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New Agent Spotlight: Avery Humlick
We’re excited to welcome Broker/Realtor Avery Humlick to Windermere Silverdale. Avery puts her clients’ needs first, and we love her positivity and drive. Her interesting background makes her a great fit for both buyers and sellers. Read on to find out more from our Q&A with her.
What drew you to real estate?
Growing up, I moved a fair amount around Maine, New York, and New Hampshire. I always idealized owning instead of renting. To me, that meant putting down roots. As an adult, I knew I wanted to be an informed buyer, and I took a class to get educated on what can be a complex process. Once I cracked that book, there was no going back. I knew I had the skills and passion to help others achieve their Real Estate dreams as well – whatever that looks like for them.
What unique professional skills do you possess that enhance your abilities as a Realtor?
I have always been in positions that are client-focused. In all my professional roles, I have always had to rely on communication and cues from the client to identify what is the best move for them. I really have the attention to detail and problem-solving skills to be a strong advocate throughout this process.
What personality traits do you think are important in this profession?
Integrity, and someone who is detail-oriented, persistent, and has the drive to go above and beyond. This has been true for all the roles I have worked previously. I believe that has really helped me to hone in on those skills. While there are lots of moving parts in the real estate industry, my goal is to make you feel at ease by bringing the expertise, along with those skills. You will find that this can be a fun process as well!
Which areas do you serve, and what do you love about our area?
I serve Kitsap County and beyond. I love that Kitsap has its nooks where you feel like you’re in a small town. I always say Poulsbo is my very own Stars Hollow (“Gilmore Girls” reference). And yet, the big city of Seattle is just a ferry ride away. Our community really has it all, and I am seeing a boom of recreational activities happening here every day of the week.
How long have you lived here, and what brought you here?
Since moving from New England, I have been in Washington for 11 years. I moved fresh out of high school when my whole family was transitioning from one coast to the other. I lived in Tacoma for most of those years, but when I came across the bridge, I was hooked and ready to put those roots down in Kitsap!
How are you involved in the community?
Previously, I had been involved with the Emergency Food Network in Tacoma. Their mission is to get food out in our communities. I frequent the Port Orchard dog park and its cleanup. My dog Quigley makes sure we are there a lot. I am looking forward to growing my involvement in this community – outside of the karaoke and trivia events that I go to often!
What made you decide to work with Windermere?
Is there anything else you’d like to share with us?
Yes, I am so excited to have joined a great team and company! I am here to learn as much as I can so I can be the best advocate for you and your Real Estate goals. Whatever that may be, I look forward to helping you every step of the way.
Thanks for sharing, Avery Humlick, and we’re so glad you’ve joined Windermere Silverdale!
If you’d like to connect with Avery, check out her website.
Buy a Home Now or Wait? Kitsap Stats & Our Advice
Some people are asking themselves whether it’s a smart move to buy a house right now or if they should wait it out. The thing is, the answer isn’t as simple as some might assume. No matter if you’re a first-time home buyer or an experienced buyer, there are a few factors you should consider before making this decision.
Know Your Local Real Estate Market
Real estate is about supply and demand, and it’s so important that you learn about your local real estate market. If you’re looking to buy a home here in Kitsap County, Washington, you can watch our “Market Update” video below, which includes stats for Kitsap County’s first quarter. One key fact to note: in this year’s first quarter, the home sale price was $599,000. That’s a slight decrease of 1.2% when comparing home sale prices in 2022’s first quarter. Watch the full video to learn more, and if you have questions, feel free to reach out to one of our local real estate agents.
Advice from a Local Real Estate Expert
If you’d love some advice from a local real estate expert, we’ve got you covered. Nancy Mackleit, Windermere Silverdale’s Branch Manager, says, “Over the years, I’ve heard from clients who’ve said they wish they would have purchased back when prices were lower. It’s like a broken record. We have almost twice the inventory as we had last year at this time. Though we are still seeing multiple offers on some properties, it is not like last year. Buyers have more of a selection. We are seeing more house sale contingencies, and buyers aren’t under so much pressure to compete with other buyers. Have the interest rates changed? Yes, the days of historically low-interest rates are over. Buyers and sellers need to adjust to the current interest rates. The rates may be higher, but the days of multiple offers on a property, escalating to prices to way above the list price, have definitely slowed down compared to last year.”
Another question buyers often ask in times like these is: what if interest rates go down? Nancy says, “Get the house now when it isn’t so competitive and refinance if this happens. There are always sellers who need to sell, and there are always buyers who need to buy. Historically, real estate picks up in spring and summer. Talk to your agent about the best strategy going into the current market. Your agent will be the best to guide you.”
Mortgage Rate Information, Predictions, and Misconceptions
Whether you’re leaning toward buying now or waiting a while, you’ll want to get pre-approved for a mortgage before going to open houses. You can shop around and get quotes from lenders, but carefully examine each lender’s proposal and terms. Most homebuyers choose a 15-year or 30-year conventional mortgage. There are also first-time homebuyer programs, VA loans, and other programs.
As Windermere’s Chief Economist, Matthew Gardner, says, “Education is everything.” So educate yourself now before diving into the home-buying process. Check out Matthew Gardner’s latest video, where he discusses mortgage rate predictions and misconceptions.
Examine Your Financial Situation & Consider Home Buying Costs
It’s important to thoroughly examine your finances and factor in all the upfront, associated costs with buying a home. First-time home buyers often focus on the down payment, but there are also closing fees, and oftentimes repairs pop up unless the home is in immaculate condition.
If you’re thinking of buying an investment property, you’ll need to really be in the know about your local rental market. Additionally, will you have the time to manage a property or will you hire a property manager? Will that property be able to really generate passive income for you in the near future or will it need a lot of work first? Furthermore, it’s important to think about how long you plan to own the property to avoid capital gains taxes if you’re thinking you may sell it within two years.
If you’ve decided you’re ready to buy a home, check out our home buying tips to learn more.
New Agent Spotlight: Mark Plastina
Dedicated and hard-working Broker/Realtor Mark Plastina is a wonderful new addition to our Windemere Silverdale team. Learn about his interesting background, his local expertise, and more.
What drew you to real estate?
I’ve always been fascinated with real estate and its buying/selling processes since I was younger. At that time, I got to see my parents in the process of buying our house. It was interesting to me. Then time passed, and I got to experience buying a house with my wife, Kimberly, for our own family. A few years after that, we were fortunate to have the opportunity to sell our first house and buy a different home that suits our family’s needs. I wasn’t a real estate agent back then, but I was really into the documents, mindful of how things were moving, and I made sure I understood everything. This is what got me into real estate. I want to be the trusted Real Estate Agent who ensures their clients are well-represented and that they understand the process, not missing any details.
What unique professional skills do you possess that enhance your abilities as a Realtor?
In my work history, I’ve been a worker, and I’ve been a manager. I believe having experienced both perspectives will enhance my abilities as a Realtor. As a worker, I perform the work diligently and pay attention to the details. As a manager, I solve higher-level problems, orchestrate projects, and give directions to my teams. I can list many more experiences/skills, but I think these traits, combined, hit the mark on how I can reach success as a Realtor.
What personality traits do you think are important in this profession?
It’s important to have integrity, a passion for excellence, a positive attitude, a strong work ethic, adaptability, perseverance, and great customer service skills. In this profession, every situation is different, which presents challenges, so a successful real estate agent should have these traits.
Which areas do you serve, and what do you love about our area?
I primarily serve Kitsap County and its neighboring areas. I’ve been to some other states, and I can say that nothing beats the freshness of the Pacific Northwest. I enjoy the beautiful scenery here and the climate.
How long have you lived here, and what brought you here?
I’ve been living in Kitsap County since 2006; I was a teenager that migrated from the Philippines. That time is one of the biggest turning points in my life and a culture shock. But it didn’t take long for me to feel happy living here. Then Kitsap became my home. There were a few years I was away from Kitsap County when I served in the U.S. Air Force. I came back to Bremerton because this is home for me; this is where my family is.
How are you involved in the community?
In addition to working as a Broker/Realtor, I work at the Puget Sound Naval Shipyard. I believe that the work we do there contributes to the Kitsap community and to the whole nation, as the goal is to preserve our national security.
What made you decide to work with Windermere?
I would like to start with the vibe I felt when I first entered the office. It’s a good vibe! What really made me decide to work with Windermere is their mentoring program, the supportive group of personnel in the office, and how Windermere gives back to our community. I kept hearing great things, and I was looking for a firm that would guide me as a successful Real Estate Agent. I believe Windermere is it.
Is there anything else you’d like to share with us?
Yes, I’m having a good time learning more about real estate and am extremely excited to grow my real estate career with Windermere! I’m looking forward to having the opportunity to assist my clients with their real estate needs and dreams. Work with me, and I’ll guide you all the way!
We’re so glad Mark Plastina has joined our Windermere team. If you’d like to connect with him, check out his website and follow him on Facebook and Instagram.
8 Tips When Preparing to Sell
Preparing to sell your home can feel overwhelming, so we’ve compiled some useful bits of advice to make sure you’re on your way to a job well done. From pricing to staging, there are many factors to keep in mind. We’re here to make the selling process smoother and more successful. Read on to gain helpful tips you can use today.
1. Determine your moving timeline
Begin the home selling process by examining your personal timeline. Are the dates flexible or are you on a set schedule? Knowing the answer to these questions will help you make the right decisions regarding the repairs and home projects you should complete. Additionally, it’s important to establish clear expectations with everyone involved, including your local listing agent.
2. Consult with a listing agent when preparing to sell
A knowledgeable listing agent will guide you through the process of selling your home. They will provide you with up-to-date information including local market trends so you can make well-informed decisions. In addition to listing the home, the agent will show the property and coordinate all aspects of the real estate transaction. It’s important to take your time and find someone you work well with and trust.
3. Get a Comparative Market Analysis (CMA)
A real estate agent will be able to conduct a Comparative Market Analysis or CMA. A CMA is a detailed report that compares your property to similar listings in the area. It allows the agent to examine market trends and determine an appropriate list price base on other nearby homes. It will also help you determine if any potential upgrades or remodels will be worthwhile.
4. Complete upgrades with a high return on investment (if it makes financial sense)
After consulting with a listing agent and looking at a Comparative Market Analysis, you’ll want to consider completing home upgrades with a high return on investment. Take into account your moving timeline and the risk/reward of doing certain upgrades. Your local real estate guide will be able to discuss all options with you to see if the projects are worthwhile.
5. Conduct a pre-inspection when preparing to sell
Did you know a seller can conduct a pre-inspection before listing the home? This inspection will identify any repairs or problems that may need to be addressed before selling. Also, providing a buyer with a pre-inspection can create a sense of trust. Being upfront about the condition of the home demonstrates transparency.
6. Identify and make necessary repairs
After consulting with a listing agent, and examining the CMA and pre-inspection, it is time to get to work. Ensure the home has all major repairs completed before listing and showing it. Repair all roof leaks or missing shingles, and ensure there are no plumbing or gas leaks. Check that the home’s foundation is solid and repair any electrical issues. Finally, make sure all pest control measures have been completed prior to listing. If there are any potential red flags regarding your property, this is the time to address those issues.
7. Consider the Windermere Ready Loan Program
If making repairs and preparing the property for selling seems daunting due to the upfront expenses, consider the Windermere Ready Loan program. This program offers up to $50,000 in expenses incurred. It is a six-month loan with no payments due during that time. It is then paid off in one lump sum once the property is sold. Many home sellers and their agents have reported success, saying that the program helped them sell their homes for more and in less time.
8. Stage your home when preparing to sell
According to Forbes, staged homes sell 87% faster than non-staged homes. Staging allows prospective buyers to easily imagine themselves in your home. It presents homes in an enticing way. And, the majority of buyers look at homes online first, so excellent photos of well-staged spaces can make a huge difference in the number and types of offers you receive.
Listing and selling a home is a labor-intensive process that requires a team effort. Our local Windermere experts are here to help you sell your home efficiently and successfully.
Home Buying Tips with Insights From Agents
In Kitsap County, during the first quarter of this year, we had 944 closed sales, with an average sale price of $606K. With the state of the current real estate market, buying a home can be a challenge in Kitsap County. But these tips and insights from some of our Windermere Silverdale agents will help you achieve success.
First-Time Homebuyers: Prepare in Advance
If you are a first-time homebuyer, the process can seem extra intimidating. But if you prepare in advance by finding a great agent and communicating your wants and needs, you’ll be in good hands. Also, it’s crucial to get pre-approved before starting your search.
If you’re new to our area, get to know the local neighborhoods across Kitsap County beforehand. It will really help you find the right home in the community that best suits you. Check out our free Guide to Kitsap to learn more. Be prepared to do lots of house hunting and to act quickly yet strategically. As Realtor/Broker Joe Stevick says, “making quick, effective offers is essential”. You can learn more in Joe’s video below.
Buying New Construction: Time is on Your Side
If you’ve got the time to wait for a build, there are many perks to a new-construction home. However, be prepared for lots of paperwork and multi-step processes. One big perk of a new build, according to Realtor, CSP, Steve Derrig, is not starting out with repairs and updates. “Having a brand new house, you do not have big-ticket home maintenance items coming up in your near future.”
Each part of Kitsap is unique, and while it may take longer to get high-speed internet in some more rural areas, coworking spaces are abundant. Take your time finding the right place to build your dream home. And, choose your builder wisely. As Steve says, it’s crucial to look at homes they’ve built. Tour neighborhoods where they have homes that they built years ago. How do they look now? Do your research to form the right crew. Watch Steve’s video to learn more.
Competitive Offer Situations: Have A Plan
First and foremost, when you are ready to buy a home, interview potential agents and lenders to make sure they are a good fit for you. Also, they should know the local real estate market. In this competitive market, it’s vital to have someone who can help you navigate competitive offers. This includes having a plan for escalation clauses, and the possibility of waiving contingencies. “Your agent should contact the seller’s agent and find out their ideal offer,” explains Broker/Realtor Summer Davy. For more insights, watch Summer’s video below.
Kitsap’s Market: First Quarter, 2022
Curious about how Kitsap County’s real estate market is doing? We had a solid first quarter and it’s still a seller’s market. In 2021, we saw strong buyer demand and low inventory, and that continues to be the case. Read on for key highlights and market trends. If you have any questions, our local real estate experts are just a click away.
News on Sold and Pending Homes
In the graph above, you can see a similar rise reflected in market volume that we saw this time last year. This follows the typical real estate market trend of a cooler first quarter before the market heats up in the summer. Sold homes still outpace pending listings and home prices are still increasing as a result of high demand. During 2022’s first quarter, 994 homes were sold. That’s up 10.7% year-over-year, showing more market activity.
Kitsap’s Market Still Favors Sellers
Since inventory remains low, sellers can list with confidence. Buyers will need to be prepared for competitive situations. As construction ramps back up and the pandemic hopefully continues to wane, we expect to see more homes come on the market.
Listing Price vs. Sale Price
During the first quarter of 2022, we saw a 10.8% increase in home prices when compared to 2021’s first quarter. Since the market tends to heat up in the late spring and summer, we expect prices to continue to rise. Many buyers will continue to meet sellers’ pricing demands, and others are facing affordability issues. Right now, the average sale price in Kitsap County is $606,000.
Insights from Our Chief Economist
Matthew Gardner, Windermere’s Chief Economist, shared his Top 10 Predictions for 2022 in one of his recent Monday with Matthew videos. Here’s what Gardner predicts for 2022:
- Prices will continue to rise, though the pace of appreciation will slow. Gardner thinks it will be about 6% in 2022 versus the massive 16% rise of 2021.
- Spring will be busier than expected. This will increase buyer demand, as buyers get more clarity in their new hybrid model combining remote and office work.
- The rise of the suburbs will also result from this work hybrid model. Many buyers are moving within the same area they already lived in.
- New construction jumps since the cost to build has come down.
- Zoning issues will be addressed.
- Climate change will impact where buyers live. People will focus more on how safe a location is in relation to natural disasters.
- Urban markets will bounce back after the demand drop from Covid.
- A resurgence in foreign investors will return since the travel bans were lifted last November. The demand will rise as long as our borders remain open.
- First-time buyers will be an even bigger factor in 2022. This year, 4.8 million millennials will turn 30, the median age of first-time buyers in the U.S. First-time buyers will be looking for cheaper markets.
- Forbearance will come to an end and that will be okay. It was well thought out, and as Gardner says, “as of recording this video, there are now fewer than 900,000 owners still in the program.” Hopefully, this continues to drop.
Additional Information
You can learn more from Matthew Gardner by reading his Market Update by region or watching his Monday with Matthew video series. And, if you’re new to our area, check out our free Guide to Kitsap.
Fourth Quarter Market Review for Kitsap County
Kitsap County’s real estate market is still going strong, and here’s a look at how we closed out 2021. Just as in previous years, our local market slowed down during the holiday season. There are still many eager home buyers wanting to live in Kitsap County, but fewer homes were for sale during the fourth quarter. Continued low inventory means that our market still favors sellers.
The Latest on Sold and Pending Homes
When viewing the last five quarters in the graph above, you can see that we had our usual growth trend in the summer. And, as we moved into colder months, we saw the seasonal slowdown. Home prices continue to rise due to high demand, and sold homes are still outpacing pending listings. The result is a strong seller’s market. In the 4th quarter of 2021, we had 1,291 closed sales, a 4.9% decrease when compared to 2020’s fourth quarter.
Our Strong Seller’s Market
With the new era of remote work and many wanting the peaceful, connected lifestyle that Kitsap offers, demand in our area remains strong. If you’re a local resident and looking to move, it’s a great time to sell. If you’re a buyer wanting to move here, learn about Kitsap County in our free digital guide. And, if you have any questions our local experts are here to help.
A Look at Listing Price vs. Sale Price
Although most buyers are still able to pay at or above the listing price for a home in Kitsap County, there just aren’t enough homes available right now. Demand is pushing the cost of housing even further in favor of sellers. In our 4th quarter, we saw an 11.3% increase year over year in the average sale price in Kitsap County, putting it at $613,000. While it is a great time for sellers, many are now voicing affordability concerns.
Insights from Our Chief Economist
Looking at the broader real estate market, we have insights from Windermere’s Chief Economist, Matthew Gardner. In his most recent Monday with Matthew, Gardner shared his market forecast for 2022: “If everything goes according to my plan, you should expect to see the housing market start to move towards some sort of balance next year, but I am afraid that it will still remain out of equilibrium until at least 2023.” This is an important reminder that the transition back to a balanced market will be a gradual shift.
While Gardner ensures us that he “doesn’t see a housing bubble forming,” he is concerned about housing affordability. There is definite cause for concern among the millennial generation as they start to settle down more and more. Millennials are currently the largest group in the generational real estate market, so it will be interesting to see where affordability and demand intersect.
In his video, Gardner concluded by saying, “demand for ownership housing remains remarkably buoyant and, in fact, it is quite likely that demand may actually increase with the work from home paradigm that will start to gain momentum next year.” In light of this, real estate continues to be an excellent investment.
Tiny Home Living and Some Interesting Insights
From efficiency to affordability, many people are drawn to the idea of living in a tiny home. Tiny houses combine maximizing space with living minimally. Although the concept seems simple, there’s more to this lifestyle than you may think.
Minimalist Living
The tiny home movement combines mindfulness, environmentalism, and minimalism into an efficient lifestyle. For example, since the living space is only about 400 square feet, a tiny home’s windows can help heat and light its rooms, resulting in a small carbon footprint. In fact, these homes produce about 2,000 pounds of CO2 emissions each year versus the average American home, which produces about 28,000 pounds of CO2 emissions per year.
Additionally, due to its tight quarters, downsizing and decluttering are key components. Limited space leaves little room for furniture and other items. This encourages using space purposefully and creatively.
While some may be wary of giving up certain things, Seattle architects like Ryan Smith of Modern Shed say that it’s all about doing it the right way. “Living small could mean what’s left is the most important part of the experience.” Smith says his team designs these structures to “solve needs for space”. Smith has designed hundreds of small places that have served as summer homes, meditation rooms, offices, and winter cabins. Any of their leftover materials are used on the next project so there’s very little waste, and extra wood is used to heat the space.
Affordable Housing
Another advantage of living in a tiny house rather than a traditional single-family home is avoiding thousands of dollars of debt. The “tiny” alternative provides a big financial incentive. This appeals to retirees looking to downsize and live simply as well as young adults, especially since the average college student loan debt is about $37,000. Most tiny homes can be built within a budget of $50,000. There are some companies that even sell tiny house kits so you can build your own home. Alternatively, there are tiny home designers and architects who will draw a custom blueprint for you.
Additional Benefits
A tiny home can serve as an accessory dwelling unit (ADU) or an in-law apartment. It can also serve as a customized home for someone with special needs, a private living space for a caregiver, or a high-quality mobile home (some remain on wheels), enabling more opportunities to travel and see family. Additionally, a homeowner can rent out their large home while living in a tiny home on their property to save money, reduce their energy bills, and live a low-maintenance life while still enjoying their property and neighborhood.
Tiny Home Residents
Though this may seem like an obvious choice for millennials, there are many tiny home residents who are people age 50 and up. Some researchers expect this to increase with the rising number of baby boomers and Generation X retiring within the next decade.
In a recent study done with 80 tiny home occupants living in Washington, California, Oregon, and Texas, 38% were over the age of 50. In addition, 78% of tiny home residents owned their home compared to 65% of traditional homeowners. 55% of these residents had more savings than the average American, with a median of $10,972 in the bank.
According to Business Insider, Washington, Oregon, and California are among the most popular states for tiny living. Interestingly, cities that are known for the arts have high concentrations of tiny home residents. San Diego, Portland, and Seattle are popular places for tiny homeowners.
Learning from the Tiny Home Lifestyle
Although living in a tiny home may not be ideal for some, we can learn from those who enjoy this lifestyle. Most tiny houses have three areas: a kitchen, a bathroom, and a sleeping area. From storing dishes and spices to decorating each space – everything is done with care; every inch of space is utilized and appreciated.
Many residents practice releasing their dependence on material items. You might not be ready to do that, but decluttering is an important skill regardless of your home’s size. It is especially vital for those who are considering downsizing. Tiny homes also emphasize a greener way of living. You can move in that direction by composting, installing solar panels, and reducing your consumption of single-use plastic items. For more on this, check out these eco-friendly ideas.
Third Quarter Market Review for Central Kitsap
Our Central Kitsap real estate market continues to grow in volume. Keep reading for key highlights about our strong seller’s market.
Our Competitive Seller’s Market
Central Kitsap’s inventory and demand are higher than they were this time last year. More people are able to work from home and are ready to enjoy life on the Kitsap Peninsula. And, these eager buyers outnumber sellers – even with Central Kitsap’s growing sales volume. Our Brokers often see multiple offer situations, resulting in bidding wars. However, if you’re looking to buy, don’t let that discourage you. That’s exactly why you need a local real estate agent to serve as your advocate and provide insight into this competitive market.
Market Data
Our third quarter of 2021 continues to thrive, both in sales volume and the large demand for homes in Kitsap County, WA. Home prices are still growing at a consistent rate, just as they did last quarter. This strong growth will probably slow down as we near the holiday season. And, if price growth does slow, we might see the market shift away from favoring sellers to a more balanced state.
Central Kitsap’s sale prices are very strong. During our third quarter, they increased by 19.7% year-over-year. While affordability is becoming more of an issue, it looks like we may be heading toward a more balanced market. More on that in the next section.
Home Purchase Sentiment Index
In his most recent Monday with Matthew video, our Chief Economist, Matthew Gardner, analyzed the data from Fannie Mae’s most recent Home Purchase Sentiment Index. The data comes from a survey containing roughly 100 questions on housing-related topics. Fannie Mae collected 1,000 consumer responses from across the country. As Matthew Gardner says, “It’s the only national, monthly survey that’s focused primarily on housing.”
The survey shows that many Americans continue to think it is not a good time to buy because of the low supply and rapidly rising prices. However, many feel it is a good time to sell as consumers predict home prices and mortgage rates will go down. As Gardner explains, “most consumers continue to report that it’s a good time to sell a home, but a bad time to buy. They most frequently cite high home prices and a lack of supply as their primary rationale…However, the good time to buy component did tick up for the first time since March.” Gardner sums it up by saying, “Consumers tempered both their recent pessimism about home buying conditions and their upward expectations of home price growth.” So again, we are seeing the potential for a shift toward a more balanced market.
Second Quarter Market Review for Central Kitsap
Silverdale and Bremerton’s Central Kitsap market exceeded performance predictions during our second quarter. We’ve compiled key highlights below so that you can easily get informed about our local real estate market.
Our Strong Seller’s Market
In Silverdale and Bremerton, inventory is still low and demand remains high. Many people are now able to work remotely and that has enabled these buyers to consider areas outside major cities – like Central Kitsap. Now these eager buyers outnumber sellers. Our Brokers continue to experience situations where some buyers are outbid either by price or by an all-cash offer in this competitive market.
If you look at the last five quarters detailed in the graph below, the market is still growing year-over-year. This data indicates the summer market will continue to heat up.
Since our inventory remains low, the prices continue to rise. Historically low mortgage rates are enabling many buyers to purchase homes for higher prices. As you can see below, the listing and sale price divergence is shrinking now. So if you’re thinking of selling, now is a great time to do so.
Market Insights From Our Chief Economist
In his most recent Monday with Matthew, our Chief Economist, Matthew Gardner, begins with the staggering fact that “prices have risen almost three-fold, as the cost to finance has dropped by 72%.” If the number sounds too good (or bad) to be true, that’s because it is. To get an accurate picture, you also have to factor in inflation. Gardner explains that “just like other goods and services, the price of a house today is not directly comparable to the price of that same house 30 years ago because of the long run influence of inflation.” When you adjust for inflation, the rise in housing prices becomes less drastic. Without adjusting for inflation, “prices have risen by 268%”. But when you adjust for inflation, the “real prices have increased by 83.6%”. Therefore, the increase is much lower than what most people are discussing today.
Matthew also compares mortgage payments, another important piece of the puzzle. Although, without adjusting for inflation, “mortgage payments have increased by 74.3%,” the inflation-adjusted “real payments are 10.7% lower!” Of course, there are other monthly payments associated with home ownership. This includes property taxes, which do not change with market fluctuations. But this still indicates “that prices have been able to rise so significantly because mortgage rates have dropped”. It’s also because “inflation-adjusted home prices really haven’t skyrocketed – contrary to popular opinion.”
However, Matthew clarifies saying, “there are some markets across the country where the picture isn’t quite as rosy. In these places, prices have risen significantly more than the national average.” The Seattle metropolitan subunit (which extends around our local area) is one of these places. This is largely due to the increasing affluence as a result of the tech boom.
Not a Housing Bubble
Gardner’s bottom line is this: “there are quantifiable reasons to believe that we are not in a national housing bubble today.” However, he does point out that some markets will see a slowdown in price growth given “where prices are today in concert with the spectre of rising mortgage rates.” Ultimately, it’s still a strong seller’s market with an overall low supply and high demand. We expect to continue to see issues with affordability as prices and mortgage rates continue to climb.
