Market News • February 8, 2022

Q4 2021 Nevada Real Estate Market Update

by Windermere Economics

Q4 2021 Nevada Real Estate Market Trends

The following analysis of the greater Las Vegas 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 Las Vegas labor market continues to recover from the pandemic, but the question is whether the latest variant of COVID-19 will slow the job recovery. The area has recovered over 204,000 of the more than 280,000 jobs that were lost in early 2020, which means Las Vegas is still 76,000 jobs shy of pre-pandemic levels. As jobs return, the unemployment level drops. The latest data shows that 6.3% of the workforce is still unemployed. This is a high number given that the pandemic started over 22 months ago, but it is still a significant improvement over the pandemic peak of 33.3%. The employment picture is one of a somewhat slow, but steady, recovery. The question remains as to what impacts, if any, the rise of the Omicron variant of COVID-19 will have.

nevada Home Sales

❱ A total of 10,222 homes sold in the final quarter of 2021—an increase of 2.1% compared to the same period a year ago, but 4.4% lower than the previous quarter.

❱ Pending sales, which are an indicator of future closings, fell 11.3% compared to the third quarter of the year, suggesting that closings in the first quarter of 2022 may not be robust.

❱ Sales were a mixed bag, rising in nine neighborhoods but falling in six. Spring Valley and Downtown saw significant increases. Where sales fell, the drop was modest. Compared to the third quarter, sales fell in all markets other than Northeast Las Vegas, Spring Valley, and Queens Ridge, but this can be attributed to seasonality as well as remarkably low supply levels.

❱ There were 34.9% fewer homes for sale in the quarter compared to the previous year, which likely impacted closed and pending sales.

nevada Home Prices

❱ Home prices rose 19.7% from a year ago to an average of $459,151. Prices were also 4.6% higher than in the third quarter of 2021.

❱ Mortgage rates notched up last fall, but the impact was not enough to significantly slow price growth. Additionally, fewer homes for sale meant that the market remained hot.

❱ Prices rose by double digits in every sub-market compared to the same quarter last year and rose in all markets other than Henderson and Queens Ridge compared to the third quarter.

❱ The labor market continues to improve, and mortgage rates have yet to get to a point where they could have a tangible impact on prices. That said, I expect them to rise as we move through 2022, which will likely act as somewhat of a headwind to price appreciation.

Days on Market

❱ The average time it took to sell a home in the region dropped 14 days compared to the fourth quarter of 2020.

❱ It took an average of 23 days to sell a home in the quarter, which was 5 more days than in the third quarter of the year.

❱ Days-on-market dropped across the board compared to a year ago but rose in all areas other than Downtown and Queens Ridge compared to the prior quarter.

❱ The greatest drop in market time was in the Aliante market, where the length of time it took to sell a home fell 31 days compared to a year ago.

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 job market continues to improve and, despite rising mortgage rates, there appears to still be significant demand from home buyers. Listing prices leveled off last summer, which might have led some to believe that the market was cooling off, but they started rising again in the fall. This was probably disappointing for home buyers who have been in a highly competitive market for quite some time.

Given all the data, and even in the face of mortgage rates that will continue rising for the foreseeable future, I have moved the needle a little more toward sellers as they are still in control.

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.

Market News • February 8, 2022

Q4 2021 Northern California Real Estate Market Update

by Windermere Economics

Q4 2021 Northern California Real Estate Market Trends

The following analysis 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

The job recovery in Northern California picked up its pace last fall, which was good news given the lackluster job growth last summer. Total employment has now risen to 2.94 million, and the markets covered by this report have recovered all but 106,000 of the 474,900 jobs that were lost during the pandemic. Year over year, total employment rose 125,800, causing the unemployment rate to drop from 6.5% to 4%—a far cry from the pandemic peak of 14%. By county, the lowest jobless rate was in Santa Clara County (3.2%), and the highest was in Solano County, where 5.4% of the workforce remains unemployed. The latest data does not cover the period when the Omicron variant of COVID-19 came to light, so we will not see any of its impacts until the January data becomes available. It is also worth noting that the region’s labor force has not been increasing at the expected pace, which can actually slow the job recovery as businesses have a hard time finding workers. Of note is that there are currently more than 78,000 fewer working-age people in the workforce than before the pandemic started.

northern california Home Sales

❱ In the final quarter of 2021, 14,218 homes sold—a drop of 10.6% compared to a year ago and 14.2% lower than in the third quarter. Seasonality is at least partially responsible for the quarter-over-quarter drop, but it’s also because inventory constraints are limiting sales.

❱ Year-over-year, sales fell in all the counties contained in this report, with a modest drop in Solano County and fairly significant decreases across the rest of the region.

❱ Listing activity fell 32% compared to the same period a year ago, which certainly played a part in the lower sales numbers.

❱ Pending home sales were also lower, suggesting that sales in the first quarter of 2022 may slow further.

northern california Home Prices

❱ The average home price in the counties contained in this report rose 16.2% year over year to $1.168 million. Of note is that prices fell 2.1% from the third quarter but this may simply be due to seasonality.

❱ The most affordable county relative to average sale prices was Shasta. Santa Clara remains the most expensive market.

❱ Average prices in all counties rose double digits compared to a year ago, but fell in all counties other than Alameda, Santa Clara, and San Luis Obispo compared to the third quarter of the year.

❱ Affordability continues to be an issue in all areas, but the pace of price growth has been slowing as mortgage rates rose .3% in the quarter. I anticipate that rates will continue to trend higher as we move through the year, which is also likely to act as somewhat of a headwind to price appreciation.

Days on Market

❱ The average time it took to sell a home dropped five days compared to the final quarter of 2020.

❱ The amount of time it took to sell a home dropped in every county compared to the previous year, but the average days on market rose across the board compared to the third quarter of 2021.

❱ In the fourth quarter, it took an average of 33 days to sell a home, which was 4 more days than it took during the third quarter.

❱ The greatest drop in market time was in San Luis Obispo County, where it took 19 fewer days to sell a home than it did the prior 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.

While the pace of price growth slowed in the fourth quarter, appreciation remains very strong. Those wondering what it will take to cause the market to slow down must consider two factors: supply and financing costs. It’s unlikely that there will be any significant increase in inventory in the coming year, but mortgage rates are on the rise. Even though I do not expect them to breach 4% until 2023, higher rates are likely to take some of the heat out of the market.

I have decided to leave the needle in the same position as in the third quarter. As rising mortgage rates are offset by low housing supply, it remains a seller’s market.

About Matthew Gardner

Design • February 7, 2022

Simply Luxury: A Guide to Curating Artwork in Your Home

by Windermere Staff

A man hangs a piece of art on a wall while a woman behind him gives him instructions.

The following is an excerpt from Windermere’s Simply Luxury magazine – Winter 2021.

Though stylish furniture can add to the design aesthetic of your home, its role is largely functional. Art, on the other hand, is where you can make the biggest impact on your home’s character and warmth. A gallery wall with pieces you’ve hand selected can influence the mood of an entire room while adding a personal touch to a home’s overall feel. The following information will help inspire you to curate sculptures, paintings, prints, and photographs that will add to the beauty and personality of your home.

A Classic: Gallery Wall

An eye-catching way to display art in your home is with a gallery wall. The best part of curating a gallery wall is choosing exactly what speaks to you. This design element can influence your mood and add character to your everyday space. Try playing with texture, type, or styles to create a personalized collection of décor elements that are perfect for your home.

A young woman hangs a painting on her living room wall.

Image Source: Getty Images – Image Credit: DjordjeDjurdjevic

Unexpected Texture

Don’t be afraid to think outside the picture frame and get creative with your pieces. A good art installation is about more than just color and content. Texture and depth can take your artwork to the next level. Try incorporating an intricate frame, sculptural elements, or a piece with varying textures into your display. This is the perfect option if you’re trying to create a focal point for an entire room, especially in larger spaces like the living room or dining room.

Make it a Reminder of Your Travels

Curating your artwork can entail more than simply hanging a few personal photographs. Because this is a space you will pass by and look at every day, it should feel special and personal. Consider collecting mementos and art pieces from different places where you’ve traveled and incorporating them into your display. This will not only add a unique touch to your artwork, but it will also give you an opportunity to reflect on pleasant memories.

A man smiles standing in his hallway lined with framed photos.

Image Source: Getty Images – Image Credit: TommL

Get Personal and Keep it Crisp

If you’re looking for a classy, timeless look, invest in a set of frames that are similar in shape and size. A crisp black-and-white gallery wall will make a powerful statement in any space. When set in a symmetrical grid, the monochrome display reads clean and fresh and doesn’t overwhelm the accompanying décor in the room. This is also a great opportunity to add a personal touch by incorporating family photographs.

Stick to a Color Scheme or Style

Frame a mix of photography, illustrations, and collages in shades you’d like to incorporate into your art collection. This is the simplest way to create something that feels cohesive without straining for a complex design. If you have a certain artistic style you feel drawn to, consider filling your entire display with it. The common elements inherent in that style will direct the eye and bring a sense of unity to the space.

For more information on curating the spaces in your home, read about these vintage design elements that have stood the test of time:

7 Vintage Design Elements That Are Still Popular Today

Market News • February 7, 2022

Q4 2021 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

Utah closed 2021 strongly with solid employment gains and an annual growth rate of 4.7%. It has been almost a year since the state recovered all the jobs lost due to the pandemic—a remarkable statistic. Even more impressive is that the employment level is now more than 61,000 jobs higher than before COVID-19 hit. The counties covered by this report have added almost 50,000 new jobs over the past year, representing a growth rate of 3.8%. Such robust growth has driven the unemployment rate down to just 2.1%, a level not seen since the Labor Department started keeping records back in 1976. Utah’s economic growth continues to impress. I believe it could be even better if the number of people in the workforce was rising significantly, which isn’t the case. But all in all, the employment picture is extremely positive.

utah Home Sales

❱ In the final quarter of 2021, 9,158 homes sold, representing a 13.2% drop from a year ago and 11.6% lower than in the third quarter.

❱ Year-over-year, sales dropped in all areas except for Morgan County. Sales slowed in all counties other than Weber compared to the third quarter of 2021.

❱ The drop in sales between the third and fourth quarters doesn’t concern me and can be attributed to seasonal factors. Lower sales compared to a year ago may be due to the number of homes for sale, which was 11.2% lower than in the same quarter of 2020.

❱ Pending sales, which are an indicator of future closings, were down 4% relative to the third quarter, suggesting that sales in the first quarter of 2022 may not rise significantly.

utah Home Prices

❱ Given Utah’s strong economy, it’s not surprising that home prices continue to rise significantly. Year over year, prices rose 17.3% to an average of $602,369. Prices were also .3% higher than in the third quarter of 2021.

❱ Compared to the third quarter, prices rose in Salt Lake, Utah, and Summit counties, but were down in the balance of the market areas.

❱ All areas contained in the report except for Summit and Wasatch counties saw prices rise by double digits. Morgan County’s rise was particularly impressive.

❱ The pace of price growth has slowed, but only very modestly. Whether this was a function of mortgage rates, which started rising in the quarter, is unclear. I expect rates to continue rising as we move through the year, which may have a compressing effect on price growth.

Days on Market

❱ The average amount of time it took to sell a home in the counties covered by this report dropped five days compared to the final quarter of 2020.

❱ Homes sold fastest in Davis County, with all but two counties seeing average time on market drop. Relative to a year ago, the greatest decline in market time was in Summit County, where it took 29 fewer days to sell a home.

❱ During the quarter, it took an average of 28 days to sell a home in the region. Although this is lower than a year ago, it was up 6 days compared to the third quarter of the year.

❱ The modest increase in market time is not very surprising given the frenetic market in 2020. The question is whether the pace of sales will increase as we move into the spring selling season.

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.

Utah’s rock-solid economy has been a major boost to the housing market. Prices continue to increase at a very impressive pace, but we will have to wait and see if this is sustainable given that mortgage rates are expected to continue rising in the coming months.

My current 2022 forecast suggests that, despite a very modest decrease in the pace of price growth compared to 2021, prices will rise by more than 10% in all the counties in this report. A few may even rise by close to 20%.

To say that it is a seller’s market in Utah would be an understatement. In the coming year, I don’t expect the housing supply to satisfy demand, which will cause prices to rise higher even in the face of rising mortgage rates. As such, I have moved the needle a little more toward sellers.

About Matthew Gardner

Market News • February 4, 2022

Q4 2021 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

The Idaho economy continues to impress with employment growing by 2.1% over the past year. Comparatively, the country as a whole has grown by 4.2% during the same period; however, the U.S. still needs to recover more than 3.7 million jobs that were lost due to COVID-19, while Idaho has already fully recovered. Moreover, state employment levels are 14,500 jobs higher than the pre-pandemic peak. Given the robust employment growth, it’s not surprising that the unemployment rate was a very impressive 2.8% in November (the most recent data available). New COVID-19 cases started rising again at the start of 2022, but it’s still unclear whether that will have an impact on the economy. Instinctively, I do not see it as a significant impediment, as the latest data suggests that infection rates may have already peaked.

idaho Home Sales

❱ In the final quarter of 2021, 6,887 homes sold. This was 5.7% lower than a year ago, and down 6.4% compared to the third quarter of last year.

❱ Quarter-over-quarter, sales rose in Bonner and Payette counties, but fell in the rest of the market areas covered by this report.

❱ Year-over-year, sales improved in Boundary and Bonner counties in the northern part of the state. Sales rose in Gem, Canyon, and Payette counties in Southern Idaho.

❱ Pending sales were 14% lower than in the third quarter, which suggests a slowing market, but this can be attributed to seasonality. Listing activity was up 41% compared to a year ago but fell 25.5% from the third quarter. The market remains very tight on the supply side.

idaho Home Prices

❱ The average home price in the region rose 19.6% year-over-year to $593,868 but fell 1.5% compared to the third quarter.

❱ When compared to the third quarter of 2021, prices were higher in Bonner and Boundary counties in the north, and in Payette, Canyon, and Gem counties in Southern Idaho.

❱ Prices rose by double digits in all of the northern counties in this report, while in the southern counties, all but Blaine County saw sale prices rise by more than ten percent. In aggregate, prices rose 29.1% in the Northern Idaho counties and were up 20.1% in the southern counties.

❱ Such aggressive price appreciation is impressive given that mortgage rates rose .3% during the quarter. It’s clear the housing market is still out of balance, even as sales growth slowed. This pace of appreciation can’t go on indefinitely, and it seems we’ve reached that end. I expect price growth will trend lower as we move through 2022 due to affordability constraints and rising mortgage rates.

Days on Market

❱ It took an average of 82 days to sell a home in Northern Idaho and 42 days in the southern part of the state.

❱ The average number of days it took to sell a home in the region dropped 9 days compared a year ago but rose 11 days compared to the third quarter of 2021.

❱ In Northern Idaho, days on market dropped in all counties compared to a year ago but rose in all counties compared to the third quarter of 2021. In Southern Idaho, market time also dropped in Valley, Payette, and Blaine counties but rose in the other markets covered by this report.

❱ Homes sold the fastest in Payette 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.

Idaho’s economy continues to fire on all cylinders. Such robust growth has caused the housing market to perform extremely well—as demonstrated by the rapid pace of home price appreciation.

In-migration to Idaho has been impressive. Much of this has been driven by the ability for employees to continue working remotely. For many workers leaving more expensive markets, price points in Idaho are a major draw. Although mortgage rates will continue to climb higher in 2022, my forecast calls for home prices in Idaho’s southern counties to see low double-digit percentage gains while the northern part of the state can expect increases in the high teens. Good news for sellers, but buyers will likely not be so happy.

Even with the prospect of more homes coming to market in the spring, Idaho remains staunchly a seller’s market and I am moving the needle a little more in their favor.

About Matthew Gardner

Market News • February 4, 2022

Q4 2021 Montana Real Estate Market Update

by Windermere Economics

Q4 2021 Montana Real Estate Market Trends

The following analysis of select Montana real estate markets 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

Jobs continue to return to Montana. The latest data shows the state needs only 3,700 more jobs to reach its pre-pandemic peak. As I have mentioned in past reports, the pace of the job recovery has been slowing—particularly in the Great Falls and Missoula metro areas—but this has been offset by growth in Billings and other parts of the state. The latest unemployment numbers showed only 2.8% of the workforce out of work, which is significantly better than the country as a whole. In the metro areas contained in this report, the lowest jobless rate was in Billings at 1.8%, followed by Great Falls at 1.9%, and Missoula at 2%. I still anticipate a full job recovery but, when placed alongside extremely low unemployment rates, the recent slowdown suggests that a lack of workers is the biggest hurdle for employers. I anticipate a return to pre-pandemic employment levels toward the end of 2022.

montana Home Sales

❱ In the final quarter of 2021, 1,479 homes sold in the markets contained in this report, which is 17.6% below the level a year ago and 14.1% lower than the previous quarter.

❱ Sales did manage to rise in Broadwater County, but it was only by one unit. Compared to the third quarter, sales were lower in every county other than Lake.

❱ Lower quarter-over-quarter sales are not surprising given seasonal factors. The drop in sales compared to a year ago is likely due to low inventory levels, which were down 47%.

❱ Year-over-year, listings were down between 30% and 82% in the counties contained in this report. Buyers are still looking, but if there isn’t a significant increase in the number of homes coming to market in the spring, things will remain very competitive for buyers.

montana Home Prices

❱ With the supply limitations discussed above, it’s hardly surprising to see prices rise 17% year over year to an average of $721,634. Prices were also 8.3% higher than in the third quarter of 2021.

❱ When compared to the third quarter of 2021, home sale prices were lower in Ravalli, Lewis and Clark, Broadwater, and Jefferson counties, but rose in the remaining markets.

❱ Average home sale prices rose by double digits in all but two of the counties contained in this report. Broadwater County saw prices more than double.

❱ Mortgage rates trended higher in the final quarter of the year, which I expect to continue as we move through 2022. This should act as a headwind to home price growth, but my current forecast suggests that prices will continue to rise by an average of 15% in 2022.

Days on Market

❱ The average time it took to sell a home in fourth quarter dropped by seven days compared to the previous year.

❱ Homes sold fastest in Gallatin County and slowest in Madison County. Days on market dropped in Ravalli, Lake, Lewis and Clark, and Jefferson counties, but rose in the balance of the counties contained in this report.

❱ It took an average of 64 days to sell a home in the region during fourth quarter.

❱ Relative to the third quarter of 2021, market time dropped in Ravalli, Broadwater, and Jefferson counties, but rose in all other markets.

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 job recovery in Montana continues and, at this point, is only limited by the number of available workers. In addition, according to the Montana Secretary of State, a record number of new businesses were registered in 2021. With a growing economy, it’s no surprise that there is a strong demand for housing. Even as mortgage rates continue to rise, there are clearly more buyers than sellers, which sets the stage for home prices to rise at well-above average rates.

As mentioned earlier, I would not be surprised if prices rose by an average of 15% this year as supply and demand remain out of balance. Given all these factors, I have decided to move the needle further toward home sellers.

About Matthew Gardner

Market News • February 3, 2022

Q4 2021 Eastern Washington Real Estate Market Update

by Windermere Economics

Q4 2021 Eastern Washington Market Trends

The following analysis 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

The Eastern Washington economy has proved remarkably resilient to the effects of the pandemic, having recovered all of the jobs that were lost and adding more than 20,500 more. Every county except Whitman shows employment levels above their pre-pandemic peak. It should be added that this report considers total employment, not just non-agricultural jobs, so the numbers are higher than might be expected. With the job market expanding at a solid pace, it is not a surprise to see the unemployment rate continuing to trend lower. As of November 2021 (the most recent data available), only 3.4% of the workforce was unemployed—down from the pandemic peak of 14.9%.

eastern washington Home Sales

❱ In the final quarter of 2021, 3,714 homes sold, down 5.1% compared to the same period in 2020. Sales were also 10.3% lower than in the third quarter, but this was mainly due to seasonal changes in the market.

❱ The number of home sales was disappointing, and though we might suspect the slowing is due to a lack of homes for sale, listings were down by less than 1%, which makes the drop in sales somewhat puzzling.

❱ Year-over-year, sales rose in two counties but fell in the other five. Compared to the third quarter, sales fell everywhere but Franklin County.

❱ Whether it was the rise of new COVID-19 infections, inclement weather, or rising mortgage rates, the main culprit behind the slowdown in sales is unclear. I will be very interested to see how the market performs in the first quarter of the new year.

eastern washington Home Prices

❱ Year-over-year, the average home price in Eastern Washington rose a very significant 21.3% to $423,870 but pulled back by a modest .4% compared to the third quarter of the year.

❱ When compared to third quarter, prices rose in Benton, Franklin, and Walla Walla counties. Prices remained static in Lincoln County and dropped in the rest of the market areas.

❱ Lincoln County saw prices drop compared to the previous year, but it is a small market, which makes it prone to significant swings. The balance of the counties contained in this report saw prices rise at double-digit rates across the board.

❱ Mortgage rates rose .3% between October and the end of the year, which may have impacted near-term price growth. That said, Spokane County is now technically unaffordable for a buyer making the median income and every county other than Lincoln is unaffordable for first-time buyers. Price growth is likely slowing due to lower affordability.

Days on Market

❱ The average time it took to sell a home in Eastern Washington in the final quarter of 2021 was 24 days.

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

❱ All markets other than Lincoln saw the average number of days-on-market drop compared to the same period in 2020, with significant declines in Walla Walla (-23 days) and Whitman (-13 days) counties.

❱ It took ten more days to sell a home in the quarter than it did during the third quarter of this 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.

Solid employment gains continue in Eastern Washington, but the housing market appears to have taken somewhat of a breather. Housing data for the winter months can be a little frenetic, but the signs of a slowdown are there. Although it is far too early to suggest that this is the case, it will be interesting to see how the market performs in the spring, especially considering rising mortgage rates and falling affordability levels.

Ultimately, only time will tell, but it seems that the Eastern Washington market is poised for a move back to some sort of balance—at least given the current data. As such, I have moved the needle a little toward home buyers, but it remains a seller’s market.

About Matthew Gardner

Market News • February 3, 2022

Q4 2021 Central Washington Real Estate Market Update

by Windermere Economics

Q4 2021 Central Washington Real Estate Market Trends

The following analysis 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 7.7% compared to a year ago, and employment levels remain well above the pre-pandemic peak. Across the five counties that make up this report, total employment is now around 4,000 more than before the pandemic. A significant number of jobs were lost in November, which gives me pause. Data for the region is not adjusted for seasonality, which may have played a part in the contraction, but we will have to wait until the spring to see if this was an anomaly or whether a pattern has emerged. Even with the slowdown, the unemployment rate was 4.4%, which is still a decent number. The lowest jobless rate was in Kittitas County at 3.6%. The highest rate was in Yakima County, where 4.9% of the labor force was unemployed.

central washington Home Sales

❱ Sales in Central Washington rose 3.9% versus a year ago, with 1,599 homes trading hands. Sales fell 2.1% compared to the third quarter of 2021, but seasonal factors likely impacted the number.

❱ Pending sales fell 19.7% compared to the third quarter, suggesting that closings in the first quarter of the year may not show much improvement.

❱ Compared to a year ago, sales rose in Douglas and Yakima counties but fell in all other markets covered by this report. Compared to the third quarter of last year, sales fell in every county other than Okanogan, which registered an impressive 22% increase.

❱ I was pleased to see inventory levels rise 16.9% year over year, but they were down 20.9% compared to the third quarter of 2021. This likely contributed to the drop in pending sales.

central washington Home Prices

❱ The average home price in Central Washington rose 11.1% year over year to $489,443 and was .4% higher than in the third quarter of the year.

❱ While home prices in the area continue to rise, we are starting to see the pace of growth slow. This is likely because mortgage rates rose .3% during the quarter. I anticipate that rates will continue to climb as we move through 2022. This will act as a headwind to the rampant pace of price growth that we have seen for the past few years.

❱ Every county except Kittitas saw double-digit increases in sale prices. Chelan and Kittitas counties showed higher sale prices than in the third quarter.

❱ All counties other than Yakima are now technically unaffordable for a household making median income, and no market is affordable for a first-time buyer. This is also likely to have a slowing effect on price growth in 2022.

Days on Market

❱ The average time it took to sell a home in Central Washington in the final quarter of 2021 was 38 days.

❱ During the quarter, it took 11 fewer days to sell a home in Central Washington than it did a year ago.

❱ All counties other than Yakima saw the length of time it took to sell a home drop compared to a year ago, with noticeable improvements in Chelan and Okanogan counties. Compared to the third quarter, market time rose in all areas, but seasonal changes were likely the cause.

❱ It took seven more days to sell a home in the fourth quarter than it did in the third.

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.

Due to seasonal changes, it is always hard to get a clear picture of the market from the winter sales numbers. However, it does appear as if the market may be coming off the frenetic pace of price growth that we’ve seen over the past two years. Inventory levels were higher, which, in concert with rising mortgage rates, may have slowed price appreciation—albeit modestly—in the quarter.

As mentioned previously, I anticipate that mortgage rates will continue to move higher through 2022. Combined with low levels of affordability in the area, this is likely to further slow home price growth.

As such, I am moving the needle a little more toward buyers. However, owners looking to sell a well-positioned and appropriately priced home are unlikely to have much of a problem finding a buyer.

About Matthew Gardner

Design • February 2, 2022

Hiring a Contractor for Your Remodel

by Windermere Staff

Two young male contractors look at blueprints as they prepare to begin a remodel.

Much has been said about the benefits of taking a DIY approach to home remodeling projects. It instills pride of ownership, builds the sweat equity you’ve put into your home, and can be more affordable than hiring a professional. The reality is, however, that sometimes, projects simply require a pro to be done right. Whether it’s the magnitude of the project, the caliber of skill required to successfully complete the job, or a combination of the two, certain projects are best executed in the hands of a professional. So, what do you need to keep in mind when hiring a contractor? Here are some quick tips:

Preparing to Hire a Contractor

Have your plans ready when you begin meeting with contractors. This will show them that you are prepared and fully invested in the project. Conduct phone interviews and meet in-person with potential candidates to give yourself the opportunity to gauge their professionalism and expertise. Here are some helpful questions to ask to get you started:

What prior experience do you have with this particular remodeling project?
Is your company licensed?
What is your timeline for starting and completing this job?
How long have you worked with your current subcontractors?
Could you provide a list of references that can speak to your quality of work?

Contractor Contracts and Implied Warranty

It is important that you understand the contract you’re agreeing to, and that you examine its finer points, such as the warranty terms. These terms will spell out what course of action will result should there be an issue with the contractor’s work. In the U.S., we have a legal concept known as “implied warranty” that protects those who hire out contractors. “Implied warranty” essentially means that it is understood that the contractor will perform quality work and that the home will continue to be safe to live in as a result of the repairs. These implied warranties are known as “good workmanship” and “habitability” respectively.

A good contract will have a detailed description of the labor and materials required to perform the job, a project schedule, the names of suppliers and subcontractors the contractors plan to use, and the payment schedule you have agreed upon.

A man and a woman shake hands with two contractors as they go over their remodeling plans.

Image Source: Getty Images – Image Credit: shynesher

Setting a Payment Schedule

When it comes to the cost of labor and materials, you won’t have much room for negotiation. The payment schedule, however, is one area where you can negotiate. Before the work begins, agree on a payment structure with your contractor. Good contractors want to perform high-quality work, completed on-time, and the agreement you reach together can incentivize their work. For example, you can stipulate that a certain percentage of the total job cost is paid out when certain stages of the project are completed.

The Potential for Temporary Housing

For large-scale remodeling projects, contractors need space to work at a high standard. Accordingly, it may be best for everyone involved if you and your household move out of your home temporarily until the work is complete. A home during a remodel is a noisy and chaotic place to be. Dust is flying, saws are buzzing, sheetrock is crashing to the floor, walls are being knocked out, and hammers are hammering. Trying to coexist with the remodel may be more trouble than it’s worth, since your usage of your home will be severely limited for the time being. If you plan on hiring a contractor to perform a large-scale remodel, search for housing alternatives far in advance to ensure that you and your household will have a place to stay.

For more information on remodeling your home, read our guide to remodeling your bathroom:

A Guide to Remodeling Your Bathroom

Market News • February 2, 2022

Q4 2021 Colorado Real Estate Market Update

by Windermere Economics

Q4 2021 Colorado Real Estate Market Trends

The following analysis of the Metro Denver & Northern 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

Following a decent summer when Colorado added around 14,000 jobs each month, the pace of recovery has slowed. That said, the latest data shows that more than 320,000 of the 376,000 jobs shed due to the pandemic have now returned. The state still needs to add a little more than 54,000 jobs in order to get back to pre-pandemic employment levels. Even though there has been a slowdown in the job recovery, which is likely due to the rise of new COVID-19 variants, I am still forecasting the state will return to its prior employment peak by the end of the summer. As jobs return, the employment rate continues to drop; it was 5.1% in November, well below the pandemic peak of 12.1%. Although it would be nice to see a lower rate, more people have returned to the workforce and are actively looking for work, which can stall job growth rates. From a regional perspective, unemployment levels range from a low of 3.8% in Boulder, to a high of 5.2% in Grand Junction.

colorado Home Sales

❱ In the final quarter of the year, 11,714 homes sold, representing a drop of 5.3% compared to the fourth quarter of 2020 and a drop of 17.6% compared to the third quarter of the year.

❱ While sales slowed region-wide, 4 of the 12 counties included in this report actually experienced significant sales increases.

❱ I’m not concerned that sales slowed compared to third quarter, as seasonal factors were likely the cause. It’s also likely that the year-over-year decline was due to the fact that there were 30% fewer homes for sale in the fourth quarter of 2021 than there were the previous year.

❱ Pending sales, which are an indicator of future closings, fell 29% compared to the third quarter, suggesting that closings in the first quarter of 2022 may also be light.

colorado Home Prices

❱ The pace of home-price growth continued to slow, albeit modestly. The average sale price rose 14.8% year over year, to an average of $610,275. Prices also rose .8% from the previous quarter.

❱ Boulder County’s price growth was noteworthy, but of even greater interest was that average sale prices are holding above the $1 million ceiling.

❱ Year-over-year, prices rose across all markets covered by this report, with double-digit gains in all but three counties.

❱ The number of homes for sale remains woefully low in most areas, which continues to put upward pressure on home prices. That said, the pace of appreciation slowed through most of 2021. This trend is likely to continue in 2022.

Days on Market

❱ The average number of days it took to sell a home in the markets contained in this report fell five days compared to the final quarter of 2020.

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

❱ It took an average of only 21 days to sell a home in the region. Although the pace dropped year over year, it rose 9 days compared to the previous quarter.

❱ Ongoing supply limitations and strong demand have caused the pace of sales to remain brisk. That said, the length of time it took to sell a home rose compared to the third quarter. I don’t think this is a major concern and can likely be attributed to seasonal factors.

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.

Inventory is still lacking, which is causing prices to rise at well-above-average rates. That said, despite how few homes are for sale, the pace of appreciation has been slowing and will likely continue to do so as mortgage rates climb.

My current forecast is for 30-year rates to stairstep higher as we move through the year, which will act as a headwind to price growth. Although I do not see rates getting above 4% until 2023, the increase in borrowing costs will start to have a greater impact on home prices.

In addition to rising mortgage rates, the significant growth in prices over the past year has started to impact housing affordability. Although the market will continue to perform well, rising financing costs and lower affordability may slowly move the market back toward some sort of balance.

All things considered, I am moving the needle a little toward buyers, but it still heavily favors home sellers.

About Matthew Gardner