Market News • May 4, 2022

Q1 2022 Utah Real Estate Market Update

by Windermere Economics

The following analysis of select counties of the Utah real estate market is provided by Windermere Real Estate Chief Economist Matthew Gardner. We hope that this information may assist you with making better-informed real estate decisions. For further information about the housing market in your area, please don’t hesitate to contact your Windermere Real Estate agent.

Regional Economic Overview

The Utah economy continues to impress, with total employment up 3.8% year over year. Of greater significance: current employment levels are now 78,600 higher than the pre-pandemic peak. The counties covered by this report added almost over 48,400 new jobs over the past year, representing a growth rate of 3.7%. Thanks to the state’s robust economy, the unemployment rate dropped to 2%, which is the lowest level recorded since the Labor Department started keeping records in 1976. Moreover, this remarkably low level of unemployment comes while the labor force rose above the 1.7 million mark—a level never before seen.

Utah Home Sales

❱ In the first quarter of 2022, 6,493 homes were sold, which is a drop of 7.5% year over year. There were 29.1% fewer sales than in the fourth quarter of 2021.

❱ Year over year, sales rose in four of the seven counties contained in this report, but fell in the balance of the region.

❱ Inventory levels remain well below the average, which is clearly limiting sales. The number of homes for sale was down 30.9% from the previous quarter, and down 5.6% from the same period a year ago.

❱ Pending sales, which are an indicator of future closings, fell 9.2% from the final quarter of 2021, suggesting that second quarter closings may remain below average.

Utah Home Prices

❱ With more demand than supply, it wasn’t surprising that home prices picked up. Year over year, prices rose 19.5% to an average of $639,131. Prices were 6.1% higher than in the fourth quarter of 2021.

❱ Compared to the final quarter of last year, prices rose in all counties other than Morgan, with Summit County jumping more than 20%.

❱ All areas contained in the report except for Morgan County saw prices increase by double digits. The pullback in Morgan County is not a concern given that it is a very small market.

❱ Mortgage rates increased in the first quarter but, as there is normally a lag between rising financing costs and their impact on sales or prices, it’s too early to tell if the market will experience any slowing. We will have a better idea in the second quarter report.

A map showing the year-over-year real estate market percentage changes in various counties in Utah for Q1 2022.

Mortgage Rates

Average rates for a 30-year conforming mortgage were 3.11% at the end of 2021, but since then have jumped over 1.5%—the largest increase since 1987. The speed of the surge in rates is due to the market having quickly priced in the seven-to-eight rate increase that the Fed is expected to implement this year.

Because the mortgage market has priced this into the rates they are offering today, my forecast suggests that we are getting close to a ceiling in rates, and it is my belief that they will rise modestly in the second quarter before stabilizing for the balance of the year.

A bar graph showing the average rates for a 30-year conforming mortgage, plus Matthew Gardner's mortgage rate forecasts for Q2 2022 through Q1 2023.

Utah Days on Market

❱ The average time it took to sell a home in the counties covered by this report dropped eight days compared to the first quarter of 2021.

❱ Homes again sold fastest in Davis County, and market time dropped in all but three counties compared to a year ago. The greatest decline in market time was in Summit County, where it took 31 fewer days to sell a home.

❱ During first quarter, it took an average of 24 days to sell a home in the region. Market time fell year over year. It also took 4 fewer days for a home to sell than in the final quarter of last year.

❱ With days on market dropping across the board compared to the prior quarter, it’s clear that there is significant demand for the few homes that are available.

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.

In last quarter’s Gardner Report, I suggested that home prices would continue to rise in 2022 but at a modestly slower pace than in 2021. Although it would be easy to assume that the jump in mortgage rates will cause price growth to slow more significantly, I am not sure whether that will be the case. As tight as the labor market is, rising incomes will likely offset most of the potential pain from higher mortgage payments. The region clearly heavily favors sellers, and I don’t expect this to change this year. While the full impact of rising mortgage rates has yet to be felt, I don’t believe it will be overly burdensome for buyers.

Given all of this, I have left the needle in the same position as last quarter. Though the data points to another very solid year for housing, I am waiting for the spring figures to determine if rising mortgage rates will cause any slowing to this supply-starved market.

About Matthew Gardner

Matthew Gardner - Chief Economist for Windermere Real Estate

As Chief Economist for Windermere Real Estate, Matthew Gardner is responsible for analyzing and interpreting economic data and its impact on the real estate market on both a local and national level. Matthew has over 30 years of professional experience both in the U.S. and U.K.

In addition to his day-to-day responsibilities, Matthew sits on the Washington State Governors Council of Economic Advisors; chairs the Board of Trustees at the Washington Center for Real Estate Research at the University of Washington; and is an Advisory Board Member at the Runstad Center for Real Estate Studies at the University of Washington where he also lectures in real estate economics.

Market News • May 3, 2022

Q1 2022 Idaho Real Estate Market Update

by Windermere Economics

The following analysis of select counties of the Idaho real estate market is provided by Windermere Real Estate Chief Economist Matthew Gardner. We hope that this information may assist you with making better-informed real estate decisions. For further information about the housing market in your area, please don’t hesitate to contact your Windermere Real Estate agent.

Regional Economic Overview

Employment in Idaho rose 3.2% over the past 12 months and the latest data shows the number of jobs is 38,300 higher than the pre-pandemic peak. This is particularly notable as there are only nine other states that have exceeded their pre-Covid employment levels. The state unemployment rate was only 2.7%, down from 3.1% at the end of 2021, and lower than the March 2021 rate of 3.9%. There was a very modest decline in total employment between February and March of this year, but I do not see this as being an issue. The labor force continues to grow, and my current forecast calls for employment to rise 3% in 2022.

Idaho Home Sales

❱ In the first quarter of 2022, 5,183 homes sold, representing an increase of 4.2% compared to a year ago but 24.7% lower than in the fourth quarter of 2021.

❱ Quarter over quarter, sales fell in every county covered by this report.

❱ Sales fell in all the northern counties contained in this report compared to a year ago, but this was offset by rising sales in more than half of the counties in Southern Idaho.

❱ Pending sales were 2.7% lower than in the fourth quarter of 2021, but this is more than likely a function of inventory levels, which were down 28.4% from the last quarter. Supply is still very tight.

Idaho Home Prices

❱ The average home price in the region rose 18.6% year over year to $612,558 and was 3.1% higher than in the fourth quarter of 2021.

❱ Compared to the final quarter of 2021, prices were higher in Kootenai and Shoshone counties in the north. All counties in the southern part of the state saw sale prices increase from the prior quarter.

❱ Prices rose by double digits in all the northern counties contained in this report, and all but Boise County saw similar robust price appreciation in the southern part of the state. In total, prices rose 17.2% in the Northern Idaho counties and 19.5% in the southern counties.

❱ The market appears to have either shrugged off the significant increase in mortgage rates in the first quarter, or the impact has yet to be felt.

A map showing the year-over-year real estate market percentage changes in various counties in Idaho for Q1 2022.

Mortgage Rates

Idaho Days on Market

❱ It took an average of 80 days to sell a home in Northern Idaho, and 53 days in the southern part of the state covered by this report.

❱ The average number of days it took to sell a home in the region dropped ten days compared to a year ago but rose eight days compared to the fourth quarter of 2021.

❱ In Northern Idaho, days-on-market dropped in all counties from a year ago, and market time dropped or remained static in every county other than Bonner compared to the previous quarter. In Southern Idaho, average market time fell in all counties other than Canyon, Gem, and Ada compared to a year ago but rose across the board compared to the prior quarter.

❱ Homes sold the fastest in Ada County in the southern part of the state, and in Shoshone County in Northern Idaho.

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.

The strong Idaho economy has helped the housing market continue its upward trajectory. We should see more homes come on the market as we move into the spring selling season, but this is unlikely to be sufficient to meet demand. The question remains whether rising mortgage rates will impact the pace of appreciation that home prices have experienced in recent years. The data suggests that it has yet to be a factor, but we will have to wait and see what the spring market shows us.

Given all these factors, I have decided to leave the needle in the same position as the previous quarter. It remains a strong seller’s market, but listing prices are softening somewhat in certain areas, which may be a pre-cursor to a slowdown in price appreciation.

About Matthew Gardner

Market News • May 3, 2022

Q1 2022 Montana Real Estate Market Update

by Windermere Economics

The following analysis of select counties of the Montana 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

At the end of the first quarter, 505,200 people were employed in the state, which is up 17,400 from a year ago and 16,100 more than the pre-pandemic peak. Regionally, job levels in Billings and Missoula were also above pre-COVID-19 rates. Great Falls is only 200 jobs shy of matching its February 2020 level. Given the solid pace of job growth in the state, it’s not surprising that the unemployment rate is at a very low 2.3%. This is the lowest rate Montana has seen since the Labor Department started keeping records in 1976. In the metro areas contained in this report, the lowest jobless rate was in Billings at 2.4%, followed by Great Falls at 2.5%, and Missoula at 2.7%. Revisions by the labor department showed an economy that is doing better than originally thought. The only cause for concern is that the labor force has not been increasing at a pace that can keep up with the needs of employers, as demonstrated by the very low jobless rate. This will likely lead wages to rise significantly to attract more workers.

Montana Home Sales

❱ In the first quarter of the year, 1,137 homes sold, which is a 35% drop from a year ago and 23.2% lower than in the final quarter of 2021.

❱ The lower number of sales can be blamed on the lack of homes for sale: inventory was down 37.7% from a year ago and was 31.7% lower than the previous quarter.

❱ The small county of Jefferson saw sales increase from a year ago, but all other markets pulled back. Compared to the final quarter of 2021, sales were lower across the board.

❱ Pending sales increased by a solid 18.8% quarter over quarter, suggesting that second quarter numbers should show growth.

Montana Home Prices

❱ Home prices rose a modest 3.1% year over year to an average of $815,938 and were 13.1% higher than in the final quarter of 2021.

❱ Compared to the fourth quarter of 2021, prices were split: there were increases in Ravalli, Lewis and Clark, Lake, Jefferson, and Gallatin counties, but prices fell in the remaining market areas.

❱ Although the tepid increase in prices may surprise some readers, it uses weighted averages which account for market size. If we use simple averages, prices in the region rose by a more significant 14.5% year over year.

❱ There is a lag between mortgage rates rising and any impact on home prices. Thus far, higher financing costs have not had much of an effect on the market, but data from the second quarter of this year should give us a better idea as to whether the increase in rates is enough to dampen the market significantly.

A map showing the year-over-year real estate market percentage changes in various counties in Montana for Q1 2022.

Mortgage Rates

Montana Days on Market

❱ The average time it took to sell a home dropped 15 days compared to the first quarter of 2021.

❱ Homes sold fastest in Gallatin County and slowest in Madison County. Missoula, Ravalli, Lake, Lewis and Clark, Broadwater, and Gallatin counties saw market time drop. The length of time it took for homes to sell rose in the rest of the counties contained in this report.

❱ During the first quarter, it took an average of 68 days to sell a home in the region.

❱ Average market time across the region rose one day compared to the fourth quarter of 2021, but was lower in Missoula, Lake, Broadwater, and Jefferson counties.

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.

Full employment and a growing economy tend to encourage home buyers, but rising financing costs are a cause for concern. Furthermore, we have yet to see whether the increase in mortgage rates will have a dampening effect on price growth, especially if more homes come on the market.

With this level of uncertainty, I have left the needle in the same position as the previous quarter. The data shows that an inflection point may have been reached, as indicated by slowing home-price growth and lower sales, but the impact of mortgage rates is not clear at this time. We should have a better picture of the market as we move through the spring. That said, it firmly remains a seller’s market.

About Matthew Gardner

More • May 2, 2022

Windermere Cup Returns for 36th Annual Regatta

by Windermere Staff

The 36^th annual Windermere Cup will be held Saturday May 7^th, 2022, in Seattle, Washington. The rowing regatta hosted by Windermere Real Estate and the University of Washington brings together the best rowing crews in the world for a weekend of festivities and races along Seattle’s scenic Montlake Cut. After a cancellation in 2020 due to the COVID-19 pandemic and a limited event in 2021, the Windermere Cup returns in full force in 2022.

The University of Washington men’s and women’s crews will face off against top international talent in a battle for Windermere Cup supremacy. Held annually on the first Saturday in May, the Windermere Cup is both an international sporting event and a celebration of boating season open day. Following the races, the Seattle Yacht Club hosts their annual Opening Day Boat Parade.

Windermere Cup 2022

Two storied programs make their way to Seattle this year to compete against the University of Washington: the Netherlands Men’s National Team and the Great Britain Women’s National Team. Last year, the Dutch men’s rowing team finished fourth at the Tokyo Olympic Games. At the Under 23 level, the Dutch men’s eight has rowed in the grand final in each of the last four world championships, winning bronze in 2019 and gold in 2017. The British women’s crew won silver at the 2016 Olympic Games in Rio de Janeiro and were one of only seven nations to qualify for the 2020 Tokyo Olympics. Great Britain’s women’s eight also won silver in the World Rowing Under 23 Championships in 2019 and gold in the women’s four in 2021.

These crews face a University of Washington rowing program whose long tradition of winning on both national and global stages shows no signs of slowing. The UW women have won twelve national championships, including two of the last four; while the men’s team has won nineteen national titles, including eight of the last fourteen. In May of last year, the UW men’s team swept all four grand finals at the 2021 Intercollegiate Rowing Association Championship Regatta.

Windermere Party on the Cut: Boats, Bites, Brews, & Bands

The night before the regatta we’ll be hosting this year’s Party on the Cut! The event will take place Friday, May 6^th, from 6 pm to 10pm. Come join us on the northeast corner of the Cut for an evening of fun, games, live music, food, and drinks. Tickets are $25 in advance or $35 at the door. This year features live performances from Nite Wave and the Queen tribute band Queen Mother. Tickets can be purchased through Brown Paper Tickets here: Party on the Cut 2022.

For more information and a schedule of events, visit windermerecup.com and follow Windermere Cup on Facebook and Twitter. You can also join in the fun on social media with the official hashtag of this year’s Windermere Cup: #WindermereCup2022

Market News • May 2, 2022

Q1 2022 Central Washington Real Estate Market Update

by Windermere Economics

The following analysis of select counties of the Central Washington real estate market is provided by Windermere Real Estate Chief Economist Matthew Gardner. We hope that this information may assist you with making better-informed real estate decisions. For further information about the housing market in your area, please don’t hesitate to contact your Windermere Real Estate agent.

Regional Economic Overview

Central Washington employment rose 6% year over year. However, with the significant revisions to 2021 employment levels the state made, total employment is down 3,778 jobs from the pre-pandemic peak. The jobs shortfalls are primarily in Kittitas and Yakima counties, with far smaller shortfalls in Okanogan and Chelan counties. Douglas County is the only market where employment levels are higher than the pre-pandemic peak. Unadjusted unemployment levels in Central Washington were 7.6%. When adjusted for seasonality, they were 5.9%. The county with the lowest unemployment rate was Chelan at 4.8%; the highest was Yakima, where 6.5% of the labor force was still without work. I expect that the region will be back to pre-pandemic employment levels by this summer.

Central Washington Home Sales

❱ Sales in Central Washington rose 6.8% compared to a year ago, with a total of 1,022 homes sold. Sales fell 36.1% compared to the final quarter of 2021, but it is likely that seasonal factors impacted the number.

❱ The drop in sales compared to fourth quarter of 2021 suggests that closings in second quarter of this year will remain tepid.

❱ Compared to a year ago, sales rose in Okanogan, Yakima, and Kittitas counties, but fell in Chelan and Douglas counties. Sales fell across the board compared to the final quarter of last year.

❱ Even though inventory levels rose 4% year over year, there were 33.5% fewer listings in the first quarter than in the prior quarter. This is creating frustrating conditions for buyers who have seen financing costs increase significantly in recent months. I hope more homes will come to market as spring gets underway, but the market is far from balanced.

Central Washington Home Prices

❱ The average home price in Central Washington rose 17% year over year to $485,435 but was 0.8% lower than in the final quarter of 2021.

❱ Lower quarter-over-quarter sale prices may be a function of rising mortgage rates, but it’s too soon to tell given that there’s usually a lag between rising financing costs and their impact on prices. Data from the second quarter of this year will give us a better indication.

❱ Every county except Yakima saw double-digit increases in sale prices compared to the first quarter of 2021. Prices were lower in Chelan and Yakima counties than in the previous quarter, but the other three counties saw higher sale prices.

❱ Median list prices have slowed their ascent in many of the markets contained in this report, which could also indicate some softening in the region. That said, the extent to which this is impacting secondhome markets—which are more susceptible to rising mortgage rates—remains uncertain.

A map showing the year-over-year real estate market percentage changes in various counties in Central Washington for Q1 2022.

Mortgage Rates

Central Washington Days on Market

❱ The average time it took to sell a home in Central Washington in the first quarter of 2022 was 55 days.

❱ During the first quarter, it took three fewer days to sell a home in Central Washington than it did a year ago.

❱ All counties other than Chelan and Kittitas saw the length of time it took to sell a home drop compared to a year ago, with noticeable improvement in Okanogan County. Compared to the final quarter of 2021, days on market rose in all counties.

❱ It took 17 more days to sell a home in the first quarter than it did in the fourth quarter of last year.

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.

The market remains in a state of imbalance. On one hand, the number of homes for sale increased as we moved into the year, but there were fewer pending sales. This is a little counterintuitive given that rising mortgage rates should have been a stimulant for home buyers. Even so, I believe home sellers remain in the driver’s seat, but the year has not started in the way some may have hoped for. Second quarter data should give us some more clarity as to the direction the market will take in 2022, but it is likely that higher mortgage costs combined with lower affordability may act as a headwind.

As such, I am moving the needle a little more towards buyers but, for the time being, sellers still have the upper hand.

About Matthew Gardner

Market News • May 2, 2022

Q1 2022 Eastern Washington Real Estate Market Update

by Windermere Economics

The following analysis of select counties of the Eastern Washington real estate market is provided by Windermere Real Estate Chief Economist Matthew Gardner. We hope that this information may assist you with making better-informed real estate decisions. For further information about the housing market in your area, please don’t hesitate to contact your Windermere Real Estate agent.

Regional Economic Overview

Even though Washington State revised the 2021 total employment level downward, the Eastern Washington job market is still in positive territory after its recovery from the pandemic. The region has recovered all of the jobs that were lost and added 13,000 new jobs. The job count in Whitman and Grant counties remains marginally below their pre-COVID peaks, but I expect that to be resolved by this summer. Unadjusted for seasonality, the regional unemployment rate was 5.9%. However, when adjusted for seasonal shifts, the rate was 4.9%. The highest jobless rate was in Grant County at 6.8%; the lowest rate was in Walla Walla County at 3.9%.

Eastern Washington Home Sales

❱ In the first quarter, 2,353 homes sold, which was down 5.7% from the same period in 2021 and 36.6% lower than in the final quarter of last year.

❱ While these numbers don’t appear positive at face value, the drop was due to the lack of homes for sale. Although listing activity was 2.2% higher than the same period in 2021, it was 40% lower than in the final quarter of last year. Limited choice is certainly impacting the market.

❱ Year over year, sales increased in Benton and Lincoln counties, but fell in the rest of the market areas. Sales fell across the board compared to the fourth quarter.

❱ Pending sales were down 12.6% from the final quarter of last year, suggesting that unless we see a surge in the number of homes coming to market, second quarter numbers may disappoint as well.

Eastern Washington Home Prices

❱ Year over year the average home price in Eastern Washington rose a very significant 21.4% to $434,921 and was 2.6% higher than the previous quarter.

❱ When compared to the final quarter of last year, prices rose in all counties other than Lincoln and Walla Walla.

❱ All counties contained in this report saw average sale prices rise; every county except Lincoln County had double-digit growth.

❱ The market has yet to feel the impact of rising mortgage rates. Inventory issues persist, so it’s likely prices will continue to rise as buyers compete for what homes are available and seek to lock in a loan rate before they rise any further.

A map showing the year-over-year real estate market percentage changes in various counties in Eastern Washington for Q1 2022.

Mortgage Rates

Eastern Washington Days on Market

❱ The average time it took to sell a home in Eastern Washington in the first quarter of 2022 was 25 days. This is 8 fewer days than in the first quarter of 2021.

❱ Compared to the previous quarter, average days on market rose in every county other than Lincoln.

❱ All counties other than Spokane and Franklin saw the average number of days-on-market drop compared to the same period in 2021. That said, the increased market time in Spokane and Franklin counties was modest.

❱ During the first quarter it took an average of only one more day to sell a home than it did during the final quarter of last year.

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.

Employment levels continue to grow in Eastern Washington, but the housing market is still struggling to find its direction. A lack of homes for sale remains a major issue and the region appears to be headed toward a slower pace of sales. For now, though, price growth remains strong. The impact of rising mortgage rates on the housing market lags by about three months. It will be interesting to see how this affects the pace of price growth once the spring market is fully underway.

Given all the factors discussed here, I have chosen to leave the needle in the same position as the previous quarter. Sellers are still in the driver’s seat—as list prices continue to increase—but higher mortgage rates will further exacerbate affordability concerns in several markets, which may move the region toward a period of greater stability. We will have to wait and see.

About Matthew Gardner

Market News • April 29, 2022

Q1 2022 Southern California Real Estate Market Update

by Windermere Economics

The following analysis of select counties of the Southern California real estate market is provided by Windermere Real Estate Chief Economist Matthew Gardner. We hope that this information may assist you with making better-informed real estate decisions. For further information about the housing market in your area, please don’t hesitate to contact your Windermere Real Estate agent.

Regional Economic Overview

The counties covered by this report have now recovered 1.89 million of the 2.17 million jobs that were lost due to the pandemic. With only 279,000 jobs needed for a full recovery, it is likely that the region will break above the pre-pandemic employment level by sometime this summer. Of note is that both Riverside and San Bernardino counties have already seen a full job recovery, and current employment levels are now more than 33,000 above the pre-pandemic peak. The region’s unemployment rate in February was 4.8%, down from 9.8% a year ago. The lowest rates were in Orange (3.7%) and San Diego (4%) counties. The highest rate was again in Los Angeles County, where it was 5.4%. In all, the Southern California economy continues to recover, with the Inland Empire performing very well. Of course, the region’s performance is influenced by Los Angeles County given its size, which is still acting as a bit of a drag to the overall job recovery. Although I hope the pace of job growth here will pick up, it will be held back by a labor force that has fewer persons in it today than it did at the start of 2020.

Southern California Home Sales

❱ In the first quarter of the year, 42,069 homes sold, which is down 9.7% from a year ago. There were 9.6% fewer sales than in the fourth quarter of 2021.

❱ Pending home sales—an indicator of future closings—rose more than 10% from the prior quarter, suggesting that sales activity in the spring may pick back up.

❱ The most significant decreases in sales were in Orange and San Diego counties, but all markets fell. Significant supply-side issues persist as listing activity was down more than 25% compared to the same period in 2021. There were 8.9% fewer homes for sale than in the fourth quarter of 2021.

❱ Buyers are looking, but choices are limited. Although listing activity has picked up in San Diego County, the other markets have not seen any growth. This will hopefully change as we move through the spring, but it’s not guaranteed, and buyers will likely remain frustrated.

Southern California Home Prices

❱ Home prices in the first quarter rose 19.1% compared to a year ago and were 4.2% higher than in the fourth quarter of 2021.

❱ It appears as if the spike in mortgage rates during the first quarter has not dampened the market and, with more buyers than sellers, the market is still extremely hot.

❱ The region saw double-digit price growth across the board, with Orange County again leading the way. Of note is that home prices in Riverside County rose 10.7% compared to the prior quarter.

❱ Rising mortgage rates and prices are certain to push affordability down even further, which is concerning. The question remains whether rising financing costs will start to slow the market. For the time being, this does not appear to be the case.

A map showing the year-over-year real estate market percentage changes in various counties in Southern California for Q1 2022.

Mortgage Rates

Southern California Days on Market

❱ In the first quarter of the year, the average time it took to sell a home in the region was 22 days, which was 6 fewer days than a year ago but 1 day longer than in the final quarter of 2021.

❱ Homes in San Diego County continue to sell at a faster rate than other markets in the region. In the fourth quarter, it took an average of 16 days to sell a home there—two fewer days than it took a year ago.

❱ The other four counties also saw the time it took to sell drop compared to a year ago, but market time rose very modestly in Riverside, Los Angeles, and San Bernardino counties compared to the fourth quarter of 2021.

❱ Limited inventory combined with growing buyer demand is creating a very tight market. Any increases we see in the number of homes for sale in the coming months is not likely to be enough to satisfy buyers.

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.

Despite low inventory levels and rising mortgage rates, the housing market continues to perform very well in Southern California. The spike in mortgage rates has yet to have a significant impact on price growth or demand; however, it will be interesting to check back in the second quarter because if there is an impact, that’s when we would likely see it.

Sellers remain in the driver’s seat, but if higher financing costs start to affect the market, there may be a shift back towards more normal conditions. My instincts suggest that this will not be the case, but only time will tell. With all of this in mind, I have left the needle in the same position as last quarter.

About Matthew Gardner

Market News • April 29, 2022

Q1 2022 Colorado Real Estate Market Update

by Windermere Economics

The following analysis of select counties of the Colorado real estate market is provided by Windermere Real Estate Chief Economist Matthew Gardner. We hope that this information may assist you with making better-informed real estate decisions. For further information about the housing market in your area, please don’t hesitate to contact your Windermere Real Estate agent.

Regional Economic Overview

The most recent jobs data showed that by February of this year Colorado had recouped all of the more than 375,000 jobs that were shed due to the pandemic and had added an additional 6,000 positions. The recovery in employment was faster than I had expected, which has led me to revise my 2022 forecast: I now predict that the Colorado job market will increase by 4% this year and will add more than 112,000 new jobs. The state unemployment rate in February was 4%, which is well below the pandemic peak of 11.8% but still above the 2.6% average in 2019. Regionally, unemployment rates ranged from a low of 3.1% in Boulder to a high of 4% in the Colorado Springs and Greeley metropolitan areas.

Colorado Home Sales

❱ In the first quarter of the year, 8,178 homes sold, representing a drop of 6.3% compared to the same period a year ago and 30% lower than in the fourth quarter of 2021.

❱ Sales increased in 4 of the 12 counties covered by this report but fell in the balance of the market areas.

❱ Similar to last quarter, low inventory levels continue to constrict sales. Listing activity was 17.3% lower than the same period in 2021 and 29.5% lower than in the fourth quarter of 2021.

❱ Pending sales, which are an indicator of future closings, also declined, though the drop of 4.3% is not that significant. That said, unless we see a surge in inventory levels in the spring, second quarter sales may also be light.

Colorado Home Prices

❱ With limited inventory and rising mortgage rates, buyers were motivated, as demonstrated by the 14.9% increase in average prices compared to a year ago. Home prices in first quarter averaged $637,963, which is 4.5% higher than last quarter.

❱ Boulder County continues to see average sale prices holding above $1 million. Although we have seen some softening in list prices, I expect this market to remain above the $1 million mark as we move through the year.

❱ Year over year, prices rose by double-digits across all markets covered by this report, with a huge jump in the small Gilpin market.

❱ With little in the way of choice for buyers—as well as a “fear of missing out” given rising mortgage rates—it’s no surprise there was such solid price appreciation. That said, there is normally a lag between rising rates and any impact on home prices. The second quarter should indicate if the jump in rates has had a softening effect on price growth.

A map showing the year-over-year real estate market percentage changes in various counties in Colorado for Q1 2022.

Mortgage Rates

Colorado Days on Market

❱ The average number of days it took to sell a home in the markets contained in this report fell four days compared to the first quarter of 2021.

❱ The length of time it took to sell a home dropped in every county other than Gilpin compared to the same quarter a year ago.

❱ It took an average of only 21 days to sell a home in the region, matching the previous quarter.

❱ Compared to the final quarter of 2021, average market time fell in Clear Creek, Adams, Denver, Jefferson, and Arapahoe counties, but rose in the balance of the markets contained in this report.

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.

With Colorado on solid economic footing, I expect housing demand to remain strong even in the face of rising financing costs. Inventory levels remain very low, and new home construction has not expanded enough to meet demand, which continues to put upward price pressure on resale homes. The market appears to have shrugged off the jump in mortgage rates in the first quarter, but the full effects won’t be felt until later this spring. We’ll have to wait and see what impact, if any, there will be, but data on listing prices shows that home sellers remain bullish.

Given all these factors, I am leaving the needle in the same position as last quarter. The market clearly still favors sellers, but we need a few more months of information to determine how rising mortgage rates may impact home sales and/ or prices.

About Matthew Gardner

Market News • April 28, 2022

Q1 2022 Oregon and Southwest Washington Real Estate Market Update

by Windermere Economics

The following analysis of select counties of the Oregon and Southwest Washington real estate market is provided by Windermere Real Estate Chief Economist Matthew Gardner. We hope that this information may assist you with making better-informed real estate decisions. For further information about the housing market in your area, please don’t hesitate to contact your Windermere Real Estate agent.

Regional Economic Overview

Oregon added 20,400 new jobs in the first quarter of 2022, leaving the state only 36,000 shy of its pre-pandemic peak. I predicted in the fourth quarter 2021 Gardner Report that a full job recovery would occur by this summer. If the current pace of job growth continues, that forecast will be accurate. The Southwest Washington economy— being far smaller—recovered all the jobs lost to COVID-19 last summer. Employment levels in Klickitat and Skamania counties are still modestly lower than before the pandemic, but solid growth in Clark and Cowlitz counties more than offset the shortfall elsewhere. Oregon’s unemployment rate was 3.8%, which is still lower than the pre-pandemic low of 3.4% but impressive all the same given the growing labor force. The jobless rate in Southwest Washington was 5.1%.

Oregon and Southwest Washington Home Sales

❱ In the first quarter of 2022, 13,837 homes sold, which is an increase of 1.1% compared to the same period a year ago, but 22.5% lower than in the prior quarter.

❱ Compared to a year ago, sales rose in more than half of the markets in this report. The areas where sales fell were mainly small markets that can fluctuate dramatically. That said, sales dropped in the more populous Clackamas and Lane counties, but I attribute this to low inventory levels.

❱ Although the number of transactions dropped significantly from the final quarter of 2021, this was more a function of inventory constraints than slack demand.

❱ Listing activity has not seen its spring bump yet, and it will be interesting to see if this happens sooner than usual given the spike in mortgage rates in the first quarter.

Oregon and Southwest Washington Home Prices

❱ The pace of home-price growth is still tapering, yet prices rose by 13.2% year over year, which is well above the state’s long-term average.

❱ Compared to the final quarter of 2021, average prices rose 2.5%, which is particularly impressive given rising financing costs.

❱ All counties contained in this report except Hood River had higher sale prices than a year ago, with significant increases in Tillamook and Columbia counties. Almost three-quarters of the markets saw prices rise more than 10%.

❱ The spike in mortgage rates has yet to have a significant impact on prices. However, it will be interesting to check back in the second quarter because if there is an impact, this is when we would likely see it.

A map showing the year-over-year real estate market percentage changes in various counties in Oregon and Southwest Washington for Q1 2022.

Mortgage Rates

Oregon and Southwest Washington Days on Market

❱ The average number of days it took to sell a home in the region dropped by six compared to a year ago, but it took ten more days for a home to go under contract compared to the fourth quarter of 2021.

❱ The average time it took to sell a home in the first quarter of 2022 was 43 days.

❱ Sixteen of the 26 counties covered in this report saw days on market drop from the first quarter of 2021, but only 5 counties saw average market time drop compared to the fourth quarter of last year. This is likely a function of seasonality, and I expect this to correct itself as we enter the spring buying season.

❱ Homes sold the fastest in Washington County, where it took an average of only 15 days for a home to sell. An additional seven counties saw an average market time of less than a month.

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.

Despite higher rates and rising prices, buyers continue to be very motivated. As such, I don’t foresee any significant downturn in demand. However, home price growth could start to taper in the coming months, which is not a bad thing.

Given remarkably low inventory levels and solid demand, home sellers still have the upper hand, though we will have to wait and see how prices will be impacted by higher mortgage rates. As such, I am leaving the needle in the same position it was last quarter.

About Matthew Gardner

Market News • April 27, 2022

Q1 2022 Western Washington Real Estate Market Update

by Windermere Economics

Q1 2022 Western Washington Real Estate Market Trends

The following analysis of select counties of the Western Washington real estate market is provided by Windermere Real Estate Chief Economist Matthew Gardner. We hope that this information may assist you with making better-informed real estate decisions. For further information about the housing market in your area, please don’t hesitate to contact your Windermere Real Estate agent.

Regional Economic Overview

The post-COVID job recovery continues. Though data showed the number of jobs dropped in January, February saw gains that almost offset the jobs lost the prior month. As of February (March data is not yet available), the region had recovered all but 47,000 of the more than 300,000 jobs lost due to the pandemic. Of note is that employment levels in Grays Harbor, Thurston, San Juan, and Clallam counties are now above their pre-pandemic levels. In February, the regional unemployment rate rose to 4.1% from 3.7% in December. Although this may be disconcerting, an improving economy has led more unemployed persons to start looking for a job, which has pushed the jobless rate higher. I expect the regional economy to continue expanding as we move into the spring and summer, with a full job recovery not far away.

Western Washington Home Sales

❱ In the first quarter of 2022, 15,134 homes sold, representing a drop of 5.8% from the same period a year ago, and down 31.7% from the fourth quarter.

❱ Yet again, supply-side constraints limited sales. Every county except Snohomish showed lower inventory levels than a year ago.

❱ Sales grew in five counties across the region but were lower across the balance of the counties contained in this report. Compared to the fourth quarter, sales were lower across all market areas.

❱ The ratio of pending sales (demand) to active listings (supply) showed pending sales outpacing listings by a factor of 6.7. Clearly, the significant jump in mortgage rates in the first quarter has not yet impacted demand. Rather it appears to have stimulated buyers partly due to FOMO (Fear of Missing Out)!

Western Washington Home Prices

❱ Although financing costs have jumped, this has yet to prove to be an obstacle to buyers, as prices rose 16.4% year-over-year to an average of $738,152. Naturally, there is a lag between rates rising and any impact on market prices. It will be interesting to see what, if any, effect this has in the next quarter’s report.

❱ Compared to the same period a year ago, price growth was again strongest in San Juan County, but all markets saw prices rising more than 10% from a year ago.

❱ Relative to the final quarter of 2021, all but Kitsap (-2.7%), Mason (-1.5%), Skagit (-1.8%), Jefferson (-6.3%), and Clallam (-0.1%) counties saw home prices rise.

❱ The market remains supply starved. While increases in “new” listings suggest that more choice is coming to market, it remains insufficient to meet demand.

A map showing the year-over-year real estate market percentage changes in various counties in Western Washington for Q1 2022.

Mortgage Rates

A map showing the real estate market percentage changes in various counties in Utah during the third quarter of 2021.

Western Washington Days on Market

❱ It took an average of 25 days for a home to go pending in the first quarter of 2022. This was 4 fewer days than in the same quarter of 2020, but 2 days more than in the fourth quarter of 2021.

❱ Snohomish, King, and Pierce counties were the tightest markets in Western Washington, with homes taking an average of 11 to 15 days to sell. The greatest drop in market time compared to a year ago was in San Juan County, where it took 23 fewer days for homes to sell.

❱ All but five counties saw average time on market drop from the same period a year ago, but the markets where it took longer to sell a home saw the length of time increase only marginally.

❱ Quarter over quarter, market time dropped in Snohomish, King, and Pierce counties. Jefferson and Clallam counties also saw modest improvement. In the balance of the region the length of time a home was on the market rose, but seasonality undoubtedly played a part.

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.

The numbers have yet to indicate that demand is waning amid rising interest rates, but this is sure to become a greater factor as we move into the spring. A leading indicator I pay attention to is changes to list prices and, in most counties, these continue to increase. This suggests that sellers remain confident they will be able to find a buyer even in the face of higher borrowing costs. If this pace of increase starts to soften, it may be an indication of an inflection point, but it does not appear to be that way yet.

Given all the factors discussed above, I have decided to leave the needle in the same position as the last quarter. The market still heavily favors sellers, but if rates rise much further, headwinds will likely increase.

About Matthew Gardner