Lately we have talked about life changes leading to real estate moves. Sometimes moves are brought on by joyful advancements in life and sometimes they are motivated by hardship. Then there are times when your actual house just doesn't fit your life anymore and it is time for something different. Whatever might be calling someone to make a move, they also have to assess the affordability.

There are three aspects to affordability: price, interest rate, and income. Price and interest rate will determine your monthly payment, and your income will provide the means to maintain and build your investment. One way I have been able to help my clients strategize affordability with higher interest rates are some creative financing options.

Most often a home buyer will procure a home loan with a 30-year term and the current interest rate. In the month of August, the 30-year conventional interest rate averaged 7.25%. While 7.25% is reflective of the average over the last 30 years, it is 2-3% higher than what we have experienced over the last 5 years. According to several experts, rates are predicted to decrease as we finish out 2023 and head into 2024. That also means that it is very likely prices will increase when that happens.

I have helped some of my clients overcome the higher interest rates and secure today's prices by helping them arrange with their lender an interest rate buy-down. Sometimes we have even been able to get the seller to financially assist in paying for the buy-down. There are two types of buy-downs: a permanent buy-down and a temporary buy-down.

A permanent buy-down requires about 3% of the purchase price to buy the rate down by a point for the 30-year term of the loan. A good rule of thumb to remember is that every 1-point in rate equals 10% in buying power. For example, if the rate is 7% and you are qualified for a home at $800,000, if the rate went down by 1 point to 6% you could now afford $880,000 and have a very similar payment. Another way to look at this is simply the monthly payment itself. An $800,000 purchase with 20% down with a 6% interest rate would save a buyer $420.82 a month vs. the payment at 7%.

A permanent buy-down is a useful tool and so is a temporary buy-down. It is actually one of the most powerful tools in today's market. It costs far less than a permanent buy-down and with rates predicted to decrease over the next 12-18 months as inflation settles, you could easily find yourself in a position to refinance.

Here is an example, let's say you are shopping for a house and have the same $800,000 budget and a 20% down payment with today's rate of 7%. The monthly principal and interest payment would be $4,257.94. You could do a 2-1 buydown (2 points lower in year one and 1 point lower in year 2) which would have your payment in year one be based on an interest rate of 5% with a monthly principal and interest payment of $3,435.66 - a savings of $822.28 a month. For year two, the monthly principal and interest would be based on 6%, resulting in a monthly payment of $3,837.12, a $420.82 savings. The total savings in monthly payments with the 2-1 buy-down over the two years would be $14,917.18.

The roughly $15,000 in monthly payment savings is paid upfront at closing and in some cases paid by the seller. The buyer still needs to qualify based on the 7% interest rate as the payments will convert to the payment based on the 7% in year three moving forward. The strategy here is to never have the payment increase to 7% amount because the buyer plans to refinance when rates come down and will permanently fix their rate below 7%. A bonus is that if the entire $15,000 credit has not been used yet, in some cases those funds can be applied towards the refinance.

This strategy has been effective in helping buyers secure a monthly payment that is more affordable so they can make a move now based on life's needs and wants. It also helps them secure today's prices. If we find a home that has had a little longer market time, a home seller is likely to assist with the $15,000 credit vs. reducing their price by 3% to accommodate a lower payment for 30 years. The temporary assistance in reducing the payment for 1 to 2 years is a viable tool for both the buyer and seller to create a win-win.

I felt it was important to bring these options to light and to encourage people to not just take today's market at face value. Creativity, collaboration, and calm have led to some of the most rewarding sales this year for both buyers and sellers. When people logically work together to accomplish moves in an environment that seems difficult, they find success. Ultimately, I am here to help my clients match their real estate to their lives despite where the rates are today.

I love rolling up my sleeves and creating a plan to help my buyers and sellers accomplish their goals. It is my mission to help keep my clients informed and empower strong decisions. If you or someone you know are curious about how today's market matches your needs, please reach out.

Thank you to everyone who pitched in during the Summer Food Drive! Through your generosity, we collectively donated $3,060 and 1,503 pounds of food to Volunteers of America Western Washington food banks! This is all going directly into our communities to help our neighbors in need.

Thank you!

There has always been a direct correlation between interest rates and home prices. The rule of thumb has always been when rates go up prices go down, and vice versa. This was temporarily proven true in the summer of 2022 when rates quickly rose by 2% (3.5%-5.5%) over 5 months. It created a price correction in the second half of 2022 as buyers retreated from the market due to affordability. One should note that price acceleration was rapid from May 2020 to May 2022 and in that two-year period prices grew upward of 50% in King and Snohomish Counties. That was an unsustainable pace. In all honesty, this was inflation’s role in the housing market, and increasing the rates was the Fed’s way of getting control.

While there was a correction from May 2022 to January 2023, since then prices have started to grow again despite the rates hovering in the 6-7% range. In fact, the median price is up from the bottom (Jan/Feb 2023) by 13% in King County and 9% in Snohomish County. Further, the median price in July 2023 was even with July 2022 in King County and down by only 2% in Snohomish County. This is a sign of price stabilization. Historically, the impact rising rates have on prices year-over-year is not negative. We are in the midst of proving that same theory.

Believe it or not, the higher rates are keeping prices stable because it is limiting the available inventory for sale. You see, there are plenty of buyers out looking for homes right now, and inventory levels are tight because potential sellers are waiting to make a move because they are holding on to their low rate. Our job market is good, we have people moving to our area and the millennials are out in full force searching for their first homes.

There are two interesting phenomena going on with potential home sellers right now. First, according to ATTOM Data, 68.7% of homeowners have at least 50% equity and only 2.1% have negative equity. This is the number one indicator that we are not in a housing crisis or bubble. Second, according to FHFA, 70% of homeowners with a mortgage have a rate 4% or lower. This is causing people who are no longer happy with where they live to stay a bit longer because they don’t want to give up their payment just yet.

Here’s the deal though, housing is a reflection of life! According to the US Census, 66% of homeowners would like to upgrade to a nicer home with features that better match their lifestyle, and 45% would like to move to a home to better match the changing size of their household. Life changes motivate moves! Many people are waiting out these life changes until rates come down so they can better afford their desired transition. This has put downward pressure on inventory, limiting selection for buyers, hence creating price growth and stabilization.

So, what is going to happen when rates come down? Experts across the board predict that rates will recede as inflation gains control. This will be a gradual process over the next 12-18 months. The biggest indicator will be inflation reaching the 2% year-over-year mark. Once we hit this point, which we are close to, experts predict the Fed will be comfortable easing off the higher rates. This will cause more homes to come to market as the delta between the rate a homeowner currently holds and what they are willing to take on to indulge their desire to move, will become more attainable. Plus, as rates recede it will increase buyer demand.

We find ourselves in a delicate dance with inflation, rates, inventory, and prices. Someone who desires a move has to consider the impact the rates can have on their payment. Many of these buyers are taking the leap and finding creative ways to offset the rate such as ARM financing, rate buy downs, or they are preparing to re-finance their purchase when rates come down. This way they will have secured a good price which is the basis of their loan.

So, do you stay or do you go? According, to the lyrics from the classic song from The Clash, “if I stay there will be trouble, but if I go there will be double.”  This is up to you to decide. Where I can help is to gather the data and help you analyze the market in order to empower you to make the best choice for you and your family. For some, the right time is now and for others, waiting a bit longer will be a good plan.
What I do know, is that when we hit the inflation rate that the Fed is comfortable with and they ease off of rates, the market will tilt. This will be a benefit for some and a challenge for others. In other words, there is not one right answer for everyone and that is where I think I have the opportunity to serve my clients best.

Helping people navigate the ever-changing market is a skill, an art, and a calling. I am here for it and find great satisfaction in helping people make big life decisions that help bring joy, solve problems, and make them money! My job is a huge responsibility and it is an honor to serve my clients. If you or someone you know are wondering about how today’s market conditions affect your goals, please reach out. We can dig into the data, assess your dreams and devise a plan.

 

 

I think we can all agree that we have been on a bit of a wild ride over the last 12 months in the real estate market. When the Fed decided to change its trajectory on interest rates in mid-2022, it created some chaos and confusion.

When big changes happen, it is a natural reaction to pause and wait for some certainty. This happened when the pandemic hit, too. People paused in March and April of 2020 and once May settled in, the market exploded. I have found that data, whether real-time data or historical trends, is incredibly helpful to create clarity.

I am committed to studying and sharing the data and I am also fortunate to have Matthew Gardner, Windermere’s Chief Economist as a source to help guide this research. He speaks to the predictions that were made at the beginning of this year by several industry experts and breaks down their varied theories in this recent article. He also speaks to their renewed predictions that are now very much more aligned with one another and in agreement that prices are not headed in a downward spiral, but are in fact on the rise year-over-year.

Below is a chart I created with hyper-local data reflecting both King and Snohomish counties’ median prices over the last 18 months in relationship to the rising interest rates. While we are off the peak of 2022 when rates were at 5%, we are only slightly lower and up quite significantly from the bottom when rates hit 7%. Proof that the market is sustaining the higher rates is that we have found ourselves back near the 7% this summer and prices have not faltered.


Would the market welcome a drop in the rate? Absolutely! When this happens, which is predicted, we will see buyer demand increase. What we will also see is additional inventory come to market as would-be home sellers will be more comfortable relinquishing their low rate to indulge their need or want for a different home. The high rates are keeping inventory low in a high-rate environment, which is supporting price stabilization and growth. Simply put, the sky is not falling.

The market continues to churn, we are not in a free fall, and prices are stable. If you’ve thought about a move, consider the data and please ask me to help you gain understanding. I can adjust the graph featured here with your local zip code or city to give you an even more thorough look at your investment.

Real estate moves are most often a result of life changes. If you have found yourself questioning whether your four walls currently meet your needs, let’s talk! I will assess your goals and apply the data in an understandable way to help guide the best decision for you today or down the road.

The recovery from the 2022 correction continued in Q2 of 2023. Since December 2022, prices have increased at a rapid rate. Inventory remains tight and absorption is steady due to pent-up buyer demand. Shorter days on market and healthy list-to-sale price ratios illustrate when a seller meets the market with appropriate pricing and is in good condition, a swift and successful sale is in store. Despite higher interest rates the market continues to churn. Rates are anticipated to come down, and when they do competition will increase.

If you are curious about how the trends relate to your goals, please reach out. It is my goal to keep my clients well-informed to empower strong decisions.

Matthew Gardner, Windermere’s Chief Economist, is a valued asset to our organization and our clients. One of the reasons why we are fortunate to have him is his transparency. Every year, Matthew makes predictions for the coming year based on his extensive research and years of experience. Just this week, he reviewed his 2023 predictions and recorded the video below. Most of his predictions were spot on and only two were slightly off. That is pretty good considering crystal balls don’t exist.

In the video recap below, he covers the trajectory of home prices, interest rates, inventory levels, the shift of the work-from-home trend, zoning changes, and affordability. All of these factors are relevant for people making informed decisions about their real estate.

Overall, it is important to note that prices are heading in a positive direction, interest rates may take a bit longer to settle and inventory remains tight. I am seeing buyer demand return to the market and prices have increased since the first of the year.

He also mentions that real estate is local and that trends can vary by location. That is where I can help you. I am deeply invested in understanding the market in the communities and neighborhoods that surround us. If you are curious about how the trends relate to your real estate goals, please reach out. It is always my goal to help keep my clients informed.

 

 

 

 

Windermere Community Service Day

This is the 8th year that my office has spent our Community Service Day working to put fresh produce on the tables of local families who need a little help. We work with the Snohomish Garden Club, planting over a half-acre of veggies and fruits that will be harvested into thousands of pounds of fresh produce over the summer and into the fall.

If you’d like to pitch in, you can donate to our Summer Food Drive, or bring donations to my office, through August 4th. All donations will go to Volunteers of America Western WA food banks.

Since 1984, Windermere associates have dedicated a day of work to complete neighborhood improvement projects as part of Windermere’s Community Service Day. After all, real estate is rooted in our communities. And an investment in our neighborhoods gives us all a better place to call home.

 

If we let the media determine the mood regarding the housing market, it would be time to shut the party down and call it a night. I’m here to report that the celebration is far from over and there is still fun to be had! While it is not all shiny and bright (it never is), we are seeing a pattern of consistent growth and the sky is far from falling.

The latest headline from the Seattle Times claims that prices “have tumbled” from last year. While prices are down from a year ago the story is much more nuanced. The Fed rate hikes slowed things down, but properties are still pending and demand is strong!

In King County, the median price peaked in May 2022 at $1M and is currently at $919,000 (May 2023), which is down 8% from peak to current. Prices hit bottom in January 2023 at $800,000 which was down 20% (the actual tumble) from the peak but are now up 15% from the bottom!

In Snohomish County, the median price peaked in April 2022 at $830,000 and is currently at $767,000 (May 2023), which is down 8% from peak to current. Prices hit bottom in February 2023 at $685,000 which was down 17% (the actual tumble) from the peak but are now up 12% from the bottom!

This was a relatively quick correction that is trending in a positive direction as the market gets used to higher interest rates. Quantitative Easing could not last forever and rates had to go up to combat inflation. During the same time frame above, interest rates dramatically changed.

In May 2022, they averaged 5.5% (the peak) and in January 2023 they averaged 6.75% (the bottom). In fact, they started 2022 at 3.5%, a level we will likely never see again! Currently, rates are hovering in the high 6% and are predicted to slowly recede as we enter the second half of 2023. Proof that buyers have become conditioned to the new normal of rates is that prices have grown from the start of 2023 (January – May 2023): 14% in King County and 11% in Snohomish County, despite rates remaining in the 6% and at times cresting 7%. When they drop to the lower 6% or even the high 5%, expect prices to climb at a faster rate. Buyers should be weighing these effects as they choose when to act. Rates can always be re-financed, but the sale price cannot.

While the homeowners that purchased during those peak months have some time before they regain their home’s value, it will happen. We are a year out from the peak and the last time we had a correction in 2018 it took 17 months to recover. That subsection of sales aside, overall equity levels are strong. Prices are up in King County by 27% from March 2019 to March 2023 and in Snohomish County up 46%. Ten-year gains are astounding at 140% in King County and 179 % in Snohomish County.

While real estate is an investment, we shouldn’t forget it is also where we live, grow, love, heal. It is our refuge, our security, and our joy. Change will always trigger moves despite the rates. This correction and recovery have been challenging and confusing, especially after the disruption of the pandemic. If you think perhaps you are ready for a change and want to know how the current real estate market relates to your plans and goals, please reach out. I am happy to help whether you or considering a move soon or well in to the future. It’s never too early to have the conversation. I look forward to hearing from you!

 

 

 

Windermere Community Service Day

Since 1984, Windermere associates have dedicated a day of work to complete neighborhood improvement projects as part of Windermere’s Community Service Day. After all, real estate is rooted in our communities. And an investment in our neighborhoods gives us all a better place to call home.

This Friday, my office will spend the day with the Snohomish Garden Club working to put fresh produce on the tables of local families who need a little help. We will plant over a half-acre of veggies and fruits that will be harvested over the summer and into the fall.

If you’d like to pitch in, you can donate to our Summer Food Drive, or bring donations to my office, through August 4th. All donations will go to Volunteers of America Western WA food banks.

On April 23rd the Washington State Legislature adjourned after passing 10 new bills that will affect housing. Some of the bills are geared toward creating more transparency around brokerage transactions, some are intended to institute more opportunities for building density to provide more affordable housing, and some are more regulatory to help guide and ease the permitting process for building and development.

The bills that will improve real estate brokerage services are centered in transparency and cleaning up some laws that do not trend with market conditions. As of January 1, 2024, all real estate brokers will be required to engage in a buyer service agreement with the buyers they work with, similar to the requirement of having a listing agreement with a seller (SB 5191). These service agreements, better known as Buyer Agency Agreements (BAA) will address compensation, exclusivity, the duration of the relationship, and establish written consent for dual agency. This will create clearly defined broker representation for buyers from the onset of the relationship.

Short-term seller rent-backs after closing are now carved out of the landlord-tenant act if the rent-back is less than 90 days (SHB 1070). This will ease the angst involved with tenant rights, as the goal of a rent-back is to create a convenient transitionary period that intends for the seller to vacate, minimizing their tenant rights. This change aligns with the trends in the marketplace and makes this solution-based approach less tenuous. Lifetime listing agreements were also shortened (SSB 5399).

Washington State ranks last in the number of housing units per family nationally and officials project that the state will need roughly one million new homes by 2044. Many of the bills that passed last month will create policies to help provide more housing units and affordability. Matthew Gardner, Windermere’s Chief Economist has been speaking about our state’s lack of affordability for years and shares his thoughts here on the HB 1110 which will allow for the development of middle housing.

HB 1110, SB 5258, HB 1042, and HB 1337 were all created to create more housing units. HB 1110 addresses middle housing, SB 5258 modifies several laws relating to the construction of condos and townhomes, HB 1042 enables the creation of housing in existing, underutilized buildings, and HB 1337 will make it easier to build Accessory Dwelling Units (ADUs) in urban growth areas.

SB 5412, SB 5290, and HB 1293 are intended to ease the permitting and design review processes when applying for a building permit. These should help streamline and accelerate getting from point A to point B on a building project. With the goal of providing more housing units, the backend systems needed to be reevaluated to meet these goals in a timely fashion while adhering to important guidelines and procedures.

Lastly, HB 1474 will increase the document recording fees by $100 to fund a new state program to provide down payment and closing cost assistance to people, or heirs, impacted by racially restrictive covenants. This program is set to raise $75 million per year to improve housing affordability. The State also committed over $1.1 billion in budget funds to work towards investing in housing supply and homelessness prevention.

Click here for a detailed review of each new bill and the budget changes. It is always my goal to help keep my clients well-informed about the real estate market and in this case, knowing the direction our state is headed with the laws surrounding real estate and housing. If you have additional questions or want to discuss how these changes may affect your housing goals, please reach out.

 

 

 

 

ATTENTION GARDENERS: Windermere Community Service Day is coming and we’d love your help!

Since 1984, Windermere associates have dedicated a day of work to complete neighborhood improvement projects as part of Windermere’s Community Service Day. After all, real estate is rooted in our communities. And an investment in our neighborhoods gives us all a better place to call home.

Our office will spend June 9th with the Snohomish Garden Club working to put fresh produce on the tables of local families who need a little help. We will plant over a half-acre of veggies and fruits that will be harvested over the summer and into the fall.

If you’d like to pitch in, we are looking for additional veggie starts. Let us know if you have some starts already going or if you would like to prepare some now that you would be willing to donate.

The garden specifically needs:

  • Scallions
  • Snow/Pod Peas (please no shelling peas)
  • Chard
  • Lettuce (the food banks require headed varieties, rather than loose-leaf)
  • Squash (any kind, EXCEPT yellow crookneck)
  • Cabbage/Broccoli/Kohlrabi/Cauliflower/Collards/Kale
  • Peppers (early maturing varieties work great: ~70-day range)
  • Herbs (never enough Basil and Parsley!)
  • Flowers (marigolds, nasturtiums, or any annuals)

It is very important that consumers understand the difference between long-term interest rates and short-term interest rates. Long-term rates involve home mortgages such a conventional 30-year fixed, Jumbo, FHA, and VA loans. Short-term rates involve car loans, credit cards, and Home Equity Lines of Credit (HELOCs). While both types of rates have gone up over the course of the last year, they have not had the same trajectory.

In an effort to combat inflation and slow spending, the Fed has made consistent increases to the short-term rate over the last year. I am sure you are running out of fingers on your hands to count the number of times you have heard this as a top story on the news: “The Fed Raises Rates!”. A huge misconception has been that the rates the Fed are referring to are mortgage interest rates.

As you can see from the chart above, the short-term rate has had a consistent upward trend and the long-term rate has had a more volatile journey. In some cases, when the Fed has increased the short-term rate, the long-term rate has gone down! My point in all of this is to illustrate that media reports are not always about mortgage rates and that it is important to obtain accurate data.

Matthew Gardner, Windermere’s Chief Economist recently recorded a video update featured below that speaks to some of the misconceptions about interest rates, specifically mortgage rates. Many consumers are confused and misinformed which can have consequences. Investing in real estate is the single largest wealth-building opportunity and to be unaware of the latest trends could get in the way of a successful financial picture.

Prices in many markets have already bottomed out from the 2022 correction and mortgage rates have come down off the peak. In some areas, we are already seeing appreciation again! This quote from Matthew sums up where we are headed. “Myself, and every economist I know, believe that rates will slowly pull back as we move through 2023, and I haven’t seen a single forecast suggesting that mortgage rates will rise to a level this country hasn’t seen in decades”.

With inflation slowing and year-over-year CPI (Consumer Price Index) numbers becoming less extreme, mortgage rates are expected to soften. In fact, there are some important reports coming up in May that will tell this story. The wave we have had to ride post-pandemic related to supply chain issues and consumer demand is coming to the shore.

Real estate will remain the cornerstone of wealth in our country. Also consider this: while real estate is an investment is it also where you live. Life changes, good or bad, lead to moves that are not related to current interest rates. All this to say, remain nimble by being well-informed. Knowledge helps us make confident decisions. You can count on me to provide you with the information you need to successfully navigate your real estate decisions. Please reach out if you’d like to discuss how the current trends relate to your goals.

 

 

 

 

 

 

Shred Day & Food Drive was a huge success!

Big thank you to everyone who came by to utilize our free shredding services and drop off food or cash donations for the Volunteers of America Western Washington food banks!

We filled two trucks of shredding and collected over 2,000 pounds of food and $3,372 which will go to our neighbors in need. Thank you for your generosity!

 

 

 

 

ATTENTION GARDENERS: Windermere Community Service Day is coming and we’d love your help!

Since 1984, Windermere associates have dedicated a day of work to complete neighborhood improvement projects as part of Windermere’s Community Service Day. After all, real estate is rooted in our communities. And an investment in our neighborhoods gives us all a better place to call home.

Our office will spend the day with the Snohomish Garden Club working to put fresh produce on the tables of local families who need a little help. We will plant over a half-acre of veggies and fruits that will be harvested over the summer and into the fall.

If you’d like to pitch in, we are looking for additional veggie starts. Let me know if you have some starts already going or if you would like to prepare some now that you would be willing to donate. Our planting day is Friday, June 9th; I can arrange the details with you for drop off or pick up!

The garden specifically needs:

  • Scallions
  • Snow/Pod Peas (please no shelling peas)
  • Chard
  • Lettuce (the food banks require headed varieties, rather than loose-leaf)
  • Squash (any kind, EXCEPT yellow crookneck)
  • Cabbage/Broccoli/Kohlrabi/Cauliflower/Collards/Kale
  • Peppers (early maturing varieties work great: ~70-day range)
  • Herbs (never enough Basil and Parsley!)
  • Flowers (marigolds, nasturtiums, or any annuals)

We are seeing signs of price stabilization and some growth after the market correction of 2022! Illustrated on the front is the up-down-up trajectory that home prices have experienced over the last year. While we are in the midst of measuring the negative difference from the peak prices of the first half of 2022 to now, we are still up 12 months over 12 months, and most recently prices are up from last month.

 

The correction in prices was a result of a 3-point increase in interest rates over the second half of 2022. Data shows the market has recalibrated in 2023 which has increased buyer demand as consumers have become more comfortable with the “new normal”. This has caused prices to stabilize and start to grow month-over-month since January. Days on market are shrinking and sale prices are averaging closer to the list prices, and in some cases are escalating over the list price. It has been an eventful past year highlighting the importance of real-time, accurate information to help empower strong decisions. Moves are motivated by life changes, lifestyle goals, and strategic financial planning. If you or someone you know is curious about how the market relates to these needs, please reach out.

Three key elements to pay attention to when assessing prices and the real estate market.

As we round out the first quarter of 2023, three real-time trends that help us understand what is currently happening in the real estate market are absorption data, interest rates, and inventory levels. Right now, the market is heating up due to seasonality, pent-up buyer demand, and rates finding their new normal. The media often lags in reporting the latest information (pending sale data) and uses closed sale data, which is outdated. I will share frontline market activity, so you are connected to the most current data.

Let’s start with absorption data. Month-to-date (3/1/23-3/27/23), days on market are shrinking and sale price to original list price ratios are climbing. This means that houses sell faster, and negotiations are more competitive for buyers. I have collected data from Snohomish County to King County and analyzed four zip codes: 98296 (City of Snohomish), 98020 (Edmonds), 98155 (East Shoreline), 98117 (Ballard).

Available inventory is constricting due to an increase in absorption and new listings lagging. As we head into spring, we will see a seasonal uptick in new listings which will be welcomed by a healthy buyer audience. Month-to-date, inventory levels based on pending sales show we are in a seller’s market (0-2 months). Months of inventory is calculated by taking the number of available homes and dividing it by the number of pending sales. If no new homes came to market the trend suggests we would sell out of homes in this amount of time. I pulled the data for the four zip codes to represent a sampling of both Snohomish and King Counties.

Both of the trends above, absorption and inventory, have been determined by buyers becoming more comfortable with the new normal of interest rates. The correction in the market that we experienced in 2022 was a result of a 3-point increase in interest rates. After prices adjusted to levels that would work with the higher rates, buyers started to return to the market. 2-3% and maybe even 4% interest rates will be folklore we tell our grandchildren about. People that want to make a move have come to terms with adapting to the higher rates and making these important life transitions. Today’s rates are much more in line with the average over the last 30 years.

At the start of 2023, the 30-year fixed mortgage was at 6.48%, then dropped to 5.99% in early February, peaked at 7.1% in early March, and is now back down to 6.54% at press time. Rates have been volatile as the Fed tries to manage inflation. You can access a video below from Matthew Gardner explaining the effect of Fed decisions, the recent bank failures on interest rates and the real estate market overall.

One item to note is that mortgage rates are long-term interest rates, and when you hear about the Fed raising rates they are referring to short-term rates such as car loans, credit cards, and home equity loans. The media does not make that distinction, often confusing the public. In fact, in some cases when the short-term rate has been increased, we have seen mortgage rates drop. Here is a great website to follow to get a real-time read on rates.

Interest rates finding their way, the psychological acceptance of the new normal, and people needing to make moves to adapt to their life changes have led to prices starting to stabilize and even grow in some markets. In analyzing the month-to-date median price data for the four zip codes, it appears prices are leveling and growth is happening or will be in the near future.  The good news is that 93% of all homeowners in the U.S. have positive home equity and 48% of homeowners have more than 50% equity.

During this time of change, it is important that each neighborhood and price point is researched individually. From the four zip code breakdowns above, the trends vary.

When I am asked the question, “How’s the Market?”, I am always curious to know what you have heard and what you want to learn about. Sweeping statements can be misleading so I am committed to diving into the data to educate my clients on how the trends affect their investments and their lifestyle.

I hope you call on me when your curiosity is piqued, or you have an emergent need in your world related to real estate. I take pride in understanding the latest trends and helping you apply them to your goals. Also, if you know of anyone that needs real estate help, please pass my name along or get me in touch with them. Your people are my people and helping them stay well-informed to empower strong decisions is my mission. As we encounter change and recalibrate, this expertise will be more important than ever; I am honored to have your trust and endorsement.

 

 

 

 

 

 

 

 

You’re invited to our annual Paper Shredding Event & Food Drive. We partner with Confidential Data Disposal to provide a safe, eco-friendly way to reduce your paper trail and help prevent identity theft.

Saturday, April 15th, 10AM to 2PM*
4211 Alderwood Mall Blvd, Lynnwood
Bring your sensitive documents to be professionally destroyed on-site. Limit 10 file boxes per visitor.

This is a paper-only event. No x-rays, electronics, recyclables, or any other materials.

We will also be collecting non-perishable food and cash donations to benefit Volunteers of America Western Washington food banks. Donations are not required, but are appreciated. Hope to see you there!
*Or until the trucks are full