Q2 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

Although the post COVID-19 job recovery took a step backward last winter, it has since picked up again, which is very pleasing to see. At the end of the second quarter, the state had recovered more than 276,000 of the 376,000+ jobs that were shed due to COVID-19. Even though employment levels are still almost 100,000 lower than the pre-pandemic peak, they are heading in the right direction. Looking at the markets contained in this report, current employment levels in Colorado Springs are only 2.2% below the pre-pandemic peak, followed by Denver and Fort Collins, which are both down 3.6% from the 2020 peak. I would add that all markets showed jobs continuing to return. With total employment levels rising, the unemployment rate stands at 6.2%, down from the pandemic peak of 12.1%. Regionally, unemployment levels range from a low of 4.8% in Boulder to a high of 6.3% in Grand Junction. COVID-19 infection rates dropped during the quarter, which is certain to lead to employment levels continuing to rise unless we see another significant increase in infection rates due to the rise of new variants across the country.

colorado Home Sales

❱ The late spring/early summer market was a good one for home sales, which were up 33.9% from a year ago. Comparing the current quarter to a period when COVID-19 was widespread is not that informative, but, with sales up more than 55% from the first quarter of this year, the market appears to be very buoyant.

❱ Sales were higher in all counties other than the very small Clear Creek County. Where sales rose, they did so at double-digit rates in all markets other than Weld.

❱ During the second quarter, 13,428 homes sold. This is very impressive but not overly surprising, given that the average number of homes for sale was up 45% from the first quarter.

❱ Another positive was that pending sales, which are an indicator of future closings, were 42.8% higher than in the first quarter. This suggests that closings next quarter should be positive as well.

colorado Home Prices

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

❱ Prices continue to appreciate at an impressive pace, recording an increase of 28.1% year over year to an average of $615,409. Home prices were also 10.7% higher than the first quarter of this year.

❱ Buyer demand remains very strong, likely exacerbated by the drop in mortgage rates in the second quarter and improving levels of inventory.

❱ Year-over-year, prices rose across all markets covered by this report, with the exception of Clear Creek County. Of the markets that saw prices rise, all did so by double digits, with very notable gains in Boulder, Gilpin, and Park counties.

❱ Affordability levels continue to trouble me, and the pace of price appreciation has to slow at some point. The market is clearly still out of balance, but as long as the credit quality of buyers remains high, I do not see any cause for concern.

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

Days on Market

❱ The average number of days it took to sell a home in the markets contained in this report dropped 14 days compared to the second quarter of 2020.

❱ The amount of time it took to sell a home dropped in every county contained in this report compared to the second quarter of 2020. The exception was Gilpin County, where it rose by only two days.

❱ It took an average of only 14 days to sell a home in the region, which is down 11 days compared to the first quarter of this year.

❱ The Colorado housing market remains very tight, as demonstrated by the fact that it took less than a month for homes to sell in every county other than one.

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.

Sales rose on the back of lower mortgage rates and higher levels of homes available to buy. Although this should signify a move back to a more balanced market, we are not there yet as price growth remains well above the long-term average.

With solid demand and favorable financing rates, the market is expected to remain active as we move through the balance of the year. That said, housing affordability is becoming an increasingly large concern. According to the Colorado Association of REALTORS®, statewide affordability for single-family homes has dropped almost 20% year-over-year and is down 17.8% for multi-family homes.

At some point, an affordability ceiling will be reached, which will slow home-price appreciation—but not yet. As such, I am moving the needle a little more in favor of home sellers, as they remain in the driver’s seat, for now.

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 Q2 2021 Colorado Real Estate Market Update appeared first on Windermere Real Estate.

Q2 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

Despite a decrease in employment levels last winter, Southern California saw a decent job recovery between May 2020 and February 2021. However, it appears we lost some momentum as COVID-19 cases started to rise again, specifically in Los Angeles County. Although the region has recovered 1.28 million of the 2.02 million jobs that were shed during the pandemic, the region is still more than 720,000 jobs shy of the pre-COVID peak. That said, the region’s unemployment rate in June was 8.8%, down significantly from 15.5% a year ago. Data at the end of the second quarter showed the lowest jobless rates were in Orange (6.4%) and San Diego (7%) counties. The highest rate was, unsurprisingly, in Los Angeles County, where it was 10.5%.

southern california Home Sales

❱ The housing market continued its upward swing, with 52,792 home sales closing in the second quarter, which was a year-over-year increase of 70.5%. However, I would caution not to read too much into this growth rate as COVID-19 heavily impacted sales in the second quarter of last year.

❱ Pending home sales, which are an indicator of future closings, were 10.9% higher than in the first quarter of this year, suggesting that closings in the third quarter will be positive.

❱ Home sales increased across the board, with closings rising in all markets by more than 40%. Sales in Orange and Los Angeles counties nearly doubled.

❱ Listing activity continues to lag, with an average of only 14,747 homes for sale in the quarter. This is 41.8% lower than a year ago, and 6.2% higher than in the first quarter of 2021.

southern california Home Prices

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

❱ The average home sale price in the region was $984,959. This was 35.7% higher than a year ago and 13.2% higher than in the first quarter of this year.

❱ Mortgage rates rose modestly in the first quarter, which likely got some would-be buyers off the fence. This additional demand, in concert with persistently low supply levels, resulted in significant price appreciation.

❱ The region saw double-digit price growth across all counties contained in this report. Annual prices were up more than 30% in all counties except Riverside—but they only just missed out. On average, prices were up more than $100,000 from the prior quarter.

❱ I still anticipate mortgage rates to rise as we move through the year, but the increase will be very modest. Although prices are expected to rise further, affordability constraints continue to grow, which at some point will slow the remarkable gains we have seen.

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

Days on Market

❱ In the second quarter of the year, the average time it took to sell a home in the region was only 19 days, which is 20 fewer days than a year ago and 9 fewer days than in the first quarter of 2021.

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

❱ Homes in San Diego County continue to sell at a faster rate than other markets in the region. In the second quarter, it took an average of only 13 days to sell a home there. This is 9 fewer days than it took a year ago.

❱ Comparing days on market to a year ago is not that informative given that the pandemic was in full force then. What is of greater interest is that market time dropped from the first quarter of this year, indicating that conditions are very tight.

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

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 were all higher than in the first quarter of 2021, while the number of homes available to buy remained significantly lower. With solid demand in place, it is staunchly a seller’s market. However, with mortgage rates likely to rise in the coming year, and affordability constraints starting to tighten all markets except perhaps San Bernadino, the pace of price growth must slow at some point.

Even with the headwinds mentioned above, I have still chosen to move the needle a little more in favor of home 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 Q2 2021 Southern California Real Estate Market Update appeared first on Windermere Real Estate.

Q2 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 recovery of the jobs lost due to the pandemic continued in the second quarter, but at a significantly slower pace than in the first quarter. Of the more than 285,000 Oregon-based jobs shed during the pandemic, 181,800 have now returned. Though this is positive, state employment is still down more than 100,000 jobs. As I predicted last quarter, it is now clear that Oregon’s efforts to pull back on reopening due to rising COVID-19 cases slowed the velocity of the job recovery, but there was growth in the second quarter.

In Southwest Washington, 16,980 of the more than 22,000 jobs that were lost have returned, and they are returning more quickly than in Oregon.

More hiring has allowed the unemployment rate in Oregon to drop from 6% at the end of the first quarter to 5.6% in June. The jobless rate in Southwest Washington currently stands at 6%, its lowest level since the pandemic took hold.

oregon and southwest washington Home Sales

❱ In the second quarter of the year, 19,614 homes sold, an increase of 37% from the second quarter of 2020. Although an increase was certainly expected given where we were last year, I was also very pleased to see a 59% increase in sales from the first-quarter figure.

❱ The largest increase in sales from the first quarter was in the greater Portland metro area, but all counties contained in this report experienced more transactions.

❱ Sales rose in every county other than Tillamook compared to a year ago, but this is a very small market that regularly experiences extreme swings in the number of sales. In markets where sales rose, all but two of them saw double-digit gains.

❱ Demand remains strong but supply is still lagging. More buyers are getting off the fence after mortgage rates rose in the first quarter. Although rates have pulled back somewhat, the specter of them rising has generated a lot of competition for the homes that are available.

oregon and southwest washington Home Prices

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

❱ The average home price in the region continues to soar. Prices were up 26.1% year over year to $532,397 and were 5.8% higher than in the first quarter of the year.

❱ Relative to a year ago, Tillamook County again led the market with the strongest annual price growth, but it is a very small market prone to significant swings. The most expensive market was Hood River County, where the average sale price was $728,700.

❱ All counties contained in this report saw prices rise more than 10%. Prices in Jackson, Klickitat, and Wasco counties were lower than in the first quarter, but I do not see this as being pervasive and I expect them to pick back up as we move through the rest of the year.

❱ Prices continue to rise at an astonishing pace, but many areas are hitting an affordability ceiling. This, in concert with modest increases in mortgage rates, is likely to temper price growth—but just not yet. This year, prices will continue to increase at well above the long-term average.

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 second quarter of 2020. It took 16 fewer days to sell a home compared to the first quarter of this year.

❱ The average time it took to sell a home in the second quarter of 2021 was 35 days.

❱ With the exception of Benton County, which was up nine days, every county saw the length of time it took to sell a home drop compared to a year ago. Benton was also the only county that saw market time rise compared to the first quarter of 2021.

❱ Homes again sold the fastest in Washington County, where it took only 11 days for the average home to go under contract. An additional 16 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 Q2 2021 Oregon and Southwest Washington Real Estate Market Update appeared first on Windermere Real Estate.

Q2 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

Employment levels in Western Washington picked up in the late spring and early summer months. The region has now recovered 168,800 of the 297,210 jobs that were lost due to the pandemic. Although the recovery is palpable, there are still 128,000 fewer jobs than there were at the pre-COVID peak in February 2020. The most recent data (May) shows the region’s unemployment rate at a respectable 5.2%. This is significantly lower than the April 2020 high of 16.8%, but still not close to the 2020 low of 3.7%. The jobless rate was lowest in King County (4.8%) and highest in Grays Harbor County (7.6%). Although unemployment levels continue to drop, we cannot attribute all the improvement to job creation: a shrinking labor force also lowers the jobless rate. In short, job recovery continues but we still have a way to go.

western washington Home Sales

❱ Regardless of low levels of supply, sales in the second quarter rose 45.6% year-over year, with a total of 25,640 homes sold. Although comparisons to the same quarter a year ago are not informative due to the pandemic, I was pleased to see sales increase 61.3% from the first quarter of this year.

❱ Listing activity was 42.8% higher than in the first quarter, which was a pleasant surprise. Listings rose the most in Kitsap, Clallam, Island, and Mason counties, but there were solid increases across the region.

❱ Sales were up across the board, with sizable increases in San Juan, King, Whatcom, and Snohomish counties. Only Mason County experienced sales growth below 10%.

❱ Pending sales (demand) outpaced active listings (supply) by a factor of 6. Even with the increase in the number of homes for sale, the market is far from being balanced.

western washington Home Prices

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

❱ Home prices rose 31.4% compared to a year ago. The average sale price was $734,567—another all-time record.

❱ Year-over-year price growth was strongest in San Juan and Jefferson counties, but all markets saw prices rise more than 23% from a year ago.

❱ Home prices were a remarkable 15.7% higher than in the first quarter of this year, possibly due in part to the drop in 30-year fixed mortgage rates between the end of the first and second quarters. That said, the modest decline in mortgage rates is certainly not the primary driver of price growth; the culprit remains inadequate supply.

❱ Relative to the first quarter of the year, San Juan (+33%), Jefferson (+24.7%), and Island (+20.5%) counties saw the fastest rate of home-price appreciation.

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

Days on Market

❱ It took an average of only 18 days for a listed home to go pending. This was 22 fewer days than a year ago, and 11 fewer days than in the first quarter of 2021.

❱ Snohomish, Kitsap, Thurston, and Pierce counties were the tightest markets in Western Washington, with homes taking an average of only 7 days to sell in Snohomish County and 9 days in the other three counties. The greatest drop in market time compared to a year ago was in San Juan County, where it took 84 fewer days to sell a home.

❱ All counties contained in this report saw the average time on market drop from the same period a year ago. The same can be said when comparing market time in the current quarter with the first quarter.

❱ It’s widely known that the area’s housing market is very tight and unfortunately, I don’t expect the number of listings to increase enough to satisfy demand in the near term. Furthermore, I’m seeing rapid growth in demand in the counties surrounding King County which is likely proof that buyers are willing to move further out given the work-from-home paradigm shift.

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 maintaining its momentum, and, even with supply levels modestly improving, the market remains extraordinarily tight.

Mortgage rates are still hovering around 3%, but the specter of them starting to rise at some point is clearly motivating buyers. I am very interested to see significant interest outside of the Seattle metro area, although King County is certainly still performing well. I will be monitoring whether this “move to the ‘burbs” is endemic, or a temporary phenomenon. My gut tells me that it is the former.

At some point, the remarkable run up in home values will slow. Affordability constraints are becoming more widespread, and even a modest uptick in mortgage rates will start to slow down price increases. It’s worth noting that list-price growth is starting to taper in some markets. This is a leading indicator that may point to a market that is starting to lose a little momentum.

The bottom line is that the market still heavily favors sellers and, as such, I am moving the needle even more in their favor.

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 Q2 2021 Western Washington Real Estate Market Update appeared first on Windermere Real Estate.

7/26/2021 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!  I’m Windermere Real Estate’s Chief Economist, Matthew Gardner, and welcome to the latest episode of Mondays with Matthew.

This month, we are going to take another look at forbearance activity across the U.S.  Now I know that we have talked about this subject several times over the past year, but it is worthwhile to look at it again if only for the fact that the program stopped taking new applications for forbearance at the end of June.

So, let’s take a look at where we were when the forbearance program started and where we are today.

 

 

And as you can see from this first chart, the situation today is a vast improvement from where we were last May when there were more than 4.76 million homes in the program. For context, that meant that more than 9% of all homes with a mortgage were in the program last May – a huge number.

But the latest data from Black Knight Financial shows that – by mid-July of this year – the number had dropped to just over 1.86 million homes, or roughly 3.5% of houses with a mortgage.

This is certainly a pretty impressive recovery, as it means that 2.9 million homeowners left the program between May of 2020 and mid-July 2021.

 

Power point slide titled “Forbearance Plans by Lender” showing a graph of active forbearance plans. The x-axis shows the dates from April 16 2020 to July 6 2021 and the y-axis shows the number of active plans starting at 0 at the bottom and increasing by 500,000 each line with 2.5 million at the top. Three lines represent the different lenders, light blue is Fannie/Freddie, Orange is FHA/VA, and green is Other. They all follow a similar trend, peaking in May and June or 2020 and steadily decreasing until they reach their lowest in July 2021 to the far right of the graph. The source is Black Knight Financial.

 

And when we look at the makeup of mortgages in forbearance, the largest share came from loans backed by Fannie Mae and Freddie Mac – not surprising given the size of their mortgage portfolio – with, at the peak, just shy of two million homes in the program – roughly 7.2% of their total portfolio.

But that number has now dropped to 582,000 or just 2.1% of loans outstanding.

Loans backed by the FHA or VA also peaked last May at about 1.53 million or 12.6% of their portfolio.

But today that number has dropped to 755,000 or 6.2% of the mortgages they hold.

And finally, loans showed here as “other” represent private label securities or portfolio loans, and it’s interesting to see that their numbers didn’t peak until late June when just short of 1.25 million homes – or 9.6% of their portfolio – were in the program.

However, today that number had dropped to 524,000, or 4% of mortgages backed by these entities.

 

What I see from the slides that we have looked at is that the number of active forbearance plans continues to fall; however, the pace of the drop has certainly slowed over the last quarter or so.

After seeing a monthly drop of 12% in April – as a large volume all plans hit their 12-month review date – the pace of improvement has since slowed to just 5% over the past 30 days.

Although the number of homes in forbearance is still higher than I would like to see, fewer than 4% of all mortgages are in the program and we haven’t seen this level since April of 2020, just as the pandemic was kicking in.

 

Power point slide titled “Scheduled Forbearance Plan Expirations” with a bar graph. The x-axis of the bar graph shows months, starting with February 2021 and ending with December 2021. The bars show that a majority of the plans are expiring in June, July, August, September and October. The source is Black Knight Financial.

 

As we look forward, you can see that almost 600,000 homes currently in forbearance are coming up for review so the potential for a greater rate of improvement in the overall number of homes in the program is certainly possible – but not guaranteed.

 

Power point slide titled “Nominal & Inflation-Adjusted Home Prices” with a line graph that shows the Forbearance plans starts. The x-axis is labeled with dates from May 5, 2020 to June 15, 2021 and the y-axis has the number of plans starting at 0 and increasing by 50,000 until 300,000 at the top. There are three lines, the teal line shows the new starts, green shows the re-starts, and the light blue shows the Forbearance plans start. The teal and the light blue line closely match each other, with a peak in May 2020 and a slow decrease since then, while the green line starts low and matches the blue lines starting in September 2020 and then following the same trend from there. The source is Black Knight Financial.

 

Unsurprisingly the number of homes entering the program for the first time as well as repeat plan starts is lower than we saw last summer but again the pace of improvement has slowed. That said, overall starts are down by 3% on the month and when we combine new and repeat starts the number is 3 to 4% lower.

 

Power point slide titled “Nominal & Inflation-Adjusted Home Prices” with a line graph that shows forbearance plans removals and extensions. The x-axis shows the dates from April 21 2020 to June 15 2021, y-axis shows the number of plans starting at 0 at the bottom and increasing my 100,000 until 900,000 at the top. The blue line represents the forbearance plan removals and the green line shows the plan extensions. The green line has a clear spike in June/July of 2020 and the blue line has a clear spike in October 2020. The source of this information is from Black Knight Financial.

 

Of the roughly 460,000 homes in forbearance that were reviewed for either extension or removal from the program in the first two weeks of June, 33% left the program while 67% had the term extended.  This is a lower removal rate than we saw during the first two weeks of either April or May, but I expect to see more homeowners come out of the program, but only as long as the country continues to reopen, and that is not a certainty given the rise of the Delta and Lambda variants of the COVID-19 virus.

Power point slide titled “Nominal & Inflation-Adjusted Home Prices” with a line graph that shows the final expiration month of active forbearance plans that assumes the plans expire in 18 months. The x-axis is the plan final expiration month from May 2021 to July 2022 and the z-axis shows the number of plans from 0 to 450,000. The line spikes in September 2021 around 400,000 and then quickly goes down so that by November the line evens out in the 150,000 range. The source of this information is Black Knight Financial.

 

I actually found this chart to be very interesting. Of the more than two million active forbearance plans, approximately half are scheduled to reach their 18-month terminal expiration date in September and October of this year.

And if we take this data, and then project a fairly modest 3% monthly rate of homeowners leaving the forbearance program, it means that over 900,000 homes would exit the program in the third and fourth quarters of this year.

And with 575,000 thousand plans scheduled to expire in September and October alone – that means that mortgage services will be faced with the daunting task of having to process nearly 15,000 plans per business day during that time. It’s going to be a lot of work!

 

Power point slide titled “Nominal and Real Monthly Payment” with a pie graph that shows the current status of COVID-19 related forbearances as of June 15, 2021. 46% of the pie is orange, representing the total removed or expired plans. 26% of the pie is light blue representing the 1.863 million plans that are active because of a term extension. 18% of the pie is navy representing the 1.292 million who are paid off. 4% is green showing the removed/expired – delinquent and active loss mit. Another 3% is brown, showing the number of plans that were removed/expired because they were delinquent. And the last 3% is grey showing the plans that are active in their original term. The source of this information is Black Knight Financial.

 

Roughly 7.25 million borrowers have used the forbearance program at one time or another through the course of the pandemic and that represents roughly 14% of all homeowners in the country.

Of that 7.25 million, the chart here shows that 72% have left the plan, and 28% remain in active forbearance, but you can also see that loan performance remains pretty robust among homeowners who have left the program with 46% of them getting things squared away with their lenders in regard to missed payments, and 18% having paid off their loan in full – likely from selling or refinancing with a different lender.

You will also see that the number of borrowers in post forbearance loss mitigation is down a tad to 333,000, while those who have left forbearance but still remain delinquent and not in loss mitigation accounts for roughly 3% of total loans in the program or just 195,000.

 

So, the way I see it, although the number of homes leaving the program has certainly slowed which, quite frankly, doesn’t surprise me, I still expect further improvement as we move through the year not just because the economy continues to reopen and people are getting reestablished at work, but also because we won’t be seeing any new owners enter the program.

And finally, I want to show you what parts of the country have a high share of homes in forbearance.

 

Power point slide titled “Nominal and Real Monthly Payments” with a map of the United States of America. Each state is shaded in a color that represents how many homes are still in forbearance. Washington is green at 3.7%; Oregon is green at 3.2%; California is yellow at 4.6%; Idaho is green at 2.3%, Nevada is dark orange at 6.5%; Montana is green at 2.6%, Colorado is green-yellow at 4.3%; Utah is green at 3.9%; Hawaii is orange at 6.8%. Texas and Louisiana are the states with the most, sitting at 7% and 7.9% respectively. Note this data is from March, as State and County data suffer a 3 month delay before it’s released. The source of this is from Windermere Economics analysis of Atlanta Fed data.

 

I must tell you first off, that this data isn’t that timely – in fact these numbers are from March as the data I get at the State and County grain is subject to a three month lag.

Anyway, as you can see from this map, not all states are created equal, with the share of homes in forbearance still elevated in Louisiana, Texas and, to a lesser degree, New York State.

Out here in the West, the rate in Nevada is still high, and California and New Mexico are both somewhat higher than I would like to have seen but, as I just said, this data is a little old, and I believe that the share of homes in forbearance in both Nevada and California is lower today than you see here.

 

Given everything that we’ve looked at today, there are a couple of conclusions that can be drawn.

The first, and most obvious, is that anyone believing but there will be a flood of homes that will be foreclosed on either toward the end of this year or in 2022, is likely to be disappointed. Even if every home still in the program does enter foreclosure which, by the way, is basically impossible, the number of homes that would be foreclosed on would be minimal when compared to the fallout following the financial crisis of more than a decade ago.

And when I say that it’s virtually impossible to expect to see all homes will be foreclosed on, it’s mainly because of the remarkable run up in home values that the country has seen since 2012.

The buildup of equity that all homeowners have seen whether they bought before 2012, or even as recently as the past 2 or 3 years, suggests that if, for whatever circumstance, owners in forbearance can’t get their heads back above water, they will choose to sell their home – in order to keep the equity that they have accumulated.

A typical homeowner in forbearance has a sizeable equity in their home, with median equity of a homeowner in the program measured at just over $100,000. And this significant amount of cash in their homes would allow them to pay the bank back any missed payments, sell, and still walk away with a sizable amount of equity.

The bottom line is that have the forbearance program was needed and it can be said that it has been successful so far in warding off home foreclosures because of the remarkable impact of the pandemic.

Although it would be naïve to suggest that foreclosure rates won’t rise at all, as the forbearance program winds down, I do see them ticking higher but, given all the data that I’ve been looking at, I would be very surprised to see overall foreclosure rates rise to a level significantly above the long-term average.

Well, I hope that you have found this month’s discussion to be interesting. As always if you have any questions or comments about this topic, please do reach out to me but, in the meantime, stay safe out there and I look forward the visiting with you all again, next month.

Bye now

 

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What to Consider When Buying an Equestrian Property

Buying a horse property is not your typical home purchase, especially for first time buyers. If you’ve never shopped for a horse property before, there is much to learn on the road to finding the best property for your needs. Working with an experienced Equestrian Advisor will also help ensure your home search and purchase go as smoothly as possible.

Horse Property Acreage

Just because a property has plentiful acreage doesn’t mean it will be suitable for horse care. The land must be flat-to-gently-sloped for grazing and provide adequate access to your horses’ basic needs. You want to look for properties with usable land – meaning there are not acres of unusable gullies, steep edges, or too many bodies of water that could make it difficult for your animals to navigate the property. Pay attention to local regulations about how much acreage is required per horse.

Zoning Instructions

If the property currently has horses or has in the past, do not assume it is an approved horse property. Part of your Equestrian Advisor’s job will be to ensure the property is in line with the local city, county, and/or HOA regulations for agriculture and livestock. Neglecting to verify the property could mean a significant financial setback if your horse property were the source of future legal issues and penalties.

Stable Inspections

When conducting the primary home inspection, be sure to have the barn and stables inspected as well. This could lead to higher upfront costs but skipping it could cause a huge headache later. Having a professional evaluate the barn and stables can reveal structural issues, electrical issues, or other potential problems that you would want to know about before you sign any paperwork.

Amenities

Housing horses and livestock on your property can be done with much more ease with a few convenient amenities. When touring prospective properties, look for the following:

  • Frost-proof spigots in the pasture, arena, and turnouts
  • Heated waterers in the stalls
  • Sufficient hay storage area
  • Tack room with a fridge for medication and supplements
  • Wash bay
  • Arena or training round pen

Your Routine

Transitioning to an equestrian lifestyle is a big adjustment, especially if this is your first time. Make sure you are taking your daily routine into consideration when looking at properties. How close are you to the barn? Where is the main water source? Careful planning every step of the way will make adapting to your new property much smoother and easier.

To connect with an experienced Equestrian Advisor today, click the link below: 

Equestrian Advisor

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6 Commonly Missed Cleaning Spots

It’s easy to get into a routine when cleaning your home season after season, year after year. While simply going over the same spots may make your home feel cleaner, at the same time, it allows the neglected areas to become dirtier. Here are six commonly missed spots around the home that, once given the attention they deserve, will help make your home feel completely clean.

6 Commonly Missed Cleaning Spots

1. Underneath & Behind Furniture

Dirt and dust love to hide in tough-to-reach, tucked-away spots like behind your nightstand, under your bed frame, and on the underside of your tables, chairs, and couches. Cleaning these areas may require some heavy lifting and rearranging but it’s worth your while. If enough dust and grime have accumulated over the years that your vacuum can’t remove the buildup, try using a washcloth to loosen the sediment.

2. Vents and Fans

Vents and fans not only collect dust, but they also distribute it around your home. Ceiling fans are one of the hardest spots in your home to reach, so you may need to use a ladder and an extended duster to clean them. Clean your vent grates with a dusting brush or a wire brush depending on the thickness of the buildup. If your home has central air, remember to replace your air filters periodically. A clean ventilation system is key to protecting your home’s air quality.

3. Bathroom Surfaces

We all know the feeling of picking up a rarely used shampoo bottle in the shower to discover a grimy ring underneath it. Wipe off your bottles and surfaces in the shower to keep it sparkling clean. Scrub away the debris from your shower head and soak it in a mixture of water and white vinegar to cleanse the device and to prevent a buildup of mineral deposits. To reach behind the toilet, you may need knee pads and an extended cleaning tool. Use a disinfectant-water mixture to prevent the spread of germs. Tackling chores like these will help make your bathroom feel brand new in no time.

 

Image Source: Getty Images

 

4. Switches & Handles

Light switches, door handles, drawer pulls, and knobs are all hotbeds for germs and dirt and can easily be forgotten while cleaning your home. Take a two-step approach to cleaning these high-touch surfaces: first clean, then disinfect. Cleaning will get rid of contaminants, while disinfecting targets pathogens. The combination of the two will help make your home feel cleaner while reducing the spread of germs. Other high-touch surfaces such as keyboards, phones, tablets, and other devices require regular cleaning as well.

5. Appliances

It’s easy to think of your appliances strictly as devices that help your home stay clean and organized, but they are magnets for dirt and gunk, too. After cleaning out the refrigerator and scrubbing down the shelves, find the coils and clean them of debris with a vacuum or a brush. The floor underneath your refrigerator can be a seriously grimy spot, so a quick mop of that area is worth your while. Give your dishwasher a good cleanse to prevent mold buildup and bad odors. Remember to clean out the filter occasionally with soap and water. Cleaning your appliances routinely can help avoid repairs and can even extend their life expectancy.

6. Baseboards

Baseboards are the perfect settling point for dirt and dust. The space between your walls and floors is an easy trap for buildup, and upon closer inspection, you’ll find some combination of scuffs, dust, food remnants and scratch marks. To thoroughly clean your baseboards, you may need to move your furniture away from the walls but be careful not to scratch the floor or damage the baseboards. Wipe away the dust before cleaning the surface. Use either a mix of soap and water, water and vinegar, or the proper wood cleaner for wooden baseboards. 

For more information on cleaning your home, seasonal maintenance, and more, visit the Living section of our blog.

Windermere Blog – Living

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Is Co-Buying Right For You?

For some buyers, purchasing a home independently may be out of reach. Co-buying is an alternative approach to homeownership where two or more individuals purchase the property together and take on a joint mortgage. Get to know the benefits and drawbacks of co-buying before deciding whether it’s right for you.

How Does Co-Buying Work? 

Just like a traditional home purchase, lenders use the buyers’ debt-to-income ratios and credit scores to determine their mortgage eligibility and formulate the terms of their loan. The lender will use the lowest median credit score to determine whether the co-buyers qualify. Before you purchase with a co-buyer, work with a real estate attorney to flesh out the details of the agreement including the distribution of shares, the responsibility of each party for the down payment and subsequent mortgage payments, and the home’s title. There are two main options for taking title to a home with a co-buyer.

Tenancy in Common (TIC)

  • When co-buyers hold a title as tenants in common, shares of the property can be divided equally or unequally. You and a co-buyer can decide to split ownership to reflect the amount invested. However, even if these amounts are unequal, no one individual may claim sole ownership of the property. If a co-buyer dies, their ownership passes along to their designated heir. With Tenancy in Common, a co-owner may sell their shares of the property at any time, without the need for approval from other co-owners.

Joint Tenancy

  • Joint Tenancy—or Joint Tenancy with Right of Survivorship (JTWROS)—requires that all co-buyers hold an equal interest in the property and that they all come into ownership through the same title at the same time. If one co-owner dies, ownership passes to the other co-owner—this is known as Right of Survivorship. Unlike Tenancy in Common, co-owners must receive approval before selling any property shares.

Pros and Cons of Co-Buying

Pros of Co-Buying

For those who don’t have the buying power to purchase a home on their own, co-buying presents an opportunity to combine assets and enter the market. Since lenders will be factoring in both of your incomes, you and your co-buyer will increase your chances of being approved for a mortgage and securing a low interest rate. Both of you will build equity over time as you pay back your joint mortgage. Even after the down payment and mortgage payments, there are a handful of costs that come with being a homeowner. Co-buying allows you to split these costs, saving money on bills, utilities, maintenance costs, and the like.

Cons of Co-Buying

Co-buying a home means you are relinquishing some control over the homeownership costs. At the end of the day, you can’t control your co-buyer’s finances. If a sudden life change leaves them financially unstable, the burden will fall on your shoulders, and you’ll have to make up the difference. Similarly, your credit score could take a hit if your co-buyer is unable to make their mortgage payments, even if you’ve consistently made yours. 

 

Before entering a co-buying agreement, it’s important that you and your co-buyer are on the same page about the terms of ownership and your expectations as joint homeowners. Working closely together will help maintain the health of your finances, and most importantly, your relationship.

For more information on purchasing a home, visit the buying section on our blog:

Blog – Buying

To begin your home buying journey, connect with an experienced Windermere Real Estate agent on our website by clicking on the button below. 

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Windermere Foundation Surpasses $1 Million Raised in 2021

In the first six months of 2021, Windermere offices collectively raised over one million dollars through the Windermere Foundation. June, a month in which Windermere celebrated its 37th Community Service Day, saw an outpouring of donations from across our 10-state footprint, bringing in over $269,000 to push the year-to-date total over $1 million. These dollars go toward supporting low-income and homeless families in the communities where Windermere offices are located. Here are some examples of how our offices have been giving back this year.

Windermere Realty Trust / Lloyd Tower – Portland, OR

Windermere Lloyd Tower can’t speak highly enough about the work of Adelante Mujeres, a local organization committed to educating and uplifting the low-income Latina population in the Portland area. The organization has a variety of programs to support women from childhood to adulthood. Their Adult Education program helps Latina women complete their secondary education and empowers them to become leaders. Empresas, a small business development program, focuses on immigrant entrepreneurs, providing one-on-one coaching and technical assistance over the course of eleven weeks. Chicas Youth Development supports over 600 girls between the ages of eight and eighteen in weekly after-school classes, designed to develop their leadership and foster academic success. In April, the Lloyd Tower office donated $5,000 to support programs like these and the small business development services Adelante Mujeres has provided local entrepreneurs throughout the COVID-19 pandemic.

The Windermere Lloyd Tower office is part of the Windermere Realty Trust network of offices in Portland, Oregon.

Windermere / Coeur d’Alene Realty, Inc. – Coeur d’Alene, ID  

This past spring, Windermere Coeur d’Alene set out to make a difference in their community by helping fight food insecurity. They found the perfect partner in Second Harvest. Second Harvest brings community resources together to feed those in need and believes that nutritious food is the key ingredient for a healthy lifestyle. The office donated $2,000 to Second Harvest to set up their “Mobile Market,” a system for transporting food directly families, at the Kootenai County Fairgrounds in the heart of town. Windermere agents volunteered their time to staff the event, and the stage was set for a successful food drive. On the day of the drive, the donations poured in. Agents helped direct traffic, unloaded vehicles, distributed donations to families in the community, and cleaned up the fairgrounds afterward. Nearly 15,000 pounds of goods were donated, enough for Second Harvest to feed 209 families.

 

Pictured Left to Right: Amy Smock, Mark Whitt, Midge Smock, Larry Frisbie, Paulette Fabian, Kris Arnett, Andrew Steiner, Bob Zern, Joel Greiner, John Tindall, Morgan Keller, Ryan Keller

 

A man unpacks boxes during a food drive.

Pictured: Mark Whitt

 

Windermere Stanwood Camano – Stanwood, WA

Windermere Stanwood Camano and their local YMCA have formed a tight bond over the years, partnering together to create memorable events for the benefit of the community. Whether it was supporting the YMCA while teaching children water safety or rounding up donations on behalf of the Windermere Foundation, they’ve always found a way to make a positive impact in the Stanwood-Camano community. This past April, the office set a goal of raising $10,000 for the YMCA through donations made by staff and agents, which were matched by the office’s owners, Marla and Randy Heagle. The office hit their goal and in celebration, hosted a food truck from Seattle’s renowned burger joint, Dick’s Drive In. Attendees were encouraged to round up their purchases in support of the YMCA.

 

A man and a woman stand together in front of a food truck.

Pictured: Marla Heagle and Randy Heagle

 

An aerial shot of the Windermere Stanwood Camano building.

An aerial shot of Windermere Stanwood Camano during the event.

 

Windermere Spokane – Spokane, WA

In April 2021, over a year after the first days of the COVID-19 pandemic, Windermere Spokane felt a call to rally their community to donate blood. The pandemic had left local blood banks depleted and in desperate need of donations. Working with Vitalant, an independent, nonprofit blood services provider in the Spokane area that focuses on providing life-saving blood and comprehensive transfusion medicine services, Windermere Spokane hosted a donation site at their office. Spokanites came out in force to support the blood drive! After all donations had been tallied, the blood drive yielded 34 units of blood.

 

A man sits in a chair getting his blood drawn.

Pictured: Richard Stokes

 

To learn more about the Windermere Foundation, visit windermerefoundation.com. To help support programs in your community, click the donate button below.

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Windermere Partners with UW to Launch Internship Program

The University of Washington College of Built Environments (CBE) announced a new paid internship program, Aspire, that offers financial support, mentoring, and skill-building through academic and professional office settings to students, with a focus on those from historically underrepresented or marginalized groups. In partnership with Windermere Real Estate, this CBE-led internship will begin today, July 13, and will focus on the single and multi-family residential real estate market in the greater Seattle area. 

During the eight-week paid summer internship, the eight interns will work and study for 25 hours per week. They will interact with real estate industry and academic leaders, while learning about the important role homeownership plays in building thriving communities. The program participants will gain skills in financial principles, sales, marketing, intercultural fluency, and leadership. At the end of the internship period, interns will present their work to industry professionals and participate in tours showcasing a range of processes in the home buying sector. 

Students who complete the eight-week Aspire internship will also receive a $5,000 scholarship, funded by Windermere and awarded in Autumn 2021. This scholarship aims to help the next generation of real estate professionals lead and build our communities in inclusive and equitable ways. Windermere has committed to continuing to support this internship through the upcoming academic year and beyond.

Windermere president, OB Jacobi, stated that this partnership is a continuation of the more than three decades long relationship between Windermere and UW, which started with the first Windermere Cup Rowing Regatta in 1987, and has continued through ongoing financial gifts to both athletic and academic programs at the university. 

“After learning about Windermere’s commitment to increasing diversity within the real estate industry, Renee Cheng approached us with an opportunity to partner with the College of Built Environments on the Aspire internship program,” said Jacobi. “Our goal is to inspire interest and engage students of color in the wide variety of careers and leadership opportunities available to them in real estate.”

Renee Cheng, Dean of the College of Built Environments at the University of Washington, highlighted the Aspire program’s real world learning experiences: “It can be difficult for our students to appreciate the historical role of homeownership in building generational wealth, particularly if their own lived experience includes housing insecurity. This program equips students with the context and confidence to engage with the role of home in the built environment.”

Aspire program manager Alexis Wheeler agreed, saying that “in addition to building intergenerational wealth, homeownership cultivated a sense of belonging and stability, encouraging people to grow into the fullest version of themselves and fostering vibrant communities throughout our region. Through the Aspire program, students will also develop an appreciation for this aspect of ‘home’ and its role promoting a more inclusive and equitable society.” 

The Aspire internship specifically sought students from historically underrepresented or marginalized groups and/or those with lived experiences with housing insecurity. With a robust slate of over 40 applicants, the CBE and Windermere were able to select a strong inaugural cohort of Aspire interns, which includes students majoring in Real Estate and Community, Environment, & Planning (CEP), as well as majors beyond the CBE. 

The Aspire Internship will run from July 13-September 1, 2021. This is an ongoing internship opportunity for CBE and other UW students, offered in collaboration with our community partners.

To learn more about our DEI Initiatives like this one, visit Windermere.com/dei.

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