Colorado Real Estate Market Update

 

 

The following analysis of the Metro Denver & Northern Colorado real estate market (which now includes Clear Creek, Gilpin, and Park Counties) 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 agent.

 

ECONOMIC OVERVIEW

The Colorado economy continues to perform quite well, having added 72,200 non-agricultural jobs over the past 12 months — a solid growth rate of 2.7%. Through the first eight months of 2018, the state has added an average of 6,700 new jobs per month. There has been a modest slowdown in employment gains, but I really don’t think this is a cause for concern and still hold to my forecast that Colorado will add a total of 82,000 new jobs by the end of 2018.

In August, the state unemployment rate was 2.9%. This matches the level seen a year ago. Unemployment rates in all the markets contained in this report rose between August 2017 and August 2018 but this is not actually a concern. Growth in the workforce is not only due to recent college graduates, but also discouraged workers who are starting to look for work again and this puts upward pressure on the unemployment rate. All of Colorado’s metropolitan areas are showing unemployment rates at around 4% or lower, suggesting that the regional economies are at, or close to, full employment.

 

HOME SALES ACTIVITY

  • In the third quarter of 2018, 16,550 homes sold — a drop of 6.2% compared to the third quarter of 2017.

  • Sales rose in just two of the 11 counties contained in this report. Gilpin County again led the way, with sales rising by an impressive 21.1% compared to third quarter of last year. There was also a significant increase in Clear Creek County. Sales fell the most in Arapahoe County.

  • Slowing sales in the quarter can, to a degree, be attributed to continued home price growth, but I believe it is more a function of the rapid rise in the number of homes for sale. The number of listings in third quarter rose by 5.4% over the same period in 2017, but was up by 31.2% compared to the second quarter of this year.
     

  • What the numbers are telling us is that inventory growth is giving buyers more choice and they are being far more selective — and patient — before making an offer on a home.

 

 

HOME PRICES

  • Even with the rapid rise in listings and slowing home sales, prices continue to trend higher. The average home price in the region rose 7.9% year-over-year to $460,982. However, the average price dropped 4% between second and third quarters.

  • The smallest price gains in the region were in Park County, where prices rose by a fairly modest 3.6%.

  • Appreciation was strongest in Clear Creek County, where prices rose 10%. All other counties in this report saw gains relative to the third quarter of 2017.
     

  • Affordability is becoming an issue in many Colorado markets and this, in concert with rising inventory levels, has started to dampen home price growth. Although I do not expect prices to drop, I do think price gains will moderate over the next few quarters.

 

 

DAYS ON MARKET

  • The average number of days it took to sell a home in Colorado remained at the same level as a year ago.

  • The amount of time it took to sell a home dropped in three counties: Gilpin, Clear Creek, and Larimer. The rest of the counties in this report saw days on market rise by only a couple of days or less.

  • In the third quarter of 2018, it took an average of 24 days to sell a home. It took less than a month to sell a home in all but one county.

  • Housing demand is still solid and, as long as homes are priced appropriately, they will continue to sell in less time than historic averages.

 

 

CONCLUSIONS

This speedometer reflects the state of the region’s real estate market using housing inventory, price gains, home sales, interest rates, and larger economic factors.

For the third quarter of 2018, I continue the trend that I started last quarter and have moved the needle a little more in favor of buyers. Listings are likely to continue their rising trend, but we should still see a seasonal drop off during the winter months. The market is clearly headed toward balance, which I am very pleased to see.

 

 

 

Matthew Gardner is the Chief Economist for Windermere Real Estate, specializing in residential market analysis, commercial/industrial market analysis, financial analysis, and land use and regional economics. He is the former Principal of Gardner Economics, and has more than 30 years of professional experience both in the U.S. and U.K. 

Helping Students Realize Their Dreams Through Scholarship Programs

 

The Windermere Foundation has raised $1,611,802 so far this year, bringing the total amount raised by the Foundation to over $37 million since 1989. Through the third quarter of 2018, $1,214,576 has been donated to local non-profits and charity organizations that provide services to low-income and homeless families.

 

Through donations from Windermere agents, staff, franchise owners, and the community, the Windermere Foundation has been able to donate to local scholarship programs that help students in need realize their dreams of furthering their education. The following are examples of two programs that have benefitted from Windermere Foundation donations this year.

 

Seattle Central College Foundation Scholarship Program

Each Windermere office raises its own funds and has a Windermere Foundation account that it can use to make donations to organizations in their local communities. This fall, the Windermere Seattle-Capitol Hill office generously donated to the Seattle Central College Foundation’s scholarship program, which is helping nearly 500 students attend the college this year, relieved of financial stress, and encouraging them to stay committed to their education.

 

Tammara S., the recipient of the Windermere Real Estate/Capitol Hill Scholarship, said, “I am honored to be the recipient of this scholarship… Attending school with an already tight budget was a hard decision to make. This scholarship will ease the stress of extra debt and the fear of having to choose anything over my education. Thank you, I appreciate your confidence in me and willingness to contribute to my future education.”

 

 

University of Washington Certificate Scholarship Program

The Windermere Foundation general fund also made a donation to support the University of Washington Certificate Scholarship program. With the help of UW Certificate Scholarships and the Windermere Foundation, 12 local adults living on low incomes were able to start classes at the University of Washington this fall. These are just a few of the recipients:

 

Loree, who is studying Fundraising Management:  A stay-at-home mom and active school volunteer/PTA fundraiser. Sadly, Loree recently lost her husband to cancer and has become her family’s primary provider. The certificate program will help her re-enter the workforce. “The scholarship will provide me the freedom to walk the path of discovery as I redefine who I am in this second phase of my life.”

 

Matthew, who is studying Wetland Science and Management:  A single dad of a 6-year-old, Matthew juggles childcare with full-time work supervising Washington Conservation Corps crews in the King Conservation District. Struggling to pay rent in Seattle, his aim is to move into a better paid job, with a schedule that better lines up with his daughter’s “… and a chance to improve the stability of our natural systems in the face of overwhelming pressures like climate change.”

 

Syed, who is studying Data Analytics:  Syed moved to the U.S. from Pakistan two years ago with a master’s degree and work experience in statistics. He is having great difficulty finding a job in his field because he has no local work experience or contacts. He is currently working at Walmart as a cashier to support his wife and 1-year-old son. “Completing this program will benefit me tremendously and help me to begin my profession, as a data analyst, in the U.S.”

 

Tobi, who is studying Project Management:  Tobi works as a corporate relations coordinator at one of the largest food banks in King County, based in South Seattle. She wants to expand her skillset and go on to lead social impact and corporate social responsibility (CSR) programs that ensure the advancement of underrepresented communities. “The skills I learn in this program will equip me to bring more to the table in this work.”

 

 

The Windermere Foundation is proud to support wonderful programs such as these that provide continuing education scholarships to those in need. Generous donations to the Windermere Foundation over the years have allowed the Foundation and our Windermere offices to continue to support local non-profits. If you’d like to help support programs in your community, please click on the Donate button.

 

To learn more about the Windermere Foundation, visit WindermereFoundation.com.

Planning for the Life Expectancy of Your Home

Nothing in life lasts forever – and the same can be said for your home. From the roof to the furnace, every component of your home has a lifespan, so it’s a good idea to know approximately how many years of service you can expect from them. This information can help when buying or selling your home, budgeting for improvements, and deciding between repairing or replacing when problems arise.

According to a National Association of Home Builders (NAHB) study, the average life expectancy of some home components has decreased over the past few decades.  (This might explain why you’re on your third washing machine while Grandma still has the same indestructible model you remember from childhood.) But the good news is the lifespan of many other items has actually increased in recent years.

Here’s a look at the average life spans of some common home components (courtesy of NAHB). 

Appliances. Of all home components, appliances have the widest variation in life spans. These are averages for all brands and models and may represent the point which replacing is more cost-effective than repairing. Among major appliances, gas ranges have the longest life expectancy, at about 15 years. Electric ranges, standard-size refrigerators, and clothes dryers last about 13 years, while garbage disposals grind away for about 10 years. Dishwashers, microwave ovens, and mini-refrigerators can all be expected to last about nine years. For furnaces, expect a lifespan of about 15 years for electric, 18 for gas, and 20 for oil-burning models. Central air-conditioning systems generally beat the heat for 10 to 15 years.

Kitchen & Bath. Countertops of wood, tile, and natural stone will last a lifetime, while cultured marble will last about 20 years. The lifespan of laminate countertops depends greatly on the use and can be 20 years or longer. Kitchen faucets generally last about 15 years.  An enamel-coated steel sink will last five to 10 years; stainless will last at least 30 years; and slate, granite, soapstone, and copper should endure 100 years or longer. Toilets, on average, can serve at least 50 years (parts such as the flush assembly and seat will likely need replacing), and bathroom faucets tend to last about 20 years.

Flooring. Natural flooring materials provide longevity as well as beauty: Wood, marble, slate, and granite should all last 100 years or longer, and tile, 74 to 100 years. Laminate products will survive 15 to 25 years, linoleum about 25 years, and vinyl should endure for about 50 years. Carpet will last eight to 10 years on average, depending on use and maintenance.

Siding, Roofing, Windows. Brick siding normally lasts 100 years or longer, aluminum siding about 80 years, and stucco about 25 years. The lifespan of wood siding varies dramatically – anywhere from 10 to 100 years – depending on the climate and level of maintenance. For roofs, slate or tile will last about 50 years, wood shingles can endure 25 to 30 years, the metal will last about 25 years, and asphalts got you covered for about 20 years. Unclad wood windows will last 30 years or longer, aluminum will last 15 to 20 years, and vinyl windows should keep their seals for 15 to 20 years.

Of course, none of these averages matter if you have a roof that was improperly installed or a dishwasher that was a lemon right off the assembly line. In these cases, early replacement may be the best choice. Conversely, many household components will last longer than you need them to, as we often replace fully functional items for cosmetic reasons, out of a desire for more modern features, or as a part of a quest to be more energy efficient.

Are extended warranties warranted?

Extended warranties, also known as service contracts or service agreements, are sold for all types of household items, from appliances to electronics. They cover service calls and repairs for a specified time beyond the manufacturer’s standard warranty. Essentially, warranty providers (manufacturers, retailers, and outside companies) are betting that a product will be problem-free in the first years of operation, while the consumer who purchases a warranty is betting against reliability.

Warranty providers make a lot of money on extended warranties, and Consumers Union, which publishes Consumer Reports, advises against purchasing them.  You will have to consider whether the cost is worth it to you; for some, it brings a much-needed peace of mind when making such a large purchase. Also, consider if it the cost outweighs the value of the item; in some cases, it may be less expensive to just replace a broken appliance than pay for insurance or a warranty.

Nevada Real Estate Market Update

 

The following analysis of the greater Las Vegas, Nevada 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 agent. 

 

ECONOMIC OVERVIEW

Job growth in the Las Vegas metropolitan area continues at a very brisk pace. A total of 32,300 new jobs were added over the past 12 months, representing a very strong annual growth rate of 3.3%. For perspective, the U.S. as a whole is growing at around 1.6%, or half the rate of Las Vegas.

Even as jobs are added to the local economy, the unemployment rate is still higher than one would expect to see. The seasonally adjusted rate is 4.9%, which is down from 5.25% a year ago but still well above the national rate. This can be attributed to a rapidly rising labor force that has grown by over 34,000 in the past year as people who had been on the sidelines start to look for employment.

 

HOME SALES ACTIVITY

  • total of 9,146 homes were sold in the third quarter of 2018 — a drop of 4.8% over the same period a year ago. The drop in sales since the start of the year had been attributed to a lack of inventory, but we are now experiencing a substantial increase in homes for sale. This has given buyers more choice and less urgency.

  • Pending sales dropped by 5% versus the same period a year ago and were down by 16% when compared to the second quarter of this year. This suggests that closings in the fourth quarter will not be very robust.

  • Sales rose in three submarkets compared to a year ago, with the Aliante market seeing solid growth (but bear in mind that this is a very small area and subject to volatility in sales). There was also a slight increase in sales in Whitney and a smaller rise in Northeast Las Vegas. All other markets saw sales decline, the most substantial of which was in the Southeast sub-market.

  • In a nutshell, Las Vegas is experiencing the same increase in listing activity as a majority of U.S. markets. There is no cause for panic, but more choice does lead to a temporary slowing in sales as buyers take their time choosing a new home.

 

 

HOME PRICES

  • Home prices in the area rose by 11.8% compared to the third quarter of 2017 — to an average of $304,182 — and were a modest 0.6% higher than in the second quarter of this year.

  • The Las Vegas market continues to see home prices rise but I believe we will start to see a slowdown as affordability issues start to appear.

  • Prices in all submarkets rose compared to the same quarter last year. The strongest growth was in the Northeast Las Vegas sub-market, where prices were up 22.5%. Eleven sub-markets saw double-digit price growth.

  • The takeaway is that home values are likely to continue to increase, but more choice — in concert with affordability constraints — will lead to a slowdown in the rate of price growth.

 

 

DAYS ON MARKET

  • The average time it took to sell a home in the region dropped five days compared to the third quarter of 2017.

  • Region-wide it took an average of only 27 days to sell a home in the third quarter of this year.

  • Days on market fell in all but two of the sub-markets compared to a year ago. The exceptions were in the Queens Ridge area (+4 days) and in Green Valley (+1 day).

  • The greatest drop in days on market was in Northeast Las Vegas, which took 10 fewer days than in the same quarter of 2017.

 

 

CONCLUSIONS                                                                                               

The speedometer reflects the state of the region’s real estate market using housing inventory, price gains, home sales, interest rates, and larger economic factors. 

Though employment growth in Clark County continues to be very robust, this has yet to be reflected in any major growth in earnings. Home prices have been growing at some of the fastest rates in the U.S., which is affecting affordability. With the lack of real wage growth, and in concert with rising inventory levels, I believe that the market will start to trend toward more balance, but we have a ways to go. Because of this, I have moved the speedometer a little more toward buyers.

 

 

 

 

Mr. Gardner is the Chief Economist for Windermere Real Estate, specializing in residential market analysis, commercial/industrial market analysis, financial analysis, and land use and regional economics. He is the former Principal of Gardner Economics, and has more than 30 years of professional experience both in the U.S. and U.K. 

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 agent. 

 

ECONOMIC OVERVIEW

The counties covered by this report—Los Angeles, San Diego, San Bernardino, Orange, and Riverside—added a very modest 47,400 new jobs between August 2017 and August 2018. Even as job growth slowed, the unemployment rate dropped from 4.9% to 4.4%. Employment growth in Southern California has started to taper, due primarily to a slowing in employment gains in the large Los Angeles County market. As it stands today, I expect employment to continue growing for the balance of the year, but at significantly slower rates than in recent years.

 

HOME SALES ACTIVITY

  • There were 47,347 home sales in the third quarter of 2018. This was 9.4% fewer than the same period in 2017 and 7.7% fewer than the second quarter of this year.
  • Pending home sales (an indicator of future closings) were 6.8% lower than during the same period a year ago, which suggests that fourth quarter closings will likely disappoint.
  • Home sales dropped across the board, but the most noticeable decline was in San Diego County, which fell 11.6%. This can be attributed to a significant rise in inventory (+33.2%)—a stark contrast to the low level of listings in the second quarter of this year.
  • There was an average of 41,654 active listings in the third quarter—up 18.2% from the second quarter—suggesting that the market is trending back toward balance.
     

 

HOME PRICES

  • Year-over-year, average prices in the region rose by 6%, but they were 0.7% lower than in the second quarter of this year.
  • Affordability continues to be an issue in most of the Southern Californian counties contained in this report, which, in concert with growing inventory, is now starting to slow home price growth.
  • Price growth did not vary that dramatically. Orange County showed the greatest annual appreciation (+8.6%). The slowest appreciation was in Los Angeles County, which still saw a respectable 5.2% increase.
  • I believe that home prices will continue to rise, but it is clear that the rate of growth is starting to taper, and this is likely to continue as we move through the final quarter of the year.

 

 

DAYS ON MARKET

  • The average time it took to sell a home in the region was 39 days. This is a one-day increase compared to the third quarter of 2017, and two days more than in the second quarter of this year.
  • The biggest drop in days on market was in San Bernardino County, where it took three fewer days to sell a home than it did in the same period last year.
  • Homes in San Diego County continue to sell at a faster rate than other markets in the region. In the third quarter, it took an average of 27 days to sell a home, which is one day more than it took a year ago.
  • Three counties saw an increase in the length of time it took to sell a home when compared to the third quarter of 2017.
     

 

CONCLUSIONS                                                                                               

The 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 Southern California economy, although still adding jobs, has started to slow. The number of homes for sale in the region is on the rise, which gives buyers more choice. This is reflected in lower sales velocities and tapering home price growth. Given all of these factors, I have moved the needle a little more in favor of buyers

 

 

 

 

Mr. Gardner is the Chief Economist for Windermere Real Estate, specializing in residential market analysis, commercial/industrial market analysis, financial analysis, and land use and regional economics. He is the former Principal of Gardner Economics, and has more than 30 years of professional experience both in the U.S. and U.K.