Market News • February 1, 2022

Q4 2021 Oregon and Southwest Washington Real Estate Market Update

by Afshan Adil

Q4 2021 Oregon & Southwest Washington Real Estate Market Trends

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

Regional Economic Overview

Slow and steady is how I would describe Oregon’s job recovery following the massive COVID-19-related job losses that were seen in the spring of 2020. To date, more than 224,000 of the 285,000 jobs that were lost have returned. I’m not forecasting a full job recovery until early next year due to labor shortages and a gap between current job openings and the skills of the labor force. That said, I still expect jobs will be added in reasonable numbers as we move through 2022. Given that Southwest Washington is a far smaller market, I’m not surprised that it has already recovered all the pandemic-induced job losses, and subsequently grown by an additional 4,000 jobs. Even though the pace of the job recovery in Oregon has been relatively muted, the unemployment rate continues to trend lower and now stands at 4.2%. While this is a decent number, it is still well above the pre-pandemic low of 3.4%. The jobless rate in Southwest Washington was a solid 3.5%.

oregon and southwest washington Home Sales

❱ During the final quarter of 2021, 17,862 homes sold, a drop of 3.6% compared to a year ago. This was mainly a result of a lack of homes for sale rather than an indication that the market is softening.

❱ Compared to the third quarter of 2021, all but four counties saw lower sales activity, which is likely due to seasonality changes in the market.

❱ Total sales were down from a year ago; however, several counties did report increases. Although most of these counties sold a relatively low number of homes, it was good to see that the drop was not across the entire region.

❱ Listing activity remains well below normal levels. Some of the drop in listings may be due to the rise of the Omicron variant of COVID-19.

A bar graph showing the annual change in home sales for counties in Oregon and Southwest Washington during the fourth quarter of 2021.

oregon and southwest washington Home Prices

A map showing the real estate market percentage changes in various counties in Oregon and Southwest Washington during the fourth quarter of 2021.

❱ Price growth continued the downward trend that started last summer but prices still rose by 14.6%, which is well above the long-term average.

❱ Compared to the third quarter of last year, 11 counties saw lower sale prices, which is likely due to seasonality changes in the market. The remaining 15 counties experienced price growth.

❱ All counties contained in this report had higher sale prices than a year ago, with very significant increases in Tillamook County. All but three counties showed double-digit appreciation.

❱ Mortgage rates in the quarter rose from 2.87% to 3.18%, which may also have contributed to the slowdown in the rapid pace of appreciation in the region.

A bar graph showing the annual change in home sale prices for various counties in Oregon and Southwest Washington during the fourth quarter in 2021.

Days on Market

❱ The average number of days it took to sell a home in the region dropped 13 days compared to the final quarter of 2020. It took 2 more days for a home to sell compared to the third quarter of the year.

❱ The average time it took to sell a home in the final quarter of 2021 was 33 days.

❱ All counties except one (Polk) saw the length of time it took to sell a home drop compared to a year ago. Market time in all but four counties increased compared to the third quarter of 2021.

❱ Homes again sold the fastest in Washington County, where it took an average of only 17 days for a home to go under contract. An additional 13 counties saw the average market time drop to below a month.

A bar graph showing the average days on market for home in various counties in Oregon and Southwest Washington during the fourth quarter of 2021.

Conclusions

A speedometer graph indicating a seller's market in Oregon and Southwest Washington during the fourth quarter of 2021.

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.

Although Oregon’s job recovery has not been as robust as many would like, its impact on the housing market really has been minimal as demand remains strong and buyers continue to take advantage of historically low mortgage rates.

Strong demand—in concert with low levels of supply and favorable financing rates—has caused prices to rise at well-above average rates. In the coming year, I believe the pace of growth will slow in the face of rising mortgage rates, which I have forecasted will reach 3.7% by fourth quarter. In addition to this, many markets are experiencing affordability constraints, which could also slow the pace of price increases.

As we move into 2022, I still believe prices will continue to rise, but the significant increases we’ve experienced over the past two year are likely behind us. While home sellers still have the upper hand, I am moving the needle a little more toward the center. The spring buying season will be a good test for buyers and sellers alike and should give me more clarity as to what the year will hold.

About Matthew Gardner

Matthew Gardner - Chief Economist for Windermere Real Estate

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

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

Market News • January 31, 2022

Q4 2021 Western Washington Real Estate Market Update

by Afshan Adil

Q4 2021 Western Washington Real Estate Market Trends

The following analysis 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

Just when we thought COVID was starting to pull back, the Omicron variant made its presence known. It is still too early to suggest that this has affected the region’s economic recovery—we won’t likely know for certain until we get more job data. I remain hopeful that this latest spike in infections will not have too much of an impact, but only time will tell. To date, the region has recovered all but 51,000 of the 297,000 jobs that were lost due to the pandemic. Some of the region’s smaller counties, including Grays Harbor, Cowlitz, Thurston, San Juan, and Clallam, have seen a full job recovery. The most recent data (November) shows the regional unemployment rate at a very respectable 3.3%, which is below the pre-pandemic low of 3.7%. The lowest unemployment rates were in King and San Juan Counties, where 2.9% of the labor force was out of work. The highest rate was in Grays Harbor County, which registered 5.1%. I still expect to see a full job recovery by this summer. However, there is a growing labor shortage holding the area back. Hopefully, this will change, but some industry sectors—especially hospitality—continue to find it hard to attract workers.

western washington Home Sales

❱ In the final quarter of the year, 22,161 homes sold, representing a drop of 5.2% compared to the same period in 2020 and down 18.8% from the third quarter.

❱ The reason there were lower year-over-year sales is simply because the number of homes for sale was down more than 30%. The drop between third and fourth quarters is likely due to seasonality changes in the market.

❱ Although home sales were lower in most markets, there was a significant uptick in Grays Harbor and Thurston counties. The number of homes sold dropped across the board compared to the third quarter.

❱ The ratio of pending sales (demand) to active listings (supply) showed sales outpacing listings by a factor of 5.2. The market is supply starved and unfortunately, it’s unlikely enough homes will be listed this spring to satisfy demand.

A bar graph showing the annual change in home sales for various counties in Western Washington during the fourth quarter of 2021.

western washington Home Prices

A map showing the real estate market percentage changes in various counties in Western Washington during the fourth quarter of 2021.

❱ Home prices rose 15.1% compared to a year ago, with an average sale price of $711,008. This was 2.1% lower than in the third quarter of 2021.

❱ When compared to the same period a year ago, price growth was strongest in San Juan and Jefferson counties. All but two markets saw prices rise more than 10% from a year ago.

❱ Relative to the third quarter, every county except Island (-8.6%), Mason (-5.2%), Lewis (-2.9%), King (-2.1%), Cowlitz (-1.7%), and Kitsap (-0.9%) saw sale prices rise.

❱ Mortgage rates rose more than .2% between the third and fourth quarters, which may have impacted prices. Affordability constraints continue to grow, which is also likely to have played a part in slowing gains.

A bar graph showing the annual change in home sale prices for various counties in Western Washington during the fourth quarter of 2021.

Days on Market

❱ It took an average of 23 days for homes to sell in the final quarter of 2021. This was 8 fewer days than in the same quarter of 2020, but 6 more days than in the third quarter of last year.

❱ Snohomish, Thurston, King, and Kitsap counties were the tightest markets in Western Washington, with homes taking an average of between 13 and 16 days to sell. The greatest drop in market time compared to a year ago was in San Juan County, where it took 33 fewer days for a seller to find a buyer.

❱ All counties contained in this report saw the average time on market drop from the same period a year ago. Every county except Whatcom saw market time rise compared to the third quarter.

❱ Longer days on market might suggest that things are starting to slow, but I don’t actually think this is the case. I believe buyers are being a little more selective before making offers, and many may be waiting in the hope that supply levels will improve in the spring.

A bar graph showing the average days on market for homes in various counties in Western Washington during the fourth quarter of 2021.

Conclusions

A speedometer graph indicating a seller's market in Western Washington during the fourth quarter of 2021.

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 housing market remains in a state of imbalance, but, as I look at the data, I believe the frenetic pace of sales and price appreciation may start to soften in 2022.

This will likely be due to financing costs and affordability acting as headwinds to price growth. Mortgage rates have started to rise again, and I have forecasted them to reach 3.7% by fourth quarter. This alone will slow price growth as affordability in many areas declines.

One thing that remains unknown that could have a significant impact on the market is long-term work-from-home policies. Many businesses have not yet determined their plans for remote working, but once they do, potential home buyers who have been waiting to see how frequently they have to commute to work could immediately start their search. In addition to boosting sales, this could add inventory to the market as well.

All things considered, I am moving the needle just a notch toward buyers. However, as you can see, we are still in a market that heavily favors home sellers.

About Matthew Gardner

Matthew Gardner - Chief Economist for Windermere Real Estate

More • January 27, 2022

Windermere Real Estate Celebrates 50th Anniversary

by Shelley Rossi

A graphic showing WIndermere Real Estate's 50th anniversary.

In honor of our 50th anniversary, Windermere set a goal to reach $50 million in giving and officially announced our third generation of leadership during our 2022 Kick-Off event.

Seattle – On Wednesday, January 26, we hosted a virtual event for our agents, franchise owners, and staff, to kick off 2022 and celebrate our 50^th anniversary. More than 4,400 people attended the virtual event to hear from several speakers, including company founder, John Jacobi, Windermere Chief Economist, Matthew Gardner, and keynote speakers Matthew Ferrara and Candace Doby. Second-generation leaders, OB Jacobi, Jill Jacobi Wood, and Geoff Wood kicked off the event by reflecting on Windermere’s 50-year history and the pride that comes from still being a family-run organization. They also introduced Lucy Wood, daughter of Jill and Geoff, and the third generation to take on a leadership role within our company.

Founded in 1972 by John Jacobi, Windermere started with seven agents in a single office in Seattle, WA. Over the next two decades, Jacobi would grow Windermere into Seattle’s largest real estate brokerage and eventually the largest in the Pacific Northwest. But according to son, OB, his dad never had aspirations of becoming a large company. “My dad’s goal was to build a real estate office where the agents were respected on the same level as other business professionals, so he made it a priority to hire people who were above all else, professional,” said OB Jacobi, adding, “It was because of the quality of the people who joined Windermere that the company began to grow and thrive.”

Fifty years later, Windermere is the largest regional real estate company in the Western U.S. with over 6,500 agents and 300+ offices in 10 states. Last year we exceeded $43 billion in sales.

During the January 26 event, the second-generation leaders talked about how their dad set out to change the real estate industry. According to son, OB Jacobi, his dad didn’t believe in awards and felt the highest achievement an agent could earn is repeat and referral business from their clients. He also thought it was the responsibility of real estate agents to make their communities a better place to live, and in 1989, through the creation of the Windermere Foundation, pioneered a giving model that is now used by real estate companies around the country.

“My dad and his team came up with an idea that would make it really easy for agents to give back,” said Jill Jacobi Wood. “It was simple but sort of ingenious; every time an agent sold a home, a small donation from their commission would automatically be made to the Windermere Foundation. All that the agents had to do was sign up to donate and we handled the rest.”

Jacobi Wood added that the goal was to create a system that would allow Windermere to make a big difference without being a financial burden on any one person. In its first year (1989), the Windermere Foundation raised $90,000 for low-income and homeless families. In 2021, our network collectively raised over $2.5 million for a total of $46 million in donations. In honor of our 50^th anniversary, the Windermere network has been given a new challenge: to reach $50 million in donations by the end of 2022.

Windermere CEO, Geoff Wood, closed the 50^th anniversary event by saying, “Great companies don’t stagnate or stay the same. They are constantly evolving and looking for ways to improve, grow, and give back. Over the past 50 years we have done just that; here’s to 50 more.”

Market News • January 26, 2022

Matthew Gardner’s Top 10 Predictions for 2022

by Afshan Adil

This video shows Windermere Chief Economist Matthew Gardner’s Top 10 Predictions for 2022. 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.

Matthew Gardner’s Top 10 Predictions for 2022

1. Prices will continue to rise

There are some who believe that U.S. home prices will drop in the coming year given last year’s extremely rapid pace of growth, but I disagree. I don’t expect prices to fall; however, the pace of appreciation will slow significantly, rising by around 6% in 2022 as compared to 16% in 2021 (nationally). As such, agents need to be prepared to explain this new reality to their clients who have become very accustomed to prices spiraling upward. Those days are likely behind us—and it’s not a bad thing!

2. Spring will be busier than expected

The work-from-home paradigm is here to stay for the foreseeable future, and this could lead to increased buyer demand. Many companies have postponed announcing their long-term work-from-home policies due to the shifting COVID-19 variants, but I believe they will soon off er more clarity to their employees. Once this happens, it will likely lead to a new pool of home buyers who want to move to more affordable markets that are further away from their workplaces. I also expect to see more buyers who are driven by the need for a home that is better equipped for long-term remote working.

3. The rise of the suburbs

For a large number of people whose employers will allow them to work from home on an ongoing basis, remote working will not be an all-or-nothing proposition. It will be a blend of working from home and the office. I believe this will lead some buyers to look for homes in areas that are relatively proximate to their office, such as the suburbs or other ex-urban markets, but away from high-density neighborhoods.

4. New construction jumps

I anticipate the cost of building homes to come down a bit this year as inflation finally starts to taper, and this should provide additional stimulus for homebuilders to start construction of more units. Material costs spiked in 2021 with lumber prices alone adding about $36,000 to the price of a new home. This year, I’m hopeful that the supply chain bottlenecks will be fixed, which should cause prices to moderate and result in a drop in building material costs.

5. Zoning issues will be addressed

I’m optimistic that discussions around zoning policies will continue to pick up steam this year. This is because many U.S. legislators now understand that one of the main ways to deal with housing affordability is to increase the supply of land for residential construction. Despite concerns that increased density will lower home values, I believe existing homeowners will actually see their homes rise in value faster because of these policies.

6. Climate change will impact where buyers live

Now that natural disasters are increasing in frequency and climate risk data is starting to become more readily available, get ready for home buyers to require information from their agents about these risks and their associated costs. Specifically, buyers will want to know about an area’s flood and fire risks and how they might impact their insurance costs and/or their mortgage rate.

7. Urban markets will bounce back

While increased working from home can, and will, raise housing demand in areas farther away from city centers, it may not necessarily mean less demand for living in cities. In fact, some urban neighborhoods that were once only convenient to a subset of commuters may now be considered highly desirable and accessible to a larger set of potential home buyers. At the same time, this could be a problem for some distressed urban neighborhoods where proximity to employment centers may have been their best asset.

8. A resurgence in foreign investors

Foreign buyers have been sitting on the sidelines since the pandemic began, but they started to look again when the travel ban was lifted in November 2021. Recently, the rise of the Omicron variant has halted their buying activity, but if our borders remain open, I fully expect foreign buyer demand to rise significantly in 2022. Keep in mind, foreign buyers were still buying homes sight unseen even when they were unable to enter the country, and this will likely still be the case if borders are closed again.

9. First-time buyers will be an even bigger factor in 2022

Once remote working policies are clearer, we should see increased demand by first-time buyers who currently rent. In 2022, 4.8 million millennials will turn 30, which is the median age of first-time buyers in the U.S. An additional 9.4 million will turn 28 or 29 in the coming year. I believe this group is likely to contemplate buying sooner than expected if they can continue working from home in some capacity. Doing so would allow them to buy in outlying markets where homes are more affordable.

10. Forbearance will come to an end

Forbearance was a well-thought-out program to keep people in their homes during the height of the pandemic. Some predicted this would lead to a wave of foreclosures that would hurt the housing market, but this has not been the case. In fact, there are now fewer than 900,000 U.S. homeowners in forbearance, down from its May 2020 peak of almost 4.8 million, and this number will continue to shrink. That said, there will likely be a moderate increase in foreclosure activity in 2022, but most homeowners in this situation will sell in order to meet their financial obligations rather than have their home repossessed.

Living • January 26, 2022

5 Ways to Create a Sustainable Kitchen

by David Chan

A close-up of a woman’s hands preparing a meal with chopped vegetables in the kitchen.

In many ways, the kitchen is the heart of a home. All the time spent making delicious food, sharing recipes, and enjoying meals with loved ones gives it a central role in home life. A consequence of the time spent in the kitchen is the creation of waste. But by adopting more sustainable practices in the kitchen, you can reduce waste and make your home more eco-friendly. Here are five ways you can create a sustainable kitchen.

5 Ways to Create a Sustainable Kitchen

1. Cut Down on Food Waste

It’s no secret that a certain portion of food always seems to go to waste, but how can you avoid throwing away perfectly edible food items? It starts with being intentional about your grocery shopping. This helps to prevent overbuying and will give you a better chance of cutting down your food waste. Food preservation is key, as well. Invest in high-quality, reusable containers to prevent food from rotting, wilting, or expiring before you intend to cook it.

2. Choose Energy-Efficient Appliances

Kitchen appliances generate a significant amount of power. By using an energy-efficient refrigerator, freezer, and/or dishwasher, you can reduce the overall energy consumption of your household. When deciding on which appliance to purchase, the most sustainable choice you can make is the one you plan on sticking with for a long time. When deciding on a gas versus an electric range, know the pros and cons of each option before making a final decision.

A young man and a woman take care of their kitchen herbs and houseplants.

Image Source: Getty Images – Image Credit: Pekic

3. Reusable Materials

Getting more uses out of the items in your kitchen will help make your household more environmentally conscious. Reusable kitchen towels are an eco-friendly replacement for paper towels when you’re cooking, wiping down your counters, or doing dishes. Using reusable grocery bags is an effective way to transport groceries sustainably. It will also help keep your kitchen organized by avoiding a plastic or paper bag pile-up under your sink. This line of reusable thinking in the kitchen can even extend to design. If you’re looking to give your kitchen a makeover while keeping sustainability in mind, consider incorporating reclaimed wood, sustainably-sourced countertops, or natural materials like bamboo.

4. Use Natural or Organic Cleaning Products

Creating a sustainable kitchen isn’t just about reducing food waste and choosing reusable materials. By using organic and/or natural cleaning products, you can ensure that your cleaning practices are sustainable as well. Using natural cleaners, like baking soda and vinegar, can also create less waste when you repurpose jars and bottles to create your preferred solution. Buy ingredients in bulk, then re-purpose old spray bottles and use towels instead of paper products to clean. Certain conventional cleaning products with synthetic chemicals can negatively impact the air quality in your home, which can have harmful effects on your health, especially if you have respiratory sensitivities.

5. Be Mindful About Water Usage

Neglecting to monitor your water usage is a slippery slope. Not only will using too much water increase the overall waste output of your home, but it will also increase your water bill. Be mindful about using only the required amount of water for cooking, do your best to avoid leaving the faucet running, and if there is a drip, fix it as quickly as you can. Using too much water can also strain your home’s water systems, putting your pipes at risk of bursting. Tempering your water usage can help to prevent water damage and the high costs that come with it.

Going zero waste doesn’t have to be expensive. Try first to extend the life of the things you already have like plastic bottles and textiles. For more information on how you can adopt sustainable practices at home, read our guide to going low-to-zero waste:

A Guide to Going Low-to-Zero Waste

Buying • Selling • January 24, 2022

What Is a Bridge Loan?

by David Chan

A real estate agent talks to her client at her computer.

With so much in flux during the period between selling a home and buying a new one, short-term financing can provide some calm among the storm. With the fate of two properties up in the air, those who are selling a home will often look to secure a bridge loan to bridge the gap between the sale of their existing home and the purchase of a new one. So, is a bridge loan right for you? The following information is meant to help you decide whether it is a fitting solution.

What is a bridge loan?

Bridge loans have shorter terms—generally up to one year—than mortgages and often come with higher interest rates. Bridge loans allow buyers to borrow a portion of the equity in real estate they already own (usually their current primary residence) to use as a down payment on the purchase of a new residence. Borrowers will commonly package the two loans together, in which they borrow the difference between the amount they owe on their current home and a percentage of the home’s value (often 75% or 80%). Just like a home equity loan, a home equity line of credit (HELOC), or a mortgage, bridge loans are secured by your current home as collateral.

Two colleagues analyze mortgage paperwork.

Image Source: Getty Images – Image Source: Natee Meepian

Bridge Loans: Pros

Once your home sells, you can use the proceeds to pay off the bridge loan, leaving you with only the mortgage for your new home.
Bridge loans can get you cash quickly to expedite the transition from one house to another.
With a bridge loan, you can expect a shorter application and loan-approval process than a typical mortgage.
A bridge loan offers you the opportunity to buy a new house before your current one sells. As a buyer, this allows you to make a contingency-free offer on a new house, meaning you can still make the purchase without having to sell your current home first. This can be a useful resource in a seller’s market, where sellers may view an offer without contingencies as favorable amongst the competition.

Bridge Loans: Cons

If your home doesn’t sell in the allotted term, you’ll be left with making payments on your current home’s mortgage, your new home’s mortgage, and the bridge loan.
Bridge loans usually come with higher interest rates than a typical mortgage and come with their own set of costs, including interest, as well as legal and administrative fees.
Having a low debt-to-income ratio, a solid credit score, and a considerable amount of equity in your current home are all required to secure a bridge loan, so qualifying may be out of reach for some homeowners.

Alternatives to Bridge Loans

Home equity loans, home equity lines of credit (HELOCs), and personal loans are all viable alternatives to bridge loans that can still create a pathway to purchasing your new home. Be sure to compare the costs associated with each line of financing before making your decision.

For more information on how to handle the transitory period between selling your current home and buying a new one, connect with a local Windermere Real Estate agent today:

Design • January 21, 2022

Colorful Modern Design Trends for Your Home

by David Chan

A colorful living room / open kitchen area.

Designing your home can feel like trying to put together a puzzle. While neutrals can help create consistency and set a calming tone in your home, color is often the missing puzzle piece that ties everything together and gives your home the life you’re looking for. Certain color combinations can create a sense of timelessness while others can help make your spaces feel modern.

Colorful Modern Design Trends for Your Home

In recent years, sustainability, multifunctionality, and the integration of natural elements into the home have cemented themselves as modern design trends that possess serious staying power. These trends go hand-in-hand with many aspects of modern life and are often the basis of homeowners’ decorations decisions. Here’s how you can you use color to create a modern look in your home.

A colorful kitchen with mint green cabinets and red accents.

Image Source: Getty Images – Image Source: Dreamer Company

Say “So Long!” to Neutrals

A combination of factors—people spending more time at home, remote work becoming more prevalent, the lasting effects on home life throughout the COVID-19 pandemic—have created a shift in how neutrals are viewed. Moving forward, expect to see a different take on the old “less is more” saying when it comes to home décor. Colors are officially back. Instead of minimalist, white-washed backdrops, designers suggest experimenting with more colorful landscapes to create vibrant, lively spaces. Now is the time to consider painting your kitchen cabinets something vibrant, add those multi-colored throw pillows that may have previously seemed too bold, or try out that wild idea you had for a gallery wall.

A colorful bedroom with blue walls, an orange lamp, and multicolored pillows and bedspread.

Image Source: Getty Images – Image Source: Onzeg

Healing Colors

Recent times have raised homeowners’ collective awareness about the meaning of the spaces they live in and how they impact their overall wellbeing. This perspective shift has elevated the importance of earthy tones. Deep greens, organic browns, rust-tinged oranges, calming blues, and illuminating yellows are all colors that bring natural elements to mind—i.e., plants, running water, the sun. Let your imagination run wild with ways that you can incorporate these colors into your home to give it a modern effervescence.

A colorful living room with orange and yellow accents, a houseplant, and a large bookshelf behind the couch.

Image Source: Getty Images – Image Source: onurdongel

Other Colorful Trends for Your Home

Tile and furniture are some other larger surface areas that can greatly benefit from a splash of color. Different tile designs can evoke different aspects of modern design and help to liven up backsplash-heavy spaces like your kitchen or your bathroom where white subway tile may leave something to be desired. Give yourself carte blanche when searching for colorful furniture. Explore bold patterns and different color combinations that complement other items in the spaces they’ll inhabit.

A colorful bathroom with orange tile flooring and orange and yellow accents.

Image Source: Getty Images – Image Source: KatarzynaBialasiewicz

For more tips on adding color to your home using plants, read our guide on decorating with indoor plants.

Ideas for Decorating with Plants

Buying • Selling • January 19, 2022

What are Closing Costs?

by David Chan

A real estate agent looks at her phone in her office.

The closing process in a real estate transaction finalizes the terms of an agreement between the buyer and seller, leading to the transfer of the property’s title. This step of the buying/selling process comes with its own set of costs. Before a buyer can hold the keys to their new home, and before a seller can celebrate the sale of their property, closing costs must be paid.

Learn more about the costs of buying and selling a home here:

What are closing costs?

The term “closing costs” refers to the various expenses, taxes, and fees paid by both the buyer and the seller to finalize a real estate transaction. The purchase agreement—signed by both parties—will dictate the terms of how the closing costs are paid, but there are some standards about who pays what.

In general, buyers can expect to pay about 2-5% of the total purchase price in closing costs, while sellers’ costs can range anywhere from about 6-10%; the difference being that buyers are using extra cash to pay for their closing costs while the amount sellers owe is typically deducted from the proceeds of the sale of their home. Note—these percentages may vary depending on property taxes, insurance rates, and other factors involved in the transaction.

Closing Costs for Buyers

Typical mortgage-related closing costs for buyers include an application fee, an underwriting fee, and prepaid interest (the accrued interest cost between your settlement date and first monthly payment). If you make less that a 20% down payment on the home, you can expect to pay your lender for private mortgage insurance (PMI), as well.

Two main property-related closing costs for buyers are the appraisal and the home inspection. Lenders will require an appraisal to double-check that the value of the property matches your mortgage loan amount, which will typically cost you a few hundred dollars. A home inspection provides the buyer with a clear understanding of the home’s condition and what repairs need to be made, either in the future or before closing. In competitive markets (a seller’s market), it’s more common for sellers to conduct pre-listing inspections and for buyers to waive the inspection contingency to make their offer more appealing. Buyers will also pay a variety of title, insurance, attorney, escrow, and property tax fees to finalize the home purchase. Usually, your lender will require you to purchase homeowners insurance before settlement to protect against insured disasters that may occur on the property.

These are just some of the costs inherent in the closing process for buyers, which are a fraction of the total costs of buying a home. Working with a Buyer’s Agent will help you stay organized as you navigate through these crucial final steps of your home purchase.

A young man and woman shake hands with their real estate agent at their kitchen table.

Image Source: Getty Images – Image Credit: PeopleImages

Closing Costs for Sellers

The seller will pay the agent commissions on the sale, typically to both the buyer’s agent and the listing agent. Agent commissions usually come in at around 4-6% of the sale price of the home. Other closing costs for sellers may include attorney fees, title insurance, a transfer tax, and the home’s property taxes for the current year if they have not yet been paid. The terms of the agreement will spell out what the seller is additionally responsible for, including HOA fees if applicable and any escrow money promised to the buyer.

Typically, escrow fees are shared between the buyer and seller, which cover the costs of distributing the funds involved in the transaction. In buyer’s markets, it’s more common for sellers to agree to pay for a portion of the closing costs—what is known as “seller concessions.” A common example of a seller concession is when the seller agrees to pay for repairs discovered during the buyer’s home inspection.

For more information on the intricacies of the buying/selling process, connect with an experienced, local Windermere agent:

Living • January 12, 2022

Gas Appliances vs. Electric Appliances

by David Chan

A close-up of a person’s hands cooking a meal on their kitchen stove.

Appliances are broken down into two main categories: gas- and electric-powered. You may be more familiar with one or the other based on personal experience, but when it comes time to choose appliances for your home, you’ll likely be weighing a variety of factors including the conversion costs, operation costs, safety, sustainability, and more. The following breakdown of the differences between gas and electric appliances can help inform your decision about what is ultimately best for your home.

What is the difference between gas and electricity?

Homes with natural gas are powered by a series of pipeline connections. The gas lines flowing from the property lead out to and connect with a larger pipeline farther away. Homes can also be powered by propane gas, which is stored in a tank on the property.

Electric power flows from generators to substations and eventually to individual homes, carried by transmission and distribution lines. In short, gas can power a variety of appliances in your home, but it won’t power your lights or electronics, whereas electricity can do both.

What is the difference between gas appliances and electric appliances?

The costs of gas and electric appliances vary region-to-region, both in upfront and operation costs. Having said that, gas is the more efficient heating fuel, and using gas appliances could save you up to 30 percent on your utility bill (consumeraffairs.com). Keep in mind that gas furnaces tend to be noisier but will usually heat up your home quicker, while electric furnaces are quieter but may take more time to warm your home.

So, what do you do if you want to convert your home from one fuel to the other? To switch from electric to gas, you’ll need to route gas lines, purchase the new appliances, and install them. Switching from gas to electric will require installing an electric line and capping the gas line(s). Each of these conversion methods will require an investment, so be sure to budget for these costs before you switch.

Gas and electric have their own unique safety hazards. With gas, you’ll need to take a couple extra steps to protect your home’s air quality. You’ll want to make sure you have a good ventilation system and that your carbon monoxide alarm is functioning properly to alert you of any potential poisoning from the furnace or the appliances themselves. With electric appliances, you won’t run the risk of a gas leak, but if the appliance’s wiring is faulty or neglectfully maintained, it could start a fire.

A close-up of a person’s hand starting their dryer.

Image Source: Getty Images – Image Source: SolStock

Gas vs. Electric Range

The range tends to be the focal point of the gas-versus-electric debate for many homeowners. While some prefer the quick-heating power of an open-flame gas stove, others view an electric stove as safer for their household and therefore better. While some enjoy the even-heating quality of an electric oven, others prefer gas ovens with traditional coil burners. Electric stoves are usually easier to maintain; especially glass tops since you only have to clean one smooth surface.

Gas vs. Electric – Dryer & Fireplace

In general, gas dryers can heat up faster than electric dryers, which means they are more efficient and can save you money on your energy bills. However, gas dryers tend to be more expensive than their electric counterparts.

Electric fireplaces are usually cheaper to install but may not be as effective as gas fireplaces for heating larger spaces. And apart from all the financials, some people simply enjoy the feeling of a natural flame (gas) coming from the hearth, while the electric heating element appeals to others.

At the end of the day, choosing between gas and electric appliances depends on your situation. Saving on energy bills may be your number one priority, or perhaps you can’t stand the idea of not cooking on an open flame. Whatever your choice, it’s helpful to know the pros and cons of each option.

Selling • January 10, 2022

Should I Remodel or Sell My Home As Is?

by David Chan

A young man and woman look at paint swatches against a wall of their home as they remodel.

Homeowners who are preparing to sell are often faced with a dilemma about whether to remodel or sell their home in its current state. Each approach has its respective advantages and disadvantages. If you decide to remodel your home, it will likely sell for more; but the increased selling price will come at the cost of financing the remodeling projects. If you decide to sell without remodeling, you won’t spend as much money putting your home on the market, but the concern is whether you’re leaving money on the table.

Should I Remodel or Sell My Home As Is?

To answer this question, it’s important to understand the factors that could influence your decision and to work closely with your agent throughout the process.

Cost Analysis: Home Remodel vs. Selling Your Home As Is

Home Remodel

When you remodel your home before selling, you’re basically making a commitment to spend money to make money. So, it’s important to consider the kind of ROI you can expect from different remodeling projects and how much money you’re willing to spend. Start by discussing these questions with your agent. They can provide you with information on what kinds of remodels other sellers in your area are making and the returns they’re seeing as a result of those upgrades. This will help you determine the price of your home once your remodel is complete.

Then, there’s the question of whether you can complete you remodeling projects DIY or if you’ll need to hire a contractor. If hiring a contractor seems expensive, know that those costs come with the assurance that they will perform quality work and that they have the skill required to complete highly technical projects.

According to the Remodeling 2021 Cost vs. Value Report (www.costvsvalue.com¹), on average, homeowners paid roughly $24,000 for a midrange bathroom remodel and about $26,000 for a minor kitchen remodel nationwide, with a 60.1% and 72.2% ROI respectively. This data shows that, for these projects, you can recoup a chunk of your costs, but they may not be the most cost-effective for you. A more budget-friendly approach to upgrading these spaces may look like repainting your kitchen cabinets, swapping out your old kitchen backsplash for a new one, refinishing your bathroom tub, or installing a new showerhead. Other high-ROI remodeling projects may allow you to get more bang for your buck, such as a garage door replacement or installing stone veneer. To appeal to sustainable-minded buyers, consider these 5 Green Upgrades that Increase Your Home Value.

A man and woman look at blueprint plans with a contractor inside a room that’s being remodeled.

Image Source: Getty Images – Image Source: stevecoleimages

Selling Your Home As Is

Deciding not to remodel your home will come with its own pros and cons. By selling as is, you may sell your home for less, but you also won’t incur the cost and headache of dealing with a remodel. And since you’ve decided to sell, you won’t be able to enjoy the fruits of the remodel, anyway. If you sell your home without remodeling, you may forego the ability to pay down the costs of buying a new home with the extra money you would have made from making those upgrades.

Market Conditions: Home Remodel vs. Selling Your Home As Is

Local market conditions may influence your decision of whether to remodel before selling your home. If you live in a seller’s market, there will be high competition amongst buyers due to a lack of inventory. You may want to capitalize on the status of the market by selling before investing time in a remodel since prices are being driven up, anyway. If you take this approach, you’ll want to strategize with your agent, since your home may lack certain features that buyers can find in comparable listings. In a seller’s market, it is still important to make necessary repairs and to stage your home.

In a buyer’s market, there are more homes on the market than active buyers. If you live in a buyer’s market, you may be more inclined to remodel your home before selling to help it stand out amongst the competition.

Timing: Home Remodel vs. Selling Your Home As Is

Don’t forget that there is a third option: to wait. For all the number crunching and market analysis, it simply may not be the right time to sell your home. Knowing that you’ll sell your home at some point in the future—but not right now—will allow you to plan your remodeling projects with more time on your hands which could make it more financially feasible to complete them.

For more information on how you can prepare to sell your home, connect with a local Windermere Real Estate agent below:

“© 2021 Zonda Media, a Delaware Corporation. Complete data from the Remodeling 2021 Cost vs. Value Report can be downloaded free at www.costvsvalue.com.”