Of all the alternatives to single-family detached homes that remain popular today, row houses may have the longest history. Some of the oldest and largest cities on the East Coast such as New York City, Boston, and Philadelphia still have row houses in great numbers. These iconic structures have served as the backdrop for some of America’s most beloved TV shows, including Full House and Cheers. Given their storied history and prime location, row houses represent the best of the past and the present in home design.
History of Row Houses
Since their beginning in the early 1600s, row houses have presented an economical solution to housing for home builders. They allowed builders to divide a plot of land into different living units that increased the number of tenants on the property. In the 19th and 20th century, the easy-to-build and inexpensive nature of the housing style fit the building demands of the era, and they proliferated throughout what are now some of the country’s most popular metropolitan areas.
Difference Between Townhouses and Row Houses
There are slight differences between townhouses and row houses. Row houses share a common façade along a street, whereas townhouses may be grouped throughout a development. Row houses have a consistent roofline and share a common wall, whereas townhouses may not adhere to the same uniformity of height and width.
Both types of housing may be governed by a Homeowners Association (HOA), which lays out guidelines for property upkeep and maintenance, enforces restrictions on making addition/remodels, and charges monthly fees that go toward the community’s shared spaces, property maintenance, and amenities.
One well known variety of row houses is the “brownstone.” As the name suggests, brownstones’ signature exterior is a mixture of sandstone that produces a dark brown color. Brownstones are commonly found in historic districts throughout New York City, such as Brooklyn, Manhattan, and Harlem.
Row houses, along with duplexes, courtyard apartments, and other similar housing types, were constructed in great numbers prior to World War II but are now far less commonly built. The term “Missing Middle” was first coined by Opticos, a team of urban designers and strategists who realized that this type of housing was largely missing in today’s market. In an episode of Monday with Matthew, Windermere Chief Economist Matthew Gardner explained how these “missing middle” housing types can improve housing affordability:
“And the key function of this type of housing is to meet the rising demand for walkable neighborhoods, respond to changing demographics, and provide housing at different price points. You see, rather than focusing on the number of units in a structure—think high rise apartments or condominiums—this type of housing emphasizes scale and heights that are appropriate for and sympathetic to single-family or transitional neighborhoods.”
For more information on the various architectural housing styles, visit our Architectural Styles page.
Featured Image Source: Getty Images – Image Credit: benedek
Imagine the process of financing a home purchase as a relay race. From start to finish, the baton must be passed several times between interconnected transactions. The down payment plays an important role in the relay race and will help you cross the finish line, but how much money do you put down? And when do you make the down payment? Understanding its characteristics will help you see where it fits in the home buying process.
What is a down payment?
The down payment is a large payment made upfront to help fund a home purchase. Unlike the financing obtained through a mortgage loan, the down payment comes out of the buyer’s pocket, not from a lender.
For example, let’s say the house you want to buy is priced at $500,000. If you put $25,000 down, or five percent of the purchase price, that would leave $475,000 you’d need to pay for with a mortgage. If you put down $100,000, or 20 percent, that would leave a $400,000 mortgage principal. In general, a higher down payment equates to a lower interest rate since that financial structure is viewed as less risky by lenders. It also means your monthly payments will be lower since your loan balance is smaller.
However, making a large down payment isn’t feasible for everyone. In fact, according to the National Association of REALTORS® Profile of Home Buyers and Sellers1, the typical down payment was seven percent for first-time home buyers and 17 percent for repeat buyers in 2021. If you’re not able to put down 20 percent of the home’s purchase price, your lender will typically require that you obtain Private Mortgage Insurance (PMI), which protects them against the possibility of a mortgage default. The benefit of PMI is that it creates a pathway to homeownership by allowing you to move in and start building equity right away.
Different loan products have different down payment requirements. Conventional loans have a minimum down payment requirement of three percent, while government-backed loan products like VA loans or USDA loans may allow you to purchase a home with no money down if you qualify.
Down Payment: Home Monthly Payment Calculator
As you prepare to buy a house, it’s helpful to see what you can afford. Your down payment will have a direct impact on your loan terms and your monthly mortgage payment. Use our Home Monthly Payment Calculator to experiment with different down payments, principal amounts, interest rates, taxes, and more for any listing price.
Though your lender will need to verify that you have the funds available to make your down payment early on in the mortgage approval process, the down payment is officially due at closing. Saving up for such a payment may seem like a daunting task, but with the right planning, you’ll make steady progress. Having a strategy in place for compiling your down payment is a telltale sign that you’re ready to buy a home. Here are some methods of generating savings to consider:
Consider downsizing to reduce your living expenses and increase your savings over time.
Reduce your debt before applying for a mortgage to give yourself a better shot at favorable mortgage terms—i.e., a lower down payment requirement and reduced interest rates.
Explore down payment assistance programs to see if you qualify.
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’s Chief Economist Matthew Gardner and welcome to this month’s episode of Monday with Matthew. Today we are going to take a look at the new home market where headwinds are certainly growing. And the reason this particular subject piqued my interest was that the National Association of Home Builders just released their Housing Market Index for August, and the numbers were certainly eye-opening.
Now, for those of you who may not be particularly familiar with this index, it is based on a survey of home builders which asks them to give their opinions on the single-family home market and asks them to rate current market conditions for the sale of homes today as well as in six months’ time. It also asks their opinion regarding foot traffic of prospective buyers to their new home communities.
NAHB Housing Market Index
And as you can see, the headline index level fell six points to 49. The drop in August marked the eighth consecutive monthly decline for the Housing Market Index. It was also notable because it was the first time since May of 2020 that the index has dropped below the key 50 breakeven level. This is significant, as it tells us that today more home builders currently rate sales conditions as poor than good.
Now, while the August number was certainly lower than some economists had forecast, I was actually not too surprised as builders have been reporting a spike in cancelled contracts recently. In fact, a report I just read that was put out by John Burns Consulting suggested that the cancellations have more than doubled since April with 17.6% of buyers pulling out of their purchases in July. That compares to 8% in April and 7 ½% a year ago.
Housing Market Index Components
This chart shows a breakdown of three components of the Housing Market Index which are all at their lowest levels since May of 2020, which was just before housing activity rebounded following the lockdown due to COVID-19.
The present sales index fell seven points to 57 but is still above the breakeven point
The future sales series fell two points to 47
Prospective buyer traffic fell five points to 32 which, if we exclude the pandemic, represents the lowest index level since April of 2014
I find this index has a very strong correlation with new home sales, but I also use it as a pretty reliable leading indicator when it comes to single-family housing starts. I’ll get to that shortly. The survey also stated that one in five builders had reduced prices in August. That might help to explain the 10-point spread between builders’ perception of current versus future sales. But there are limits on home builders’ ability to keep cutting prices in order to support sales. This has become a significant issue because many of them are currently holding a large stock of inventory.
New Homes for Sale
Here is what current inventory levels look like. Although you might think that it’s not that bad given that only 9% of available homes are finished are ready to move into, I would tell you that builders incur costs every day that a home is not sold, even if that home has yet to be built. And with inventory at a level not seen since 2008, I’m sure there are a lot of builders not sleeping too well right now.
I would add that by the time the above video is released, the July new home sales report will have been published. I can almost guarantee that the number of homes for sale will have grown further.
New Home Sales
Higher inventory levels are due to slower sales activity, which is continuing to decline. Sales are 17% lower than a year ago. With more homes for sale and lower transactions, it would now take more than nine months to absorb all available homes using the current sales pace. I would also tell you that the last time months of supply broke above nine was all the way back in 2010.
It’s my forecast that sales in July will have dropped from the annualized rate of 590,000 shown in the chart above to somewhere between 570,000 and 580,000.
U.S. Single-Family Housing Starts
With high supply levels and lower sales, it’s not at all surprising to see builders hitting the brakes, with new home starts falling by 10.1% between June and July of this year. Starts are down by 18 ½% from a year ago. Starts have dropped on a sequential basis for five consecutive months now, and I am afraid that they will drop further before finding a bottom.
So, what’s the bottom line here? Well, there are several issues I see, the first of which is affordability. Home prices have been spiraling upward since the start of the pandemic not only because mortgage rates dropped, but construction costs started jumping and builders had to charge more for a home.
Builders saw prices rise by almost 18% last year. This had already taken a significant toll on affordability even before the mortgage rates spike we saw earlier this year. The upshot, as I see it, is that tighter monetary policy from the Fed, in concert with construction costs that remain well above normal levels, has hit builders and hit them hard. Of course, they are doing their best to address the situation by slowing construction activity significantly, but I think that they are going to have a pretty rough time for the next several months.
Ultimately, I see little option for home builders other than lowering prices further, especially now that they are competing with rising inventories in the resale market. I also believe that there are buyers out there waiting patiently on the sidelines for prices to drop in the coming months as they know that builders at some point have to solve the current supply demand imbalance and lowering prices is the easiest way of doing this. Last month the average price drop was 5%, but this is very likely to increase as we move toward the fall.
Will builders get through the situation they find themselves in? I believe that they will. And there are some glimmers of light out there with inflation appearing to be peaking, interest rates are, if not dropping, then certainly stabilizing, and this will help.
Builders also understand that the country has a significant housing shortage. In fact, a recent report published by “Up For Growth” suggested that we have a housing shortage today of around 3.8 million homes. Although this includes rental and ownership housing, some basic math tells me that there is a need today for around 2.5 million new owner-occupied homes. So, light is definitely at the end of the tunnel, but there is a way to go before they get out of it.
And there you have it. I hope that you’ve found my thoughts on this topic of interest. As always, if you have any questions or comments about the current new home environment, please do reach out to me. In the meantime, stay safe out there and I look forward to visiting with you all again next month.
Bye now.
About Matthew Gardner
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.
Although there are certain fundamental principles to contemporary design, it is constantly evolving. While other interior design styles are often rooted in a specific period, contemporary design is set in the present. What’s popular now is what’s popular in contemporary design. Its ability to remain timeless is what gives contemporary design its greatest quality—it never goes out of style. Learn a bit more about contemporary design to find ways to incorporate it into your home.
What is contemporary interior design?
Contemporary style is characterized by clean lines, state-of-the-art materials, and a preference for openness over ornamentation. These tenets go hand in hand with the philosophies of modernism and minimalism, but contemporary design simply dips its toes in these other design styles without relying on them too heavily.
The aesthetic of modern construction lends itself well to contemporary design. Industrial spaces and open rooms with high ceilings and large windows help to deliver a magazine-quality contemporary look. But even if your home isn’t tailor-made for contemporary design, you can still curate it.
Image Source: Getty Images – Image Credit: vicnt
Contemporary Design in Your Home
The simplest way to incorporate contemporary design philosophy into your home is to let the natural architectural elements show. Let your exposed wooden beams and brick walls shine, decluttering the spaces around them to make them the focal point. This can make your spaces feel empty at first but remember; contemporary design is all about opening things up to effectively apply decorative details.
Choose modern furniture with clean lines and solid-colored fabrics. In the kitchen and bathroom, chrome and metallic surfaces will reinforce a contemporary aesthetic. When decorating, start with a neutral foundation (white, grey, and black) and add bold accent colors on top. The timeless appeal of a hardwood floor makes it a fitting choice for achieving contemporary style, while textured textiles in natural fabrics will help to liven up your spaces.
Stone, metal, and glass mix well in contemporary design, often combined in the selection of living room sets, decorative centerpieces, and kitchen/bathroom design. Large pieces of art, accent walls, and bold decorations help to broaden the color palette of contemporary spaces. You are free to choose bold, impactful hues from across the color spectrum in your decoration.
The Differences Between Contemporary and Modern Design
Whereas contemporary design is centered on what is popular during the present, modern design is rooted in a specific time period. Modern design dates back to at least the early twentieth century, which evolved into mid-century modern during the 1950s.
Modern design typically has earthier colors and a general preference for wood, whereas saturated colors and metals/glass are more at home in contemporary design. Choosing modern design means you’re choosing to make decorative variations on a theme, whereas the theme of contemporary design is always changing, so you never know where it might lead.
Visit our Design Styles page to learn more about common interior design styles and how you can incorporate them into your home:
This article originally appeared in the Summer/Fall 2022 issue of Windermere Living
By Amanda Zurita | Photography by Victoria Kovios
Closet Curation
Turn your wardrobe into your personal boutique with these professional “editing” tips.
Iris Miyasaki was born an organizer. Growing up in Hawaii in a Japanese American family, minimalism was part of her life. “In school, my binders were always very organized and color coded,” she says. “People found it amusing, but it was just how I functioned.” Today, she puts that passion for order and organization to use as a professional wardrobe curator and stylist under her Seattle-based brand Wardrobe by Saki (wardrobebysaki.com). Here are her tips for curating a captivating closet and finding ease through editing.
How does editing your closet differ from other decluttering trends?
Decluttering is the first step of purging, more of a first run-through to get rid of things you truly don’t need. Editing and curating, however, is where I bring in a styling aspect to organization and understand how my clients are using the pieces in their closets.
For example, perhaps a client has a sweatsuit that they wear all the time. In the decluttering phase, they’re not going to get rid of it. But, when it comes to editing, I ask questions like, “Does this outfit make you happy? Do you want to put this on every day?” If no, then we’ll work to find something better. Oftentimes, once you’ve relived the story of a piece, you’ll realize that the memory is in your heart and not solely attached to an item—so it’s easier to let go of.
What goes into making an “Instagram worthy” closet?
When you can see all your clothes, shoes, and accessories, you’ll want to use them more. I focus on creating a visual palette for my clients, whether that means organizing by color, silhouette, or types of items. The idea is to create a closet they’ll want to “shop” in.
Your closet is your personal store. If you don’t love it, if you wouldn’t shop in that store, you aren’t going to pull things from it. From a technical standpoint, it’s important to be consistent with your storage colors and textures. And you don’t have to fill every single space. In fact, negative space opens up breathing room for your things.
Aside from the visual aspect, what kind of emotional impact can editing a wardrobe have?
You interact with your closet every day, so when you’re able to utilize that space in the most efficient way, it just takes a weight off your shoulders. Rather than combing through clutter, you can have peace of mind knowing, “OK, all my things are right here and I love each one of them.” That kind of foundation helps you to feel at ease going through the rest of the world. A curated closet offers a sense of calm and contentment.
What’s your advice for parting with meaningful items that you may not be using frequently?
I like to ask my clients: Have you used this within the past year or year and a half? Fashion trends change, and what you like changes. Your body changes. So, if you haven’t worn something in the past year, maybe it’s time to part. When it comes to sentimental pieces, I find it helps to talk about the memories associated with them.
Windermere Living is one of the top real estate magazines on the West Coast, offering carefully curated editorial that reflects our passion for community, connection, and inspired living alongside exceptional homes on the market. Windermere Living is the exclusive listings magazine published by Windermere Real Estate in partnership with SagaCity Media.
Once you and your agent work through the process of selling your home, there comes a point when it’s time to switch gears and get ready to move. It can be difficult to juggle the various steps of the moving process, especially if you’re Buying and Selling a Home at the Same Time. Using a moving checklist will help you stay organized and on schedule throughout your moving timeline.
Moving Checklist: A Step-by-Step Guide to the Moving Process
We’ve included a comprehensive checklist below of all the steps you’ll need to complete to ensure a smooth, successful move. This list is also available as an interactive web page and downloadable PDF here: Moving Checklist
Twelve Weeks Before:
Get estimates from professional movers or truck rental companies if needed.
Once you’ve selected a mover, discuss insurance, packing, loading and delivery, and the claims procedure.
Six to Eight Weeks Before:
Use up things that may be difficult to move, such as frozen food.
Sort through your possessions. Decide what you want to keep, what you want to sell, and what you wish to donate to charity.
Record serial numbers on electronic equipment, take photos (or video) of all your belongings and create an inventory list.
If you are moving yourself, use your inventory list to determine how many boxes you will need. Stock up on the items you’ll need from our “Moving Essentials” list.
Obtain a change of address packet from the post office and send it to creditors, magazine subscription offices, and catalog vendors.
Discuss tax-deductible moving expenses with your accountant and begin keeping accurate records.
If you’re moving to a new community, contact the Chamber of Commerce and school district and request information about services.
Make reservations with airlines, hotels, and car rental agencies, if needed.
Begin packing nonessential items.
Two to Four Weeks Before:
Arrange for storage, if needed.
If you have items you don’t want to pack and move, hold a yard sale.
Update the address listed on your car registration, license, and insurance.
Transfer your bank accounts and safe-deposit box items to new branch locations if needed. Cancel or redirect any direct deposit or automatic payments from your accounts.
Make special arrangements to move your pets and consult your veterinarian about ways to make travel comfortable for them.
Have your car checked and serviced if you’ll need to drive it a long distance.
Change your utilities, including phone, power, and water, from your old address to your new address.
Week of Moving Day:
Defrost your refrigerator and freezer.
Have movers pack your belongings.
Label each box with the contents and the room where you want it to be delivered.
If you’re using a moving company, arrange to pay for their services in full, or the remainder of what you owe, upon delivery.
Set aside legal documents and valuables that you do not want packed.
Pack clothing and toiletries, along with extra clothes in case the moving company is delayed.
Give your travel itinerary to a close friend or relative so they can reach you as needed.
Pack a first-day box with items that you’ll want accessible before other boxes are unpacked. See our list of suggested items on the right and add any others you’ll want to include.
Moving Day:
Old Home
Pick up the truck as early as possible if you are moving yourself.
Make a list of every item and box loaded on the truck.
Let the mover know how to reach you.
Double-check your closets, cupboards, attic, basement, yard, and garage for any left-behind items.
New Home
Be on hand at the new home to answer questions and give instructions to the mover.
Check off boxes and items as they come off the truck.
Confirm that the utilities have been turned on and are ready for use.
Unpack your first-day box.
Unpack your children’s toys and find a safe place for them to play.
Examine your goods for damage.
Our Moving Checklist page has all the information above, plus helpful lists for Moving Essentials and which items to pack in your First-Day Box available as a downloadable PDF.
For additional information on the selling process from start to finish, tips on working with an agent, and more, visit our Home Selling Guide:
With its grand stature and signature look, Colonial architecture hearkens back to the nascent days of British settlement on American soil. Since then, the classic home style has seen waves of renewed interest, giving rise to multiple variations on the colonial theme. Today, they remain a popular choice for homeowners throughout the Eastern and Southern United States.
History of Colonial Style Architecture
Like the Cape Cod home style, the roots of Colonial architecture took shape as European settlers made their way to American shores and began to develop their homesteads. A century later amid the country’s centennial celebrations, a new wave of interest in colonial homes took hold. This gave way to the Colonial Revival period, which saw architects and home builders molding the settlers’ early home designs into something more suited for the needs of modern life. Several variations were born during this time, including Georgian, Dutch, French, and others.
Colonial homes are easily identifiable, with symmetric and traditional exteriors that allow their signature characteristics to stand out. Their spacious interiors prioritize comfort, with common living areas and bedrooms typically located on different stories. Here are some common elements of colonial home design.
Symmetrical façades and windows with a central door
Shuttered windows for protection against the elements
Rectangular shape with either a central or double chimney
Built of brick, wood, or stone, depending on the region and era of construction
Pitched roofs with side gables
Front porch columns, typically framing the door
Grand entryways
Living spaces on ground floor, bedrooms located throughout second or third stories
Hardwood floors
Decorative moldings
To learn more about the various home styles from A-Frame to Victorian, head to our Architectural Styles page.
Becoming a homeowner comes with many responsibilities, but if the home you’re purchasing requires you to be part of a Homeowners Association (HOA), you’ll have to follow additional guidelines and pay additional fees. As you’re looking for homes, talk to your agent about whether purchasing a home that’s part of an HOA is right for you.
What is a Homeowners Association (HOA)?
A Homeowners Association is an organization that governs a community of homes. Homeowners within the governed community must follow certain guidelines for property upkeep and maintenance and will face restrictions on their ability to make additions and/or changes to the property. These rules exist to maintain a standard level of quality amongst the community to maximize property value.
Different HOAs may have different stipulations based on the type of housing they govern. For example, an HOA may oversee a community of detached single-family homes, but they are commonly found in communities of condo or townhome housing styles where there is a shared, communal living style. Each HOA has a Board of Directors in charge of enforcing rules, collecting fees, and managing the funds, and certain associations may hire a third-party management company to help the Board of Directors carry out their operations. The members of an HOA are the residents who live in that community. Here are some examples of typical HOA property restrictions:
Exterior paint color choices must be submitted for approval
Grass must be mowed regularly
Flower beds must be kept weed-free
Noise regulations and/or noise curfew
Pet restrictions (type of animal and/or number of pets per household)
Homeowners Association (HOA) Pros and Cons
Living in an HOA community means your property will maintain its curb appeal and you can live with the knowledge that systems are in place to protect property values. However, the benefits come with additional restrictions on your freedoms as a homeowner while increasing your monthly payments.
If you buy in a development governed by a Homeowners Association, you will be required to pay HOA fees on top of your monthly mortgage payment. Typically paid monthly, HOA fees go toward the neighborhood’s shared spaces, property maintenance, and amenities. Homeowners Association fees vary greatly depending on the particulars of that community’s agreement. These fees often cover landscaping costs, parking, community security, garbage pickup, maintenance and repair, insurance, and other amenities, such as a shared pool or gym. If the home is your primary residence, your HOA fees are not tax-deductible.
HOA fees are an additional expense you’ll have to budget for when buying a home. To get an idea of what you can afford, use our free Home Monthly Payment Calculator by clicking the button below. With current rates based on national averages and customizable mortgage terms, you can experiment with different values to get an estimate of your monthly payment for any listing price, accounting for any HOA fees you may incur.
Interior design solutions come in all shapes and sizes. After all your furniture items, art, and other physical items are all in their right place, decorating with house plants can provide the perfect final touch. The best plants for your home are the ones that will thrive in your local climate while complementing your existing décor. Here are a few common house plants and their corresponding interior design styles to aid your decorating efforts.
Decorating with House Plants to Match Your Décor Style
Mid-Century Modern
Mid-century modern interior design is ubiquitous, and for good reason. Its simple concepts, open spacing, and emphasis on natural elements make it one of the premier interior design styles for homeowners and design experts alike. A Split-Leaf Philodendron, or “Swiss cheese plant,” is ideally suited for these interior spaces, and its signature leaf holes make it a visual focal point. Swiss cheese plants will thrive in open spaces with access to natural light, climbing toward the ceiling as space allows. For the same reasons, Fiddle-Leaf Figs feel at home in a mid-century modern aesthetic.
There’s an inherent give and take with industrial interior design in that it foregoes traditional elements that we associate with comfort for stylistic choices that create a strict-yet-visually appealing environment. Decorating with house plants can add vibrance to an industrial backdrop of wood, steel, brick, stone, and copper without compromising the edginess of the style. Both Snake Plants and Cast Iron Plants will harmonize with an Industrial space. Both are low-maintenance plants that mesh well with materials that evoke toughness and durability.
Minimalist
The combination of minimalism and house plants is a match made in heaven. Given minimalism’s focus on the reduction of waste and clutter and the importance of bringing the outdoors in, all signs point toward decorating with house plants. Being selective about which plants you include will keep everything in line with the fundamental concepts of minimalism—too many plants and things would easily feel off balance. Large-leaf plants are a perfect solution for minimalist decorators, such as Rubber Plants, Bird of Paradise, and Silver Evergreen.
The Farmhouse interior style prioritizes cleanliness and an inviting spirit. Its white-washed backdrop of whites, grays, and beiges makes it a fitting canvas for the lush green additions that a selection of house plants can provide. Spider Plants work well to fill shelf space, which come in both solid green and white-striped varieties. These plants are easy to take care of and thrive in partial sun or shade. Aloe Vera plants in the kitchen can refresh the look of your shelving or counter space.
Homeowners with traditionally styled interiors have a whole host of options to choose from. Any classic plant species will complement its traditional surroundings, but more specific choices can bring out the uniqueness in your home. If your decorations are rife with patterns and geometric shapes, perhaps a fern or Amazon Lily would help to balance the room. Bamboo may be a natural fit for your home depending on your existing décor. If you’re looking for a hanging display to fill empty wall space, consider Devil’s Ivy.
As always, research the watering and sunlight needs of a house plant before bringing it into your home. For more on decorating with house plants, be sure to read our room-by-room guide:
The following analysis of select counties of the Northern 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
Over the past 12 months, the Northern California markets covered in this report added 184,600 jobs. With decent job growth, the unemployment rate fell to 2.4%, which is a significant drop from the 5.8% rate we saw a year ago. The lowest jobless rate was in Santa Clara County (1.8%), and the highest rate was in Solano County, where 3.5% of the workforce remains unemployed.
Northern California Home Sales
❱ In the second quarter of 2022, 14,235 homes sold, which is a drop of 21.1% compared to a year ago. Sales rose an impressive 37.6% compared to the first quarter of this year.
❱ Year over year, sales fell across the board. The largest drop was in San Luis Obispo County. Solano and Shasta counties had fairly modest declines.
❱ The number of homes for sale jumped more than 67% compared to the first quarter of the year. This growth in inventory has caused an impressive rise in sales.
❱ Pending home sales ticked up from the first quarter of 2022, suggesting that we may see some growth in closings in the third quarter of this year.
Northern California Home Prices
❱ The average home price in the region rose 10.6% from this time last year to $1.35 million. Compared to the final quarter of 2021, prices rose by 11%.
❱ I have started watching list prices, as they will be a leading indicator of whether the market is starting to feel the impacts of declining affordability due to rising financing costs. In the second quarter, the median list price in the region rose an average of 13%. We did see a small drop in Placer County, but I am not overly concerned as it is a fairly small area that can experience unusual swings in both list and sale prices.
❱ Sale prices rose by double digits in all counties other than Shasta compared to a year ago; they were also higher across the region compared to the first quarter of the year.
❱ Even with rising inventory levels and higher financing costs, the market appears to still be buoyant. However, the pace of price growth has slowed, which will likely continue as the area starts to move toward a more balanced market.
Mortgage Rates
Although mortgage rates did drop in June, the quarterly trend was still moving higher. Inflation—the bane of bonds and, therefore, mortgage rates—has yet to slow, which is putting upward pressure on financing costs.
That said, there are some signs that inflation is starting to soften and if this starts to show in upcoming Consumer Price Index numbers then rates will likely find a ceiling. I am hopeful this will be the case at some point in the third quarter, which is reflected in my forecast.
Northern California Days on Market
❱ The average time it took to sell a home in the Northern California counties in this report dropped two days compared to the second quarter of 2021.
❱ The amount of time it took to sell a home fell in Napa, Santa Clara, San Luis Obispo, and Shasta counties, remained static in Alameda and Solano, and rose modestly in Contra Costa and Placer counties. Average market time fell in all counties other than Solano and Shasta compared to the first quarter of 2022.
❱ In the second quarter, it took an average of 26 days to sell a home, which was seven fewer days than in the first quarter of this year.
❱ The greatest drop in market time from a year ago was in Shasta County, where it took seven fewer days to sell a home.
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.
Positive job growth and a growing economy continue to stimulate the housing market, which has led home sales and prices to rise even as mortgage rates and supply levels jumped. Although affordability continues to be a significant issue, there are no indications that a major correction is imminent. However, we are seeing the speed that homes sell starting to slow, as is the pace of price growth. This suggests to me that the market is starting to cool. That said, with average list prices in most counties continuing to rise, sellers remain confident.
All things considered, I have left the needle in the same position as in the first quarter of the year. The market still favors home sellers, but rising inventory levels and slowing price growth suggest they are not in a better position now than they were at the start of the year.
About Matthew Gardner
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.
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