Market UpdatesReal Estate April 7, 2020

Economic Insights from Matthew Gardner

How will the coronavirus impact the housing market?

 

As we all hunker down through these challenging times, it is comforting to remember that there will be light at the end of the tunnel.

A voice of calm and reason in this time of uncertainty has been our Windermere Chief Economist, Matthew Gardner. While he is expecting an economic slowdown accompanied by a temporary 15-20% reduction in the number of homes sold, he believes the housing market will bounce back once we find our new normal.

Click here to watch his latest videos, or scroll down for some key takeaways…

 

 


 

The US economy will contract sharply but should perk up by Q4.

We’re in for a rough few quarters as the economy enters a recession. Just how rough—and how long—is still under debate. What economists do agree on is that the 4th quarter is looking remarkably positive…assuming we get through the COVID-19 crisis and the economy can resume somewhat normal activity before the fall.

 

 


Housing prices will likely remain stable.

Seattle home prices should remain steady—or even rise slowly as we come out of the recession—for a few reasons:

  1. DIVERSE INDUSTRIES IN OUR AREA which allow us to better weather the economic storm.
  2. SOLID FINANCIAL FOOTING as one third of local home owners have 50% or greater equity in their homes.
  3. STRONG DEMAND with more buyers than homes available, as well as rock-bottom interest rates.

 

 


This will be different than 2008…

We’re experiencing a health crisis, not a housing crisis.

  1. WE’LL SEE A PAUSE, NOT A COLLAPSE. Unlike last time, the housing market was strong going into this crisis and should rebound quickly. Why? Because this recession will be due to specific external factors rather than any fundamental problem with the housing market.
  2. FORECLOSURES WILL BE FEWER with most lenders offering relief to homeowners in distress due to temporary employment issues. Unlike 2008’s mortgage crisis caused by lax lending standards and low down payments, today’s home owners are better qualified and have more equity in their homes.

 

 


 

Find a Home with Windermere Real Estate

 

Find a Home | Sell Your Home | Property Research

Neighborhoods | Market Reports | Our Team

We earn the trust and loyalty of our brokers and clients by doing real estate exceptionally well. The leader in our market, we deliver client-focused service in an authentic, collaborative and transparent manner and with the unmatched knowledge and expertise that comes from decades of experience.

2737 77th Ave SE, Mercer Island, WA 98040 | (206) 232-0446

mercerisland@windermere.com

© Copyright 2020, Windermere Real Estate / Mercer Island

Market UpdatesReal Estate March 2, 2016

Economic & Housing Outlook for the Puget Sound Region

seattle-811754_960_720I recently attended two highly informative events where Windermere’s Chief Economist, Matthew Gardner, covered the economic and housing outlook for our region. Mr. Gardner shared that the economic landscape for the greater Seattle area is quite good.  Our unemployment and rate of inflation are both low. He stated that we need to see more diversification in the job offerings in our region – we’re a bit too reliant on Amazon, which is the leading company creating jobs and our need for more housing inventory. Wage discrepancy and the level of part time employees searching for full time work is also an issue.  Add in the current home pricing in King County plus the rapid rise of rents, and there is a segment of Seattle Metro buyers who are priced out the market and are looking in other counties for housing. The Tacoma area is increasingly where buyers are choosing to make home purchases.  Home pricing and local economics are  also affecting the number of 1st time move-up buyers. They are opting to remain in place for now, which has definitely made an impact on the number of homes being listed for sale.

The flip side of the current price of homes is the positive equity being generated for today’s Seattle Metro homeowners. This positive equity should motivate more sellers to enter the housing market, and give us the desperately needed housing inventory our market needs. Fixed rate mortgages will remain low during 2016, although there is a misconception among 1st time home buyers that a 4% 30 year fixed mortgage rate is too high.  Think back to 1982 when buyers faced an 18% mortgage rate!   4% is a dream in comparison.

Supply in the high end real estate market is tight in our region and will remain so during 2016. Luxury real estate buyers are able to take advantage of fantastic jumbo loan options currently, as long as they can find the home of their dreams to purchase. There is definitely some good news in the horizon that may increase the inventory of luxury real estate in the greater Seattle area. It is projected more high end spec builders will experience improved access to financing options from lenders this year.

With 2016 being an election year, Mr. Gardner projected no large surprises in housing or economics looming.  Typically, election years are fairly benign and 2016 promises to follow in a similar vein. If you have any questions on our regional housing market, or about your home’s current value, please give me a call at 206-412-0038 or send me an email at marianne@windermere.com so I can answer your questions.