Here at Windermere Whidbey, we are dedicated to building sustainable communities for generations to come. We realize that truly affordable homeownership opportunities are key to maintaining a stable workforce and strengthening our economy. Local supporters of affordable housing are following the lead of the neighboring San Juan Islands who have successfully created Community Land Trusts to permanently address this critical need.
Home on Whidbey (HOW) is based on a traditional Community Land Trust (CLT) model, a non-profit organization created to hold land for the benefit of a community and the individuals within.
The CLT acquires property through purchase or donation, removing the land from the speculative real estate market, and providing homes for individuals and families who would otherwise be squeezed out of the housing market due to their income level. CLT homeownership is a highly successful model across the nation, creating high quality, always affordable homes.
So how does the HOW CLT work?
HOW uses a shared equity model of housing, combining community investment with income qualified homebuyers.
The Homeowner owns the home structure and pays a nominal fee to lease the land it sits on, and agrees to a resale formula that maintains affordability for future owners.
Subsequent sales of the home are based on a re-sale formula providing a fair return for the first owner while keeping the home's price accessible to future buyers.
HOW provides access to affordable homes in markets that may otherwise be out of reach for people with limited incomes.
HOW allows for homeowners to build equity on their investment with a reasonable rate of return.
HOW helps create stable and secure homes, promoting healthy families and financial stability.
HOW supports homeowners with homebuyer education, home maintenance workshops, membership participation, and leadership opportunities.
Community benefits:
HOW provides affordable and stable housing options to attract and retain workers who would otherwise be priced out of the housing market. This creates a reliable workforce for local businesses, while improving the overall economic stability of the community.
HOW protects local residents from rising property values that often displace individuals and families with lower and moderate income.
HOW promotes strong community ties and the connection that comes from putting down roots.
The best part is we don’t have to wonder if this model works… it has already proven to be successful right here in our backyard on Orcas Island!
The OPAL CLT projects, on Orcas Island, have been wildly successful in creating a positive impact on the individuals, families, and overall community.
“When I learned about the possibility of buying an OPAL house, it was like someone opened a window on the rest of my life. The insecurities were gone. My three daughters and I would have a roof over our heads and a home that I could afford. My children could grow up on the island where they belong. I would have neighbors I could count on for support. Even now it is hard to describe what OPAL offered us and what a difference it has made in our lives.” – Former OPAL Homeowner
If you would like to know more about the OPAL CLT, check out the video and links below:
Affordable housing is crucial for the wellbeing of our residents and our economy. HOW Community Land Trust is dedicated to providing permanently affordable homes and thriving communities here on Whidbey Island.
By supporting affordable housing projects, Windermere Whidbey is working towards creating a more vibrant and thriving community for all. This commitment to the community reflects our belief that everyone deserves access to safe and affordable housing, regardless of their income level. We invite you to join us as Members of HOW CLT.
To learn more about HOW CLT and how you may become a supporter/member please check out their Website and Facebook page.
Q4 2022 Western Washington Real Estate Market Update
by Matthew Gardner
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
Although the job market in Western Washington continues to grow, the pace has started to slow. The region added over 91,000 new jobs during the past year, but the 12-month growth rate is now below 100,000, a level we have not seen since the start of the post-COVID job recovery. That said, all but three counties have recovered completely from their pandemic job losses and total regional employment is up more than 52,000 jobs. The regional unemployment rate in November was 3.8%, which was marginally above the 3.7% level of a year ago. Many business owners across the country are pondering whether we are likely to enter a recession this year. As a result, it’s very possible that they will start to slow their expansion in anticipation of an economic contraction.
Western Washington Home Sales
❱ In the final quarter of 2022, 12,711 homes sold, representing a drop of 42% from the same period in 2021. Sales were 34.7% lower than in the third quarter of 2022.
❱ Listing activity rose in every market year over year but fell more than 26% compared to the third quarter, which is expected given the time of year.
❱ Home sales fell across the board relative to the fourth quarter of 2021 and the third quarter of 2022.
❱ Pending sales (demand) outpaced listings (supply) by a factor of 1:2. This was down from 1:6 in the third quarter. That ratio has been trending lower for the past year, which suggests that buyers are being more cautious and may be waiting for mortgage rates to drop.
Western Washington Home Prices
❱ Sale prices fell an average of 2% compared to the same period the year prior and were 6.1% lower than in the third quarter of 2022. The average sale price was $702,653.
❱ The median listing price in the fourth quarter of 2022 was 5% lower than in the third quarter. Only Skagit County experienced higher asking prices. Clearly, sellers are starting to be more realistic about the shift in the market.
❱ Even though the region saw aggregate prices fall, prices rose in six counties year over year.
❱ Much will be said about the drop in prices, but I am not overly concerned. Like most of the country, the Western Washington market went through a period of artificially low borrowing costs, which caused home values to soar. But now prices are trending back to more normalized levels, which I believe is a good thing.
Mortgage Rates
Rates rose dramatically in 2022, but I believe that they have now peaked. Mortgage rates are primarily based on the prices and yields of bonds, and while bonds take cues from several places, they are always impacted by inflation and the economy at large. If inflation continues to fall, as I expect it will, rates will continue to drop.
My current forecast is that mortgage rates will trend lower as we move through the year. While this may be good news for home buyers, rates will still be higher than they have become accustomed to. Even as the cost of borrowing falls, home prices in expensive markets such as Western Washington will probably fall a bit more to compensate for rates that will likely hold above 6% until early summer.
Western Washington Days on Market
❱ It took an average of 41 days for homes to sell in the fourth quarter of 2022. This was 17 more days than in the same quarter of 2021, and 16 days more than in the third quarter of 2022.
❱ King County was again the tightest market in Western Washington, with homes taking an average of 31 days to find a buyer.
❱ All counties contained in this report saw the average time on market rise from the same period a year ago.
❱ Year over year, the greatest increase in market time was Snohomish County, where it took an average of 23 more days to find a buyer. Compared to the third quarter of 2022, San Juan County saw average market time rise the most (from 34 to 74 days).
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 regional economy is still growing, but it is showing signs of slowing. Although this is not an immediate concern, if employees start to worry about job security, they may decide to wait before making the decision to buy or sell a home. As we move through the spring I believe the market will be fairly soft, but I would caution buyers who think conditions are completely shifting in their direction. Due to the large number of homeowners who have a mortgage at 3% or lower, I simply don’t believe the market will become oversupplied with inventory, which will keep home values from dropping too significantly.
Ultimately, however, the market will benefit buyers more than sellers, at least for the time being. As such, I have moved the needle as close to the balance line as we have seen in a very long time.
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.
Watching fireworks on New Year's Eve is an activity that has been enjoyed for over a century. A firework display can bring joy and excitement to all who watch. The thrill of the countdown, the booming sound of each firework and the bright colors illuminating the sky—all of these come together to make New Year's Eve a special event.
Fireworks will start at the family friendly time of 9PM in Oak Harbor's favorite oceanside recreational area, Windjammer Park.
The cost of entry is $9. Come enjoy the festivities!
3. Karaoke & Drinks - Penn Cove Brewery in Freeland
Sing in the New Year!
Singing karaoke on New Year's Eve is a time-honored tradition for many. There’s something special about choosing your favorite song and joining in with other partiers to sing along. Whether you’re belting out a classic rock anthem or crooning your way through a sappy love song, karaoke is the perfect way to welcome in the new year.
Penn Cove Brewery Company has got your covered. They will be hosting a karaoke night on the 31st at their taproom in Freeland. Hosted by Noah 'Hard Orange'. Food & drink will be available. Bring your friends and make it a night to remember!
"Get your tickets for a four course prix fixe dinner paired with some of our favorites! Our chef @michelrymple will make some scrumptious dishes to go along with Island-tied and Eastside- famous @jbneufeldwine!!
Tickets at thefaremarket.com"
"Early birds, this show's for you! Put on something sparkly and celebrate New Year's Eve with a fabulous drink at this swanky speakeasy, and still be home in plenty of time to watch the ball drop in NYC! Or, I guess, you could go out to dinner, a party or another show afterward. Your call."
New Year's Eve Mike Gallion and a few friends will be bringing live music back to Cozy Corner's Roadhouse in Clinton. Time will be from 7 pm to 9 pm or beyond.
New Year's Eve is a special night and one that deserves celebrating in some way. Whether it’s watching fireworks, seeing live music, or singing karaoke.
No matter what path you take to bring in the New Year, these exciting traditions guarantee not only an enjoyable time with friends and family but also happy memories that will last long after 2022 ends.
So let’s raise a glass and wish each other the best as we look forward to an even more wonderful 2023!
As a Whidbey Island homebuyer, you may be searching for affordable housing and having a rough go at it. Mortgage rates are much higher now than they were last year, and this could mean several hundred dollars more a month when looking at a potential mortgage in your desired price point.
Luckily, today I am going to share with you a program that can help reduce your monthly mortgage payment by hundreds of dollars.
At this point you are probably thinking, “What wizardry is this?” Well, the magic all has to do with mortgage buydowns, and more specifically I want to talk about what some sellers are doing to make their homes more appealing and affordable to potential buyers looking on Whidbey Island.
What Is A Buydown On A Mortgage?
Most lenders when originating a loan will have an option for the borrower to purchase something called discount points (also referred to as mortgage points, or prepaid interest points). Essentially it is a prepaid fee that allows you to buy down the interest rate on your loan and thereby lower your monthly payment for the entire duration of the loan.
In a different type of buydown, the points purchased at the start of the loan lower the interest rate for a specific period of time. As mentioned above we are now seeing sellers offer to pay for these shorter term buydowns to make their home more affordable to a larger number of buyers. The most common one we are seeing now is called the 2/1 buydown.
Contact a local expert about financing your next home
The 2/1 Mortgage Buydown allows a borrower to lock in an interest rate 2% lower than the current rate for the first year, and then 1% lower for the second year of the loan. After that the loan defaults back to what the current rate was at the time of the loan origination. Let’s look at an example of how this works.
Let’s say you are looking at a home for $600,000. You plan on making a 20% down payment, leaving $480,000 that needs to be financed. Observe the chart below:
$609 dollars/month savings for the borrower during the first year!!!
Okay let’s break it down. If a borrower was financing their $480K loan at today’s rate of about 6.75% their monthly payment would be $3,113.27/month. When using this 2/1 buydown program their rate drops to 4.75% for the first year, and 5.75% for the second year. This lowers the monthly payments during that time to $2,503.91 and $2,801.15 respectively. After that point your loan goes back to what the original rate would have been if you were not taking advantage of this program. AND, should the interest rates fall during the course of the first two years, you can always refinance to the new lower rate after the buydown period ends.
One additional thing to note is that the borrower would still need to qualify for the loan at the current interest rate, not the buydown rate.
The best part about this is that everybody wins! The seller gets more potential buyers interested in their home (this can be a lot more enticing and more cost effective than a price reduction), and the buyer gets two years of reduced monthly payments. If both parties agree, the seller would then pay for the buydown through escrow when the home sale closes. In the example above the seller would pay around $10K depending on a variety of factors. Presto chango!
This is just another tool to put in your tool kit and another reason to work with a professional who has a full set of tools!
Real Estate Top 10 Predictions for 2023 - Matthew Gardner
by Matthew Gardner
This video shows Windermere Chief Economist Matthew Gardner’s Top 10 Predictions for 2023. Each month, he analyzes the most up-to-date U.S. housing data to keep you well-informed about what’s going on in the real estate market.
Real Estate Top 10 Predictions for 2023 - Matthew Gardner
1. There Is No Housing Bubble
Mortgage rates rose steeply in 2022 which, when coupled with the massive run-up in home prices, has some suggesting that we are recreating the housing bubble of 2007. But that could not be further from the truth.
Over the past couple of years, home prices got ahead of themselves due to a perfect storm of massive pandemic-induced demand and historically low mortgage rates. While I expect year-over-year price declines in 2023, I don’t believe there will be a systemic drop in home values. Furthermore, as financing costs start to pull back in 2023, I expect that will allow prices to resume their long-term average pace of growth.
2. Mortgage Rates Will Drop
Mortgage rates started to skyrocket at the start of 2022 as the Federal Reserve announced their intent to address inflation. While the Fed doesn’t control mortgage rates, they can influence them, which we saw with the 30-year rate rising from 3.2% in early 2022 to over 7% by October.
Their efforts so far have yet to significantly reduce inflation, but they have increased the likelihood of a recession in 2023. Therefore, early in the year I expect the Fed to start pulling back from their aggressive policy stance, and this will allow rates to begin slowly stabilizing. Rates will remain above 6% until the fall of 2023 when they should dip into the high 5% range. While this is higher than we have become used to, it’s still more than 2% lower than the historic average.
3. Don’t Expect Inventory to Grow Significantly
Although inventory levels rose in 2022, they are still well below their long-term average. In 2023 I don’t expect a significant increase in the number of homes for sale, as many homeowners do not want to lose their low mortgage rate. In fact, I estimate that 25-30 million homeowners have mortgage rates around 3% or lower. Of course, homes will be listed for sale for the usual reasons of career changes, death, and divorce, but the 2023 market will not have the normal turnover in housing that we have seen in recent years.
4. No Buyer’s Market But a More Balanced One
With supply levels expected to remain well below normal, it’s unlikely that we will see a buyer’s market in 2023. A buyer’s market is usually defined as having more than six months of available inventory, and the last time we reached that level was in 2012 when we were recovering from the housing bubble. To get to six months of inventory, we would have to reach two million listings, which hasn’t happened since 2015. In addition, monthly sales would have to drop below 325,000, a number we haven’t seen in over a decade. While a buyer’s market in 2023 is unlikely, I do expect a return to a far more balanced one.
5. Sellers Will Have to Become More Realistic
We all know that home sellers have had the upper hand for several years, but those days are behind us. That said, while the market has slowed, there are still buyers out there. The difference now is that higher mortgage rates and lower affordability are limiting how much buyers can pay for a home. Because of this, I expect listing prices to pull back further in the coming year, which will make accurate pricing more important than ever when selling a home.
6. Workers Return to Work (Sort of)
The pandemic’s impact on where many people could work was profound, as it allowed buyers to look further away from their workplaces and into more affordable markets. Many businesses are still determining their long-term work-from-home policies, but in the coming year I expect there will be more clarity for workers. This could be the catalyst for those who have been waiting to buy until they know how often they’re expected to work at the office.
7. New Construction Activity Is Unlikely to Increase
Permits for new home construction are down by over 17% year over year, as are new home starts. I predict that builders will pull back further in 2023, with new starts coming in at a level we haven’t seen since before the pandemic.
Builders will start seeing some easing in the supply chain issues that hit them hard over the past two years, but development costs will still be high. Trying to balance homebuilding costs with what a consumer can pay (given higher mortgage rates) will likely lead builders to slow activity. This will actually support the resale market, as fewer new homes will increase the demand for existing homes.
8. Not All Markets Are Created Equal
Markets where home price growth rose the fastest in recent years are expected to experience a disproportionate swing to the downside. For example, markets in areas that had an influx of remote workers, who flocked to cheaper housing during the pandemic, will likely see prices fall by a greater percentage than other parts of the country. That said, even those markets will start to see prices stabilize by the end of 2023 and resume a more reasonable pace of price growth.
9. Affordability Will Continue to Be a Major Issue
In most markets, home prices will not increase in 2023, but any price drop will not be enough to make housing more affordable. And with mortgage rates remaining higher than they’ve been in over a decade, affordability will continue to be a problem in the coming year, which is a concerning outlook for first-time buyers.
Over the past two years, many renters have had aspirations of buying but the timing wasn’t quite right for them. With both prices and mortgage rates spiraling upward in 2022, it’s likely that many renters are now in a situation where the dream of homeownership has gone. That’s not to say they will never be able to buy a home, just that they may have to wait a lot longer than they had hoped.
10. Government Needs to Take Housing More Seriously
Over the past two years, the market has risen to such an extent that it has priced out millions of potential home buyers. With a wave of demand coming from Millennials and Gen Z, the pace of housing production must increase significantly, but many markets simply don’t have enough land to build on. This is why I expect more cities, counties, and states to start adjusting their land use policies to free up more land for housing.
But it’s not just land supply that can help. Elected officials can assist housing developers by utilizing Tax Increment Financing tools, whereby the government reimburses a private developer as incremental taxes are generated from housing development. There are many tools like this at the government’s disposal to help boost housing supply, and I sincerely hope that they start to take this critical issue more seriously.
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.
This blog entry was originally published on windermere.com
Halloween is coming up and if you're looking for something to do on Whidbey Island, we've got you covered. From family-friendly events to things that are perfect for adults only, we've got something for everyone. Check out our list and start planning your festivities!
Bayview Community Hall's Black Cat Ball is a spooky celebration of all things Halloween. Attendees are encouraged to wear their best costumes, and there will be live music, a vinyl DJ set, and live visuals throughout the night. The event is a fundraiser for the hall, with bar proceeds going to support its operations. This year's Black Cat Ball is sure to be a night to remember!
Live Music / Vinyl DJ Set / Live Visuals
DJ Hall Pass / DJ MMD
Haunting Autumn / Woodbae & Treestar + special guests / Live Visuals
Bring the family for trick or treating in Langley!
Langley invites families to bring their super heroes, goblins, and ghosts to downtown Langley for a safe and fun trick or treating experience this Halloween.
Participating Langley merchants will have treats waiting for the kids from 2:30 to 5 p.m. on Wednesday, Oct. 31.
The whole town is dressed for the season, with merchants in costumes, lighted trees, crows, pumpkins, and more decorating the town, brought to you by Langley Main Street Association.
On Sunday October 30th at 2:00 p.m. at the Clyde Theater in Langley you can have the distinct pleasure of hearing Gideon Freudmann, cellist and composer, play accompaniment to the classic silent film: The Cabinet of Doctor Caligari.
Guest Conductor Gabriela Garza is back to lead the Whidbey Island Orchestra this October 29th at WICA in a Halloween concert: "Burton's Halloween Fantasy."
The program is full of Tim Burton movie themes, including inventive and humorous scores for "Beetlejuice," "Batman," "Edward Scissorhands," "Alice in Wonderland," "Willie Wonka," and "The Nightmare Before Christmas."
The haunting of Coupeville goes all month long and features a large variety of fun spooky events and activities. These include the Haunted Fort Casey, Pumpkin Patches with Trolley Rides, The Scarecrow Trail (Hocus Pocus themed this year), and more!
You don’t want to miss this Coupeville Halloween tradition with a twist!
Join us at 5pm at Cook’s Corner on October 29th for our traditional costumed Torchlight Parade, immediately followed by a street dance and trick or treating. It will be a night of costume prizes, music, candy, and fun!
Fun for the whole family at Oak Bowl & Mario's Pizza. Starting on Oct. 30th 5:30 to 7:30 is a 2 hour unlimited Glow Bowling event. Also includes treat bags & a costume parade for the kids.
Looking for a terrifyingly good time this Halloween? Will you find your way out of our Corn Maze or will you encounter a collection of gruesome ZOMBIES?
And keep one thing in mind - if you make a wrong turn, you’ll be forced to turn around and come across one of the maze monsters a second time!
Come on out with the whole family for WISBA's first Trunk or Treat!
After you trick or treat outside make sure you make your way into the Elks Lodge for WISBA's Spooktacular Vendor Event! There will be 20+ vendors to shop from!
If you would like to participate in the trunk or treat, please fill out this form:
Ready to Drop Anchor on Whidbey Island? Here’s Your Guide to Home Buying Preparedness! Ahoy, future Whidbey Island dwellers! If you’re toying with the idea of becoming a homeowner on our scenic slice of paradise, let me provide you with a pun-intended map to help you navigate your readiness. Financial Sea Legs or Sinking Ship? […]
Housing Market 2023: Home Prices, U.S. Demographics, and More by Matthew Gardner Housing Market 2023 Hello there, I’m Windermere Real Estate’s Chief Economist Matthew Gardner, and welcome to this month’s episode of Monday with Matthew. I spend a lot of time reading reports that relate to the housing market, but there is one in particular […]
What is a Buyer’s market? – How to navigate the real estate market on Whidbey Island If you’re considering selling a home on Whidbey Island, understanding the dynamics of the real estate market is paramount. This guide aims to elucidate the concept of a buyer’s market and how to navigate the ebbs and flows of […]
2023 Top 10 Predictions | Mid-Year Update by Matthew Gardner Top 10 Real Estate Market Predictions 2023 | Mid-Year Update Hello there, I’m Windermere Real Estate’s Chief Economist Matthew Gardner and welcome to this month’s episode of Monday with Matthew. You may remember that at the end of last year, I published my Top-10 Predictions for […]
WHIDBEY ISLAND GROWN COOPERATIVE
“Whidbey Island Grown Cooperative is a group of farmers, small businesses, and community members working to build a strong, resilient local food system on Whidbey Island.”
Did you know you can find locally sourced, fresh products for purchase directly from farms and other producers here on the Island and other local farms?
Whidbey Island Grown Cooperative (WIGC) is an online marketplace for the sale of available farm fresh products to the community.
This innovative system (Food Hub) combines Whidbey’s agricultural richness with easy online shopping and pick-up experience while supporting locally owned and operated businesses, for the common good.
Customers can purchase fresh, local, seasonal products online and pick them up at one of four locations in Langley, Coupeville, and Oak Harbor.
How to Buy fresh food from local farmers and producers!
Friday to Tuesday: Log in to https://whidbeyislandgrown.com/ to purchase fresh, local food and other specialty and holiday items from Whidbey Island producers through WIGC’s online marketplace. Ordering closes on Tuesday at 9 pm.
Wednesday-Friday: Farmers and producers prepare their products and drop them at the packing site.
Friday: Volunteers pack the orders and distribute them to four stands on the island:
3-5 PM in Langley - Whidbey Island Center for the Arts (565 Camano Ave).
4-6 PM in Coupeville – Scenic View (formerly Sherman Pioneer Farm - 46 S. Ebey Rd),
4-6 PM in Freeland - Mutiny Bay Blues Farmstand (5486 Cameron Rd)
4:30-6:30 PM in Oak Harbor - Elks Lodge (155 N Ernst St, next to Flyer's Restaurant)
Also, on Friday: Put in your order for next week!
Support local farms and eat great food, all while practicing safe social distancing.
Supporting Local Means Eating Seasonal
Most of us are accustomed to the grocery store, where every type of fruit and vegetable is stocked year-round. Locally, those products are only available in season, and the rest of the year they are shipped in from somewhere else in the world.
In spring and fall, available crops are varieties that like shorter hours of light, cooler temperatures, and even frost. In summer, crops are harvested that prefer long, hot days. Don’t see a vegetable you’re looking for? It may not be in season.
Join the Hub today and start sourcing your good food locally!
Autumn is here and it is a wonderful time to be on Whidbey Island. One major reason is because all the local farms are sharing their Fall offerings. Today we will answer the question, “Where to buy Pumpkins on Whidbey”. If you are on the search for Pumpkin Patches, Corn Mazes, or Apple Picking locations to visit, then read on!
Fall is the perfect time to visit The Farm Stand at K&R Farms. Not only can you enjoy picking your own pumpkins or getting lost in the corn maze, but you can also take in the beauty of the sunflower field. And if that isn’t enough to get you in the autumn spirit, then maybe the ice cream will do the trick. In addition to all of these seasonal favorites, you can also purchase fresh produce, local honey, and shaved ice. So whether you’re looking for a fun day out or some delicious food, The Farm Stand at K&R Farms has something for everyone.
The Pumpkin patch, corn maze, and sunflower field are open daily from 11 AM – 6 PM
Ready for some serious fall fun? Look no further than Whidbey Farm and Market! Their pumpkin patch and hay pyramid are open from Sunday to Thursday 11 AM to 6 PM, and Friday and Saturday 11 AM to 10 PM. You can get lost in their corn maze daily from 11 AM to 6 PM; it’s only $5 to enter. Feeling adventurous? Check out their night corn maze on weekends; it’s open from dark until 10 PM. And if you get hungry, don’t worry – they have coffee and ice cream available for purchase, as well as many other items at the market. Plus, there’s live music on Saturdays and Sundays. So come on down and enjoy all that Whidbey Farm and Market has to offer!
With Fall in the air, it can only mean one thing- it’s time to head on down to Case Farm! This historic farm has been around since 1898 and is currently run by the fifth generation of Cases. When you visit, you’ll be able to experience all the best that autumn has to offer, from picking out a pumpkin in their patch to getting lost in their corn maze. And of course, you can’t forget about the farm animals! They have cows, turkeys, ducks, chickens, cats, and dogs that are all waiting to meet you. So come on down and enjoy all the fun that Case Farm has to offer this fall! PLUS there is even a kid friendly bale stack maze for the little ones to enjoy. SO MUCH FUN!
Scenic Isle Farm is a must-visit destination for anyone looking to get into the Fall spirit. Established in 1852, the farm is located in the historic town of Coupeville. Take your visit to the next level with a fun trolley ride to the sprawling pumpkin patch. The perfect place to pick out the perfect pumpkin for carving or baking. In addition to pumpkins, the farm also sells edible squash and gourds, making it a one-stop shop for all your Fall decorating needs. So whether you’re looking for a fun day trip or a unique photo opportunity, Scenic Isle Farm is sure not to disappoint.
Fall is the time of year for fresh apple cider, and there’s no better place to get it than Rock’n Apple Ranch. Not only do they offer delicious cider by the half gallon ($7) or gallon ($12), but they also have U-pick apples for just $1 per pound. So if you’re looking for some fall fun, they’ve got you covered. Open from 10 to 3 pm daily. Whether you’re looking for fresh cider or a fun-filled day out picking apples, Rock’n Apple Ranch is the perfect destination.
This video is the latest in our Monday with Matthew series with Windermere Chief Economist Matthew Gardner. Each month, he analyzes the most up-to-date U.S. housing data to keep you well-informed about what’s going on in the real estate market.
Hello there, I’m Windermere’s Chief Economist Matthew Gardner and welcome to this month’s episode of Monday with Matthew. A little while ago, a housing analyst was being interviewed about the current state of the residential market and they suggested that the country is in a “housing recession.” Well, needless to say, this got a lot of attention from the media and the public at large—for obvious reasons.
Any time the word “recession” is mentioned we almost subliminally cast our minds back to 2007. And when the word “recession” is combined with the word “housing,” then panic starts to set in with flashbacks of headlines about burgeoning housing supply, plummeting home prices, and surging foreclosures.
As this is a topic being discussed by many across the country right now, I wanted to share with you my opinion as to whether the phrase “housing recession” is an appropriate one when describing today’s market.
So, what is a recession? To answer this, I will turn to my trusted Oxford English Dictionary, and this is how they describe that word.
Definition of a Recession
Image Source: Matthew Gardner
Recession:
a difficult time for the economy of a country, when there is less trade and industrial activity than usual, and more people are unemployed
the movement backward of something from a previous position
Well, how do we use these definitions when it comes to the ownership housing market?
I guess that “less trade” could mean lower sales and we have certainly seen sales pull back. “Movement backward” could be how someone might describe the fact that sale prices have been pulling back in many markets across the country.
But although some may say that we really are in a housing recession given the definition of the word, is it really accurate? Are we are inextricably headed down a road that leads to the bursting of some sort of bubble as we all remember from 2007? I don’t believe we are. To explain my thinking let’s start out by looking at housing supply.
Inventory of Homes for Sale
Image Source: Matthew Gardner
Yes, listing activity is up—can’t argue with that—with the number of resale homes for sale jumping by more than a third from the start of this year. But there’s more to it than that. You see, we have to look a little further back to better understand what’s really going on.
And to do this, let’s check out the number of homes for sale during the first seven months of this year and compare those numbers to the same periods in 2018 through 2021.
Active Listings By Month
Image Source: Matthew Gardner
I don’t know about you, but this doesn’t look like a chart showing a massively oversupplied market! The number of homes for sale in July of this year was almost exactly the same as we saw last July and is still well below the levels seen in 2018, 2019, or 2020.
Sure, listings are up. But are we at levels that will cause prices to tumble? Remember that it was a massive increase in the number of homes for sale that led to the housing bubble bursting back in 2007. Listings peaked at almost 3.9 million units in 2006; but today there are 2.6 million fewer units on the market than we saw back then. Now that we’ve seen that supply isn’t at concerning levels, let’s look at demand.
Existing Home Sales
Image Source: Matthew Gardner
This chart doesn’t look too good. On an annualized basis, sales have been pulling back since the start of the year but that’s not the full story. Let’s look at this in a slightly different way.
Year-to-Date Sales
Image Source: Matthew Gardner
The bars here show year-to-date sales through July—both adjusted and unadjusted for seasonality—and although unadjusted sales so far this year are lower than we saw during the first seven months of 2021, they are at about the same level as we saw in 2018 and are higher than in 2019 or 2020.
But when we adjust the monthly sales data for seasonality, year-to-date sales in 2022 were higher than all years shown here other than 2021.
So, although sales have fallen, it appears to me that we are heading back to a more realistic market rather than one that is hemorrhaging. Yet another indicator we need to consider when examining the market for evidence of some sort of recession are months of inventory , which shows how long it would take to sell every home for sale using the current monthly sales pace.
Months of Inventory
Image Source: Matthew Gardner
This graph shows that it would take three months to sell every home on the market given the sales we saw in July. That is quite a jump from the January pace but, again, perspective is everything.
Months of Inventory: Seller’s Market
Image Source: Matthew Gardner
At three months, it is still a seller’s market. It’s generally accepted that the definition of a seller’s market is any number below four months; a balanced market is four to six months of inventory, and a buyer’s market is when the month of inventory is above six.
And a simple bit of math shows us that, for the market to shift from favoring sellers to favoring buyers, the number of homes for sale must break above two million—which we haven’t seen since 2015—and monthly sales would have to drop to below 300,000. We’ve only seen that happen three times in history: November 2008, and again in July and August of 2010.
Yes, listings are up, and sales are down. There’s no denying it. But, again, does the data justify the term recession? My answer would be no. But, if you’re still not convinced, let’s turn our attention to sale prices. I think that might help make things even clearer.
Median U.S. Existing Home Price
Image Source: Matthew Gardner
The solid line represents the median sale prices of homes over time and the dotted line shows the trend. You can clearly see that we started breaking away from the trend line in early 2021 and that’s not at all surprising as it started the month after mortgage rates hit their historic all-time low.
But today’s financing costs are significantly higher, and prices have started to slide. Although I certainly expect that we will see sale prices fall further, it appears to me as if they are simply moving back to the long-term trend, and not collapsing.
Mortgage Rate Forecasts
Image Source: Matthew Gardner
With mortgage rates doubling from their 2021 lows, downward pressure on sale price was to be expected. But will they—as some think—rise to a level that will cause home prices to plummet? To answer that, here are the forecasts of several associations. You’ll see that all, bar the National Association of Realtors and Freddie Mac, see rates pulling back—albeit modestly—in 2023.
Of course, all these are annual averages and today’s rates are higher with the latest Freddie Mac data showing the average 30-year fixed rate above 6%—a level we haven’t seen since 2008.
However, economists including myself find it unlikely that rates will continue rising significantly from where they are today. The mortgage market is certainly in a bit of disarray right now with the yield curve inverting, but that should correct itself by early next year and that’s why we generally expect rates to start pulling back from their current levels by the start of 2023.
But if rising rates are triggering memories of 2008, you wouldn’t be alone. There are some expecting that the spike in rates will trigger a surge in foreclosures and that will doom the market. But as you see here, although foreclosure filings have certainly risen, they are still remarkably low compared to historic standards.
U.S. Foreclosure Filings
Image Source: Matthew Gardner
In the second quarter, newly delinquent mortgages represented just 1.9% of all mortgages outstanding1 and that’s the lowest share the market has seen since 2006. Although I do expect the number of homes being foreclosed on will rise as we move into 2023, I just don’t see it getting to the levels necessary to materially impact the market. And a big part of the reasoning behind my thinking is this:
Equity Rich Households (Q2 2022)
Image Source: Matthew Gardner
In the second quarter of 2022, over 48% of homeowners with a mortgage were sitting on more than 50% equity.
Simply put, for enough homeowners to be put in a negative equity situation that would lead them to enter foreclosure and materially damage the market, home prices across the country would have to fall by a percentage greater than we saw during the market crash. And I just don’t see this happening.
The word “recession” has many connotations, and when it’s used to describe the housing market, it can engender a significant level of panic. So, I will ask you all. Given the data I have showed you today, do you think that we are in a housing recession?
Yes, supply levels have risen. But they are still relatively low when compared to historic averages and with builders slowing construction activity to a crawl, it’s unlikely that housing supply will grow much organically. Over the longer term, I believe that the supply of resale homes for sale will remain below historic averages. I say this for one simple reason: mortgage rates.
In 2020, a record number of households refinanced their homes to take advantage of the mortgage rates that had been plummeting. And in 2021, over six million home buyers got mortgages with rates averaging below 3%.
I would suggest to you that we will not see the number of homes for sale even get back to normalized levels in the mid-term, as many potential sellers will decide not to sell, because if they did, they would lose the never seen before and likely never to be seen again mortgage rate that they currently have.
Of course, there will be sellers who have to move because of factors such as job relocation, death, or divorce, but I would contend that listing activity may well be tight for a long time. And if supply remains below the level of demand, the market is further protected.
And as far as demand goes, let’s not forget that the age makeup of the country suggests that we will see a lot more potential buyers as Millennials and Generation Z mature, with current numbers suggesting significant buyer demand for the next two decades.
As for sale prices, I still believe (as do almost all economists) that the median home price next year will be higher than we will see this year, but a very significant drop in the pace of sales growth is likely as we trend down to historic averages.
Of course, all real estate is local and there are markets across the country that will see prices drop in absolute terms. But even in the most highly susceptible markets, it will be a temporary phenomenon. By 2024, homeowners in these markets will see the value of their homes start to rise again.
I’m going to leave you with my quote to describe today’s market today and it’s that we are in a “housing reversion,” NOT a housing recession.
As always, I’d love to hear your comments on my thoughts so feel free to reach out. In the meantime, stay safe out there and I’ll see you all again next month.
1: New York Fed Quarterly Report on Household Debt and Credit
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.
This blog entry was originally published on windermere.com
