year prior.

Age may be a factor, as well.  The tendency to move more often has historically been a younger-adult behavior. The median age in the US was up to 39 in 2022, as opposed to 35 in 2000, suggesting that an aging population is less inclined to go through the upheaval of a move. The current data showed that non-movers were higher in the 30-to-44 and 65-plus age groups. Yet, those same numbers revealed that even in the younger-adult population, the moving rate declined.

Again, a look at Census Bureau data may shed some light on the reasons people move – or stay put, as the case may be. According to the Current Population Survey, 40% of people move because they’d like to own rather than rent, would like to live in a better neighborhood, or would like more space or a nicer home. With the hot housing market experiencing soaring house prices during and coming out of the pandemic, these outcomes may now be harder to achieve.

While there are other factors at play – a decline in marriage and birth rates, for example, which are both life events that spur a move – it’s likely that the most significant catalysts to staying put are rising interest rates and Washington’s rising home prices.

This post was based on information found on seattletimes.com.

As we march steadily into the cooler winter months, the expected seasonal slowdown is upon us. Interest rate increases have continued to influence a quieter-than-usual fall market. Higher mortgage rates reduce buying power, as well as the momentum of move-up buyers and sellers. Fewer sellers mean lower inventory and a reduction in closed sales.

Indeed, the supply of listed homes in our region has continued to decline. As compared to the same month last year, October experienced a 30% decrease in active King County property listings.

If trends hold true to the past three years, the start of winter will bring rising home prices locally. It is expected that median sold prices will rise between December and April, unless rates increase significantly.

In King County, the median price for single-family homes dropped 2% from $903,000 in October 2022 to $882,997 last month. This was a slight bump up from September, and a 14% increase year-over-year. Despite the expected seasonal lull, 33% of homes are selling above list price in an average of just 6 days. This demonstrates a willingness for buyers to compete for the most desirable properties. Condo prices rose 9% year-over-year to $540,000, versus $494,975.

Following modest price gains from August to September, the Seattle residential market saw a 5% decrease in the median sold price for single-family homes between September and October, from $926,000 to $900,000. Inventory dropped slightly, spurring an increase in the number of homes selling over list price by 5% compared to September. Homes sold, on average, in 6 days. Sold condo prices were 10% higher year-over-year, rising from $522,500 in October 2022 to $573,750 last month. By the end of October, Seattle condo inventory was at 3.6 months’ supply, double the amount for single-family homes.

On the Eastside, median sold prices dropped slightly from $1,427,500 in September to $1,420,000 last month, though demand remained high. The portion of homes selling above list price increased to 34% in October, which is more than double the percentage selling over list price at the same time last year. There was also a notable year-over-year difference in months of inventory: 1.5 last month, versus 2.4 in October 2022. Condos on the Eastside sold for about 8% more year-over-year, increasing from a median sold price of $607,500 last year to $657,000 last month.

The October median sold price of a Snohomish County single-family home remained flat year-over-year, at $729,950. Homes selling above list price dropped from 31% in September to 26% last month, the only region covered here with a drop in this metric. That’s still a large increase from October 2022, when 13% of closed sales were over list price. Residential inventory dropped by 38% from October 2022, while the number of listed Snohomish County condos dropped by 23% year-over-year.

The early part of the calendar year typically sees an increase in multiple offers, driven by sellers listing properties in the spring and by a seasonal influx of motivated buyers. With the new year on the horizon and an expected increase in both inventory and buyer activity, now’s the perfect time to chat with your Windermere broker about how to navigate the current market to match your goals.

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