Western Washington I 2014 Second Quarter Market Update

Windermere Real Estate is proud to partner with Gardner Economics on this analysis of the Western Washington real estate market. This report is designed to offer insight into the realities of the housing market. Numbers alone do not always give an accurate picture of local economic conditions; therefore our goal is to provide an explanation of what the statistics mean and how they impact the Western Washington housing economy. We hope that this information may assist you with making an informed real estate decision. For further information about the Whidbey Island Real Estate Market, give us a call and we'll talk about how our local statistics impact our local market.

Regional Economics

The post-recession job recovery continues unabated in Western Washington, with all of the counties contained within this report either exceeding their pre-recession peak or approaching it. Washington State added just shy of 84,700 jobs over the past 12-month period, representing a very respectable annual growth rate of 2.8 percent. In total, all of the counties covered added 64,190 jobs (also a 2.8 percent increase over a year ago). If there was a spring bump, it certainly came in the second quarter, with the area adding 52,180 jobs.

The tri-county area of King, Snohomish, and Pierce Counties still dominates in terms of total growth, adding 42,400 jobs in second quarter—an increase of 60,300 jobs compared to a year ago. King County employment is now four percent higher than its pre-recession peak; Snohomish is one percent higher, and Pierce County now matches its 2008 peak employment numbers.

Looking more closely at the county figures, King County (+4.0%) maintains its top position in terms of employment growth; this is followed by Pierce County (+3.5%), and Cowlitz County which continues to outperform with the addition of 800 jobs (+2.2%).

In Western Washington, losses were seen only in Grays Harbor County which shed 180 jobs over the past year. That said, this county added 720 jobs in second quarter indicating a quite substantial turnaround. Employment in Jefferson and Kitsap Counties matched that seen a year ago but, again, both counties added jobs in the quarter.

Turning our attention to unemployment rates in the region, I am not surprised to see all counties showing improvement in total unemployment. This is particularly important because the labor force grew over the past year, albeit modestly. What this means is that the drop in the unemployment rate is a function of job creation and not a slowdown in people looking for work.

When compared to June of 2013, the greatest declines in the unemployment rate were in Cowlitz County where the rate dropped by 3.4 percent to 7.1 percent. This was followed by Grays Harbor County where the rate dropped from 11.8 to 8.5 percent. Unemployment dropped by 3.2 percent in Mason and Lewis Counties. The unemployment rate in counties throughout Western Washington also improved when compared to last quarter.

Thus far in 2014, employment growth has exceeded my expectations; however, the growth is still bifurcated with very solid expansion in the core central Puget Sound area, but not necessarily across the entire state. Because of this, I am maintaining the “B+” grade that I have given the employment situation for the past year.

Regional Real Estate

In my first quarter report, I suggested that I was disappointed with the number of homes for sale and hoped that we would see improvement in inventory levels as we moved further into the spring selling season. Well, I am happy to report that my hopes were met, with a 33 percent increase in housing inventory compared to last quarter—and a 7.7 percent increase over a year ago.

The greatest growth in listings year-over-year was seen in Snohomish County, registering a 36 percent increase in homes for sale. This was followed by Thurston County where the total number of homes for sale was 25 percent higher than a year ago, and Pierce County rounded out the top three with a 21 percent increase. Only three counties reported an annual decrease in listing activity during second quarter. The largest decline was seen in Jefferson County (-13%), while Island and Lewis Counties both dropped by 10 percent.

When comparing first and second quarters of this year, every county reported more homes for sale. The greatest increase was seen in Kittitas County where inventory levels grew by 50 percent. This was followed by Whatcom (+44%), King (+41%), and Thurston (+40%) Counties. The smallest increase was seen in Lewis County at a still respectable 14 percent increase over first quarter of this year.

When we look at sales activity, 29,885 homes sold in the first half of 2014—a modest increase of 1.3 percent over the first half of 2013. However, during second quarter, sales growth followed the rise in listings, reporting a substantial 51.8 percent increase compared to first quarter. In the second quarter, there were over 18,000 home sales—compared to 11,870 last quarter.

Year-to-date, home sales grew the fastest in San Juan County (+69.7%), possibly suggesting that the vacation home market may have recovered. This was followed by Grays Harbor County (+34.5%) and Mason County (+28.1%).

There were four counties where home sales fell compared to the first half of 2013: Clallam County (-2.7%), Whatcom County (-2.4%), King County (-2.3%), and Skagit County (-1.5%). I believe these numbers to be due to the low inventory levels.

As mentioned earlier, when compared to the first quarter of 2014, home sales were solidly higher. This growth was most pronounced in San Juan County where sales were up by a substantial 85 percent. This was followed by King County (+61%), Skagit County (+58%), and Mason County (+54%). The slowest sales growth was seen in Grays Harbor County (+9%).

The average home price in Western Washington in the first half of 2014 was $355,335—up by 4.6 percent over the first half of 2013. As is seen in the chart below, all but four counties saw average sales prices rise compared to a year ago. Price growth has been tapering over the past year, but remains generally positive.

When we look at individual counties, the strongest annual gains were in Lewis County where prices rose by 9.7 percent. There were also significant gains seen in Snohomish County (+7.9%), Island County (+7.3%), King County (+7.2%), and Clallam County (+7%).

Compared to the first quarter of 2014, home prices were also higher in all but one county. The greatest growth was seen in Jefferson County (+14.7%), followed by Mason County (+13.8%) and Cowlitz County (+12%). There were an additional three counties that saw double-digit gains in sale prices. Home prices fell in just one county, and this was the always-volatile San Juan County, where prices for the quarter were down by 3.9 percent.

Even though rising home prices slowed in the second quarter, I am very pleased to see the growth in listing activity. As such, it’s time to up the grade for the housing market to a “B+” from the “B” grade given last quarter.

Conclusions

The economy in our region continues to improve. The ongoing low-interest rate policy of the Federal Reserve has helped fuel a turnaround in the housing market. Even with the increases in mortgage rates last summer, financing costs remain well below historical averages, with the 30-year fixed-rate mortgage averaging 4.2 percent in the second quarter of this year. Rates have dropped through the quarter and I do not expect to see any form of rapid rise through the summer months. That said, I do anticipate that interest rates will start to climb modestly through the balance of this year and into 2015.

Shifting to the new construction housing market, I have a cautiously optimistic view for economic growth in the next few years. With the exception of multifamily rentals, the new home sector remains well below potential, and will likely persist in that state for a couple of years, but continue to doggedly improve. Interestingly, the lack of new home construction bodes well for the resale market, as I expect that we will start to see additional demand coming from new households moving out of rental housing and into homeownership. This will lead to additional demand for single-family homes.

The housing market is starting to get more balanced, thanks to slowing price growth combined with somewhat greater choices for buyers. That said, we still have a long way to go. To give you some perspective, there were 33,258 homes for sale in Western Washington in June of 2009, and in June of 2014, there were just 20,670!

I expect that the summer will continue to be good to us with higher levels of inventory leading to further increases in sales activity. Mortgage lending has started, at long last, to become modestly easier, which will also do its part to add to the continued improvement of the housing market and the overall economy.

About Matthew Gardner

Mr. Gardner is a land use economist and principal with Gardner Economics and is considered by many to be one of the foremost real estate analysts in the Pacific Northwest.

In addition to managing his consulting practice, Mr. Gardner chairs the Board of Trustees at the Washington Center for Real Estate Research at the University of Washington; sits on the Urban Land Institutes Technical Assistance Panel; is an Advisory Board Member for the Runstad Center for Real Estate Studies at the University of Washington; and is the Editor of the Washington State University’s Central Puget Sound Real Estate Research Report.

He is also the retained economist for the Master Builders Association of King & Snohomish Counties. He has twenty-five years of professional experience in the U.K. and U.S.

He has appeared on CNN, NBC and NPR news services to discuss real estate issues, and is regularly cited in the Wall Street Journal and all local media.

 

New Listings Via Our Facebook Page

Did you know that along with our website’s daily Multiple Listing Service (MLS) updates on homes for sale on Whidbey Island, you can also see all of our new listings on our Windermere Whidbey Facebook page?

When you become a fan of our page, you’ll see all of our new listings in your news feed – click on the link and you’ll have access to the photo gallery and contact information for the listing broker. From there you can also access additional information on the listing, and even forward the listing to friends and family that might also like to see the home.

Ready to talk to a broker about helping you sell your home or find a new home? Give us a call today! The market’s hot on Whidbey and we’d love to work with you.

 

Three Mortgage Tips for Home Buyers

The vast majority of today’s home buyers will need help financing their purchase. If you’re one of them, here are several tips that will help you obtain the right mortgage for you.

Know your credit score

It’s important to know your credit score because lenders use this measurement as an indicator that you will be able to not only handle a mortgage, but have the financial maturity and track record to make your mortgage payment every month. They also use your credit score to determine what kind of interest rate you will qualify for. It’s important to check your credit score once a year to check for errors – which happen more often than you might think. Click here for a good resource guide for learning more about your credit score.

Before house hunting get pre-approved (not just pre-qualified)

There is a difference between getting pre-qualified and pre-approved. Pre-qualification means a lender has had a quick look at your personal finances and believes, without looking at details, that you would perhaps qualify for a home loan. Pre-approval means that the lender has taken an in-depth look at your finances (based on your actual income, debt and credit history) and can give you parameters on how much home you can afford. When negotiating with sellers – especially when there’s a good chance your offer might be one of several offers on a home – having a pre-approval from your lender puts you in a strong negotiating position.

Shop for lenders and ask for referrals

Buying a home is an expensive purchase – it’s important to not only find the right home for you, and at the right price, but to find a lender that will work with you to obtain the best loan for you based on your finances and lifestyle. In the old days, lender options were limited to the bank on the corner. Today, you’ll find loans through traditional banks, through individual mortgage brokers and even through online portals. The right lender can completely transform your mortgage-buying experience, so it’s important to talk to several lenders. Additionally, be sure to ask for referrals and testimonials from your real estate broker and your friends/family. Just because a lender quotes you the lowest interest rate and loan terms does not necessarily mean that you’ll receive the best customer service. And when possible, personally meet with lenders to see who you feel the most comfortable with. Mortgages can be complicated and you want someone on your side who you trust is working hard for you.

If you’re thinking about buying a home – and you’ll be looking on Whidbey Island – be sure to visit our Whidbey Island Windermere website. Our site has tons of information and resources to help you including a ‘homes for sale on Whidbey Island‘ search function, market information and sales data, information on our communities, and a contact page where you can reach out to one of our knowledgeable and experienced brokers.

 

 

Thank You

We don’t often get a chance to thank all the people that make our Whidbey Island real estate offices so wonderful, nor do we often get the chance to thank all of our clients who have purchased or sold real estate through us. So today’s the day.

We recently won Best Real Estate Agency on Whidbey Island, courtesy of Whidbey News Group’s readers choice awards.

And we couldn’t be more proud!

Wining this award really is about the people who come in and out of our office every day … our smart and talented staff, our amazing brokers, and the buyers and sellers who put their trust in us to help them with complicated real estate transactions.

Our goal has always been – and always will be – to exceed your expectations for client services and to give back to the island that we all call home.

On behalf of everyone here at Windermere Whidbey Island … THANK YOU!

Indoor Air Quality Basics

Most of us tend to think of air pollution as something that occurs outdoors where car exhaust and factory fumes proliferate, but there’s such a thing as indoor air pollution, too.  Since the 1950s, the number of synthetic chemicals used in products for the home has increased drastically, while at the same time, homes have become much tighter and better insulated. As a result, the EPA estimates that indoor pollutants today are anywhere from five to 70 times higher than pollutants in outside air.

Luckily, there are many ways to reduce indoor air pollution. We all know that buying organic and natural home materials and cleaning supplies can improve the air quality in our homes, but there are several other measures you can take as well.

How pollutants get into our homes

Potentially toxic ingredients are found in many materials throughout the home, and they leach out into the air as Volatile Organic Compounds, or VOCs. If you open a can of paint, you can probably smell those VOCs. The “new car smell” is another example of this. The smell seems to dissipate after a while, but VOCs can actually “off-gas” for a long time, even after a noticeable smell is gone.

We all know to use paint and glue in a well-ventilated room, but there are many other materials that don’t come with that warning. For instance, there are chemicals, such as formaldehyde, in the resin used to make most cabinets and plywood particle board. It’s also in wall paneling and closet shelves, and in certain wood finishes used on cabinets and furniture. The problems aren’t just with wood, either. Fabrics—everything from draperies to upholstery, bedding, and carpets—are a potent source of VOCs.

The good news about VOCs is that they do dissipate with time. For that reason, the highest levels of VOCs are usually found in new homes or remodels. If you are concerned about VOCs, there are several products you can buy that are either low- or no-VOC. You can also have your home professionally tested.

How to reduce VOCs in your home

Make smart choices in building materials.

~ For floors, use tile or solid wood—hardwood, bamboo, or cork – instead of composites.
~ Instead of using pressed particle board or indoor plywood, choose solid wood or outdoor-quality plywood that uses a less toxic form of formaldehyde.
~ Choose low-VOC or VOC-free paints and finishes.

Purify the air that’s there.

~ Make sure your rooms have adequate ventilation, and air out newly renovated or refurnished areas for at least a week, if possible.
~ Clean ductwork and furnace filters regularly.
~Install air cleaners if needed.
~ Use only environmentally responsible cleaning chemicals.
~ Plants can help clean the air: good nonpoisonous options include bamboo palm, lady palm, parlor palm, and moth orchids.
~ Air out freshly dry-cleaned clothes or choose a “green” cleaner.

Fight the carpet demons.

~ Choose “Green Label” carpeting or a natural fiber such as wool or sisal.
~ Use nails instead of glue to secure carpet.
~ Install carpet LAST after completing painting, wall coverings and other high-VOC processes.
~ Air out newly carpeted areas before using.
~ Use a HEPA vacuum or a central vac system that vents outdoors.

Prevent Mold.

~ Clean up water leaks fast.
~ Use dehumidifiers, if necessary, to keep humidity below 60 percent.
~ Don’t carpet rooms that stay damp.
~ Insulate pipes, crawl spaces, and windows to eliminate condensation.
~ Kill mold before it gets a grip with one-half cup of bleach per gallon of water.

If you would like to learn more about VOCs and indoor air quality, please visit: http://www.epa.gov/iaq/.

Taking Good Care of our Water Supplies

When you live on an island, like we do here on Whidbey Island, you’re surrounded by water – beautiful, blue water. And boy, does is make for a spectacular view from nearly every corner of our island. Sunrises and sunsets, in particular, are pretty darn stunning when they dance across the Puget Sound.

All that water (salt water) makes it easy to forget that we’re still an island, and we still need to take care of our domestic water supplies. Our water supply sustains not only people, but plants, birds and animals … and taking good care of it, and conserving where we can, is an important piece of being a good island resident and steward.

There are lots of resources aimed at helping educate us on conserving water where we can, and understanding why taking care of our water is vitally important to our island way of life.

Here are two resources that are informative and offer great ideas and advice.

1. Water Conservation: Tips That Save Water & Money – Did you know that if all the old toilets in the U.S. were replaced with water efficient models, we would save 520 billion gallons of water each year. That’s the equivalent of the amount of water that flows over Niagara falls in 12 days!

2. Our Islands Our Water – Did you know that groundwater is Island County’s main water source?  Seventy-two percent of Island County residents rely on groundwater. As such, groundwater quantity and quality are the driving reasons for our water resource management efforts.

As real estate brokers, we work closely with Whidbey Island buyers and sellers on a daily basis, and as Whidbey Island residents ourselves we pay close attention to issues that affect our island communities. If you’re interested in finding out more about water quality, water conservation, and what you can do to help with both, give your local Whidbey Island Windermere office a call and we’ll help you find the resources you need.

 

 

Tools Every Homeowner Should Have

Just in time for summer maintenance jobs around the house – here’s a nifty list of tools that every homeowner should have.

1. Level: Pictures, shelves, appliances, fences … there are hundreds of things that you’ll want to make sure are level.

2. Tool bucket or box: Unless you have loads of wall space to organize and display your tools, a basic bucket or box works great for keeping all your tools in one place.

3. Toilet plunger: Consider having one on each floor of your house … when you need one in a hurry, running to the garage or basement takes an awful lot of time.

4. Tape measure

5. Slip-joint pliers: With a handy adjustable ‘jaw’, you can use them for all sizes of jobs.

6. Screwdriver set: There are a variety of screws, both in use today and in older items, so have a set that gives you lots of options.

7. Needle-nose pliers: Pick up a couple sizes.

8. Hacksaw and crosscut saw

9. Combination wrench set: The best sets will have both a standard set and a metric set.

10. Claw hammer

12 Caulking gun: Home repair caulking and glue most often come in a large tube; a caulking gun makes it much easier to dispense.

13. Hand-held wire cutters: A good pair of small wire cutters will save your household scissors for more delicate jobs like paper and fabric.

14. Small electric screwdriver and drill

Summer Entertaining Guide

Summer is officially here, and the season is ripe with opportunities for parties, barbeques, and outdoor entertaining with friends and family. To set the stage for fun gatherings, we have collected some ideas for outdoor decorating, fun party themes, and more on the “Summer Entertaining” Pinterest board. What are your tips for throwing a fantastic summer soirée?

Outdoor improvement

Add some finishing touches to your outdoor spaces to create a fun atmosphere and a touch of your personal style.

Party ideas

You don’t need an excuse for a party! Elevate your gatherings to a whole new level with these fun party ideas.

Get your game on

From Bocce to Horse Shoes, there are plenty of games for guests of all ages.

Summer safety

Keep your friends and family safe outdoors with these quick tips.

How to feed a crowd

Don’t forget to search for delicious recipes, quick BBQ tips, kid-friendly foods, and summery cocktails.

You can find more fun home decoration and entertaining ideas on the Windermere Pinterest Board.

Community Service Day 2014

There are lots of reasons why it’s so great to be a part of our Windermere offices here on Whidbey Island – one of the most important, and most-loved reasons is Community Service Day.

It all started in 1984 when a handful of Windermere owners and agents came together to make repairs at a local elementary school. Today, every year Windermere closes its offices for one day to help make a positive difference in our local communities. Thirty years and more than one million hours of community service later, we’ve continued this tradition through neighborhood-enhancing projects in the areas where our Windermere teams live, work, and play.

This past Friday, June 2oth, our local offices spent the day giving back to the communities we love and live in. Here is just a sample of where we were!

The Oak Harbor agents and staff were at Help House Food Bank - Help House is the ONLY food bank in Oak Harbor.  This is a heavily used facility so it needed an overall freshen-up.  Volunteers weeded the entire property, including trimming shrubs and trees as well as removing a lot of ivy that was taking over one of the buildings.  They also painted the exterior trim and the entire interior, which included a bathroom and kitchen, and freshened up the paint on the organization’s sign. Special thanks to Rhonda Porter from Alaska Credit Union, who has provided lunch for our volunteer crew for more than 10 years!

 

 

 

The Coupeville agents and staff were at the Coupeville Boys and Girls Club - Coupeville volunteers built garden boxes for the kids to plant vegetables, they painted the benches and the bike racks, and assisted in general maintenance and upkeep projects. Painting supplies were donated by Island Paint and Glass; People’s Bank in Coupeville also participated in the day.

 

 

 

 

We love Windermere Community Service Day because it’s a way for us to give a helping hand and offer a huge “Thank You!” to the people and organizations that so richly and generously enhance the lives of everyone who lives here on Whidbey Island.

 

June Perspective

Recently, we were at a luncheon honoring corporate philanthropists from throughout the Puget Sound region. Companies of all shapes and sizes were honored, from the largest technology giant to a local shipyard committed to preserving Ballard’s Nordic heritage. The commonality among all these companies was giving back. Some do it by donating millions of dollars to non-profit organizations, while others give through volunteerism and in-kind donations.

We were reminded that philanthropy is not a one-size-fits-all proposition – and it got us thinking about our own charitable efforts at Windermere. While we’re incredibly proud of what we’ve been able to achieve through the Windermere Foundation, can we do more?

The answer is always yes.

For us, that comes in the form of our annual Community Service Day. Cash is king, but there’s something to be said for rolling up your sleeves and getting your hands dirty. That’s the philosophy behind Community Service Day.

For 30 years, Windermere offices have closed their doors for one day to help make a positive difference in the local community. This year’s event is on June 20, and on that day you will find us doing a variety of projects, including cleaning, landscaping, and painting at local senior citizens centers, facilities for homeless children and adults, public parks and schools, low-income housing, and emergency shelters, among others.

We love living in a region that is known globally for its charitable giving. And we love being a part of a company whose agents prove time and time again that service to other is not something you do, it is who you are.