Market Insights | April 2020

 

Our local real estate market is unique and we know that we can’t depend on Seattle real estate news to have a thorough understanding of what’s going on and what to expect here. That’s why Marla Heagle, owner and REALTOR®, prepares a hyperlocal report every month. This in-depth look at the Stanwood and Camano Island market includes key statistics, like listings sold by price point or the number of days on the market, and empowers our agents and our clients with the most up-to-date and relevant information. 

 

Subscribe to Market Insights here!

 

 


April 2020 Market Insights

 

As we continue to adapt to our new normal, I wanted to take this opportunity to share some of the trends we’re seeing in Stanwood and Camano Island real estate.

 

Let’s start with April’s stats! The local market took a hit but wasn’t knocked out – the number of new listings, pending sales, and closed sales decreased but prices increased an average of 17 percent. We also had higher rates of engagement on our virtual home tours, which shows that buyers, sellers, and Realtors® are adopting new tools to keep moving forward through COVID-19.

 

Looking ahead, some of the lasting effects of COVID-19 might include:

 

  • More businesses that choose to operate remotely, which could mean more people living in suburban areas like Stanwood and Camano Island rather than large cities
  • Streamlined real estate processes with the help of digital tools for contracts, notaries, and even home tours
  • A shift in what buyers are looking for, like more spacious homes or more outdoor living spaces

 

As always, we are here to help you navigate these changes and trends! Take a look at the full report for Stanwood and Camano Island and, if you have any questions about the report or about buying or selling your home, contact us! We look forward to continuing to serve you!

View Camano Island Report

View Stanwood Report

 


Posted on May 19, 2020 at 3:06 pm
Windermere Stanwood Camano | Posted in Buying, Selling, We Are Stanwood Camano |

Market Insights | March 2020

Our local real estate market is unique and we know that we can’t depend on Seattle real estate news to have a thorough understanding of what’s going on and what to expect here. That’s why Marla Heagle, owner and REALTOR®, prepares a hyperlocal report every month. This in-depth look at the Stanwood and Camano Island market includes key statistics, like listings sold by price point or the number of days on the market, and empowers our agents and our clients with the most up-to-date and relevant information. 

 

Subscribe to Market Insights here!

 


March 2020 Market Insights

 

The COVID-19 pandemic continues to shape our lives and our economy, but we will continue to work tirelessly to help our clients move their lives forward during these uncertain times. Our homes are more important than ever before – providing tangible value while the stock market fluctuates, and acting now as our shelters, schools, offices, gyms, and more as we all take steps to curb the spread of COVID-19.

 

A quick look at the numbers shows that market conditions still seemed to favor sellers in March, which is common this time of year with limited supply and high demand. Pending sales decreased as expected but average sales prices are up over last year in both Stanwood and Camano Island. We’re also adapting our business practices to keep our clients and our team members safe at this time. According to the Governor’s order, real estate brokers are able to take new listings and send contracts electronically, and arrange for appraisals and inspections to be conducted as needed. Realtors® are also allowed to show listings with strictly limited group sizes, and we’ll continue to implement best practices to keep all parties safe.

 

Take a look at the full report for Stanwood and Camano Island and, if you have any questions about the report or about buying or selling your home, please contact us! We look forward to continuing to serve you!

View Market Insights

 


Posted on April 14, 2020 at 11:50 am
Windermere Stanwood Camano | Posted in Buying, Selling, We Are Stanwood Camano |

Is it time to downsize?

Image Source: Shutterstock 

 

Choosing less space often has to do with a desire to live a life that’s simpler. Whether you’re retiring, want an eco-friendly, low-maintenance lifestyle or your children have moved away, downsizing might be the best option for you. Here are the advantages and disadvantages to consider before making the move and questions to begin asking yourself now.

 

Advantages

  • Increased cash flow.
    • Spend less on your mortgage payment and you are likely to have more money leftover for other needs or desires.
  • More time.
    • Cut down on time spent on household chores such as cleaning and vacuuming which will leave you with more hours in the day to do something more enjoyable.
  • Lower utility bills.
    • Costs less to heat and air condition a small home.
    • Less square footage decreases the amount of energy expended.
    • Reducing energy is better for the environment and it helps keep your home green.
  • Reduced consumption.
    • You would likely buy less since you won’t necessarily have the room for it.
  • Minimized stress.
    • Homeowners who have successfully downsized often feel happier because they are no longer overwhelmed by the demands of a larger home.
    • Less responsibility, less housework to do, increased cash flow and flexibility equals reduced stress.

 

Disadvantages

  • Fewer belongings.
    • Moving into a smaller space would mean you would need to give away or donate furniture, books, kitchen supplies, etc.
  • No room for guests.
    • Hosting holiday dinners might be out of the question for a smaller home.
  • Space restrictions.
    • Less space means you could feel cramped.
  • Lifestyle changes.
    • For long-term homeowners, downsizing means changing a lifestyle.

 

What to consider before downsizing

These questions are important to ask yourself because for some people, downsizing may not be the best option for them.

  1. Does size matter to me?
    1. Think about how much your identity is wrapped in your house.
    2. Is it important for you to have a guest room or a second bathroom?
  2. Will I miss some important things about a more spacious home?
    1. Will moving into a smaller home feel like a step backward?
  3. How will other life events affect my living in a smaller home?
    1. Consider possible scenarios you may not expect such as adult children moving back home or if you plan to add a child.

 

The Cost to You

  1. How much will it cost to replace the furniture?
    1. When you move into a smaller home this means you might have to downsize your furniture to make room.
  2. How much will it cost to get rid of the stuff I don’t need or won’t fit?
    1. It’s important to have a plan for how you’re going to sell or give away the things you don’t need.
    2. Consider things like family heirlooms. What are you going to do with all your antiques or treasures that your smaller home may not be able to accommodate?
  3. How much will I get when I sell my current home, and will it help cover the cost of buying my new home?

 

If you know downsizing is the right option for you, you’re probably asking yourself, “Should I sell first and then buy or buy first and then sell?”. When you’re ready to discuss your options, talk to an experienced Real Estate Agent. 

 

This post originally appeared on Windermere.com


Posted on February 21, 2020 at 2:36 pm
Windermere Stanwood Camano | Posted in Buying, Selling |

Broker’s Perspective – Love it or List it?

Windermere Stanwood-Camano Real Estate Brokers are deeply connected to the issues that face local home-buyers and sellers. In this series of blogs, The Broker’s Perspective, Windermere Stanwood-Camano Brokers provide insight into current Real Estate market trends and topics.

This week we take a look at the popular topic of “Should I move or remodel?” Nancy McClure, a broker from our Camano Island office gives us her perspective on this hot topic.

Original Windermere blog;  Should I Move Or Remodel?


Windermere Broker Nancy McClure gives us her perspective –

Windermere Broker, Nancy McClure

What are the most important factors to consider when trying to make the decision to move or remodel?  

Most decisions with Real Estate ultimately come down to decisions based on Cost or Location.   If you are located in Seattle and accept a job in Spokane, most likely you will move instead of remodeling, basing the decision on your location.

If you love the neighborhood you live in, but would like an updated home, remodeling or moving is generally considered based upon the cost.

If you are looking at remodeling with the intent to move,  the remodeling decisions are usually based upon remodeling costs vs. possible returns.

 

What home renovation projects deliver the best return on investment?

Paint!  Something this small can make a big difference and does not cost a ton.   When you start tearing things apart and renovating large parts of the home, it can be challenging to recoup your investment dollar for dollar.   However, this is probably not the case with a “fixer – upper” that is purchased at a lower price point.  Fixer upper homes generally have more flexibility on larger renovation projects based on the fact that these homes are purchased with the intent to remodel and sell.  In the case of a fixer-upper,  here are a few things that can add good value to the home,

Remodeling the kitchen and bathroom – Kitchen remodels can change the entire feel of a home.  If the kitchen is outdated there is a good chance the bathroom is too!

Adding a bedroom – This can be done by finishing basements and attics or putting a closet in a spare room and can definitely raise the value of the home.

Replacing doors and windows, installing new heating or cooling systems – Energy efficient homes are in demand.

Adding a deck or putting on a new roof – These are just a sample of some exterior projects that will give you an immediately improved look and a higher home value.

Other projects that may add value include replacing siding, adding a garage or carport, repairing front porch, landscaping and resurfacing the driveway.

 

Could your renovations possibly decrease the sale price of your home?

It sure could.  When making the decision to remodel with the intent to sell the home it is important to choose timeless, classic details.  Choosing a color that is not popular, or a layout that is not functional could definitely be detrimental.   Contractors, Interior Designers, and Real Estate professionals can help you with the most sought after details in homes today.

 

Do we have good resources in our local Stanwood – Camano area such as custom builders, licensed contractors, and interior designers?

We do. Both of the Windermere offices have information on local resources. Also, our brokers are deeply connected to the community, so many have personal connections with contractors, builders and much more.  Stop by and we’ll give you a referral, or two!

 

Any parting tips you may want to leave us with?

If you end up selling, don’t forget curb appeal!  Homes that have great curb appeal tend to sell quicker and generally for a better price.

Remodeling a home isn’t quite as easy as HGTV makes it look!  Start with a good support network, know when to hire a professional, do your research and don’t forget to ask your contractors for references before hiring them!  And then go have some fun!


Posted on April 16, 2019 at 3:46 pm
Windermere Stanwood Camano | Posted in Buying, DIY, Selling, We Are Stanwood Camano |

Market Stats February 2019

Every month, Windermere Stanwood-Camano publishes a snapshot of the local real estate market. Our Brokers use this data to help determine listing prices, realistic offers, and tailored advice for their clients. We also like to make this information public, to help you with your real estate journey. Market Stats are provided courtesy of Marla Heagle. 


February 2019 Stanwood – Camano Area Market Stats

If you have any questions about our local statistics, please contact our office and we will put you in touch with an experienced professional broker from one our offices.

Terry’s Corner office 360-387-4663

Stanwood office 360-629-8233

 

View Full Stats – Camano Island       View Full Stats – Stanwood


To read in-depth statistics from January 2019, click on the links below.

View Full Stats – Camano Island  View Full Stats – Stanwood


Matthew Gardner’s Real Estate Forecast for 2019

Year End Market Stats 2018 and MSI

 


Posted on April 3, 2019 at 2:43 pm
Windermere Stanwood Camano | Posted in Buying, Selling |

Should I Move or Remodel?

There are a number of things that can trigger the decision to remodel or move to a new home. Perhaps you have outgrown your current space, you might be tired of struggling with ancient plumbing or wiring systems, or maybe your home just feels out of date. The question is: Should you stay or should you go? Choosing whether to remodel or move involves looking at a number of factors. Here are some things to consider when making your decision.

 

Five reasons to move:

1. Your current location just isn’t working.

Unruly neighbors, a miserable commute, or a less-than-desirable school district—these are factors you cannot change. If your current location is detracting from your overall quality of life, it’s time to consider moving. If you’re just ready for a change, that’s a good reason, too. Some people are simply tired of their old homes and want to move on.

2. Your home is already one of the nicest in the neighborhood.

Regardless of the improvements you might make, location largely limits the amount of money you can get for your home when you sell. A general rule of thumb for remodeling is to make sure that you don’t over-improve your home for the neighborhood. If your property is already the most valuable house on the block, additional upgrades usually won’t pay off in return on investment at selling time.

3. There is a good chance you will move soon anyway.

If your likelihood of moving in the next two years is high, remodeling probably isn’t your best choice. There’s no reason to go through the hassle and expense of remodeling and not be able to enjoy it. It may be better to move now to get the house you want.

4. You need to make too many improvements to meet your needs.

This is particularly an issue with growing families. What was cozy for a young couple may be totally inadequate when you add small children. Increasing the space to make your home workable may cost more than moving to another house. In addition, lot size, building codes, and neighborhood covenants may restrict what you can do. Once you’ve outlined the remodeling upgrades that you’d like, a real estate agent can help you determine what kind of home you could buy for the same investment.

5. You don’t like remodeling.

Remodeling is disruptive. It may be the inconvenience of loosing the use of a bathroom for a week, or it can mean moving out altogether for a couple of months. Remodeling also requires making a lot of decisions. You have to be able to visualize new walls and floor plans, decide how large you want windows to be, and where to situate doors. Then there is choosing from hundreds of flooring, countertop, and fixture options. Some people love this. If you’re not one of them, it is probably easier to buy a house that has the features you want already in place.

 

Five reasons to remodel:

1. You love your neighborhood.

You can walk to the park, you have lots of close friends nearby, and the guy at the espresso stand knows you by name. There are features of a neighborhood, whether it’s tree-lined streets or annual community celebrations, that you just can’t re-create somewhere else. If you love where you live, that’s a good reason to stay.

2. You like your current home’s floor plan.

The general layout of your home either works for you or it doesn’t. If you enjoy the configuration and overall feeling of your current home, there’s a good chance it can be turned into a dream home. The combination of special features you really value, such as morning sun or a special view, may be hard to replicate in a new home.

3. You’ve got a great yard.

Yards in older neighborhoods often have features you cannot find in newer developments, including large lots, mature trees, and established landscaping. Even if you find a new home with a large lot, it takes considerable time and expense to create a fully landscaped yard.

4. You can get exactly the home you want.

Remodeling allows you to create a home tailored exactly to your lifestyle. You have control over the look and feel of everything, from the color of the walls to the finish on the cabinets. Consider also that most people who buy a new home spend up to 30 percent of the value of their new house fixing it up the way they want.

5. It may make better financial sense.

In some cases, remodeling might be cheaper than selling. A contractor can give you an estimate of what it would cost to make the improvements you’re considering. A real estate agent can give you prices of comparable homes with those same features. But remember that while remodeling projects add to the value of your home, most don’t fully recover their costs when you sell.

 

Remodel or move checklist:

Here are some questions to ask when deciding whether to move or remodel.

1.      How much money can you afford to spend?

2.      How long do you plan to live in your current home?

3.      How do you feel about your current location?

4.      Do you like the general floor plan of your current house?

5.      Will the remodeling you’re considering offer a good return on investment?

6.      Can you get more house for the money in another location that you like?

7.      Are you willing to live in your house during a remodeling project?

8.      If not, do you have the resources to live elsewhere while you’re remodeling?

 

If you have questions about whether remodeling or selling is a wise investment, or are looking for an agent in your area, we have professionals that can help you. Contact us today!


Posted on March 19, 2019 at 10:45 am
Windermere Stanwood Camano | Posted in Buying, Living, Selling |

Market Stats January 2019

Every month, Windermere Stanwood-Camano publishes a snapshot of the local real estate market. Our Brokers use this data to help determine listing prices, realistic offers, and tailored advice for their clients. We also like to make this information public, to help you with your real estate journey. Here are Marla Heagle’s key takeaways from January 2019.


Continued Evidence of a Balanced Real Estate

Market in Our Local Area

 

As we dive into 2019 in Stanwood and Camano Island, we are continuing to see signs of a balanced real estate market. These three points were taken from Matthew Gardner’s economic forecast last month, and are ringing true in our local market:

1.  Single Family home prices will rise in 2019, but the rate of growth is trending lower.

Area 2019 Price Forecast
Camano Island +5.7%
Stanwood +7.5%
Snohomish County +5.6%

In January 2019 compared to January 2018, we have seen year over year price growth of .5% on Camano island and 2% in Stanwood. As the year continues, that number is likely to increase.

2. Regional economic growth will still drive housing demand.

3.  The big story for 2019 will be the ongoing move towards a balanced market.

We have seen this move towards a balanced market in our January numbers for Stanwood and Camano Island.  As we reported last month, Camano Island had 2.6 months supply of inventory (MSI) at year end and at the end of January it rose to 3.4 months.  Stanwood had 3.7 MSI at year end and is now 5.1. A true balanced market.

To read in-depth statistics from January 2019, click on the links below.

View Full Stats – Camano Island       View Full Stats – Stanwood


To read in-depth statistics from December 2018, click on the links below.

View Full Stats – Camano Island  View Full Stats – Stanwood


Matthew Gardner’s Real Estate Forecast for 2019

Year End Market Stats 2018 and MSI

 


Posted on February 21, 2019 at 12:29 pm
Windermere Stanwood Camano | Posted in Buying, Selling |

Year End Market Stats 2018

Every month, Windermere Stanwood-Camano publishes a snapshot of the local real estate market. Our Brokers use this data to help determine listing prices, realistic offers, and tailored advice for their clients. We also like to make this information public, to help you with your real estate journey. Here are Marla Heagle’s key takeaways from December 2018.


Are Camano Island and Stanwood

Heading for a Balanced Housing Market?

 

How do we determine if we are in a seller’s, buyer’s, or balanced housing market? It comes down to something called Months Supply of Inventory (MSI). MSI quantifies how many months it would take the market in its current condition to absorb all the active listings. So, we’re easily able to see if the market is favoring buyers or sellers. Generally, a balanced market will have somewhere between four and six months of supply. If supply is less than four months, sellers have gained asking power. If it’s above six months, buyers have gained negotiating power.

MSI is calculated by dividing the current month’s inventory figure by a rolling 12-month calculation of pending sales.

Here’s a glimpse at our local MSI.

 

At the end of December 2018:

  • Camano Island had 2.6 MSI, which is a seller’s market.
  • Stanwood had 3.7 MSI, which is a seller’s market heading towards a balanced market.

 

Let’s look at the difference 10 years ago, at the end of December 2008:

  • Camano Island had 29.1 MSI, which was a buyer’s market.
  • Stanwood had 10.9 MSI, which was also a buyer’s market.

 

If new homes stop entering the market today, MSI equals how many months would it take to sell all the homes currently available for sale. It would take 2.6 months on Camano Island today but would have taken 29.1 months 10 years ago. Times have changed.

 

The chart below shows the Stanwood/Camano Island combined MSI over the past 10 years.

 

Steve Harney, Founder of Keeping Current Matters, said this in a recent blog post:

“Returning to a normal market is a good thing. However, after the zaniness of the last eleven years, it might feel strange. If you are going 85 miles per hour on a road with a 60 MPH speed limit and you see a police car ahead, you’re going to slow down quickly. But, after going 85 MPH, 60 MPH will feel like you’re crawling. It is the normal speed limit, yet, it will feel strange.

That’s what is about to happen in real estate. The housing market is not falling apart. We are just returning to a more normal market which, in the long run, will be much healthier for you whether you are a buyer or a seller.”

 

To read in-depth statistics from last month, click on the links below.

View Full Stats – Camano Island  View Full Stats – Stanwood

 

 

 

 

 


Posted on January 29, 2019 at 11:29 am
Windermere Stanwood Camano | Posted in Buying, Selling |

Investing In a Green Home Will Pay Dividends In 2019

As we step forward into 2019, eco-friendly “green homes” are more popular than ever. Upgrading your home’s sustainability improves quality of life for those residing in it, but it is also a savvy long-term investment. As green homes become more popular, properties boasting sustainable features have become increasingly desirable targets for homebuyers. Whether designing a new home from scratch or preparing your current home for sale, accentuating a house with environmentally-friendly features can pay big dividends for everyone.

While the added value depends on the location of the home, its age, and whether it’s certified or not, three separate studies all found that newly constructed, Energy Star, or LEED-certified homes typically sell for about nine percent more than comparable, non-certified new homes. Plus, one of those studies discovered that existing homes retrofitted with green technologies, and certified as such, can command a whopping 30-percent sales-price boost.

There are dozens of eco-friendly features that can provide extra value for you as a seller. To name a few:

 

Cool roof

Cool roofs keep the houses they’re covering as much as 50 to 60 degrees cooler by reflecting the heat of the sun away from the interior, allowing the occupants to stay cooler and save on air-conditioning costs. The most common form is metal roofing. Other options include roof membranes and reflective asphalt shingles.

 

Fuel cells

Fuel cells may soon offer an all-new source of electricity that would allow you to completely disconnect your home from all other sources of electricity. About the size of a dishwasher, a fuel cell connects to your home’s natural gas line and electrochemically converts methane to electricity. One unit would pack more than enough energy to power your whole home.

For many years, fuel cells have been far too expensive or unreliable. But as technology has improved, so too has reliability. Companies like Home Power Solutions and Redbox Power Systems have increased the reliability of these fuel sources while reducing their size. Much like we’ve seen computers and cell phones shrink in size while improving reliability and power, fuel cells continue to be refined.

 

Wind turbine

A wind turbine (essentially a propeller spinning atop an 80- to 100-foot pole) collects kinetic energy from the wind and converts it to electricity for your home. And according to the Department of Energy, a small version can slash your electrical bill by 50 to 90 percent.

But before you get too excited, you need to know that the zoning laws in most urban areas don’t allow wind turbines. They’re too tall. The best prospects for this technology are homes located on at least an acre of land, well outside the city limits.

 

Green roof

Another way to keep the interior of your house cooler—and save on air-conditioning costs—is to replace your traditional roof with a layer of vegetation (typically hardy groundcovers). This is more expensive than a cool roof and requires regular maintenance, but young, environmentally conscious homeowners are very attracted to the concept.

 

Hybrid heating

Combining a heat pump with a standard furnace to create what’s known as a “hybrid heating system” can save you somewhere between 15 and 35 percent on your heating and cooling bills.

Unlike a gas or oil furnace, a heat pump doesn’t use any fuel. Instead, the coils inside the unit absorb whatever heat exists naturally in the outside air, and distributes it via the same ductwork used by your furnace. When the outside air temperature gets too cold for the heat pump to work, the system switches over to your traditional furnace.

 

Geothermal heating

Geothermal heating units are like heat pumps, except instead of absorbing heat from the outside air, they absorb the heat in the soil next to your house via coils buried in the ground. The coils can be buried horizontally or, if you don’t have a wide enough yard, they can be buried vertically. While the installation price of a geothermal system can be several times that of a hybrid, air-sourced system, the cost savings on your energy bills can cover the installation costs in five to 10 years.

 

Solar power

Solar panels capture light energy from the sun and convert it directly into electricity. Similarly to wind turbines, your geographical location may determine the feasibility of these installments. Even on cloudy days, however, solar panels typically produce 10-25% of their maximum energy output. For decades, you may have seen these panels sitting on sunny rooftops all across America. But it’s only recently that this energy-saving option has become truly affordable.

In 2010, installing a solar system on a typical mid-sized house would have set the homeowner back $30,000. But as of December 2018, the average cost after tax credits for solar panel installation was just $13,188! Plus, some companies are now offering to rent solar panels to homeowners (the company retains ownership of the panels and sells the homeowner access to the power at roughly 10 to 15 percent less than they would pay their local utility).

 

Solar water heaters

Rooftop solar panels can also be used to heat your home’s water. The Environmental Protection Agency estimates that the average homeowner who makes this switch should see their water bills shrink by 50 to 80 percent.

 

Tax credits/rebates

Many of the innovative solutions summarized above come with big price tags attached. However, federal, state and local rebates/tax credits can often slash those expenses by as much as 50 percent. So before ruling any of these ideas out, take some time to see which incentives you may qualify for at dsireusa.org and the “tax incentives” pages at Energy.Gov

Regardless of which option you choose, these technologies will help to conserve valuable resources and reduce your monthly utility expenses. Just as importantly, they will also add resale value that you can leverage whenever you decide it’s time to sell and move on to a new home.


Posted on January 3, 2019 at 3:07 pm
Windermere Stanwood Camano | Posted in Buying, Housing Trends, Selling |

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 | Posted in Buying, Community, Housing Trends, News, Selling |