Local economy finding ‘balance’

Economist Matthew Gardner motioned his outstretched hand horizontally through the air. “Balance,” he said. “That’s what we’re trending back to.”

Gardner was addressing some 250 people during an economic forum Friday, Jan. 26, at the Camano Center.

After nearly 20 years of volatility in the housing market — the early 2000s boom, the Great Recession and the ensuing recovery — the economy should return to that of one resembling the 1990s with slow and steady growth, he said.

After huge leaps in home prices during the past few years in the Stanwood-Camano area, price increases should slow to about 5 percent this year, Gardner projects.

“It’s not bad — a move back to balance — it’s just that most people don’t remember what a balanced market looks like,” said Gardner, chief economist at Windermere Real Estate in Seattle. “Many people have only known volatility.”

Prices for homes increased about 10 percent in Stanwood, rising from an average median price of $389,995 in 2017 to $430,000 in 2018, according to Northwest Multiple Listing Service data. On Camano Island, the cost of a home rose 3.7 percent, increasing from $394,975 to $410,000.

The biggest change last year was the drop in the number of homes for sale in spring, which drove up prices because what few homes were for sale didn’t stay long on the market. Local housing inventory spent the rest of the year steadily rebounding from some of its lowest points ever in spring.

Further complicating inventory levels is a smattering of interesting trends: People choosing to live in their homes longer; constraints for homebuilders, such as a shortage of workers and costly regulations; people increasingly opting not to pull up roots and move for a new job; and people working longer instead of retiring.

Meanwhile, millennials are starting to search for homes, which is keeping demand high.

“Millennials are doing everything we did, just about five years later in life than we did,” Gardner said.

One of that generation’s largest impediments to buying a home has been the lack of wage increases in the past few years — a trend Gardner sees as reversing this year.

“Companies are having a really hard time finding workers,” he said. “To get them, you’ve got to pay them. And I think that will kick in this year.”

However, Gardner warned that the U.S. economy also is prime for a recession.

“Quite frankly, we’re due … we’re in the second longest economic expansion in U.S. history,” he said. “But it will look nothing like the Great Recession.”

He predicted a recession similar to that of 1991 where the economy posted a few quarters of negative economic growth.

Several factors could cause the recession — a trade war, the Federal Reserve raising rates too quickly, over-leveraged companies. With the U.S.’s gross domestic product growth slowing, it may take just one economic event to send growth below zero.

“There’s always an outside shock that causes a recession,” Gardner said. “But this one will not be caused by housing.”

During the Great Recession’s housing crisis, home values decreased — the only time that happened during a modern recession.

“Overall, we’re positioned well here,” he said. “I don’t see anyone here more exposed than elsewhere.”

Contact reporter Evan Caldwell at ecaldwell@scnews.com and follow him on Twitter @Evan_SCN for updates throughout the week and on Instagram @evancaldwell.scn for more photos.

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Posted on January 30, 2019 at 8:43 am
Windermere Stanwood Camano | Category: News

2019 Economic and Housing Forecast

What a year it has been for both the U.S. economy and the national housing market. After several years of above-average economic and home price growth, 2018 marked the start of a slowdown in the residential real estate market. As the year comes to a close, it’s time for me to dust off my crystal ball to see what we can expect in 2019.

 

The U.S. Economy

Despite the turbulence that the ongoing trade wars with China are causing, I still expect the U.S. economy to have one more year of relatively solid growth before we likely enter a recession in 2020. Yes, it’s the dreaded “R” word, but before you panic, there are some things to bear in mind.

Firstly, any cyclical downturn will not be driven by housing. Although it is almost impossible to predict exactly what will be the “straw that breaks the camel’s back”, I believe it will likely be caused by one of the following three things: an ongoing trade war, the Federal Reserve raising interest rates too quickly, or excessive corporate debt levels. That said, we still have another year of solid growth ahead of us, so I think it’s more important to focus on 2019 for now.

 

The U.S. Housing Market

Existing Home Sales

This paper is being written well before the year-end numbers come out, but I expect 2018 home sales will be about 3.5% lower than the prior year. Sales started to slow last spring as we breached affordability limits and more homes came on the market. In 2019, I anticipate that home sales will rebound modestly and rise by 1.9% to a little over 5.4 million units.

Existing Home Prices

We will likely end 2018 with a median home price of about $260,000 – up 5.4% from 2017. In 2019 I expect prices to continue rising, but at a slower rate as we move toward a more balanced housing market. I’m forecasting the median home price to increase by 4.4% as rising mortgage rates continue to act as a headwind to home price growth.

New Home Sales

In a somewhat similar manner to existing home sales, new home sales started to slow in the spring of 2018, but the overall trend has been positive since 2011. I expect that to continue in 2019 with sales increasing by 6.9% to 695,000 units – the highest level seen since 2007.

That being said, the level of new construction remains well below the long-term average. Builders continue to struggle with land, labor, and material costs, and this is an issue that is not likely to be solved in 2019. Furthermore, these constraints are forcing developers to primarily build higher-priced homes, which does little to meet the substantial demand by first-time buyers.

Mortgage Rates

In last year’s forecast, I suggested that 5% interest rates would be a 2019 story, not a 2018 story. This prediction has proven accurate with the average 30-year conforming rates measured at 4.87% in November, and highly unlikely to breach the 5% barrier before the end of the year.

In 2019, I expect interest rates to continue trending higher, but we may see periods of modest contraction or levelling. We will likely end the year with the 30-year fixed rate at around 5.7%, which means that 6% interest rates are more apt to be a 2020 story.

I also believe that non-conforming (or jumbo) rates will remain remarkably competitive. Banks appear to be comfortable with the risk and ultimately, the return, that this product offers, so expect jumbo loan yields to track conforming loans quite closely.

 

Conclusions

There are still voices out there that seem to suggest the housing market is headed for calamity and that another housing bubble is forming, or in some cases, is already deflating. In all the data that I review, I just don’t see this happening. Credit quality for new mortgage holders remains very high and the median down payment (as a percentage of home price) is at its highest level since 2004.

That is not to say that there aren’t several markets around the country that are overpriced, but just because a market is overvalued, does not mean that a bubble is in place. It simply means that forward price growth in these markets will be lower to allow income levels to rise sufficiently.

Finally, if there is a big story for 2019, I believe it will be the ongoing resurgence of first-time buyers. While these buyers face challenges regarding student debt and the ability to save for a down payment, they are definitely on the comeback and likely to purchase more homes next year than any other buyer demographic.

If you enjoyed this article and would like to hear more about the market forecast join us and Matthew Gardner Jan. 25 at 6 PM at the Camano Center on Camano Island. Space is limited, reserve your seat here!

Posted on December 30, 2018 at 12:08 pm
Windermere Stanwood Camano | Category: Buying, Community, Housing Trends, News, Selling

This quirky century-old schoolhouse is yours for $695,000

The two-acre property on the Stillaguamish River in Silvana includes a replica Old West town.

SILVANA — The old schoolhouse here and the quirky property it sits on, complete with a Wild West-style town in the back yard, is up for sale.

The asking price is $695,000.

The school was built around 1907, part of the Silvana School District that eventually was absorbed into the Arlington School District.

A larger, two-story school was constructed later. Lessons were moved there, and the older schoolhouse became a gymnasium.

The 1907 school outlasted its newer neighbor, which has been torn down. The building off Pioneer Highway — with white walls and a red roof — has been a private residence for at least two decades.

Michael Berg, 71, bought the school and property in 1997 for $80,000. He estimates he’s put upward of $400,000 into improvements. He lives there and uses it as an art studio, mainly for metal and bead work.

A European style fountain, multiple outbuildings and lawn sculptures dot the landscape of the old Silvana Schoolhouse. (Kevin Clark / The Herald)

A European style fountain, multiple outbuildings and lawn sculptures dot the landscape of the old Silvana Schoolhouse. (Kevin Clark / The Herald)

The building has been raised on a foundation above the 100-year flood level. A new bell tower sits on top. A little white chapel, saloon, restrooms, changing rooms, clubhouse, fire pit, fountains and greenhouse are among the features out back. The large yard has been the site of weddings, family reunions and memorials.

A photo album shows the building two decades ago, a shell. It’s still not finished inside, but there is electricity, plumbing and telephone line, along with the new foundation, windows and other improvements.

The replica Old West town out back was purchased around 1998 from a man in Lake Stevens and moved to Silvana. Behind the yard, a field spreads out, and then there’s the Stillaguamish River. Trains sound their whistles as they rumble over nearby tracks.

The view from the back porch of old Silvana Schoolhouse (Kevin Clark / The Herald)

The view from the back porch of old Silvana Schoolhouse (Kevin Clark / The Herald)

Berg plans to move to Arizona, where he has family. He’d like to sell to someone who will improve and enjoy the property.

“I really love it,” he said. “I think whoever buys it will really love it, too.”

Molly Alumbaugh, a Realtor with the Windermere offices in Stanwood and Camano Island, said the property is definitely one of the more interesting ones she’s worked on.

The building is about 3,300 square feet, including unfinished areas. The property includes about two acres.

The Silvana School and its pupils in 1908. (Courtesy of Robin Monson Sather. Published in “Early Stillaguamish Valley Schools” by the Stillaguamish Valley Genealogical Society)

The Silvana School and its pupils in 1908. (Courtesy of Robin Monson Sather. Published in “Early Stillaguamish Valley Schools” by the Stillaguamish Valley Genealogical Society)

Most of the people Alumbaugh has heard from so far are interested in the schoolhouse and yard as an event venue, she said. They like its history and character.

“With rustic farmhouse and Western weddings all the rage, someone could really go to town with this,” she said.

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Posted on August 31, 2018 at 11:50 am
Windermere Stanwood Camano | Category: News

Letter: Thanks to neighborhood, Camano’s National Night Out was a success

Dear Editor: Camano neighbors gathered Aug. 7 at the Utsalady Ladies Aid Building for a giant block party to celebrate a night out against crime. Along with food and fun, information was available from local resource groups for making the community and neighborhoods on Camano Island safer places.

Participating groups were: Camano Island Fire and Rescue, Island County Sheriff Mark Brown and Sheriff’s Citizens Patrol, Camano Law Enforcement and support foundation, Island County Animal Patrol, Stanwood/Camano Amateur Radio Club & Amateur Radio Emergency Service, Camano Preparedness Group, American Legion, Camano Community Center, Island County Transit, Island County Chamber of Commerce, Windermere Real Estate and Utsalady Ladies Aid.

The Utsalady Ladies Aid members and I want to thank the neighborhood residents, the local law enforcement agencies and others for participating in this event and bringing to us important information about crime prevention and preparedness.

Thanks to everyone involved in making this first National Night Out celebration on Camano Island so successful.

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Posted on August 20, 2018 at 10:21 am
Windermere Stanwood Camano | Category: News

Curbed Seattle

1906 schoolhouse—plus a saloon and a chapel—listed for $695K

Like your own little old-timey town!

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Whether you’re looking to open an event venue or just for some unique digs, here’s something for you: a two-acre property in Silvana, a Snohomish County town with a population of 90 or so people, featuring a collection of vintage buildings, from a chapel to a saloon. But the centerpiece is really the stately 1906 schoolhouse.

The exterior of the building maintains much of the original character, with white brick and French doors. Inside, it’s very visibly mid-remodel although that means the place comes with a brand-new foundation above the flood plain and all new windows, adding a little longevity to the building. Some decorative elements are already taken care of, too, including vintage lights salvaged from an Ellensburg theater.

Much of the schoolhouse is still intact, though, including the bell tower.

The grounds are full of extra surprises and explorable places, including a saloon, an old shed (currently storing the schoolhouse’s original windows), an adorable chapel, and several other outbuildings, all wood-paneled and evoking kind of an Old West feel.

In a best-of-both-worlds situation, all the buildings feature underground wiring and power.

Outdoor space has been cultivated, too, including a fire pit area, picnic tables, a fountain, and a patio surrounding a stilted house.

New landscape elements can get their start in a greenhouse—also vintage, built in 1920—on the grounds. Its design evokes the schoolhouse, with an ornamental peak that nods to the bell tower.

 

View the Listing Details

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Posted on August 17, 2018 at 11:37 am
Marla Heagle | Category: Buying, News, Selling

Rotary announces parade winners

Seventy-six entries in this year’s Stanwood Camano Community Parade marched west through downtown Stanwood for about hour on Saturday, Aug. 4.

Dan Sailer, chair of the parade committee, said kids, teens and adults came ready to see a grand parade with entries from all over the area competing for top honors.

The parade, hosted by the Stanwood Camano Rotary, began with a flyover by the Black Jacks and featured various groups, bands and performers —many tossing handfuls of candy to the children lining the route.

Among the dignitaries were Grand Marshal Jeff Ericson. Sailer said the parade is made possible by local sponsors, including Josephine Caring Community, Stanwood Redi-Mix, Windermere Real Estate, Camano Island Management, Les Schwab, Greenworks, and The UPS Store.

“The Rotary Parade Committee would like to thank the following people for making this year’s Parade possible: Trevor Harrison; city of Stanwood Public Works; Stanwood Police Department; announcer Don Wick; Four Square Church for supplying the PA system; tables and chairs; judges Terry Vedders, Krystal Sunburg, Kjersti Sunburg and Jaime Eagle; and the Country Store for providing their parking lot as a staging area for the parade,” Sailer said. “And of course the amazing people of Stanwood, Camano Island and Warm Beach for coming out and supporting the Parade year after year.”

Parade Winners

Best of Show: Cedarhome Baptist Church
Band/Musical: Stanwood 4-Square Church
Equestrian: Ixtapa
Best Service Club: Lions
Best Float: Sons of Norway
Best Auto: Windemere
Drill/Marching: Stanwood High School Cheer
Youth Category: Stanwood Youth Football and Cheer

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Posted on August 7, 2018 at 10:20 am
Windermere Stanwood Camano | Category: News

Camano Island community made Soap Box Derby track possible

Letter to the Editor

These past weeks, I have been repeatedly reminded of why my wife, Marla, and I chose to make the Stanwood-Camano community our home. During our recent efforts to raise funds and construct the new Soap Box Derby Headquarters and Track at our Arrowhead Ranch on Camano Island, we were greeted time and again with support, encouragement, and excitement. Due to this, we were able to complete the track on budget and on time for last month’s annual Windermere Soap Box Derby event with great success and fanfare.

More than 70 kids from across the state of Washington came out to race in this year’s derby, two of which get to advance to the World Championships in Akron, Ohio, later this summer. Our hope with this event is to provide a positive atmosphere for molding childhood memories. Further, we’re putting our stamp on the map as a community that revolves around its people; a place where businesses and families can thrive with mutual support.

I would like to extend our heartfelt gratitude to everyone who has and continues to contribute to this great event. The participating families, volunteers, donors, and spectators all helped make this year’s derby the greatest yet. Hats off to you all!

Randy Heagle, Owner of Windermere Stanwood and Camano Island

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Posted on July 14, 2018 at 10:24 am
Windermere Stanwood Camano | Category: News

Stanwood-Camano community made soap box derby move possible

Dear Editor: These past weeks, I have been repeatedly reminded of why my wife, Marla, and I chose to make the Stanwood-Camano community our home. During our recent efforts to raise funds and construct the new Soap Box Derby Headquarters and Track at our Arrowhead Ranch on Camano Island, we were greeted time and again with support, encouragement and excitement. Due to this, we were able to complete the track on budget and on time for last month’s annual Windermere Soap Box Derby event with great success and fanfare.

More than 70 kids from across the state of Washington came out to race in this year’s derby — two of whom will advance to the World Championships in Akron, Ohio, later this summer.

Our hope with this event is to provide a positive atmosphere for molding childhood memories. Further, we’re putting our stamp on the map as a community that revolves around its people; a place where businesses and families can thrive with mutual support.

I would like to extend our heartfelt gratitude to everyone who has and continues to contribute to this great event. The participating families, volunteers, donors and spectators all helped make this year’s derby the greatest yet. Hats off to you all — with gratitude.

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Posted on July 9, 2018 at 10:18 am
Windermere Stanwood Camano | Category: News

Gravity-Powered Fun

Mattea Black sat in her soap box derby car grinning ear-to-ear while waiting for her race.

“It’s just so much fun,” the 10-year-old Stanwood Elementary School student said. “I don’t know why you wouldn’t want to race.”

Black, who would go on to finish fourth in the Super Stock Division, was one of 72 kids racing down the new track Saturday at the 11th annual Windermere Stanwood-Camano Soap Box Derby.

Addison Inman, 11, of Camano Island, won the Stock Division in the Crow’s Nest car, and Adrina Kuehlwein, 9, of Stanwood won the Super Stock Division racing the Oso Strong car. It’s Inman’s second year racing and Kuehlwein’s first.

Both champions and their families win a paid trip to Akron, Ohio, for a week in July to compete in the 81st All American Soap Box Derby. Champions at the All-American compete each year for the title of world champion and more than $36,000 in college scholarships.

The Stanwood-Camano derby hosted competitors ages 7 to 17 in two groups. In the stock division, the combined weight of the stock car, wheels and driver cannot exceed 200 pounds. For the super stock division, the combined weight cannot exceed 240 pounds. Stock division drivers must be age 7-13; super stock drivers must be ages 9-17.

The derby was held for the first time at Arrowhead Ranch on Camano Island, moving from Stanwood. The event attracted more than 1,000 spectators to the sun-soaked ranch for a day of racing, food and fun, said Christie Connors, Stanwood Camano Soap Box Derby director.

“The community came out, even people who weren’t attached to racers,” Conner said. “It was a real positive family experience.”

In addition, the 1,000-foot long track is at a more gradual grade than the Stanwood street, getting a big thumbs up from the racers.

“The other track (in Stanwood) is faster, this is a more steady speed,” said 12-year-old Jenna Sanders, who has raced the past five years. “You’ve got to stay straight and stay low.”

Kuper Stoner, 9, agrees.

“It’s all about staying low and going straight,” the Utsalady Elementary student said. “It’s fun. I feel like it tests me if I can become a real driver. And I love the breeze on my face as I go down.”

As the only soap box derby in Washington, this event attracts racers from throughout the Northwest.

First-time racer Tabatha Holm, driving the Davis Place Teen Center Car, won the Sportsmanship Award. Best in Show went to Adam Garcia of the Gerber Collision car in the Stock Division and to Micah Knowles the Spartan Warrior car in the Show Super Division.

Stock

1st Place Addison Inman

2nd Place Bella Siddle

3rd Place Graham Gilday

4th Place Carter Priszner

5th Place Bentley Knowles

6th Place Ryan Slusser

7th Place Lillian Jacobson

8th Place Anthony Yuchasz

Super Stock

1st Place Adrina Kuehlwein

2nd Place Auroaru Bosecker

3rd Place Braddock Johnson

4th Place Mattea Black

5th Place Ryker Belles

6th Place Cheyenne McNeely

7th Place Ellie Mac Donald

8th Place Jenna Sanders

Contact reporter Evan Caldwell at ecaldwell@scnews.com and follow him on Twitter @Evan_SCN for updates throughout the week and on Instagram @evancaldwell.scn for more photos.

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Posted on June 19, 2018 at 10:16 am
Windermere Stanwood Camano | Category: News

Brand-new track, permanent Camano home for Soap Box Derby

Races involving 73 cars are on Saturday at a converted ranch where striped pavement belongs to kids.

CAMANO ISLAND — The cars sat in rows inside a big red barn, recently renovated.

It was quiet at the ranch-turned-racetrack last week.

It won’t be on derby day.

The cars were built by drivers ages 7 to 17, supervised by parents, grandparents, friends and volunteers. They’ll be raced in the 11th Stanwood-Camano Soap Box Derby on Saturday. Two winners from the day-long event head to Akron, Ohio, for a national competition in July.

The Stanwood-Camano race has drawn hundreds of spectators in past years. 12188815_web1_M4a-SoapBoxPrep-edh-180607-0305-2-1200x789.jpg

This year, instead of speeding down the slope of a closed city street in Stanwood, the racers will hurtle down a freshly paved track on an idyllic Camano Island property. A double yellow line splits the new black pavement into two lanes from the top of the hill to the end of the track, beyond which lies a green field and a ridge of trees.

Randy and Marla Heagle, who own the local Windermere Real Estate offices and started the event a decade ago, always had a vision to build a permanent home for the Soap Box Derby. They wanted someplace that wouldn’t inconvenience neighbors and traffic with a road closure, and where drivers could practice more often. They also see opportunities for more events, including regional rally races and team building activities for adults.

The couple bought the 20-acre property at 615 Arrowhead Road two years ago and began fixing it up. The Arrowhead Ranch was in rough shape, Randy Heagle said. They hauled four bins of garbage out from the barn, which has been transformed into derby headquarters.

Last week, workers were finishing putting in guardrail along the track.

“I just want to build a place that helps give kids memories, and when they look back at being a kid on Camano Island, this is one of those hero moments,” Marla Heagle said.

They started the derby because they wanted an event that brought together kids, businesses and the community. Ten years from now, Randy Heagle pictures derby cars on display in nearly every local business so when people arrive in Stanwood, they know it’s a derby town.

There are 73 cars for this year’s race, up from 24 the first year. Businesses sponsor many of the cars so that children can participate regardless of family income. Some private donors also have offered to cover the entry fee for children who otherwise couldn’t afford it, Randy Heagle said. Attending as a spectator is free.

There aren’t many Soap Box Derby races in the Pacific Northwest that can qualify a racer for the championship in Akron. This is the only one in or near Snohomish County. One local driver has placed sixth nationally and hauled home a large, shiny trophy.

“The kids can practice a lot more now,” Randy Heagle said. “Our goal is hopefully in the next five years we get an Akron champion.”

They’ve spent about $125,000 on building the track and derby headquarters, the Heagles said. A little more than $30,000 has been donated, and they’ve received contributions such as free use of heavy equipment. They are accepting donations at gofundme.com/buildatrack.

They’ve been working with the nonprofit Stanwood Camano Community Resource Center and dozens of volunteers. Windermere employees volunteer with the derby as their annual service project, and former drivers have offered to come back and help, too. One wants to do an Eagle Scout project at the new track.

“I think of all the people who have given time, effort, encouragement,” Randy Heagle said. “We truly couldn’t do it without them.”

On Saturday, people can bring camp chairs, pop-up tents and blankets, Marla Heagle said, and the easiest parking is at nearby Utsalady Elementary School.

The derby starts at 9 a.m. and is expected to continue all day.

Kari Bray: 425-339-3439; kbray@heraldnet.com.

Full article.

Posted on June 18, 2018 at 8:21 am
Windermere Stanwood Camano | Category: News