The Washington State economy added 104,600 new jobs over the past 12 months. This impressive growth rate of 3.1% is well above the national rate of 1.4%. Interestingly, the slowdown we saw through most of the second half of the year reversed in the fall, and we actually saw more robust employment growth.
Growth continues to be broad-based, with expansion in all major job sectors other than aerospace due to a slowdown at Boeing.
With job creation, the state unemployment rate stands at 4.5%, essentially indicating that the state is close to full employment. Additionally, all counties contained within this report show unemployment rates below where they were a year ago.
I expect continued economic expansion in Washington State in 2018; however, we are likely to see a modest slowdown, which is to be expected at this stage in the business cycle.
HOME SALES ACTIVITY
- There were 22,325 home sales during the final quarter of 2017. This is an increase of 3.7% over the same period in 2016.
- Jefferson County saw sales rise the fastest relative to fourth quarter of 2016, with an impressive increase of 22.8%. Six other counties saw double-digit gains in sales. A lack of listings impacted King and Skagit Counties, where sales fell.
- Housing inventory was down by 16.2% when compared to the fourth quarter of 2016, and down by 17.3% from last quarter. This isn’t terribly surprising since we typically see a slowdown as we enter the winter months. Pending home sales rose by 4.1% over the third quarter of 2017, suggesting that closings in the first quarter of 2018 should be robust.
- The takeaway from this data is that listings remain at very low levels and, unfortunately, I don’t expect to see substantial increases in 2018. The region is likely to remain somewhat starved for inventory for the foreseeable future.
- Because of low inventory in the fall of 2017, price growth was well above long-term averages across Western Washington. Year-over-year, average prices rose 12% to $466,726.
- Economic vitality in the region is leading to a demand for housing that far exceeds supply. Given the relative lack of newly constructed homes—something that is unlikely to change any time soon—there will continue to be pressure on the resale market. This means home prices will rise at above-average rates in 2018.
- Compared to the same period a year ago, price growth was most pronounced in Lewis County, where home prices were 18.8% higher than a year ago. Eleven additional counties experienced double-digit price growth as well.
- Mortgage rates in the fourth quarter rose very modestly, but remained below the four percent barrier. Although I anticipate rates will rise in 2018, the pace will be modest. My current forecast predicts an average 30-year rate of 4.4% in 2018—still remarkably low when compared to historic averages.
DAYS ON MARKET
- The average number of days it took to sell a home in the fourth quarter dropped by eight days, compared to the same quarter of 2016.
- King County continues to be the tightest market in Western Washington, with homes taking an average of 21 days to sell. Every county in the region saw the length of time it took to sell a home either drop or remain static relative to the same period a year ago.
- Last quarter, it took an average of 50 days to sell a home. This is down from 58 days in the fourth quarter of 2016, but up by 7 days from the third quarter of 2017.
- As mentioned earlier in this report, I expect inventory levels to rise modestly, which should lead to an increase in the average time it takes to sell a house. That said, with homes selling in less than two months on average, the market is nowhere near balanced.
This speedometer reflects the state of the region’s housing market using housing inventory, price gains, home sales, interest rates, and larger economic factors. For the fourth quarter of 2017, I have left the needle at the same point as third quarter. Price growth remains robust even as sales activity slowed. 2018 is setting itself up to be another very good year for housing.
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.
Posted January 29 2018, 11:00 AM PST by Matthew Gardner, Chief Economist, Windermere Real Estate
Approved on October 30, 2017.
The final amendments to the original 2016 Shoreline Master Plan have now been approved by the State Department of Ecology. Getting here has been years in the making, but it is finally done.
Historically, much of our waterfront has been zoned Rural, Rural Residential, Rural Farm Forest, Nature and Conservancy, among the most prominent designations. It appears, from the revised County zoning maps, that the percentage of shoreline now under the restrictive Conservancy zoning has been dramatically increased.
To explain, surrounding every island is a 200’ shoreline zone that overlays every waterfront parcel of land. When I use the word “overlays”, I mean that the 200’ shoreline area may now be zoned differently than the upland portion of the same property. In the past, two zoning designations on a single parcel was uncommon.
The Conservancy zoning is intended to protect our shoreline ecology. It does this by limiting the uses permitted on lands of this zoning. Most uses other than single family dwellings are discouraged, including any commercial use, even vacation rental of shoreline homes.
I would encourage every shoreline property owner to look at the new shoreline zoning maps posted on the County’s website. Do this by going to the Community Development Department at SanJuanco.com, pull up the “maps” section and click on the map of your island. Then view your shoreline designation, to verify if your property is one affected by zoning change.
A good outcome of the Master Plan seems to be that single family residential construction within the shoreline zone may be more broadly allowed than has been the case for the last 5 plus years. There seems to be more freedom to develop shoreline residential property. Of course there are definite limits to this freedom, as is always the case. The proof will be in how the new rules are interpreted by our County officials.
San Juan County’s shoreline now meets State standards of protection against degrading and harming the shoreline environment. Only time will tell the full story. I plan updates on this issue as I learn more as to how it is being applied.
John Dunning, Designated Broker/Owner
There have been many forecasts published right now for 2018, for politics, the economy, the weather, and so much more. Here is what I expect to see in 2018.
Interest Rates: Interest rates continue to be a great topic of discussion, with most predicting a rise. While the rates may rise a bit, I believe they will average around 4.4% for a 30 year fixed mort- gage by the end of the year.
National Home Sales: We should expect that home sales will continue to increase, and demand will exceed the inventory. Still, the inventory should begin to increase due to the rise of new home construction.
Home Buyer Profile: The millennial home buyers are going to continue to increase, particularly in the less expensive markets. Last year, millennials comprised of 34% of the buyers nationally.
Local Market Forecast: We too have been experiencing an increase of millennial buyers. With the strong economy and dramatic growth in Puget Sound, these folks are looking to Orcas and the San Juan’s as an optimal getaway. The homes here look enticingly affordable compared to what is available in the Seattle market currently. Our inventory is continuing to shrink, and unless some- thing dramatic happens nationally, the local market should continue to remain strong. However, unless we begin to see new inventory, we may experience a slow down in the market, as buyers struggle to find what they are looking for, and they appear willing to wait for the ‘right’ property. Please stop by the office, or give us a call, and we will be happy to discuss this further with you .
John Dunning, Designated Broker/Owner
As the excitement of the holidays wind down, we find ourselves at the point of making resolutions for the coming year. And, while ideas such as eating healthy, exercising and losing weight tend to be at the forefront of our minds, let us not forget to also set goals as homeowners. Having a plan for the year ahead can help you optimize your finances, save you money and ensure your home is well-maintained. Here are a few areas to focus on:
Examine Your Finances
Once you have established how much money is coming in, you can concentrate on where it is going out. In aspiring to be debt free, see if you can find a way to maximize your mortgage. Evaluate your property tax, assessed value and homeowner insurance. If you have questions about these, talk to a professional and educate yourself about options.
Save Yourself Cash
If you are considering home updates this year, do your research and set a budget. Knowing how much you have to work with will help you to prioritize and not overspend.
Maintain Your Home & Value
Create a maintenance schedule for the year and include items like changing CO2 batteries, replacing furnace filters, winterizing sprinklers and planning deep cleans. In addition, create a punch list of things that need to be fixed and stop putting them off. Separate those that you can do yourself from those that will require a professional.
Once you have a plan in place be sure and stick to it, and you are guaranteed to enjoy a happy home in 2018.
Every week, the Windermere Foundation disburses grants to support non-profit agencies dedicated to helping low-income and homeless families. On a given day, thousands of dollars’ worth of grants can be issued. However, on one particular day, November 15 to be exact, an amazing thing happened…the Windermere Foundation disbursed nearly $254,000. This was a record day of giving for the Windermere Foundation!
A total of 35 non-profit organizations benefitted from the record-breaking $253,782 in donations that day. The largest beneficiary was Attain Housing in Kirkland, WA, which received $56,000. Their grant was funded by the Windermere Real Estate East, Inc. group of offices which are located east of Seattle in Bellevue, Redmond, Issaquah, and Kirkland. The funds will provide affordable housing to homeless families with children, as well as case management for setting financial and social goals.
Attain Housing helps homeless and at-risk families with children in King County to become stable and self-sufficient. Here’s a story of one of their recent clients:
When Jeremy and Lisa entered into Attain Housing’s program just five months ago, they had a lot of hurdles ahead of them. They were both only nineteen, had a newborn, had been homeless since they were fourteen, and had never experienced stability. As soon as they moved into one of Attain’s transitional housing apartments and began working with their case manager, Jeremy started attending a skills training program. He has since earned his GED, acquired his driver’s license, obtained a vehicle, and started full-time employment. Jeremy’s family is on track to successfully complete the program by the end of their first year, but they already have plans to move into market rate housing within the next two to three months. This is success!
According to Kathy Fleming, Executive Director at Attain Housing, “The $56,000 gift from Windermere ensures that five families (including 15 children) will have safe housing and supportive services for an entire year. This is a significant gift and the largest grant that Attain Housing has received from any organization or company. Thank you!”
The Windermere Foundation is fortunate to have generous owners, agents and staff that contribute to their offices’ Foundation fund pool. This pool of funds, combined with Windermere transaction donations, monies raised through Windermere office fundraising events, and donations from the public, allows the Windermere Foundation to disburse much-needed funding to local non-profits in the areas that our Windermere Real Estate offices serve.
If you’d like to help to help non-profits that provide services to low-income and homeless families in your area, please consider donating to the Windermere Foundation.
To learn more about the Windermere Foundation, visit http://www.windermere.com/foundation.
Posted December 4 2017, 1:35 PM PST by Marilou Ubungen @ Windermere Real Estate
Our office and brokers have received many calls with questions regarding the newly received property value assessments.
According to the San Juan County Assessor’s website “State law requires that assessors appraise all taxable property within the county at 100% of its true and fair market value, according to the highest and best use of the property. Fair market value, or true value, is the amount of money that a willing and unobligated buyer is willing to pay a willing and unobligated seller.
“Each year, the County is responsible for reviewing the values of approximately 20,000 parcels. Whether you have purchased your property recently or not, the Assessor will still evaluate your property on an annual basis. These annual evaluations are based on research of sales of properties within the past year. For example, if 2016 sales are available, they are used to calculate the 2017 assessed values.
By State law, members of the Assessor’s office are re- quired to conduct a physical inspection of the property every 6 years. If new construction occurs, then this new construction will be physically inspected annually until construction is completed. These physical inspections are taken into consideration when updating the current assessed value.
Once the valuation is established, your taxes are calculated based on a tax rate. Many factors determine property tax rates, the amount of property tax due on com- parable properties will vary throughout a county. The three main factors that determine the tax rate include: various combinations of taxing districts in different areas of the county, budget amounts for each taxing district, and voter-approved special levies and bonds.
Key point: these tax rates vary year to year, depending upon the County annual budget. If assessed values go up (or down) it does not necessarily mean that your taxes will go up (or down).
If you disagree with your new property assessed value, there is an appeal process via the Board of Equalization that you may undergo. Keep in mind that you must reg- ister the appeal within 30 days of the original filing of the new valuation of your property.
The San Juan County Assessor’s website is an excellent resource for additional information:
John Dunning, Designated Broker/Owner
We have reached that time of the year again that is all about getting together with family and sitting down to big, elaborate meals. And while we are supposed to be happy and celebrating, many people are simply thankful to get through the holidays in one piece. Why must the holidays be so stressful? Good news, they don’t have to be! Want to know the easiest way to bypass the stress: have a plan. Simple right? Not exactly, but it’s amazing how much a thorough plan can transform your holiday season. With Thanksgiving being only a week away, let’s go through the next week; breaking up preparation tasks to make it all feel less daunting.
The Week Before
Collect your recipes and create a shopping list.
Still don’t know exactly what you’re making for the big feast? Time to get that sorted. Go through as many recipes as it takes, but remember, not every dish needs to be fancy and complicated. Sometimes the simplest option is the best.
Clean out your refrigerator.
Figure out what needs to get eaten over the next week to create as much storage in your fridge as possible. Are there items that can get used in some of your recipes? Are there things that simply need to get tossed? Keep in mind that you will want to maximize the amount of storage containers you have on hand. This will make life much easier as you move the through the week.
Dedicate this last weekend to preparations.
This is your time to do the shopping. Hit the market early, and give yourself plenty of time to shop. Chances are you have a big list, and it’s no fun trying to get everything in your basket while racing the clock. And while you are out, consider picking up extra storage containers that you can fill with leftovers and send home with guests.
Clean the house.
If you are hosting, you will want your home to sparkle and shine for guests coming to visit. Take the time to do a thorough clean this weekend, and prepare spare rooms with clean linens and supplies. It’s easy to do some touch up cleaning right before everyone shows up, but doing most of the chores now will save on time and stress later in the week. Even if you are going away for the holidays, having a clean house to come home to is a nice treat after a busy weekend.
Make the big stuff.
There is plenty of food that can be cooked and assembled ahead of time, and the weekend is perfect for scratching the most time consuming of these off your list. For starters, make your pie crusts. Even if you make the filling later, having a crust ready to go is a huge relief. Pre-cook it and put it in the freezer until the night before. And if you want, cook the whole pie on Wednesday night so all you have to do is reheat on Thursday. Other great options for making ahead are the cranberry sauce, toasted nuts, stock for stuffing and casseroles. Also, if you are making your own bread for the stuffing, doing that over the weekend gives it plenty of time to dry out over the coming days.
The Final Week
Less is more.
The less you have to take care of on the last few days before Thanksgiving the happier you will be on the day itself. For those of us with full time jobs, this is especially true. Still, taking care of a few small things will allow you more time to relax and visit with family on the big day. So, on the days leading up, after dinner of course, go ahead and pre-chop those vegetables that you will need for your side dishes. Take your turkey out of the freezer and get the brine on it a couple of days. Do a little extra tidying around the house and put some extra seasonal décor. Find a clear, designated area for drinks and appetizers, then set the dining room table for your guests (eating on the couch for a night or two is perfectly acceptable).
All of this may seem like a lot to accomplish in the last week, but if you do it, you will thank yourself later. Thanksgiving is not about spending your whole day slaving away in the kitchen; it’s about having time to spend with the people you love. So plan ahead, stop stressing, and be thankful to have so many people who want to spend the day with you.
WINTER PREPARATION FOR YOUR HOME
With the early onset of winter weather, it seems an appropriate time revisit some home maintenance tasks. Though we go through these changes every year, sometimes it is nice to have a reminder of what needs to be examined before the temperatures changes too dramatically.
First off, since our heating systems are about to get a lot more use (if they are not already), let’s be sure everything is in good working order. If you have a gas or oil furnace system, have someone come out to inspect it to be sure everything is in good working order. And don’t forget to check those air filters. If you use electric heaters, keep the area around these clear, thus avoiding potential fire hazards. For those with a wood stove, have a chimney sweep come out and do a thorough clean. It is recommended to do this annually, before the cold season if possible.
Other areas of note: examine your insulation, particularly if you have an attic, and feel for spots where cold air may be leaking through. Changing out insulation now will help you heat your home more efficiently all winter long. Weather stripping may also need to be replaced to keep cold air from seeping in around doors and windows.
Outside your home, make sure that hose bibs are covered up and hoses stored away for the season. Gutters should also be cleaned out, especially after all the leaves that have been falling off trees recently. And speaking of trees, take a look around the house and note any branches that could cause problems under heavy snow or wind conditions. Better to take preventative measures than have problems later on down the road.
Finally, stock up on emergency supplies such as first aid, flashlights, batteries, blankets, water and extra food. For those of you living in the higher elevations, such as Buck Mountain, this is extremely important. We have already had our first winter warning on Orcas, so don’t delay in checking these items off your To-Do-List. A prepared home is a happy home.
John Dunning, Designated Broker/Owner
AFFORDABLE HOUSING — WHAT COULD BE DONE
This column is the second on the affordable housing issue. We all know what is needed, but it seems we don’t have a clear vision of how to accomplish it.
Last time I mentioned an affordable housing solution on San Juan Island that appears to have served that island well since its development in 1982. It’s called The Oaks. Located in a rural area and buffered from surrounding properties, most Islanders don’t even think about it and some don’t even know it exists.
In a time of less restrictive zoning regulations, the developer acquired 7 contiguous parcels of rural land totaling approx. 40 acres. They installed streets, sidewalks and utilities serving 76 home sites for double wide manufactured homes. The land is leased to the homeowners who own the units, which can be resold by owners moving off-island, or to other properties. Sales prices have ranged from around $100—$200K depending on location and size of the homes. The property lease includes water, sewer and road maintenance such that the area appears well maintained. There are relatively few sales of these homes because turnover of residents is low.
Today, due to County zoning regulations, it would be almost impossible to do an Oaks. Yet we can see it works and addresses affordable housing needs, at least on San Juan Island by being a product that naturally falls into the right price point. Our County needs to encourage affordable housing development by creating new zoning regulations to allow projects like this to occur today. Of course, the devil is in the details, and zoning modification would have to include safeguards such that neighbors would not be adversely affected.
Orcas Island has areas of forested and/or buffered land where thoughtfully-designed high-density development could occur on otherwise low-density land. This would be an excellent topic for each of us to address with our Commissioners. The time may now be right for such a discussion.
Since I started this column, I have received a fair amount of thoughtful feedback and I encourage you to give me a call or drop by to say hello and discuss any Island issue you feel is important. My intention is to make this column thought provoking and helpful in some small way.
John Dunning, Designated Broker/Owner
With the weather changing and winter rapidly approaching, Windermere Real Estate offices in Snohomish and King Counties are participating in the “We’ve Got You Covered” campaign; collecting cold weather gear for homeless youth in the city. While we are lucky to not have a large homeless population here on Orcas, there are still many people in our community who could use a helping hand.
With this in mind, our office has decided to run a local version of this campaign. So from now until November 10th we are collecting warm socks, hats, scarves, mittens and gloves for youth in our community. Items will then be delivered to Orcas Family Resources, who has graciously agreed to help us with distribution.
If you would like to donate, items can be dropped off at the Windermere Office in Eastsound. (*all items must be new)
Thank you for helping us keep our community warm this winter!