Buying • More • February 21, 2017

New Features vs. Character

by Windermere Staff

We are often asked, “Which is the better buy, a newer or older home?” Our answer: It all depends on your needs and personal preferences. We decided to put together a list of the six biggest differences between newer and older homes:

The neighborhood

Surprisingly, one of the biggest factors in choosing a new home isn’t the property itself, but rather the surrounding neighborhood. While new homes occasionally spring up in established communities, most are built in new developments. The settings are quite different, each with their own unique benefits.

Older neighborhoods often feature tree-lined streets; larger property lots; a wide array of architectural styles; easy walking access to mass transportation, restaurants and local shops; and more established relationships among neighbors.

New developments are better known for wider streets and quiet cul-de-sacs; controlled development; fewer aboveground utilities; more parks; and often newer public facilities (schools, libraries, pools, etc.). There are typically more children in newer communities, as well.

Consider your daily work commute, too. While not always true, older neighborhoods tend to be closer to major employment centers, mass transportation and multiple car routes (neighborhood arterials, highways and freeways).

Design and layout

If you like Victorian, Craftsman or Cape Cod style homes, it used to be that you would have to buy an older home from the appropriate era. But with new-home builders now offering modern takes on those classic designs, that’s no longer the case. There are even modern log homes available.

Have you given much thought to your floor plans? If you have your heart set on a family room, an entertainment kitchen, a home office and walk-in closets, you’ll likely want to buy a newer home—or plan to do some heavy remodeling of an older home. Unless they’ve already been remodeled, most older homes feature more basic layouts.

If you have a specific home-décor style in mind, you’ll want to take that into consideration, as well. Professional designers say it’s best if the style and era of your furnishings match the style and era of your house. But if you are willing to adapt, then the options are wide open.

Materials and craftsmanship

Homes built before material and labor costs spiked in the late 1950s have a reputation for higher-grade lumber and old-world craftsmanship (hardwood floors, old-growth timber supports, ornate siding, artistic molding, etc.).

However, newer homes have the benefit of modern materials and more advanced building codes (copper or polyurethane plumbing, better insulation, double-pane windows, modern electrical wiring, earthquake/ windstorm supports, etc.).

Current condition

The condition of a home for sale is always a top consideration for any buyer. However, age is a factor here, as well. For example, if the exterior of a newer home needs repainting, it’s a relatively easy task to determine the cost. But if it’s a home built before the 1970s, you have to also consider the fact that the underlying paint is most likely lead0based, and that the wood siding may have rot or other structural issues that need to be addressed before it can be recoated.

On the flip side, the mechanicals in older homes (lights, heating systems, sump pump, etc.) tend to be better built and last longer.

Outdoor space

One of the great things about older homes is that they usually come with mature tress and bushes already in place. Buyers of new homes may have to wait years for ornamental trees, fruit trees, roses, ferns, cacti and other long-term vegetation to fill in a yard, create shade, provide privacy, and develop into an inviting outdoor space. However, maybe you’re one of the many homeowners who prefer the wide-open, low-maintenance benefits of a lightly planted yard.

Car considerations

Like it or not, most of us are extremely dependent on our cars for daily transportation. And here again, you’ll find a big difference between newer and older homes. Newer homes almost always feature ample off-street parking: usually a two-care garage and a wide driveway. An older home, depending on just how old it is, may not offer a garage—and if it does, there’s often only enough space for one car. For people who don’t feel comfortable leaving their car on the street, this alone can be a determining factor.

Finalizing your decision

While the differences between older and newer homes are striking, there’s certainly no right or wrong answer. It is a matter of personal taste, and what is available in your desired area. To quickly determine which direction your taste trends, use the information above to make a list of your most desired features, then categorize those according to the type of house in which they’re most likely to be found. The results can often be telling.

If you have questions about newer versus older homes, or are looking for an agent in your area we have professionals that can help you. Contact us here.

More • February 17, 2017

The 4 Phases of Remodeling: The Honeymoon Stage

by Guest Author

As with anything in life, a remodeling project can come with its ups and downs. Certain phases seem to go a mile a minute, while others feel like they’ve lasted a lifetime and a half, all while it looks as though nothing is being completed. Fear not — this is pretty typical. And, while every project is different, a good portion of renovations have four major phases, what I’m calling the Honeymoon, the Midproject Crisis, the Renewal of Vows and the Happily Ever After.

For now, let’s take a closer look at the Honeymoon phase of renovating.

Honeymoon 1: Homegrown Decor, LLC, original photo on Houzz

After weeks of searching for a remodeler in your area, calling references, checking out their Houzz profile and working toward an agreeable price, you say, “I do,” sign the contract, finalize the design and begin work in two weeks. There’s a little nervousness in the air, but as you enter the Honeymoon phase, the mood is mainly one of excitement.

Demolition Begins

A couple of weeks go by, and the day comes for work to start. Protective products are placed, and demolition begins. Demo, sweet, demo. Normally one of the quickest moving stages of a remodel, demolition makes it look as if a lot of work is being done practically overnight. Cabinetry is removed, walls are torn down, appliances are taken away and, in a matter of days or weeks (depending on the size of your project), you’re staring at a blank canvas.

After that, any necessary framing and structural work will begin. Framing usually isn’t as exciting or fast-paced as demolition, but still, there is visible progress almost daily. At this point, you and your partner are walking on air. The rate of work is astounding, and you’re still very excited (although maybe a little less nervous now) about the entire project.

Honeymoon 2: Blondino Design, Inc., original photo on Houzz

Speed Bumps Ahead!

However, like a delayed flight on a real honeymoon trip, there are obstacles that can slow down this phase, specifically during demo. If you’re living in an older house, there’s the possibility that when your walls are opened, asbestos or lead could be discovered, which will need to be dealt with before work can continue.

Another common speed bump is building permit delays. Going through government-mandated processes can be tricky sometimes, especially if you or your building professional don’t have everything you need to get the green light from your municipality the first time around.

More holdups can come from structural elements that become apparent after demolition. For example, say you were going to move a door to another wall in your dining room. Once the demo crew opens up the wall where the new door will be installed — surprise! — there are plumbing pipes running the height of the wall. Reconfiguring design to meet these new requirements will add time to the demo stage.

Don’t panic. These delays happen often, and it’s worth accounting for and accepting these hurdles before you even begin to think about renovating.

Honeymoon 3: Jim Schmid Photography, original photo on Houzz

Rolling With the Punches

To help your honeymoon run more smoothly, here are a few tips I’ve learned from witnessing hundreds of remodels (and even surviving a couple myself):

Embrace change. Really. Give change a huge hug. Get to know it on a personal level. Because no matter what room you’re touching (whether it’s the kitchen or a teensy guest bath), it’s likely that you use that room daily. The sooner you accept that this room (major or not) will be unavailable for a period of time, the sooner you’ll be able to adapt your daily routines to fit around it.
Love your microwave. This applies to kitchen remodels specifically. As soon as demo is done, your primary cooking and eating area will be gone. Before your project starts, find an untouched room in your home to create a mini kitchen that will include necessities such as a microwave, toaster oven and coffee pot. Think of it as the mini kitchen you had in your dorm or apartment in college and revel in the nostalgia.
Don’t worry too much. I know this sounds hard — OK, really hard, especially for control freaks like myself — but trusting your building professionals to know what they’re doing (even if you do come across one of the aforementioned speed bumps) will really help you keep your head on straight. And if you do have questions or concerns …
Communicate! Communication has proved time and time again to be one of the biggest parts of a remodel — and a successful marriage. I cannot stress it enough. Talk with your contractor, talk with your significant other — talk, talk, talk. Ask framing questions, bring up budgetary concerns, muse over paint colors. Whatever is on your mind, getting it out of your head and into the air is beneficial for everyone involved (especially you).

Honeymoon 4: Jeff Herr Photography, original photo on Houzz

And remember: The Honeymoon phase of a remodel is definitely one of the high points in a process with numerous peaks and valleys, so try to enjoy it. No matter what you may encounter during demolition and framing, it’s likely that the mood of everyone on board — you, your contractor, your family and even your pet — will be very positive.

You’ve just embarked on a new journey, and the excitement of watching the image of your new home come into focus just adds fuel to your fire. Revel in that post-contract-signing bliss and maybe enjoy a glass of your favorite beverage with your significant other while you two imagine the new space that will be formed in your newly torn-apart home. Enjoy it, because what lies ahead is a bit uncertain.

With that in mind: What happens when it feels like nothing is happening? Is there still work being done? Are we still on schedule? Is it OK to freak out a little bit? Read more in the upcoming article in this series, “The Midproject Crisis.”

By Hannah Kasper, Houzz

Market News • February 16, 2017

Four Reasons Why Dodd-Frank Will Not Be Repealed

by Windermere Economics

Many worry about President Trump’s pledge to remove regulations relating to financial services and the rollback of the ‘Dodd-Frank Wall Street Reform and Consumer Protection Act’. For those who may be unware of this very substantial bill, it represented the most comprehensive financial regulatory reform measures taken since the Great Depression, and was a result of the financial crisis and housing crash of 2008/2009.

In effect, the Dodd-Frank Act created an agency to enforce compliance with consumer financial laws, introduced more stringent regulatory capital requirements, and made banking institutions retain some risk associated with home mortgage issuance.

While I believe that it’s safe to suggest that certain aspects of Dodd-Frank will be rolled back, there are four reasons why I don’t think the entire Act will be repealed.

1. Legislative action is needed to overturn any laws, and this includes Dodd-Frank. There is a very rigorous process to do this, and unsurprisingly, no consensus amongst lawmakers. Given these headwinds, and the fact that it took nearly 10 years to implement the rules that are contained within the Dodd-Frank Act, it will likely take the same length of time to roll it back.

2. A presidential executive order repealing Dodd-Frank would trigger a judicial review. An important point to understand here is that executive orders can be nullified upon judicial review if they are deemed unconstitutional or if they are not supported by statute (think of what we’re currently seeing with President Trump’s immigration ban). The courts could deem that legislative action is required if a major policy initiative is the subject of the executive order, and a reform as sweeping as Dodd-Frank is likely to be deemed a major initiative. If so, then it is back to Congress to do the legislative work, which as we all know, is never a quick process.

3. The legislative branch probably doesn’t have a strong desire to tackle another major rules overhaul concurrent with the Affordable Care Act (ACA). Given the focused public spotlight on health care, legislators may run short on bandwidth to address a second statute as massive as Dodd-Frank.

4. If financial markets continue to rise (think: Dow Jones 20,000), the focus on financial services deregulation will probably lessen. Wall Street is currently outperforming even the most bullish analysts’ predictions and bank stocks are surging in value against higher earnings and profits. As such, voices within the financial services arena that are crying out for deregulation may have less influence on Congress, and certainly less credibility with the American public.

From a housing perspective, Dodd-Frank addressed the high-risk lending practices that were once endemic amongst banks. Any changes to the Act are highly unlikely to allow Wall Street to go back in that direction. Rather, the moves will take place more around the edges, such as cutting compliance costs, freeing up community and regional banks from the same rules as their bulge-bracket peers, and helping out investment advisors who believe they’ve been targeted unfairly.

For some, any repeal of Dodd-Frank implies a return to the irresponsible lending practices of years past, but the chances of that are close to zero. We may see a modest drop in credit score requirements when it comes to applying for a mortgage, but all that will do is add more potential buyers into an already competitive housing market. As for a resurgence of sub-prime lending? I am confident that will not happen.

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 over 25 years of professional experience both in the U.S. and U.K.

Living • February 14, 2017

Inspired by Love: Red home décor accents are not just for Valentine’s Day

by Guest Author

Valentine’s Day is here, the color red is seemingly everywhere, and you may have considered introducing red accents into your home décor to get into the spirit. The good news is that red isn’t just for holidays. In fact, the color red can actually add more energy to your interior regardless of the time of year. Here are eight ways that you can use red to spice up different living spaces.

Red bar stools look great in almost any color environment; from a vivid purple dining room, to a cool white-on-white kitchen.

Make your living room really stand out by adding an accent chair in a passionate shade of red. Pair it with neutral colors and make it the star of the room along with cool items, such as a black and white accent pieces.

In a black and white home, add a pop of red by choosing a Persian carpet in this wonderful color. The deep color grounds the living space and the intricate pattern masks spills.

There is nothing more fabulous than a dining area with a dreamy chandelier, but if you really want to make this room the star of your home, add a fancy red table.

This simple red cabinet becomes a statement piece by sticking to a monochromatic theme. A few white and off-color items on the shelves keeps monochromatic from becoming monotonous.

Where better than the bedroom to add the romantic color of red? Go modern with bold, textured pillows mixed with softer colors.

A glam red kitchen will bring romance into your home. This flirtatious and sweet kitchen will make you want to cook more with your loved one.

Red is the perfect color for your bathtub if you want to make your bathroom feel more romantic. Highlight it by using minimalist lighting fixtures and gorgeous vintage wallpaper.

More • February 10, 2017

Luxury Design, Furnishings and Décor Trends

by Guest Author

content_kaia.lighting.portfolio.interiors.styles.jpg

There is an appreciation of luxury that is quiet, understated, and personal that is gaining momentum in 2017. People want their homes to feel luxurious but also welcoming, warm, and most importantly, authentic. This means creating spaces that feel highly personal with a piece of original art, beautiful accessory, unique lighting or custom furnishing.

Finding pieces that are truly special requires more than visiting local retailers and galleries, so we have assembled a list of distinctive artisan brands that produce one-of-a-kind pieces, from glittering lighting to parchment wall panels and luxury textiles.

Based in London and Vienna, KAIA creates refined lighting pieces that combine function and beauty in equal measure. All of the brand’s items are designed exclusively by craftsman Peter Straka and expertly made in KAIA’s Vienna workshop. Their main focus is that the light fixture should always be artful – even when it is not illuminated.

Master of luxurious custom-made finishes for furniture and surfaces, Simon Orrell is London’s go-to craftsman for yachts and interiors. From a workshop in London’s Chelsea Design Quarter, has worked closely with artisans from around the world to create unique furniture and accessories that draw upon historic techniques and materials like shagreen, parchment and shells like mother of pearl. Luxury surfaces have become his specialty, transforming everyday objects into museum-quality pieces.

Known for their Lusive© Décor label that provides large scale custom lighting for luxury hotels and casinos, Thomas Cooper Studio is now featuring limited edition collections designed for the home. Manufactured in Los Angeles, using original materials and artisanal processes to create inspired designs, the end result is high function meets high art.

Modern design and home furnishings are certainly dominating the interior design scene at the moment but not all homes are suited for the current darling of design. Ave Home, a specialty furniture company based in New Orleans, revives classic design by creating historical reproductions with superb attention to detail. Their collections offer a variety of timeless styles, including French Louis XV, Swedish Gustavian, Hollywood Regency, and the aforementioned Mid Century Modern.

Since 1952, Pindler has been perfecting the art of fabric design and development. Some of their signature lines include ornate looks like the Heart Castle Collection to more contemporary looks like the Mirage Collection. Whatever your style – their fabrics are unbeatable in style and quality.

After 35 years as an interior designer, Coryne Lovick launched her namesake collection in 2013 with a selection of timeless pieces devised to work in many types of spaces. Like her interiors, the Coryne Lovick Collection is sophisticated, inviting, and is known for exquisite detail and luxe materials.

Studio Jackson is a full-service interior design firm based in Los Angeles. In addition to the firm’s thriving consultancy, they are now offering a collection of furniture designed by founder and Principal Designer, Ryan Gordon Jackson. RJ creates designs for a discerning contemporary-minded customer and each piece is handmade by highly trained artisans in their workshop. The collection speaks to Jackson’s design mantra that “Luxury and contemporary design are not mutually exclusive.”

Studio Roeper is a California artisan studio dedicated to the creation of custom handmade and finely crafted luxury furniture for private residences, boutique hotels, art collectors and interior designers around the world. All of the slabs and lumber are locally sourced, milled and seasoned in-house at their own sawmill. Their commitment to mixing art with function extends into play with their own handmade skateboards!

Market News • February 9, 2017

Oregon and South West Washington Real Estate Market Update

by Windermere Economics

ECONOMIC OVERVIEW

Oregon added almost 60,000 new jobs in 2016, up from the 55,600 jobs that were created in 2015. Year-over-year, the state increased employment by 3.3%, down slightly from the third quarter’s 3.5% increase, but impressive nevertheless.

In December, the state unemployment rate was 4.6%, well below the 5.5% rate seen at the end of 2015. Given this substantial growth in jobs, we will certainly see incomes continue to trend higher, which will act as its own economic boost at the regional level.

HOME SALE ACTIVITY

Home sales continue to slow, with sales up by a marginal 0.1% in the quarter relative to the same period in 2015. In total, there were 15,140 home sales.
Sales rose at the fastest rate in Skamania County, which saw an annual increase 36.8%. There were also noticeable sales increases in Wasco and Linn Counties. The greatest declines in sales were seen in Clatsop, Crook/Jefferson, and Tillamook Counties.
While year-over-year sales rose in 11 counties, 15 counties saw transactions decline.
Both supply constraints and unrealistic price expectations from some sellers are pushing sales activity lower.

HOME PRICES

Average prices in the region rose by 10.9% year-over-year to $332,996. This is up from the annual increase of 8.1% seen in the third quarter of the year.
Klickitat County saw the greatest annual price growth, with homes selling for 57% higher than a year ago, but this is mostly a function of a market that has very few home sales.
All but one county saw prices rise when compared to the fourth quarter of 2015, with several counties continuing to exhibit significant increases in average sale prices.
Home prices remain well above historic averages and are likely to remain that way through 2017.

DAYS ON MARKET

The average number of days it took to sell a home in the region dropped by 13 days when compared to the fourth quarter of 2015, and is two days less than the third quarter of this year.
The average time it took to sell a home during the fourth quarter was 81 days.
Jackson, Jefferson, and Wasco Counties were the only areas where the average time it took to sell a home rose, but I see no cause for concern at this point.
Homes sold the fastest in Washington and Multnomah Counties, where it took an average of 27 and 31 days respectively for homes to sell.

CONCLUSIONS

Sales activity continues to slow, but this has not adversely affected home prices. The market still clearly favors sellers and, even with recent increases in mortgage rates, this is likely to be the case through 2017. As such, I have left the needle at the same spot as third quarter.

Market News • February 6, 2017

Colorado Real Estate Market Update

by Windermere Economics

ECONOMIC OVERVIEW

Annual employment growth in Colorado was measured at a respectable 2.2% in November and will likely finish the year having created around 55,000 new jobs. Within the metropolitan market areas included in this report, we are seeing employment growth at or above the state level and I anticipate that this will continue to be the case in 2017.

Unemployment rates continue to drop, and with rates now below three percent, all of Colorado’s metro areas are at full employment. Because of this robust level of growth—in concert with very low unemployment levels—I anticipate that we will see some fairly substantial income growth as companies look to recruit new talent and keep existing employees happy.

HOME SALE ACTIVITY

There were 14,614 home sales during the fourth quarter of 2016—up by a marginal 0.7% from the same period in 2015.
Jefferson County saw sales grow at the fastest rate over the past 12 months, with a 5.9% increase. Sales activity fell in three counties, but this was a function of short supply rather than slowing demand.
Listing activity continues to remain well below historic averages, with the total number of homes for sale in the fourth quarter 12.8% below that seen a year ago.
The key takeaway from this data is that 2017 is shaping up to be one which will still substantially favor home sellers. I do anticipate that we will see some improvement in listing activity, but it is almost a certainty that demand will exceed supply for another year.

HOME PRICES

Demand continued to exceed supply in the final three months of 2016 and this caused home prices to continue to rise. In the fourth quarter, average prices rose by 9% when compared to the fourth quarter of 2015. The average sales price across the region is now $393,969.
In many parts of the region, prices are well above historic highs and continue to trend upward. With double-digit price increases over the past year, the market remains very hot.
Annual price growth was strongest in Larimer and Jefferson Counties, where prices rose by 11.8% and 10.9% respectively.
While we will likely see some modest softening in home price growth in 2017, we can still expect a very strong market.

DAYS ON MARKET

The average number of days it took to sell a home dropped by one day when compared to the fourth quarter of 2015.
Homes in a majority of the counties took less than a month to sell.
In the final quarter of the year, it took an average of just 27 days to sell a home. This is down from the 28 days it took in the fourth quarter of 2015.
The Northern Colorado housing market is still firing on all cylinders. The only missing piece is listings, which remain well below the historic average.

CONCLUSIONS

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

For the fourth quarter of 2016, the needle remains firmly in the seller’s territory. It will be interesting to see if the recent increase in mortgage rates has any effect at all on the housing market. I believe that it will; however, I expect that it will likely cause a slowdown in home price growth rather than any collapse in home prices.

Market News • February 2, 2017

Nevada Real Estate Market Update

by Windermere Economics

ECONOMIC OVERVIEW

Employment in the Las Vegas market slowed modestly towards the end of 2016 after having performed very well for the past couple of years. November data showed that 943,100 people were employed in Clark County; this is up by 19,000 from November of 2015, representing a growth rate of 2.1%. In a further sign of an improving labor market, the local unemployment rate has dropped from 6.4% to 5.1% over the past 12 months

HOME SALES ACTIVITY

There were a total of 8,857 home sales in the fourth quarter, which was an increase of a substantial 14.8% over the same period a year ago. Sales were 12.5% lower than seen during the third quarter, but that is due to seasonality.
Sales activity was less robust in the Spring Valley, South Summerlin/Lakes, and Green Valley/Henderson sub-markets, but even in these areas sales rose.
Sales grew at the fastest rate in the North Las Vegas sub-market, which saw a 24.9% increase when compared to a year ago. There were sizable increases in sales in almost all of the sub-markets reviewed within this report.
Inventory levels remain woefully low, with 17.5% fewer listings than seen a year ago. That said, listing activity did rise in the Southwest, South Summerlin/Lakes, and Southeast sub-markets, which may indicate that listings will continue to increase in 2017, but I wouldn’t guarantee it.

HOME PRICES

Average prices in the region rose by 3.9% year-over-year to $237,487. This is a modest drop of 1.6% compared to the third quarter.
The relatively affordable Sunrise sub-market saw the strongest annual growth, with home prices rising by 11.9% to $153,667. We also saw notable gains in the Spring Valley neighborhood, where sale prices were up by 9.7% to $200,700.
Prices rose in all but two sub-markets compared to the fourth quarter of 2015, with several remaining above the region-wide average.
There were modest price declines in two sub-markets. The Whitney market saw a 7% drop to $163,000, and the South Summerlin/Lakes market saw prices drop by 1.1% to $339,000.

DAYS ON MARKET

The average time it took to sell a home in the region dropped by 15 days when compared to the fourth quarter of 2015.
It took an average of 45 days to sell a home in the fourth quarter, which is seven days lower than the third quarter.
All component sub-markets saw the length of time it took to sell a home drop when compared to a year ago.
The greatest drop in days-on-market was in the Downtown sub-market, which dropped by a substantial 27 days to an average of 41 days.

CONCLUSIONS

The speedometer reflects the state of the region’s housing market using housing inventory, price gains, sales velocities, interest rates, and larger economic factors. Employment growth in Clark County is slowing, but that appears to have had little effect on the housing market. Inventory levels are still lower than I would like to see in a balanced market, and because of this, home prices continue to trend upward.

Due to slower price growth and rising interest rates, I have moved the speedometer a little toward the buyer’s side. That said, sellers are still in the driver’s seat.

Market News • January 31, 2017

Eastern Washington Real Estate Market Update

by Windermere Economics

ECONOMIC OVERVIEW

Washington State finished the year on a high, with jobs continuing to be added across the region. Additionally, we are seeing decent growth in the area’s smaller cities and towns, which to date have not benefitted from the same robust growth as the larger metropolitan markets. Unemployment rates throughout the Eastern Washington region continue to drop and several markets are getting close to full employment. In the coming year, I anticipate that we will see income growth starting to rise as companies look to recruit new talent and keep existing employees happy.

HOME SALES ACTIVITY

Sales activity in the Eastern Washington market areas saw a 13.4% increase compared to the same period in 2015. In total, there were 3,630 home sales in the fourth quarter of this year.
Sales rose at the fastest rate in Walla Walla County, which had a 30.4% increase over Q4 2015. There were also noticeable increases in Kittitas and Okanogan Counties.
A majority of counties in the region saw home sales improve relative to the fourth quarter of 2015, but two counties did experience declines. The largest drop in sales was seen in Whitman County.
Sales are a product of supply and, unfortunately, the number of homes for sale in Eastern Washington is well below historic averages—and trending lower. Unless we see more listings come on the market, this will likely have a negative impact on sales growth in 2017.

HOME PRICES

Average prices in the region rose by 10.2% year-over-year to $230,102. Double-digit price growth is unsustainable, but I expect to see prices slow somewhat as interest rates rise.
Kittitas County saw the greatest price growth, with homes selling for 21.6% above that seen a year ago.
All of the counties in this report saw prices rise when compared to the fourth quarter of 2015, with all but two increasing by more than 10%.
The key takeaway here is that the market still clearly favors sellers over buyers.

DAYS ON MARKET

The average number of days it took to sell a home in the region dropped by 16 days when compared to the fourth quarter of 2015.
The average time it took to sell a home in the region was 69 days.
Douglas County was the only area where the average days on market rose (from 42 to 57 days).
Counties where homes sold the fastest were Franklin and Benton, where it took just over a month to sell homes.

CONCLUSIONS

The speedometer reflects the state of the region’s housing market using housing inventory, price gains, sales velocities, interest rates, and larger economic factors. Economic growth in Washington State continues to trend well above the nation and it is one of the fastest-growing regions in the country. Housing markets throughout the state have benefited greatly from this economic vitality. Home prices continue to increase while the number of homes for sale remains stagnant. The average number of active listings in the fourth quarter was 21% lower than the same period a year ago, and pending sales were 7% higher. As such, the market remains staunchly in favor of sellers, even with interest rates that jumped in December.

Market News • January 30, 2017

Southern California Real Estate Market Update

by Windermere Economics

ECONOMIC OVERVIEW

The markets covered by this report, which include Los Angeles, San Diego, San Bernardino, Orange, and Riverside Counties, added 279,600 new jobs between November 2015 and November 2016. With this shift toward “full employment”, the area’s unemployment rate dropped from 5.5% to 4.7%.

HOME SALES ACTIVITY

There were a total of 46,075 home sales in the fourth quarter of 2016. This was 7.9% higher than the same period in 2015, but 12.3% lower than the third quarter of 2016. This can be attributed to a seasonal drop as we wound the year down.
The average number of homes for sale remains well below that seen a year ago (-6.8%), but the drop in listings is not as substantial as we have seen in the past.
Home sales were up across the board with substantially higher home sales in Riverside, Orange, and San Bernardino Counties. Reasonable growth was also seen in San Diego and Los Angeles Counties.
Even with a relatively slim difference in the number of homes for sale compared to a year ago, we are still in need of inventory. We should see a minor increase in listings in 2017, but it is unlikely that the market will return to being balanced in the foreseeable future.HOME PRICES
When compared to the fourth quarter of 2015, average prices in the region rose by 5.9% and are 2.6% higher than the third quarter of 2016.
When comparing the third and fourth quarters, all markets saw average prices rise, including San Diego County, where the average price rose by 5.4% to $634,300.
San Diego County saw the greatest annual appreciation in home values (+7.8%). This was followed by Los Angeles County, where the average price rose 6.0% year-over-year.
Pending sales were also higher across the board which, when combined with lower listings, means the market is clearly out of balance.

HOME PRICES

When compared to the fourth quarter of 2015, average prices in the region rose by 5.9% and are 2.6% higher than the third quarter of 2016.
When comparing the third and fourth quarters, all markets saw average prices rise, including San Diego County, where the average price rose by 5.4% to $634,300.
San Diego County saw the greatest annual appreciation in home values (+7.8%). This was followed by Los Angeles County, where the average price rose 6.0% year-over-year.
Pending sales were also higher across the board which, when combined with lower listings, means the market is clearly out of balance.

DAYS ON MARKET

The average time it took to sell a home in the region was 54 days. This is a drop of 10 days when compared to the fourth quarter of 2015, and one day below the time it took in the third quarter of 2016.
The biggest decline in days on market was seen in Riverside and Orange Counties, where it took 14 fewer days to sell a home compared to a year ago.
Homes in San Diego County continue to sell at a faster rate than the other markets in the region. In the fourth quarter, it took an average of 34 days to sell a home, which is five days less than seen a year ago.
All five counties saw a drop in the amount of time it took to sell a home between the fourth quarter of 2015 and the fourth quarter of 2016.

CONCLUSIONS

The speedometer reflects the state of the region’s housing market using housing inventory, price gains, sales velocities, interest rates and larger economic factors. The Southern California economy continues to add jobs, which in turn increases demand for housing. The region remains a seller’s market; however, it will be interesting to see what effect the recent rise in interest rates will have on the growth of home prices, especially in the more expensive Orange County and Los Angeles County areas. Given further anticipated increases in interest rates, I have moved the speedometer a little more in favor of buyers, but it still remains a seller’s market.