Q1 2021 Idaho Real Estate Market Update

The following analysis of select counties of the Idaho 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

I am pleased to report that Idaho has not only recovered all the jobs that were lost following the onset of the pandemic, but total employment is now 10,400 jobs higher than the previous peak we saw in February of last year. Utah is the only other state in the U.S. that can make this claim. Having recovered all the jobs lost, and with new positions being added, the unemployment rate continues to trend lower and now stands at a very solid 3.2%—almost half the national rate of 6%. New COVID-19 cases did rise in the first quarter, but not to such an extent that is likely to negatively impact the economy. In all, Idaho is positioned very well to continue to grow.

idaho Home Sales

❱ In the first quarter of 2021, 4,949 homes sold, representing a drop of 4.5% year over year. Total home sales were down 32% from the final quarter of 2020.

❱ Interestingly, sales did rise in all the northern markets compared to the same time a year ago, with impressive increases across the board. However, sales were down 32% compared to the fourth quarter of 2020.

❱ Year-over-year sales growth was positive in three of the seven Southern Idaho counties, but the areas that saw growth are all relatively small.

❱ Pending sales rose 1.4% compared to the final quarter of last year, suggesting that the second quarter is likely to show improvement. The biggest issue, however, is the lack of homes for sale: inventory levels are 48.6% lower than a year ago, and 8.7% lower than in the fourth quarter.

idaho Home Prices

A map showing the real estate market percentage changes in various Idaho counties.

❱ The average home price in the region rose by a remarkable 35.4% year over year to $516,725. Sale prices were also up 4% compared to the prior quarter.

❱ Southern Idaho saw significant gains, with Boise County jumping more than 70%. That said, this is a very small area and subject to extreme swings. Prices in Southern Idaho were 10.7% higher than in the prior quarter.

❱ Prices rose in all Northern Idaho counties covered by this report, with significant gains across the board. Prices were 6.6% higher than in the final quarter of 2020.

❱ Buyers significantly outnumber sellers, which is causing prices to rise at a frenetic pace. I would like to see inventory rise to meet demand, but I doubt this will be the case in the near term.

A bar graph showing the annual change in home sale prices for various Idaho counties.

Days on Market

❱ It took an average of 98 days to sell a home in Northern Idaho and 61 days in the southern part of the state covered by this report.

❱ The average number of days it took to sell a home in the region rose nine days compared to the first quarter of last year.

❱ In Northern Idaho, days-on-market dropped in all counties other than Boundary, where market time rose by 2 days. In Southern Idaho, market time dropped in all counties other than Boise, where it took 26 more days to sell a home than in the first quarter of 2020.

❱ Homes sold the fastest in Canyon and Ada counties in the southern part of the state and in Shoshone County in the northern part of the state.

A bar graph showing the average days on market for homes in various counties in Idaho.

Conclusions

A speedometer graph indicating a seller's market in Idaho.

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.

With employment levels now higher than before the pandemic, buyers are clearly comfortable and, perhaps motivated by modestly rising mortgage rates, they are out in force. Unfortunately, the choice of available homes is very limited, which continues to cause prices to rise at well-above-average rates. As such, sellers still have a significant advantage. Since I do not expect to see listings rise enough to meet this demand, I am moving the needle more in favor of sellers.

 

About Matthew Gardner

Matthew Gardner - Chief Economist for Windermere Real Estate

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.

The post Q1 2021 Idaho Real Estate Market Update appeared first on Windermere Real Estate.

Q1 2021 Montana Real Estate Market Update

The following analysis of select Montana real estate markets 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

Montana’s job recovery following COVID-19 continues to impress, having returned more than 56,000 of the 63,300 jobs that were lost in the state. The recovery in employment was seen across all metro areas and I feel fairly confident that all of the jobs lost in Montana will have returned by the end of the year.

The February unemployment rate in Montana was 3.9%—well below the national rate of 6%. The Labor Department recently revised its unemployment estimates across the metro areas, and all of them saw rates increase from levels shown at the end of 2020. Even so, jobless rates in Montana were still well below the nation. Billings and Missoula were at 4.2% and Great Falls came in at 4.3%.

montana Home Sales

❱ In the first quarter, a total of 1,121 homes sold in the markets contained in this report, representing a drop of 31.8% compared to the same period in 2020. Sales were down 37.2% compared to the final quarter of 2020.

❱ With few choices for buyers, I was surprised to see sales higher in three counties. That said, they are all very small markets and the total growth in sales was only 22 units. In total, sales were down 522 units compared to a year ago.

❱ The decline in sales does not come as a surprise and can be almost totally attributed to the remarkably low level of homes for sale. The average number of listings in the first quarter was 36.5% lower than a year ago and 6.5% lower than in the fourth quarter of 2020.

❱ At some point, I expect to see sales start to rise again, which will likely occur when potential home sellers feel less concerned about COVID-19.

montana Home Prices

A map showing the real estate market percentage changes in various Montana counties.

❱ Year-over-year, home prices fell 14% to an average of $531,193 and were 12% lower than in the fourth quarter of 2020.

❱ I am not concerned about the regional decline in prices, as it was directly due to a significant price drop in Jefferson County, which is a very small market that is subject to severe swings. Additionally, the expensive Madison County market also saw prices drop, which impacted regional growth.

❱ Average sale prices rose in Ravelli, Missoula, Lake, and Broadwater counties, but this was offset by a drop in prices across the balance of the region.

❱ I cannot guarantee that the decline in home prices will turn around in the second quarter. I think the market is trying to find balance after having experienced a significant period where price growth has far exceeded the long-term trend.

A bar graph showing the annual change in home sale prices for various counties in Montana.

Days on Market

❱ The average number of days it took to sell a home dropped 28 days compared to the first quarter of 2020.

❱ Homes sold fastest in Lewis & Clark County, and slowest in Lake and Ravalli counties. All markets other than Lake (+37 days) saw market time drop compared to the first quarter of 2020.

❱ During the quarter, it took an average of 82 days to sell a home in the region.

❱ Market time rose one day compared to the fourth quarter of 2020.

A bar graph showing the average days on market for homes in various Montana counties.

Conclusions

A speedometer graph indicating a seller's market in Montana.

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.

Montana’s economy is performing better than most of the nation, and I believe that the housing market is still on solid ground—despite some of the numbers in this report. I expect both price growth and home sales to pick back up, but this can only happen if there are more homes to choose from.

It is still a seller’s market in which well-positioned, well-priced homes continue to attract buyers. As such, I have moved the needle a little further in favor of sellers, irrespective of lower sale prices that much of the market saw in the first quarter.

 

About Matthew Gardner

Matthew Gardner - Chief Economist for Windermere Real Estate

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.

The post Q1 2021 Montana Real Estate Market Update appeared first on Windermere Real Estate.

Q1 2021 Eastern Washington Real Estate Market Update

The following analysis of the Eastern 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

Following the COVID-19-induced slowing of employment growth, Eastern Washington had a solid recovery in place. However, as infections increased between last November and this January, that recovery stalled. Employment in retail trade and transportation saw job levels drop. There was also a significant decline in Professional & Business Services in the Kennewick area. According to the most recent available data, employment experienced some improvement in February, but regional employment is still down more than 16,500 jobs from the pre-pandemic peak. With the labor market stalling, the unemployment rate ticked up from 6.8% in December to 6.9% in February, but I am hopeful this will turn around as the vaccine becomes more freely available.

eastern Washington Home Sales

❱ Home sales throughout Eastern Washington rose 1.2% compared to the same quarter in 2020, with a total of 2,467 homes sold.

❱ Tepid sales growth can be partially attributed to the lack of homes on the market. In the first quarter there was an average of only 452 homes for sale. This is 58.9% lower than a year ago and 40.7% lower than in the fourth quarter of 2020.

❱ Sales activity rose in four counties and dropped in three. Of note was the significant growth in sales in Grant and Lincoln counties, but keep in mind that these are relatively small markets. The same can be said of the counties where sales dropped the most, so there’s no need to worry at the present time.

❱ Pending home sales were 5.5% higher than a year ago; however, they were 7.5% lower than in the fourth quarter. While the the lack of homes for sale is to blame for this drop, it does suggest that the pace of sales in the second quarter may not be positive.

eastern washington Home Prices

A map showing the real estate market percentage changes in various Eastern Washington counties.

❱ Year-over-year, the average home price in Eastern Washington rose a significant 20.8% to $359,474. Home prices were also 2.6% higher than in the fourth quarter of 2020.

❱ Demand remains in place, but supply remains well below the level I would like to see. With more buyers than sellers, it’s no surprise that prices increased at rates well above the long-term average.

❱ Prices rose in every county, with double-digit increases in all but one market and very significant price growth in Spokane and Grant counties.

❱ With mortgage rates slowly increasing, one might expect the market to cool somewhat. But unless there is a significant increase in inventory, I would be surprised to see this happen in the foreseeable future.

A bar graph showing the annual change in home sale prices for various counties in Eastern Washington.

Days on Market

❱ The average time it took to sell a home in Eastern Washington in the final quarter of 2021 was 33 days.

❱ It took 24 fewer days to sell a home in Eastern Washington in the first quarter than it did a year ago.

❱ All markets saw days-on-market drop compared to the first quarter of 2020.

❱ It took the same number of days to sell a home in the first quarter as it did during the fourth quarter of last year.

A bar graph showing the average days on market for homes in various Eastern Washington counties.

Conclusions

A speedometer graph indicating a seller's market in Eastern Washington.

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.

Demand is very strong and, even in the face of rising mortgage rates, buyers are still out in force. With supply still lagging significantly, it staunchly remains a seller’s market. Furthermore, assuming that new COVID-19 infections start to trend lower, I believe even more buyers may enter the market. As such, I am moving the needle even further in favor of sellers.

 

About Matthew Gardner

Matthew Gardner - Chief Economist for Windermere Real Estate

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.

The post Q1 2021 Eastern Washington Real Estate Market Update appeared first on Windermere Real Estate.

Q1 2021 Central Washington Real Estate Market Update

The following analysis of the Central 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

Through last fall, the Central Washington region was on its way to recovering the jobs that were lost due to COVID-19, but new infections have reversed that momentum. The hardest hit sectors were retail trade and transportation; all the markets contained in this report saw employment in these sectors drop. Due to the decline in employment, I wasn’t surprised to see the unemployment rate tick back up to 8.2% from the year-end level of 7.9%.

In aggregate, total employment was measured at 211,520, down from a pre-pandemic peak of 218,624. I hope that broader vaccine distribution will lead to a reopening of the local economy, which will give a much-needed boost to the area.

central washington Home Sales

❱ Sales in Central Washington were essentially static compared to the same period in 2020, with a total of 939 homes sold.

❱ Pending sales were 9.2% lower than in the fourth quarter of last year, suggesting that closings in the second quarter may also disappoint.

❱ Home sales rose in Kittitas County but were either static or fell in the rest of the region.

❱ Although the picture may appear somewhat bleak, I believe the primary issue has been a lack of inventory. However, the number of homes coming on the market has actually started to rise and I’m hopeful this will lead to improved sales as we move toward the summer.

central washington Home Prices

A map showing the real estate market percentage changes in various Central Washington counties.

❱ Year-over-year, the average home price in Central Washington continues to trend higher, with prices up 20.8% to $414,084.

❱ With signs that there are more sellers coming to market, combined with modestly rising mortgage rates, I expect to see the rapid pace of price growth start to slow, which will be good news for home buyers.

❱ All counties covered by this report saw prices rise significantly, with double-digit increases in all but one market.

❱ The takeaway is that average home-price growth in Central Washington remains well above the long-term average, but there are signs prices may experience a modest slowdown as we move through the year.

A bar graph showing the annual change in home sale prices for various counties in Central Washington.

Days on Market

❱ The average time it took to sell a home in Central Washington in the final quarter of 2021 was 57 days.

❱ During the fourth quarter, it took 13 fewer days to sell a home in Central Washington than it did a year ago.

❱ Three counties saw the length of time it took to sell a home drop compared to a year ago, but Okanogan and Yakima saw market time rise 13 days and 1 day, respectively.

❱ It took nine more days to sell a home in the first quarter than it did in the fourth quarter of 2020.

A bar graph showing the average days on market for homes in various Central Washington counties.

Conclusions

A speedometer graph indicating a seller's market in Central Washington.

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.

With signs of more listings coming online, the frenetic housing market may cool, but I do not see it contracting further. Though it remains a seller’s market, I have decided to leave the needle in the same position as it was at the end of 2020.

 

About Matthew Gardner

Matthew Gardner - Chief Economist for Windermere Real Estate

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.

The post Q1 2021 Central Washington Real Estate Market Update appeared first on Windermere Real Estate.

8 Tips for a More Energy Efficient Home

Whether they are motivated by rising energy costs or a desire to cultivate a more sustainable home, homeowners are constantly searching for ways they can go green, reduce their home’s energy waste, and save money in the process. Here are some simple methods for a more energy-efficient home.

 

1. Determine Your Energy Output

A natural first step in your energy-efficient journey is to get a gauge of how much energy your home is currently using and where it is being used. Analyze your recent bills to get a picture of your home’s energy consumption and the habits that are tied to that level of usage. From there, you can determine what kinds of cutbacks can be made to save energy. You might also consider hiring a professional energy auditor to fully inspect your home’s energy practices and identify where there’s room for improvement.

 

2. Laundry Room Best Practices

Adjusting your methods in the laundry room is an easy way to make an impact on your home’s energy output. When it’s sunny, air-dry your clothes to save energy. Most of the energy consumption generated by doing laundry comes from the heating of the water, so use cold water when possible. Wait until you have a full load before running the washer to maximize your laundry room’s efficiency.

 

3. Install Energy-Efficient Lighting

Replacing incandescent lights with newer, more energy-efficient options is a productive step towards reducing your home’s energy waste. A change of lightbulbs is a relatively cheap solution compared to more expensive energy-saving methods like replacing appliances. Because energy-efficient lightbulbs use less energy than standard bulbs, they commonly last much longer as well.

 

4. Check Your Windows

Excessive air conditioning and heating are often the culprits behind wasteful energy practices. Weatherstripping and caulking your windows help to regulate the flow of air, keeping your home warmer in the colder months and cooler in the hotter months. Old, drafty windows let in air that can increase your home’s energy usage, regardless of the season. The upfront investment in purchasing new windows will pay off in the long run and will help to reduce energy waste.

 

5. Check Your HVAC Unit

A fine-tuned HVAC system is critical to making your home as energy efficient as it can be. Maintenance of your HVAC unit periodically to make sure it’s running in tip–top shape and to avoid replacements, which can be quite expensive. The cleaner your HVAC filters, the more efficiently they can run. The filters should be swapped out a maximum of every three months, more often if you use it year-round or if you have pets at home.

 

6. Insulate Your Home

A well-insulated home can deliver significant savings on heating and cooling costs. Walls and windows are common areas where air can escape, but so are pipes and ducts. Wrapping all these areas in insulation will pave the way for saving energy throughout the house.

 

7. Turn Down Your Thermostat

Turning down your thermostat is an effective method of reducing energy consumption. Even lowering it by one degree will lower your furnace’s energy output and can make a difference in your home’s overall energy efficiency. Remember to clean your furnace filter often. A clean filter will allow your home’s heating system to run more efficiently and cost-effectively.

 

8. Set Energy Efficiency Goals

Once you’ve begun to implement some of these strategies to make your home more energy-efficient, you’ll discover new ways to reduce your home’s energy waste while saving money. Set goals for your home’s overall energy output in a given month or set a target number you’d like to see on your next energy bill. Track your home’s progress in energy efficiency and the savings you’ve generated over time to see the difference you’ve made.

The post 8 Tips for a More Energy Efficient Home appeared first on Windermere Real Estate.

Q1 2021 Southern California Real Estate Market Update

The following analysis of the Southern California 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 job recovery in Southern California can best be described as frenetic. Following the loss of more than 2 million jobs due to the pandemic, employers started rehiring last summer. That momentum was lost in the fall, but the latest data shows almost 400,000 jobs returned in February. As of penning this report, the region has recovered 1.3 million of the jobs that were lost, but that still leaves total employment down 700,000 from its pre-pandemic peak.

As jobs return, we see the unemployment rate gradually drop. The current rate is 10.9%. The latest data available showed the lowest jobless rates were in Orange County (6.8%) and San Diego County (7.2%). The highest rate was—unsurprisingly—in Los Angeles County, where it was 10.9%. In aggregate, the counties contained in this report have not seen a recent spike in new COVID-19 cases. As long as levels do not start to spike again, I expect to see more businesses reopen and demand for workers rise again.

southern california Home Sales

❱ The housing market remains remarkably robust, with 42,029 home sales in the first quarter of 2021, representing an increase of 20.1% year over year.

❱ Pending home sales, which are an indicator of future closings, were 5.0% higher than in the fourth quarter. This suggests that closings in the second quarter will be positive.

❱ The growth in sales was widespread, with all markets showing impressive double-digit gains. Of note is that Orange and Los Angeles counties saw sales rise by more than 20%.

❱ Listing activity was disappointing, with only 13,885 homes for sale in the first quarter of the year. This is 42.5% lower than a year ago and 27.7% lower than in the fourth quarter of 2020.

southern california Home Prices

A map showing the real estate market percentage changes in various Southern California counties.

❱ The average sale price in the region was $870,038. This was 17.5% higher than a year ago and 4.6% higher than in the fourth quarter of 2020.

❱ Mortgage rates have started to rise, but this has not yet influenced the rapid pace of price appreciation. With prices rising faster than incomes, affordability concerns continue to grow.

❱ The region saw double-digit price growth across all counties contained in this report, with significant increases continuing in Riverside County as buyers move out of the L.A. area.

❱ Mortgage rates and high home prices relative to incomes are likely to lead to a slowing in price growth. That said, with a limited number of homes for sale and solid demand, prices in the Southern California market will, again, rise at rates that are above the long-term average in 2021.

A bar graph showing the annual change in home sale prices for various Southern California counties.

Days on Market

❱ In the first quarter of 2021, the average time it took to sell a home in the region was only 27 days. This is 18 fewer days than a year ago but matches the pace of the final quarter of 2020.

❱ All markets contained in this report saw the time it took to sell a house drop compared to the first quarter of 2020.

❱ Homes in San Diego County continue to sell at a faster rate than other markets in the region. In the first quarter, it took an average of only 19 days to sell a home in that market. This is 11 fewer days than it took a year ago.

❱ The drop in market time is a function of limited inventory levels in concert with significant demand.

A bar graph showing the average days on market for home in various Southern California counties.

Conclusions

A speedometer graph indicating a seller's market in Southern California.

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.

Home sales and prices remain impressive, and demand continues to be very strong. These conditions favor home sellers; therefore, they are still in control of the market. While I expect the number of listings to rise this year, as well as a modest increase in mortgage rates, the market will remain tight.

Even as we see financing costs rising, I have still chosen to move the needle a little more in favor of sellers, as demand is likely – at least for the time being – to continue to exceed supply.

 

About Matthew Gardner

Matthew Gardner - Chief Economist for Windermere Real Estate

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.

The post Q1 2021 Southern California Real Estate Market Update appeared first on Windermere Real Estate.

Q1 2021 Colorado Real Estate Market Update

The following analysis of the Metro Denver & Northern Colorado 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

Following the decline in employment last winter, Colorado has started to add jobs back into its economy. The latest data shows that the state has now recovered more than 219,000 of the 376,000+ jobs that were lost due to COVID-19. This is certainly positive, but there is a long way to go to get back to pre-pandemic employment levels. Denver and Fort Collins continue to have the greatest improvement in employment, but all markets show job levels well below pre-pandemic levels. With total employment levels rising, the unemployment rate stands at 6.6%, down from the pandemic peak of 12.1%. Regionally, unemployment levels range from a low of 5.6% in Fort Collins and Boulder to a high of 6.7% in Greeley. COVID-19 infection rates have started to increase again, and this has the potential to negatively impact the job market. I am hopeful that the state will not be forced to pull back reopening, but this is certainly not assured.

colorado Home Sales

❱ 2021 started off on a bit of a sour note, with total sales down 1.2% compared to the same period in 2020. Sales were 29.2% lower than in the final quarter of 2020 as 8,645 homes sold.

❱ Sales were higher in four of the counties contained in this report, were essentially flat in one, and dropped in seven. It was pleasing to see significant sales growth in the large counties of Denver and Adams.

❱ Another positive was that pending sales, which are an indicator of future closings, were 4.8% higher than in the fourth quarter of 2020 and 5% higher than a year ago.

❱ The disappointing number of home sales overall can primarily be attributed to the woeful lack of inventory. Listings in the quarter were down more than 61% year over year and were 40.6% lower than in the fourth quarter of 2020.

colorado Home Prices

A map showing the real estate market percentage changes in various Colorado counties.

❱ Prices continue to appreciate at a very rapid pace, with the average sale price up 16.5% year over year, to an average of $556,100. Home prices were also 4.4% higher than in the fourth quarter of 2020.

❱ Buyers appear to be out in force, and this demand—in concert with very low levels of inventory—continues to heat the market.

❱ Prices rose over last year across all markets covered by this report, with the exception of the very small Gilpin County. All other counties saw sizeable gains and the trend of double-digit price growth continued unabated.

❱ Affordability levels are becoming a greater concern as prices rise at a far faster pace than wages. Even though mortgage rates have started to rise, they haven’t yet reached the level needed to take some of the heat out of the market.

A bar graph showing the annual change in home sale prices for various counties in Colorado.

Days on Market

❱ The average time it took to sell a home in the markets contained in this report dropped 20 days compared to the first quarter of 2020.

❱ The amount of time it took to sell a home dropped in every county contained in this report compared to the fourth quarter of 2020.

❱ It took an average of 25 days to sell a home in the region, down one day from the fourth quarter of 2020.

❱ The Colorado housing market remains very tight, as demonstrated by the fact that it took less than a month for homes to sell in all but two counties.

A bar graph showing the average days on market for homes in various counties in Colorado.

Conclusions

A speedometer graph indicating a seller's market in Colorado.

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 relatively low level of home sales is not a surprise given how few choices there are for buyers. Sellers are certainly benefitting from strong demand, as demonstrated by the significant price growth. I maintain my belief that there will be an increase in inventory as we move through the year, but it is highly unlikely that we will see a balanced market in 2021.

Given these factors, I am moving the needle a little more in favor of sellers, as demand is likely to continue to exceed supply.

 

About Matthew Gardner

Matthew Gardner - Chief Economist for Windermere Real Estate

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.

The post Q1 2021 Colorado Real Estate Market Update appeared first on Windermere Real Estate.

Q1 2021 Oregon and Southwest Washington Real Estate Market Update

The following analysis of the Oregon and Southwest 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 region’s job recovery, which stalled in the fall of 2020, has picked up again and I am hopeful this will continue.

Of the more than 285,000 Oregon jobs that were shed at the onset of the pandemic, 153,000 have now returned. Although employment levels are still 132,000 below the prior peak in February of 2020, the trend is again heading in the right direction. That said, rising COVID-19 infections have led the state to pull back on reopening and it is uncertain how this might impact the job market this spring. In Southwest Washington, 10,400 of the 22,000 jobs that were lost have returned and the trajectory appears to be similar to Oregon’s. With more jobs returning, the unemployment rate in Oregon continues to trend lower and now stands at 6% — a significant improvement from the 14.9% rate last April. The jobless rate in Southwest Washington currently stands at 6.7%, matching the level at the end of 2020.

oregon and southwest washington Home Sales

❱ In the first quarter of 2021 sales rose 7.1% compared to the same period a year ago, with a total of 12,342 homes sold.

❱ Sales rose in 14 counties but dropped in 12. As I mentioned in the last edition of the Gardner Report, most of the counties that saw sales drop were small and these markets can see significant swings. It appears as if this trend continues as smaller markets again saw lower sales.

❱ Following the trend seen last fall, sales were lower than fourth quarter. This can be attributed to a very significant lack of homes for sale rather than a slowdown in demand.

❱ Housing demand remains strong and is only being impacted by a lack of supply. Additionally, buyers are even more active today given the recent rise in mortgage rates. I expect an increase in inventory and sales in the coming year as homeowners who are able to continue working remotely sell and move to more affordable markets.

oregon and southwest washington Home Prices

A map showing the real estate market percentage changes in various Oregon and Southwest Washington counties

❱ Home prices in the region continue to skyrocket. The average sale price was up 21.7% year over year to $503,089. Prices were 5.7% higher than in the fourth quarter of 2020.

❱ Tillamook County led the market with the strongest annual price growth, but this is a very small market prone to significant swings. The most expensive market was Hood River County, where the average sale price was $694,333.

❱ Prices were higher in all counties contained in this report, with double-digit appreciation in all but one.

❱ Home prices continue to rise at a very significant pace, but I anticipate some headwinds—mainly in the form of higher mortgage rates—that may cool the market somewhat. That said, the pace of appreciation will remain above its longterm average throughout 2021.

A bar graph showing the annual change in home sale prices for various counties in Oregon and Southwest Washington

Days on Market

❱ The average number of days it took to sell a home in the region dropped 30 days compared to the first quarter of 2020. It took 6 fewer days to sell a home compared to the final quarter of last year.

❱ The average time it took to sell a home in the first quarter of 2021 was 51 days.

❱ All but one county (Tillamook, +1 day) saw the length of time it took to sell a home drop compared to a year ago.

❱ Homes again sold fastest in Washington County, where it took 17 days to sell. An additional eight counties saw the average market time drop to below a month.

A bar graph showing the average days on market for homes in various counties in Oregon and Southwest Washington

Conclusions

A speedometer graph indicating a seller's market in Oregon and Southwest Washington

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.

Home sales continue to grow, and robust demand is causing prices to rise significantly, resulting in a market that strongly favors sellers. The additional supply of homes that I’m predicting for 2021, combined with modestly rising interest rates, may start to slow the momentum in price growth, but for now I have moved the needle further in favor of sellers.

 

About Matthew Gardner

Matthew Gardner - Chief Economist for Windermere Real Estate

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.

The post Q1 2021 Oregon and Southwest Washington Real Estate Market Update appeared first on Windermere Real Estate.

4/29/2021 Housing and Economic Update from Matthew Gardner

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 and welcome to the April edition of Mondays with Matthew. I’m Windermere Real Estate’s Chief Economist, Matthew Gardner

There were a lot of rich, housing-related datasets released this month so let’s get going.

And first up, I want to look at mortgage applications.

Source: MBA

You may remember last month we discussed what was going on with mortgage rates as they had started to trend higher beginning in the New Year. Well, as rates rose, you can see here that mortgage applications slowed before picking back up in at the end of February, which was interesting as rates were still rising at that time.

And for those who find it curious that applications picked up even as rates were rising, well it was partly because buyers started to believe that rates would not be headed back down, and they wanted to get locked in for fear that they would continue trending higher.

Now, this pattern did reverse at the end of March as rising rates started to take a toll on would be buyers and affordability issues started to come more into play, but as mortgage rates pulled back in April, applications picked up again – albeit modestly.

Next to the Mortgage purchase graph, on the right we see the weekly mortgage purchase index which looks at the year over year data. Here we see that since this time last year, there are 58.2 percent more mortgage applications.

Source: MBA

But when we take a look at the data on a year-over-year basis.  Well, WOW!

Applications were up by over 58%! But remember what happened in March of last year? Who can forget….?

And its therefore really not surprising to see this kind of spike, but, I would caution you all that almost any dataset that compares current numbers to those seen a year ago – well, they are likely to paint far too rosy a picture, and one that is removed from reality.

Something to be aware of.

 

Next up, we got several datasets regarding the new home market March and we will start off with permits and starts.

Two line graphs next to each other. The one on the left shows the single family building permits from January 2019 to March 2021. Overall the trend is upward, with a large dip from March to May 2021, but they soon recover as if that dip never happened. From January to March 2021 there was another small dip, but there’s already proof of improvement back from that. On the right, the graph shows the single family home starts, again overall starts have increased since January 2019 to March 2021, with a few peaks and valleys in between, included a recent dip from November 2020 to February 2021, but they’re back on the rise since then.

Source: Census Bureau

Following the pullback in permit applications that was seen in February, builders were more optimistic in March with single family permits up by 4.6% on the month and 35.6% higher than a year ago – but don’t forget what we just said about year over year data!

Looking at housing starts – well they pulled back in January and February, but also saw a solid 15% monthly increase in March.

Interestingly, there was a massive spike in starts in the mid-west where they were up by 109% month-over-month, but they were actually down by over 12% out here in the west.

I would also let you know that the number of homes under construction rose by 1.6% versus February and this was particularly pleasing given that construction costs remain very elevated.

And it hasn’t just been material costs that have been hitting home builders, they have also seen significant pressures with labor costs and here’s why…

One line graph to the left, with space to the right for another. Data shows total employment in construction from January 2010 to February 2021. Overall trend shows constant growth since 2012, with a sharp dip in 2020 from the pandemic.

Source: BLS

This chart shows how many people are employed in the construction of single-family homes and, at face value, it looks pretty good with constant growth seen since 2012 – of course, ignoring the impact of the pandemic but….

On the same slide as the total employment in construction, to the right of that graph there’s total employment in Construction from January 2000 to January 2021, which shows an overall trend of decrease in jobs. A peak in 2006 soon falls to a very low valley in 2012.

Source: BLS

Looking at a longer timeline, it doesn’t paint as good a picture. At its peak in 2006, there were almost 650,000 people employed building homes, but the number today is just 60% of that.

Of course, there are fewer homes being started today than there were back in those halcyon days but starts today aren’t 40% lower, so the job market remains tight. In fact, there are over 260,000 job openings in the construction sector. Of course, not all of them are for the single-family construction market, but we do know that builder’s cost of labor is rising and that, in concert with higher land and material costs continue to impact builder’s ability to bring homes to market that are relatively affordable as the increase in costs is transferred directly into the price that a home must sell for and that brings me to data on new home listings, sales and prices in March.

Two graphs side by side, on the left is a line graph showing the Single Family New Homes for Sale in the US. This graph shows an overall trend of decrease in new homes for sale from 2019, but increased since the lowest point in the fall of 2020. On the right is a bar graph showing the houses for sale by stage of construction. The grey line represents “not started,” light blue represents “Under construction,” and navy represents “completed.” The light blue lines showing under construction are constantly the highest bars hovering between 150,000 and 200,000.

Source: Census Bureau

Even with new housing permits and starts rising significantly the seasonally adjusted estimate of new houses for sale at the end of March was 307,000. This represents a supply of 3.6 months at the current sales rate.

The number of new homes for sale was down by 7% from a year ago, but I do expect that the increase in permits and starts bodes well for this arena, and I do expect to see more listings come online over time.

If you look at the chart to the right, you will notice that the number of homes for sale that have yet to be started continues to rise. This is because builders want some certainty that the home will be sold, and it’s, therefore, easier to sell before you build it.

Source: Census Bureau

And when we look at sales, well they rise by 20.7% in March to an annual rate of over 1 million units and clearly rebounded from the previous month when we saw a massive drop as severe winter storms wreaked havoc across much of the country.

Interestingly, you will see that as many homes sold that hadn’t yet started as were under construction. Clearly, demand is robust to the degree that buyers willing to commit to buying a home that hasn’t yet been built.

The median new home sale price came in at $330,800 – that’s down by 4.4% on the month but 0.8% higher than a year ago.

Source: NAR

OK – now we have covered the new home market, let’s take a look at how the resale market fared in March.

The number of homes for sale remains at almost historically low levels with marginally more than 1 million units on the market. Now there maybe some of you out there who say that is inaccurate as NAR is reporting 1.07 million homes for sale, and you’d be absolutely correct.  But I have adjusted the data to account for seasonality, so it is slightly different.

Anyway, with such limited choice across the country, it wasn’t a surprise to see sales pulling back, with the total number of closings running at an annual rate of 6 million units – that’s down by 3.7% month over month, and down by 12.3% when compared to March of 2020.

Am I worried about this? No, I am not. Why? Well, as I just mentioned, just look at the inventory numbers.  With little choice, it’s not at all surprising to see sales pull back but I would add that the market still hit 6 million transactions and that was in the face of the increase in mortgage rates that we saw last month so, to tell you the truth, I was actually a little surprised to see that the number held above that 6 million level.

Source: NAR

But even as sales pulled back a little, prices didn’t, and more records were broken with the median sale price hitting an all-time high, and year-over-year price growth above 17% was another record shattered.

Source: NAR

And if you need further proof that there is little to be concerned about when it comes to sales pulling back, you only need to look at these charts.  Low supply, but still very robust demand has months of supply at levels that indicate a highly unbalanced market. Nationally, I like to see somewhere between 4 and 6 months of supply, not 2.1…

But look at the right. For every offer accepted in March, there were 3.8 additional offers, and I would also tell you that the average length of time it took to sell a home in March was just 18 days and that’s down by one day from February but down by eleven days when compared to a year ago.

Surely if demand was waning, wouldn’t the number of offers be going down, and days on market going up?

Source: NAR with Windermere Economics seasonal adjustments

And when we separate out the single-family market, you can see that listings notched very slightly higher – up by 1.2%, but the level is still close to an all-time low with listings down by over 31% year over year.

As far as sales are concerned, well they also pulled back a little and were down by 1.3% versus February but were 14% higher year over year.

Source: NAR

And as we discussed earlier, even with lower sales activity, sale prices are still rising at a very rapid pace and are now over 18% higher than seen a year ago and a remarkable 6.2% higher than seen in February.

The median price also broke above $330,000 for the first time.

Source: NAR with Windermere Economics Seasonal Adjustments

Moving on to the condominium market, we saw listings rise as the pandemic took hold, and there were concerns back then that we were at the start of a systemic increase in listings with people fleeing cities over fears of COVID-19, as well as the ability to work remotely, but the increase soon wore off, even if it rise by 9% in March when compared to February, but there were 5.1% fewer listings than seen a year ago.

But on the sales front – and with listings rising – we saw demand for those homes with sales up by 5% versus February and 36.4% higher than seen in March of 2020.

Source: NAR

In a similar fashion to single-family prices, sale prices for condominium units saw a spike in price in March and were up by 4.9% versus February and almost 10% higher than seen a year ago.

Although you will see that annual sale price growth did turn negative last May – due to COVID – it is actually rare to see this. We did see a tiny drop back in 2018 but you will likely remember that mortgage rates were rising then and knocking on the door of 5%.

Anyway, since last May, sale prices have picked back up very nicely and worries of any significant drop in condo prices appears to be overblown.

As far as the ownership market is concerned, I am far less worried that mortgage rates have been ticking higher than I am that there are just not enough homes for sale to meet demand.

We had seen some growth in the new construction arena – and that took just a tiny bit of heat off the resale arena – but demand continues to exceed supply, and that is pushing prices higher and affordability issues have already started to appear in several markets across the country.

At some point, we will see price growth slow, but I think that it will be far more to do with affordability limitations than it will rising mortgage rates.

So, there you have it. My thoughts on the housing market in March.

As always, if you have any questions or comments about the numbers, we have looked at today, feel free to reach out. I would love to hear from you.

In the meantime, thank you for watching, stay safe out there, and I look forward to visiting with you again, next month.

Bye now.

The post 4/29/2021 Housing and Economic Update from Matthew Gardner appeared first on Windermere Real Estate.

Q1 2021 Western Washington Real Estate Market Update

The following analysis 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

In the summer and fall of 2020, Western Washington regained some of the jobs lost due to COVID-19, but employment levels in the region have been in a holding pattern ever since. As of February, the region had recovered 132,000 of the 297,000 jobs that were lost, but that still leaves the area down by 165,000 positions. Given the announcement that several counties may have to roll back to phase 2 of reopening, I would not be surprised to see businesses hold off on plans to add to their payrolls until the picture becomes clearer. Even with this “pause” in the job recovery, the region’s unemployment rate ticked down to 6.1% from the December rate of 6.4% (re-benchmarking in 2020 showed the December rate was higher than the originally reported 5.5%). The lowest rate was in King County (5.3%) and the highest rate was in Grays Harbor County, which registered at 9.2%. Despite the adjustment to the 2020 numbers, my forecast still calls for employment levels to increase as we move through the year, though the recovery will be slower in areas where COVID-19 infection rates remain elevated.

western washington Home Sales

❱ Sales in the first quarter were impressive, with 15,893 home sales. This is an increase of 17.5% from the same period in 2020, but 32% lower than in the final quarter of last year—a function of low levels of inventory.

❱ Listing activity continues to be well below normal levels, with total available inventory 40.7% lower than a year ago, and 35.5% lower than in the fourth quarter of 2020.

❱ Sales rose in all counties other than Jefferson, though the drop there was only one unit. There were significant increases in almost every other county, but sales growth was more muted in Cowlitz and Thurston counties. San Juan County again led the way, likely due to ongoing interest from second-home buyers.

❱ The ratio of pending sales (demand) to active listings (supply) shows how competitive the market is. Western Washington is showing pendings outpacing new listings by a factor of almost six to one. The housing market is as tight now as I have ever seen it.

western washington Home Prices

A map showing the real estate market percentage changes in various Western Washington counties

❱ Home price growth in Western Washington continues to trend well above the long-term average, with prices 21.3% higher than a year ago. The average home sale price was $635,079.

❱ Compared to the same period a year ago, price growth was strongest in Grays Harbor and Mason counties, but all markets saw double-digit price growth compared to a year ago.

❱ Home prices were also 2.9% higher than in the final quarter of 2020, which was good to see given that 30-year mortgage rates rose .4% in the quarter.

❱ I expect to see mortgage rates continue to trend higher as we move through the year, but they will remain significantly lower than the long-term average. Any increase in rates can act as a headwind to home-price growth, but excessive demand will likely cause prices to continue to rise.

A bar graph showing the annual change in home sale prices for various counties in Western Washington

Days on Market

❱ The market in early 2021 continued to show far more demand than supply, which pushed the average time it took to sell a home down 25 days compared to a year ago. It took 2 fewer days to sell a home than it did in the final quarter of 2020.

❱ Snohomish and Thurston counties were the tightest markets in Western Washington, with homes taking an average of only 15 days to sell. The greatest drop in market time was in San Juan County, where it took 52 fewer days to sell a home than it did a year ago.

❱ Across the region, it took an average of only 29 days to sell a home in the quarter. All counties saw market time decrease from the first quarter of 2020.

❱ Very significant demand, in concert with woefully low levels of supply, continues to make the region’s housing market very competitive. This will continue to be a frustration for buyers.

A bar graph showing the average days on market for homes in various counties in Western Washington

Conclusions

A speedometer graph indicating a seller's market in Western Washington

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.

Demand is very strong and, even in the face of rising mortgage rates, buyers are still out in force. With supply still lagging significantly, it staunchly remains a seller’s market. As such, I am moving the needle even further in their favor.

As I mentioned in last quarter’s Gardner Report, 2021 will likely see more homeowners make the choice to sell and move if they’re allowed to continue working remotely. On the one hand, this is good for buyers because it means more listings to choose from. However, if those sellers move away from the more expensive core markets into areas where housing is cheaper, it could lead to increased competition and affordability issues for the local buyers in those markets.

 

About Matthew Gardner

Matthew Gardner - Chief Economist for Windermere Real Estate

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.

The post Q1 2021 Western Washington Real Estate Market Update appeared first on Windermere Real Estate.