By Evan Caldwell | Jan. 29, 2019
Stanwood, Wash. – Economic growth doesn’t come without some burden.
“We are suffering from our own successes,” said economist Matthew Gardner. “We have a robust economy, and that means growing pains.”
The solid economy equates to more jobs — and more people — moving to the region, putting continued pressure on infrastructure and housing markets, he said. Gardner spoke about the national, state and local economic past, present and future to about 250 people at an economic forum Friday, Jan. 24, at the Camano Center.
“If you want a job, you can certainly find a job,” said Gardner, citing Snohomish County’s low 2.5% unemployment rate. “And jobs and income growth should increase this year.”
Snohomish County continues to be one of the fastest-growing counties in the nation. By 2025, an estimated 250,000 people are predicted to join the 800,000 already living in the county, according to estimates by the state Office of Financial Management.
However, finding affordable places to live is the current challenge, said Gardner,
Gardner is the chief economist for Seattle-based Windermere Real Estate and also sits on the Washington Governor’s Council of Economic Advisors. He 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 UW, where he also lectures in real estate economics.
“People are coming, that’s for sure, you can see it in the housing demand,” he said. “We need to be building more homes.”
In the Stanwood and Camano ZIP codes of 98292 and 98292, the number of new listings per month continued a steady downward trend in 2019, according to Northwest MLS data. In December 2019, there were 129 homes for sale in the area, down from 148 in December 2018.
Prices have climbed. The average median price for a home in Stanwood increased to $443,000 in 2019 from $430,000 in 2018 and $389,995 in 2017, according to Northwest Multiple Listing Service data. On Camano Island, the median cost of a home rose to $434,000 in 2019 from $410,000 in 2018 and $394,975 in 2017.
“Because inventory is so tight, housing prices will continue to rise in 2020 .. and it could be a very tight market for a very long time,” Gardner said. “So, why aren’t there more homes for sale? They’re living in them longer and moving less frequently for jobs.”
Americans nowadays are staying in their homes for about eight years before moving – up from four years from 2000-09, according to Attom Data Solutions, a real-estate data firm.
In addition to newcomers, millennials are starting to enter the housing market, adding increased pressure in the first-time homebuyer category, Gardner said. Even the few hundred new homes and about 150 new apartment units planned to be built in Stanwood in the next few years are insufficient to meet demand, Gardner said.
“To better compete, we need to create housing people can afford to live in — the teachers, the firefighters,” he said. “And certainly cities will need to address infrastructure needs, and governments will need to work on mass transit options.”
However, several factors can stymie new home construction, such as cost of land and materials, permitting constraints and an expensive construction workforce. In Snohomish County in 2019, there were 2,221 permits to build new single-family homes, down from 5,719 permits in 2005. On Camano in 2018, there were 375 permits for new home construction, down from a high of 752 in 2005.
Gardner said the U.S. economy is due for a minor recession in the coming years. The U.S. was last in recession from 2007-09.
“We might have a recession in 2021 in some segment of the economy, but it’ll be OK; it’ll be modest,” Gardner predicted, citing data showing major companies slowing the pace of hiring in the run up to the presidential election. “What do companies do when they’re worried? Nothing. Like a deer in headlights, they freeze, they’re being cautious.”
This article was originally published on goskagit.com.