With the dawn of a new football season comes the opportunity to give back to our community. As the “Official Real Estate Company of the Seattle Seahawks,” all of us at Windermere look forward to partnering with the team for the seventh season of #TackleHomelessness. For every defensive tackle made in a home game this season, we’ll donate $100 to Mary’s Place, a Seattle-based non-profit dedicated to helping local children and families on their journey out of homelessness.
The Windermere Foundation and Mary’s Place share a common mission to end homelessness, and it’s partnerships like #TackleHomelessness that help to further that mission in our communities. Last year, the Seahawks’ defensive efforts raised $35,800 for Mary’s Place, pushing the #TackleHomelessness six-season total to $196,100.
Since 1989, the Windermere Foundation has raised over $47 million for homeless children and families in our communities. We’ve set our sights on reaching $50 million in total donations this year in honor of our company’s 50th anniversary, and we look forward to cheering on the Seahawks this year as we work toward our goal. Keep up with our progress this season by following us on Facebook, Twitter, LinkedIn, and Instagram.
Image Source: Windermere Services Company
To learn more about the Windermere Foundation or to make a donation, please visit windermerefoundation.com.
The math of a home sale is relatively straightforward. Sellers list their home at a certain price, a buyer makes an offer, and eventually the two parties reach a final, agreed-upon price. However, between these two points in the selling process, there are several other figures that go into to setting a home’s value that you should be aware of. Your real estate agent will be your best resource in interpreting the different values associated with your home and what they mean as you prepare to sell.
Understanding the Value of Your Home
Listed Price (Asking Price)
Also known as an asking price, the listing price of a home is the price at which a seller lists their property when it goes on the market. The listing price is a gross price, meaning the costs associated with selling the home are not included. A real estate agent’s Comparative Market Analysis (CMA) will accurately set your home’s listing price, accounting for the various factors that influence home prices including location, condition, seasonality, local market conditions, and more.
The listing price is a starting point for negotiations with buyers. You may receive an offer that matches your asking price, but it’s common for buyers to make offers at other price points. You can either accept, reject, or make a counteroffer in response until you and the buyer reach an agreement.
Whether you’re selling in a buyer’s market or a seller’s market may determine you and your agent’s approach to the listing price of your home. There may be certain pricing tactics you can employ to either drive buyer attention or increase competition, but if your home’s listing price strays too far from its market value (see below), it could stay on the market for longer than you expected.
Market Value
As a seller, you’re interested in what buyers are willing to pay for your home. By taking into account a home’s condition, size, curb appeal, and features, as well as local market conditions and what comparable homes are selling for, a home’s market value reflects the price buyers will pay for a property.
A home’s appraised value is determined by a professional appraiser to ensure that the lender is loaning the correct amount of money for the home. Appraisers assess the home’s layout and features, square footage, gross living area (GLA), overall condition inside and out, home updates and remodels, and more. If the appraised value comes in too low or too high, the buyer and seller must renegotiate for the deal to go through. In competitive markets, buyers may include an appraisal gap guarantee in their offer, which states that the buyer will cover the difference between the price of the home and the appraised value.
Sale Price (Purchase Price)
Also known as the purchase price, your home’s sale price is what it ultimately ends up selling for. Once you and the buyer have reached an agreement on the terms of the transaction, the buyer will have the home inspected and final negotiations may occur based on the findings of the inspection. Familiarize yourself with the Common Real Estate Contingencies buyers may include in their offer and what they mean when selling your home.
Net Proceeds
So, how much do you actually make on the sale of your home? After subtracting the total costs of selling from your home’s sale price, you’ll arrive at your net proceeds. This is the amount you walk away with from the transaction.
Assessed Value
Your agent’s CMA is a reliable method of determining your home’s value for its eventual sale, but its assessed value is used for taxation purposes. Employed by local municipal or county entities, an assessor will conduct a review of your property to determine its assessed value. The assessor’s findings are passed to local tax officials, who use that number to calculate the home’s property taxes.
This video is the latest in our Monday with Matthew series with Windermere Chief Economist Matthew Gardner. Each month, he analyzes the most up-to-date U.S. housing data to keep you well-informed about what’s going on in the real estate market.
Hello there, I’m Windermere’s Chief Economist Matthew Gardner and welcome to this month’s episode of Monday with Matthew. Today we are going to take a look at the new home market where headwinds are certainly growing. And the reason this particular subject piqued my interest was that the National Association of Home Builders just released their Housing Market Index for August, and the numbers were certainly eye-opening.
Now, for those of you who may not be particularly familiar with this index, it is based on a survey of home builders which asks them to give their opinions on the single-family home market and asks them to rate current market conditions for the sale of homes today as well as in six months’ time. It also asks their opinion regarding foot traffic of prospective buyers to their new home communities.
NAHB Housing Market Index
And as you can see, the headline index level fell six points to 49. The drop in August marked the eighth consecutive monthly decline for the Housing Market Index. It was also notable because it was the first time since May of 2020 that the index has dropped below the key 50 breakeven level. This is significant, as it tells us that today more home builders currently rate sales conditions as poor than good.
Now, while the August number was certainly lower than some economists had forecast, I was actually not too surprised as builders have been reporting a spike in cancelled contracts recently. In fact, a report I just read that was put out by John Burns Consulting suggested that the cancellations have more than doubled since April with 17.6% of buyers pulling out of their purchases in July. That compares to 8% in April and 7 ½% a year ago.
Housing Market Index Components
This chart shows a breakdown of three components of the Housing Market Index which are all at their lowest levels since May of 2020, which was just before housing activity rebounded following the lockdown due to COVID-19.
The present sales index fell seven points to 57 but is still above the breakeven point
The future sales series fell two points to 47
Prospective buyer traffic fell five points to 32 which, if we exclude the pandemic, represents the lowest index level since April of 2014
I find this index has a very strong correlation with new home sales, but I also use it as a pretty reliable leading indicator when it comes to single-family housing starts. I’ll get to that shortly. The survey also stated that one in five builders had reduced prices in August. That might help to explain the 10-point spread between builders’ perception of current versus future sales. But there are limits on home builders’ ability to keep cutting prices in order to support sales. This has become a significant issue because many of them are currently holding a large stock of inventory.
New Homes for Sale
Here is what current inventory levels look like. Although you might think that it’s not that bad given that only 9% of available homes are finished are ready to move into, I would tell you that builders incur costs every day that a home is not sold, even if that home has yet to be built. And with inventory at a level not seen since 2008, I’m sure there are a lot of builders not sleeping too well right now.
I would add that by the time the above video is released, the July new home sales report will have been published. I can almost guarantee that the number of homes for sale will have grown further.
New Home Sales
Higher inventory levels are due to slower sales activity, which is continuing to decline. Sales are 17% lower than a year ago. With more homes for sale and lower transactions, it would now take more than nine months to absorb all available homes using the current sales pace. I would also tell you that the last time months of supply broke above nine was all the way back in 2010.
It’s my forecast that sales in July will have dropped from the annualized rate of 590,000 shown in the chart above to somewhere between 570,000 and 580,000.
U.S. Single-Family Housing Starts
With high supply levels and lower sales, it’s not at all surprising to see builders hitting the brakes, with new home starts falling by 10.1% between June and July of this year. Starts are down by 18 ½% from a year ago. Starts have dropped on a sequential basis for five consecutive months now, and I am afraid that they will drop further before finding a bottom.
So, what’s the bottom line here? Well, there are several issues I see, the first of which is affordability. Home prices have been spiraling upward since the start of the pandemic not only because mortgage rates dropped, but construction costs started jumping and builders had to charge more for a home.
Builders saw prices rise by almost 18% last year. This had already taken a significant toll on affordability even before the mortgage rates spike we saw earlier this year. The upshot, as I see it, is that tighter monetary policy from the Fed, in concert with construction costs that remain well above normal levels, has hit builders and hit them hard. Of course, they are doing their best to address the situation by slowing construction activity significantly, but I think that they are going to have a pretty rough time for the next several months.
Ultimately, I see little option for home builders other than lowering prices further, especially now that they are competing with rising inventories in the resale market. I also believe that there are buyers out there waiting patiently on the sidelines for prices to drop in the coming months as they know that builders at some point have to solve the current supply demand imbalance and lowering prices is the easiest way of doing this. Last month the average price drop was 5%, but this is very likely to increase as we move toward the fall.
Will builders get through the situation they find themselves in? I believe that they will. And there are some glimmers of light out there with inflation appearing to be peaking, interest rates are, if not dropping, then certainly stabilizing, and this will help.
Builders also understand that the country has a significant housing shortage. In fact, a recent report published by “Up For Growth” suggested that we have a housing shortage today of around 3.8 million homes. Although this includes rental and ownership housing, some basic math tells me that there is a need today for around 2.5 million new owner-occupied homes. So, light is definitely at the end of the tunnel, but there is a way to go before they get out of it.
And there you have it. I hope that you’ve found my thoughts on this topic of interest. As always, if you have any questions or comments about the current new home environment, please do reach out to me. In the meantime, stay safe out there and I look forward to visiting with you all again next month.
Bye now.
About Matthew Gardner
As Chief Economist for Windermere Real Estate, Matthew Gardner is responsible for analyzing and interpreting economic data and its impact on the real estate market on both a local and national level. Matthew has over 30 years of professional experience both in the U.S. and U.K.
In addition to his day-to-day responsibilities, Matthew sits on the Washington State Governors Council of Economic Advisors; chairs the Board of Trustees at the Washington Center for Real Estate Research at the University of Washington; and is an Advisory Board Member at the Runstad Center for Real Estate Studies at the University of Washington where he also lectures in real estate economics.
Throughout the course of buying a home, you’ll work with a variety of professionals, all with specific training to help you through each stage of the process. With such a cast of specialists around you, it’s helpful to know everyone’s responsibilities and which questions to ask whom. One important distinction to be made is the difference between your real estate agent and your mortgage broker. The following information is a guide to understanding where they differ and how each of them helps you to buy a home.
Real Estate Agent vs. Mortgage Broker
Both real estate agents and mortgage brokers are licensed professionals who play a pivotal role in the home buying process by bringing parties together to get a deal done. However, that’s about where the similarities end.
Real Estate Agent
Your real estate agent will represent you throughout the buying process. Their access to the Multiple Listing Service (MLS) allows them to search the widest network of available homes to find the ones that match your budget and criteria. They’ll also receive alerts on open houses and are usually the first to know when new listings hit the market.
Once you’ve identified a home you’d like to pursue, they’ll assist you in putting together your offer, negotiating with the listing agent representing the seller, and guide you through the counteroffer process (should there be one). Once the seller accepts your offer, your agent will help you negotiate any final repair requests found in the home inspection and assist you through closing until you’ve received the keys to your new home.
The point is: your agent will be with you throughout your home buying journey, from start to finish. They are an invaluable resource for local market knowledge and real estate expertise. Though they will not execute the financial aspects of a home purchase for you, (that’s where your mortgage broker comes in), they can recommend trusted lenders with whom you can apply for and secure a home loan.
Mortgage Broker
Mortgage brokers work on the financial side of a real estate transaction, representing buyers to find them favorable mortgage terms when shopping for a home loan. They connect borrowers to lenders by researching the various fees and rates associated with obtaining a mortgage, accessing the buyer’s financial creditworthiness, and coordinating paperwork. Mortgage brokers are not responsible for loaning any money. Once they’ve found the right lender and loan product for their client, they hand the baton to the lender, who will then disburse the funds at the appropriate time.
Working with a mortgage broker can save you time and money. In some cases, they may be able to get the lender to waive certain fees and are experts at finding the best deal for their clients among a vast array of loans and lenders. Mortgage brokers are instrumental in getting your financing for your home purchase secured and provide guidance on which loan products may work best for you.
Questions to Ask Your Real Estate Agent and Mortgage Broker
Now that you know a bit more about the respective responsibilities of real estate agents and mortgage brokers, here are a few common questions to ask when conducting interviews:
Real Estate Agent
Mortgage Broker
How do you help buyers to make their offer stand out?
What is the required down payment for this loan?
Which designations and/or certifications do you have?
What’s the difference between fixed-rate and adjustable-rate mortgages?
How many clients are you working with currently?
Which costs are attached to this loan?
What is the best way to contact you?
How high does my credit score need to be?
How long have you been an agent in the local market?
What is the interest rate for this loan?
Do you represent both buyers and sellers?
What’s the difference between pre-qualification and pre-approval?
Do you have recommendations for mortgage brokers, home inspectors, etc.?
After setting a goal to reach $50 million in total donations in honor of Windermere’s 50th anniversary, the Windermere Foundation is getting closer to reaching that goal thanks to the $1.5 million that has been raised so far this year. After ending last year with a grand total of over $46 million in donations, that leaves roughly $2.5 million to hit our goal by the end of 2022. Here are some recent examples of how our offices have been raising money and helping low-income and homeless families in their communities via the Windermere Foundation.
Windermere Wedgwood
The Windermere Wedgwood office was inspired to support Lutheran Community Services—a local response organization helping refugees to find stability in the Pacific Northwest—after learning that they needed help raising money to support incoming families of Afghan refugees. After discussing the situation with Windermere Foundation Representatives from the Northgate, Sand Point, Madison Park, Eastlake, and Ballard offices, they got to work spreading the news and gathering donations. Support poured in, and when a check for $15,125 was presented to LCS, there were tears of joy.
Windermere Coast Offices
For the past ten years, the Windermere Coast offices of Gearhart and Cannon Beach, Oregon have participated in the Autism Society of Oregon – Clatsop Chapter’s 5k race/fundraising event “Color the Coast for Autism” as a way to support families with children on the autism spectrum. This year not only did the offices participate and donate $1,000, but they placed well in the race, too! Agent Katy Walstra Smith came in first place for the 5k relay, with two other agents placing inside the top 20.
Pictured L to R: Dennis O’Reilly, Cynthia O’Reilly, Katy Walstra Smith, Pam Ackley, Tobi Rates, and Brandi Lindstrom – Image Source: Pam Ackley
Windermere West Campus
Observed in April, Sexual Assault Awareness Month (SAAM) is an annual campaign to raise public awareness about sexual assault and educate communities and individuals on how to prevent sexual violence. Windermere West Campus of Federal Way, Washington directed their recent Windermere Foundation efforts toward supporting the King County Sexual Assault Resource Center by donating $1,500 to support the center’s family service programs.
Windermere Bozeman-Downtown
The Windermere Bozeman-Downtown office continues to support and spread goodwill throughout the Bozeman community. In April, they hosted a Windermere Week of Giving for five local organizations that resulted in $1,000 donations to each.
Their donation to Thrive will go toward hiring mentors for two children for an entire school year. The funds allocated to Eagle Mount paid for some of the production costs for their largest annual fundraiser, which the Bozeman staff helped put on during Community Service Day 2022. Their donation to Haven will be used to provide resources to victims of domestic and/or sexual abuse. Family Promise plans to use the funds to support families experiencing homelessness in Gallatin County. And the donations to HRDC will go toward the establishment of a new facility to provide resources and solutions to people experiencing poverty in the area.
Pictured L to R: Aidan Young, Kelly Martin, Mike Stem, Andrew Flakker, Natalie McDonald – Image Source: Natalie McDonald
Pictured L to R: Kim Stevens, Erica Coyle, Kevin Schwartz, Bobby Goodman
Windermere Mercer Island
Every year, the Windermere Mercer Island office hosts a shredding event which draws crowds of clients and community members alike. This year, they hired a local shredding company to bring a truck to the office parking lot and invited the community to safely and securely shred their old documents while getting a chance to meet some of their fellow community members. The event also served as a platform to collect donations for and raise awareness about the Windermere Foundation’s 50 in 50 campaign.
Windermere Walla Walla
In May, Windermere Walla Walla held a cartoon-themed bowling night to raise money for the local YWCA, the Christian Aid Center, and Children’s Home Society. Agents, staff, and community members came dressed as cartoon characters of all kinds, which made for a colorful and lively scene at the local bowling alley. All in all, Walla Walla collected a whopping $10,000 to support the YWCA’s resources for local women in need, the Children’s Home Society’s child and family counseling, and the Christian Aid Center’s efforts to provide emergency shelter for the Walla Walla homeless population.
The following analysis of select counties of the Western Washington real estate market is provided by Windermere Real Estate Chief Economist Matthew Gardner. We hope that this information may assist you with making better-informed real estate decisions. For further information about the housing market in your area, please don’t hesitate to contact your Windermere Real Estate agent.
Regional Economic Overview
The most recent employment data (from May) showed that all but 2,800 of the jobs lost during the pandemic have been recovered. More than eight of the counties contained in this report show employment levels higher than they were before COVID-19 hit. The regional unemployment rate fell to 4.5% from 5.2% in March, with total unemployment back to pre-pandemic levels. For the time being, the local economy appears to be in pretty good shape. Though some are suggesting we are about to enter a recession, I am not seeing it in the numbers given rising employment and solid income growth.
Western Washington Home Sales
❱ In the second quarter of 2022, 23,005 homes sold, representing a drop of 11% from the same period a year ago, but up by a significant 52% from the first quarter of this year.
❱ Sales rose in Grays Harbor County compared to a year ago but fell across the balance of the region. The spring market, however, was very robust, likely due to growing inventory levels and buyers trying to get ahead of rising mortgage rates.
❱ Second quarter growth in listing activity was palpable: 175% more homes were listed than during the first quarter and 61.98% more than a year ago.
❱ Pending sales outpaced listings by a factor of 3:1. This is down from the prior year but only because of the additional supply that came to market.
Western Washington Home Prices
❱ Even in the face of rising mortgage rates, home prices continue to rise at a well-above-average pace, with average prices up 13.3% year over year to $830,941.
❱ I have been watching list prices as they are a leading indicator of the health of the housing market. Thus far, despite rising mortgage rates and inventory levels, sellers remain confident. This is reflected in rising median list prices in all but three counties compared to the previous quarter. They were lower in San Juan, Island, and Jefferson counties.
❱ Prices rose by double digits in all but four counties. Snohomish, Grays Harbor, Mason, and Thurston counties saw significant growth.
❱ List prices and supply are both trending higher, but this has yet to slow price growth significantly. I believe we will see the pace of appreciation start to slow, but not yet.
Mortgage Rates
Although mortgage rates did drop in June, the quarterly trend was still moving higher. Inflation—the bane of bonds and, therefore, mortgage rates—has yet to slow, which is putting upward pressure on financing costs.
That said, there are some signs that inflation is starting to soften and if this starts to show in upcoming Consumer Price Index numbers then rates will likely find a ceiling. I am hopeful this will be the case at some point in the third quarter, which is reflected in my forecast.
Western Washington Days on Market
❱ It took an average of 16 days for a home to go pending in the second quarter of the year. This was 2 fewer days than in the same quarter of 2021, and 9 fewer days than in the first quarter.
❱ Snohomish, King, and Pierce counties were, again, the tightest markets in Western Washington, with homes taking an average of between 8 and 10 days to sell. Compared to a year ago, average market time dropped the most in San Juan County, where it took 26 fewer days for a seller to find a buyer.
❱ All but six counties saw average time on market drop from the same period a year ago. The markets where it took longer to sell a home saw the length of time increase only marginally.
❱ Compared to the first quarter of this year, average market time fell across the board. Demand remains very strong.
Conclusions
This speedometer reflects the state of the region’s real estate market using housing inventory, price gains, home sales, interest rates, and larger economic factors.
The economy remains buoyant, which is an important factor when it comes to the regional housing market, particularly as it affects buyers. Even though the number of homes that came to market has jumped significantly, which should favor those looking for a new home, demand is still robust, and the market remains competitive.
Much to the disappointment of buyers, rising listing prices suggest that sellers are clearly still confident even as financing costs continue to increase. While the pace of price growth is slowing, sellers are still generally in control. As such, I have moved the needle a little more in the direction of sellers. Until we see list-price growth and home sales slow significantly, we will not reach a balanced market.
About Matthew Gardner
As Chief Economist for Windermere Real Estate, Matthew Gardner is responsible for analyzing and interpreting economic data and its impact on the real estate market on both a local and national level. Matthew has over 30 years of professional experience both in the U.S. and U.K.
In addition to his day-to-day responsibilities, Matthew sits on the Washington State Governors Council of Economic Advisors; chairs the Board of Trustees at the Washington Center for Real Estate Research at the University of Washington; and is an Advisory Board Member at the Runstad Center for Real Estate Studies at the University of Washington where he also lectures in real estate economics.
This video is the latest in our Monday with Matthew series with Windermere Chief Economist Matthew Gardner. Each month, he analyzes the most up-to-date U.S. housing data to keep you well-informed about what’s going on in the real estate market.
Hello there, I’m Windermere’s Chief Economist Matthew Gardner and welcome to this month’s episode of Monday with Matthew. You know, one of the many things I love about being an economist is that it is a remarkably humbling profession. You see, just when we start to believe that our models are close to perfection, something comes along to remind us that forecasting isn’t an exact science.
And if you’re wondering what I am talking about, I recently took a look at the 2022 mortgage rate forecast I put out at the start of the year and…well, let’s say that rates rose at a far faster pace than I had anticipated. I thought that now would be a good time to take another look at rates and share my thoughts on the direction that they will likely take during the rest of the year and my reasoning behind it. And that means we need to talk about inflation.
30-Year Conventional Mortgage Rates: 2018 – 2022
So, a quick look back. As you can see, there wasn’t much to celebrate in 2018, with rates rising from 3.95% to 4.94% before pulling back and ending the year at around 4.5%. In 2019, rates fell following the Feds’ announcement that they were likely done with raising the Fed Funds Rate, and the mortgage market also reacted positively to the announcement from the White House that they were going to impose tariffs on select Chinese imported goods. We saw an uptick in late summer, but that was mainly due to news related to BREXIT.
In 2020, rates were dropping but spiked very briefly when COVID-19 shut the country down and bond markets panicked. But with the Fed jumping in with an emergency rate cut and announcing that they would start buying a significant number of treasuries and mortgage-backed securities, rates tumbled to an all-time low of just 2.66%. In 2021, rates rose as new COVID infections plummeted, but then dropped again as the Delta variant took hold, but ultimately trended modestly higher in the second half of the year.
And then we get to 2022. Rates started the year at just over 3.1% but have since skyrocketed to over 5.8% before a small pullback that started a few weeks ago. In as much as economists expected rates to rise this year, nobody anticipated how fast they would rise. So, what went wrong? Well, there’s actually a rather simple answer.
Even though we expected rates to trend higher in 2022, there were two things we hadn’t built into our forecast models.
Russia’s invasion of the Ukraine
Inflation continued to climb for far longer than we expected
So, how do things look for the rest of the year? To explain my thinking, it’s important to remember that the bond market and, by implication, mortgage rates hate nothing more than high inflation because when inflation is running hot, it limits demand for bonds which, in turn, forces the interest rate payable on bonds to rise and this pushes mortgage rates higher.
But what’s been fascinating to watch is that over the past couple of weeks, rates have actually been dropping which is certainly counterintuitive given where inflation is today. And the only reason I can see for this is that bond traders were thinking that inflation might be topping out.
But then we got the June CPI numbers, and it certainly didn’t suggest that inflation was slowing, in fact it showed the opposite. But even though the total inflation rate hasn’t yet peaked, I believe that a shift has actually started and that we are closer to a peak in inflation than you may think.
Indicators of Inflation: Consumer Spending
The June CPI report showed the headline inflation rate still trending higher but look at the core rate which excludes the volatile food & energy sectors. That has actually been pulling back for the past three months. And consumer spending when adjusted for inflation fell 0.4% in May. That’s the first monthly drop since last December, and I expect the June number when it comes out at the end of the month to show spending dropping even further.
This is a very important dataset that often gets overlooked but it is starting to tell me that the economy is slowing because of inflation and slower spending acts as a headwind to further price increases.
The core PCE price index is up 4.7% year-over-year, but this was the smallest annual increase since last November and you can see that it is also starting to roll over. This index is actually the Fed’s favored measure of inflation as it’s more comprehensive that the CPI number as it measures the change in spending for all consumers, not just urban households.
Indicators of Inflation: 5-Year Breakevens and Producer Price Index
The five-year “inflation breakeven” has plunged more than a full percentage point since peaking at just under 3.6% in late March. And this number is important as it lets us know where bond traders expect the average inflation rate to be over the next five years.
The Producer Price Index measures inflation at the wholesale, not retail, level and even though the total rate rose as energy costs continue to impact the manufacturing sector, the core rate has been pulling back for the past three months. Now let’s look at some commodity prices and see what’s going on there.
The price for natural gas is down over 34% from its recent high
Copper prices are down 26% from the recent June peak and down substantially from March
Soybean prices are down 10%
Despite the war in Ukraine, wheat prices are down 27% from June
Retail Gas Prices: West Coast, West Coast Excluding CA, U.S.
It appears as if gas prices have also rolled over. Of course, here on the West Coast it’s more expensive than the nation even when you take California out of the equation.
U.S. Treasury Yields: 10-Year and 2-Year Constant
And finally, to cap things off, traders must also be pondering the same numbers as I am because bond yields themselves have been tumbling at both the long and short ends of the yield curve with the 10-year note still yielding less than 3% even after the CPI report and two-year yields, while still elevated, are still down from 2.42% just two weeks ago.
So, given all the charts we have looked at, I hope that you too are seeing some light at the end of the tunnel when it comes to the likelihood that inflation is about to start easing.
No doubt, the headline inflation number for June wasn’t one that anyone wanted to see but, if the trends we have looked at continue, I still expect inflation to start slowly creeping lower, which will push bond prices higher, yields will start to pause—if not drop—and that will allow mortgage rates to hold at or close to their current levels for the time being. Although we could see rates coming down, though they will still start with a five for the foreseeable future. I hope that you have found my thoughts of interest.
About Matthew Gardner
As Chief Economist for Windermere Real Estate, Matthew Gardner is responsible for analyzing and interpreting economic data and its impact on the real estate market on both a local and national level. Matthew has over 30 years of professional experience both in the U.S. and U.K.
In addition to his day-to-day responsibilities, Matthew sits on the Washington State Governors Council of Economic Advisors; chairs the Board of Trustees at the Washington Center for Real Estate Research at the University of Washington; and is an Advisory Board Member at the Runstad Center for Real Estate Studies at the University of Washington where he also lectures in real estate economics.
Increased inventory and slower price appreciation across King County offer hope to buyers that we are returning to a more balanced market. Contingencies are once again the norm, creating more sustainable buying patterns. Find our full market recap here.
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LOCAL ECONOMY
Local wages see huge gains
According to a recent report, Washington state saw the second-largest wage increase on record last year. Gains were made across industries, from transportation and warehousing to tech startups. READ MORE
[THE STATE OF] REAL ESTATE
Amazon pledges $23M to affordable housing in Seattle
The tech giant is giving back to its hometown, with a new pledge that will help fund 568 affordable units.
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Getting your home ready to sell can feel like a circus act. Without the right organization, juggling the countless moving parts involved in this stage of the selling process can take its toll. This is the perfect opportunity to create a checklist to keep yourself on track and within your budget. The following information will illuminate the key responsibilities you face as a homeowner as you prepare to hit the market.
We’ve included a comprehensive checklist below of the common tasks required to get your home ready to sell. It is also available as an interactive web page and downloadable pdf here: Get Ready to Sell Checklist
Preparing to Sell Your Home: Working with an Agent
Before you start working on the house itself, it’s best to get the ball rolling on the strategic aspects of selling a home. Working with a real estate agent is the best way to get your home sold for the best price in a timely manner.
A listing agent will represent you throughout the selling process to determine the value of your home, coordinate open houses, market the property, and negotiate with buyers to reach a deal. In the early stages of your discussions with your agent, they will conduct a Comparative Market Analysis (CMA) to see what price your home could fetch on the market, accounting for various factors that influence home prices such as seasonality and local market conditions. Based on the findings of your agent’s CMA, you can discuss whether remodeling fits into your go-to-market strategy, and your agent can provide intel on which remodeling projects could deliver significant ROI based on buying trends, your location, and what comparable listings in your market are offering.
Home value estimation tools can help you get an idea of what your home is worth to facilitate your conversations with your agent.
Once you’ve found an agent, you’re ready to get your home in tip-top selling shape. The following checklist is available as a free downloadable PDF here:
This list of value-adding curb appeal projects will help to form buyers’ first impressions of your home and make your ever-important exterior listing photos stand out amongst the competition.
Remove peeling and chipped paint; replace with a fresh coat
Fix loose trim and fencing
Clear gutters and downspouts
Make sure there is good exterior lighting and all walkway lights and front-door lanterns work
Clean and repair the roof as needed
Clear garage of clutter and tidy shelves
Inspect chimney for cracks and damage
Yard
Mow and trim grass; re-seed and fertilize where necessary
Prune all overgrown trees and shrubs
Weed flowers beds
Remove or replace dead or diseased plants, shrubs, and trees
Clean grease and oil stains from driveway
Decks/Patios
Paint or stain worn areas on wood decks
Remove grass growing in concrete cracks; sweep off debris from shrubs and trees
Clean all deck rails and make sure they’re secure; replace missing slats or posts
Clean outdoor furniture
Front Door
Polish or stain worn areas on wood decks
Add a fresh coat of paint to get rid of nicks
Clean the glass on the storm door; make certain the screen is secure
Make sure the doorbell operates properly and there are no squeaks when the door opens and closes
Windows
Clean all windows inside and out
If needed, add a fresh coat of paint to the window trims and sills
Make sure all windows open and close easily
Replace cracked windowpanes and those with broken seals
Make sure window screens are clean and secure; replace any screens with holes or tears
Front Entry
Clean entryway floors and area rugs
Downsize clutter in the entry and entry closet to give the appearance of spaciousness
Double-check entry lighting to make sure it works
Interior
Not only will these interior projects get your house sparkling clean, but they’re also preparatory steps for staging your home and hosting open houses.
General Interior Cleaning
Clean all floors, carpets, walls, and trim
Replace burned-out light bulbs
Empty trash
Remove family photos, valuables, and prescription drugs
Tidy up clutter
Kitchen
Fix dripping faucets
Organize pantry and cupboards so they appear clean, neat, and spacious
Make sure the refrigerator and freezer are defrosted and free of odors
Clean the oven and cook top thoroughly
Set the table
Living/Family/Dining Rooms
Give rooms a fresh coat of paint as needed
Repair cracks and holes in ceiling and walls
Make sure all wallpaper is secure
Repaint any woodwork that is worn or chipped
Clean or replace draperies and blinds; open them to maximize light
Make sure draperies and blinds open and close
Steam-clean carpets
Clean rugs and wood flooring, and remove any stains or odors
Position the furniture to showcase the size and space of the room
Remove and replace any attached items, such as chandeliers and draperies, that you wish to move with you
Put away toys and hobby supplies; remove extra magazines and books from tables
Bathrooms
Make sure sinks, tubs, showers, and countertops are clean and free of stains
Repair any leaky faucets
Remove grout and soap stains from tile
Replace any missing or cracked tiles or grout
Make sure all joints are caulked
Make sure all fixtures, including heat lamps and exhaust fans are operating
Install a new shower curtain and buy matching towels
Store all supplies, such as toilet paper, shampoo bottles and cleansers, out of sight
Bedrooms
Repair cracks in ceiling and walls
Apply a fresh coat of paint if necessary
Make sure all wallpaper is secure
Clean draperies and blinds; open them to maximize light
Put away toys, clothes, and clutter
Neatly make up the beds
Basement
Check for water penetration or dampness; call for professional repairs if necessary
Get rid of musty odors
Clean furnace, hot water heater, and drains
Make sure light fixtures work
Arrange storage area in a neat and organized manner
Make sure stairway handrail is secure
Tidy Extras
Use air fresheners or bake treats to make the house smell good
Plant flowers to brighten the walkway and enrich the entry
Remove any indoor houseplants that are brown or losing their leaves
Remove all “fixer” cars, campers, and boats from the property
Discard the clutter of magazines on the coffee and end tables
Tidy and declutter all closets
Hide or get rid of worn-out throw pillows
Store pet supplies
At night, turn on the porch light and outdoor lighting
Put away toys and hobby supplies; remove extra magazines and books from tables
Homeowners are always seeking ways to breathe new life into the spaces in their homes. Using nature to achieve this transformation is beneficial in several ways. Planting an herb garden not only helps to make your kitchen feel fresh and sustainable, but it can make your food taste better, too. Here are some tips for getting your herb garden started.
How to Plant an Herb Garden
Like other indoor plants, the key to properly supporting your herb garden is to cultivate fertile growing conditions. Herbs love sun, so you’ll want to position your plants in an area where they have access to sunlight. If sunlight is hard to come by in your local climate, consider investing in a grow light. Even if space is limited, the following locations can be a fitting home for your herb garden:
Container Garden
Container gardens give you the flexibility to move your herbs around the house. This can be especially helpful if you get inconsistent or spotty sunlight.
There are various options when choosing materials for your containers. Terra cotta, plastic, and ceramic planters all have their respective advantages, but what’s most important is that you pair the herbs with a container whose size is conducive to its growth and has proper drainage holes.
Hanging Garden
A hanging garden is a stylish way to incorporate nature into your home. To properly set up your hanging garden, you’ll need adequate wall space. Again, prioritize access to sunlight and easy accessibility. Vertical bookshelves can make for a simple, multifunctional hanging garden, while other DIY options can help to spruce up your kitchen. Whichever route you choose, consider using lightweight materials. A mobile hanging garden can come in handy when doing chores and rearranging the house.
Window Box Garden
Box gardens are a fixture of landscaping and gardening design and can help to improve your home’s curb appeal. Once they’re filled with soil, plants, and water, window boxes can be much heavier than you’d expect, so sturdy woods that don’t rot easily—cedar, mahogany, redwood, etc.—are popular material choices. As always, proper drainage is important when crafting your window box garden. If you’re building your window box yourself, drill the proper drainage holes before assembly. Add a layer of landscaping fabric along the bottom to prevent soil from leaking.
After you’ve decided where you’ll set up your garden, there’s the question of which herbs to grow. The following herbs are perfectly suited for a beginner gardener’s touch and happen to be culinary staples.
Basil: Fresh basil is a game changer. Sow basil seeds around twelve inches apart to allow them to reach their full potential. This herb will take your homemade pizzas to the next level, kick your pesto recipe up a notch, and provide the perfect garnish for countless other dishes.
Thyme: Rich soil fused with organic matter will create ideal growing conditions for thyme. This herb loves the sun, so making sure it gets plenty of sunlight will maximize its flavor. Thyme pairs perfectly with roasted and slow-cooked dishes, adding a perfect layer of warmth and depth.
Cilantro: Make taco night unforgettable with fresh cilantro. With enough heat, cilantro plants will grow quickly and are known to self-sow for multiple rounds. To clear up confusion, cilantro and coriander come from the same plant. “Cilantro” refers to the leaves, while “coriander” is the name for the plant’s seeds, which are often ground up when used in cooking.
Mint: Potting mint is key to keeping it well maintained. Without a proper container, it will run wild. There are many varieties of mint, ranging from classics like spearmint and peppermint to exotic strands such as chocolate and cinnamon mint.
Parsley: Parsley takes its sweet time to germinate, so consider buying plants rather than seeds to speed up the growing process. Countless recipes lean on the fresh taste of parsley, so you can’t go wrong dedicating a decent amount of real estate in your herb garden to it.
Oregano: Oregano thrives in sunny conditions. To maximize growth, plant its seeds some time in spring when the soil is warm. A staple of Italian cooking, having fresh oregano in your herb garden will give your pizza and pasta recipes an extra kick.
Chives: Known for their grass-like look, chives are closely related to onions but have their own distinct taste. Sow their seeds in spring and water regularly to keep their soil moist. Chives are a flavorful alternate for onions or scallions, while their bright green color makes them a perfect garnish for soups, salads, and sauces.
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