Selling March 22, 2021

The Risks of FSBO

Selling a home is a complex process that requires patience, knowledge of the market, and a deep understanding of the financial processes. And that’s just the beginning. Accordingly, many homeowners trust in a professional to sell their home by working with a real estate agent. Despite the expertise an agent brings to the table, some homeowners choose to go it alone, bearing the responsibility of a successful home sale on their own shoulders. If you’re thinking about selling “For Sale by Owner”, or FSBO, know that there are certain risks and obstacles that can easily cause your home selling journey to veer off course.

The Risks of FSBO 

Real estate agents are professionals who possess a vast knowledge of both the industry at large and local market conditions acquired through years of training, certifications, and working with clients. For FSBO sellers, the complexities of the home selling process can easily illuminate a lack of experience and leave them feeling unsure of how to continue, or worse, situations may arise where proceeding incorrectly could jeopardize the transaction. This lack of expertise could lead to incorrectly pricing your home, which will attract the wrong buyers. An accurately priced home requires market knowledge and an objective approach to the home’s value, which can be tough for homeowners. The more time an overpriced home spends on the market, the more likely the price will have to be lowered. A home with a lowered price that has been on the market for some time is less appealing to buyers than an accurately priced new listing. An underpriced home could leave significant money on the table for the seller.

A common motivating factor for wanting to sell FSBO is that, in the case of a successful sale, the seller avoids paying commission to an agent. However, what that commission ultimately pays for is a vast skill set that is specifically trained to get you the most money for your home. Agents not only have access to all kinds of information on local market conditions, trends in the real estate market, and data on comparable homes in your area, they are also connected to a network of potential buyers and have the marketing know-how for appealing to them and any others in your market. To attempt to approach this same level of visibility while selling FSBO means incurring additional expenses like ad placement, signage, hiring a photographer, and more.

Selling a home takes up a great deal of time. FSBO sellers can expect to stage the home, host showings and tours, answer phone calls from buyers, interview home inspectors, and coordinate open houses, all while gathering data on the local market—and that’s all before any negotiations or paperwork. When an offer comes through, FSBO sellers must dive into the extensive documentation required for the mortgage, title transfer, and any other legalese involved in the transaction. It’s like having another job that you may simply not have time for, whereas a real estate agent’s job is to dedicate their time, energy, and experience to the successful sale of your home.

 

All these factors make selling FSBO a risky proposition. Mistakes in the selling process can lead to both financial and legal implications, but part of a real estate agent’s expertise is knowing how and when these dangers can arise and navigating them properly. If you’re looking to sell your home, we’re happy to connect you with an agent here:

Design March 17, 2021

Timeless Home Design

When decorating and designing, homeowners often strive for a home that may incorporate vintage and modern elements but remains timeless at its core. Fortunately, certain design principles and elements have stood the test the time and can help you curate the home you desire. Here is your guide to understanding how you can design a home that looks and feels timeless.

Principles of Timeless Home Design

Balance

When designing a space in your home, balance is a key concept to delivering a timeless ambiance. Achieved through a proportionate arrangement of objects and colors, balance will help create a logical pattern in your home that pleases the eye. Experiment with symmetry in your home to build balance. This doesn’t mean that there needs to be two of every object, rather in every space you should utilize the objects and color schemes present to create symmetry.

Focal Point

Imagine a living room without a couch or mantle, or a dining room without a dining table. These images are confusing because we simply don’t know where to focus our attention. A core principle of timeless design is that space should have a focal point to give order to the room. Focal points don’t always have to be derived from a built-in feature of the home, you can create one with furniture, artwork, or some other form of eye-catching décor.

Scale and Proportion

Scale and proportion are two fundamental concepts of interior design and are key to creating a timeless décor. Simply put, proportion refers to the relationship of items and colors, while scale refers to their relationship with the room. For example, if a room in your home has high ceilings, this allows for taller furniture and artwork, while the most spacious rooms in your house are the best home for large décor pieces and furnishings. Proper usage of scale and proportion also means leaving some space between items to let the room breathe, so to speak.

Colors and Patterns

For a timeless look and feel, choose more classic color and pattern schemes. Basketweave is a traditional pattern that helps to create symmetry. Stripes are always in style and can help to reinforce clean lines. Stick to neutral paint colors on your walls as they give you the flexibility to add décor without overwhelming the room. Combinations of off-whites, beiges, grays, and earthy tones will deliver that timeless feel you’re looking for.

Natural Elements

There’s nothing more timeless than nature. Materials like wood, stone, and marble have been a cornerstone of design since antiquity. Whether you utilize these materials in your home as furniture, accent pieces, or focal points, they will help create a trend-free, organic environment in any room.

Living March 15, 2021

How to Prevent Water Damage to Your Home

Water is constantly coursing through your home, flowing in and out of drain pipes, sinks, tubs, and showers. Numerous systems in our homes are dependent upon water, but the minute it runs rampant it begins to cause damage. The consequences of water damage run the gamut, from rotted drywall and mold growth to serious structural issues. The following guide will help you understand what you can do to prevent water damage in your home.

How to Prevent Water Damage

Leaks

Leaks soften wood, which invites all sorts of unwanted activity from termites, while simultaneously creating a perfect habitat for mold and mildew growth. To prevent leaks, keep your drains healthy by frequently cleaning out your drain strainers and refraining from dumping grease down your drains. Check to make sure none of your drains are leaking and if need be, repair or replace your p-traps. Drips, dark stains around your pipes, and discoloration on your ceilings and walls are all strong indicators that a leak has sprung. If you notice an inexplicable spike in your water bill, this is also a sign of a potential leak. By identifying these signs, you can begin repairs right away and stop the water damage in its tracks.

Gutter Drainage

A home with weak gutter drainage is an open invitation for water damage to occur. Cleaning your gutters routinely is the best way to prevent them from clogging, which helps to avoid damage to your siding and foundation. Make sure your downspouts expel the gutter water away from your house parallel to the ground. Take a trip to the hardware store for downspout extensions and elbows to make sure that water won’t build up around your home’s foundation, especially if you live in a rainy climate.

Sump Pump

Your sump pump can be your saving grace should a water emergency occur. Sump pumps move excess groundwater away from your home, preventing it from infiltrating your basement or crawl space. They are connected to the Ground Fault Circuit Interrupter (GFCI) electrical outlet, which protects it from electrical shorts. There are two ways to test your sump pump. The first is by pouring in enough water to raise the float. If it’s working properly, the pump should activate and begin removing water from its pit. The other method is to unplug the pump’s power and plug it back in. If it does not turn on, it requires repair or replacement.

More

There are some additional steps you can take to prevent water damage to your home. Inspect your roof to identify any damaged shingles or cracks. While you’re up on the roof, take a look at your chimney. Repair any cracked or broken bricks and consider a chimney cap if you don’t already have one in place.

 

Water damage can be harmful to your home and your finances. Even the smallest leak can snowball into larger problems if neglected. By following the steps to prevent water damage, you’ll know if your home needs repairs before it’s too late. For more advice on preventing damage to your home, read our guides to wildfire and winter storm prevention.

Selling March 12, 2021

The Benefits of a Pre-Listing Inspection

Pre-listing inspections can help sellers better understand the condition of their home before putting it on the market. They can also strengthen a home’s appeal to potential buyers and help to streamline the offer process, which is especially important in competitive markets. However, pre-listing inspections can also open sellers up to added liability. Talk to your Windermere agent to understand if conducting a pre-listing inspection is right for your home.

What is a Home Inspection?

Conducted by a licensed home inspector, a home inspection is a detailed review of the condition of a home and property. Inspectors examine everything from a home’s electrical work and sewage to its heating and cooling systems, searching for any evidence of damage or structural issues that may affect its value. By having your home inspected before you sell, you’ll have the chance to discover whether it needs any repairs or upgrades.

Pre-Listing Inspections

Pre-listing inspections not only help identify repairs, but they can also make the selling process more efficient. A pre-listing inspection discloses a home’s condition to buyers up front and gives them confidence that the seller is being transparent about any possible issues. This can save significant time for both buyers and sellers, especially in competitive markets where there are multiple offers on the table.

Something for sellers to keep in mind is that if a home in a competitive market does not provide a pre-inspection report, buyers may be hesitant to make an offer knowing the time it takes to perform an inspection and the fact that they are likely competing against several other buyers who are willing to waive this step.

The Benefits of a Pre-Listing Inspection

Home inspections give a good baseline of your home’s condition. The information gathered during this process is exactly the kind of in-depth knowledge that buyers want to know when considering placing an offer on a home.

Since buyers will know right away what repairs are needed, they can factor them into their initial offer, as opposed to discovering them during the inspection contingency and getting entangled in negotiations. Being forthcoming about your home also reduces the chances of an offer falling through and the buyer walking away.

An added benefit of a pre-listing inspection is that it helps your real estate agent more accurately price the home and enables them to market it with the knowledge that everything is being presented in the most transparent way possible.

 

If you have any questions about home inspections or any of the steps in the selling process, we’re happy to connect you with a Windermere agent here: 

Buying March 8, 2021

Relocating for Remote Work

As the ubiquity of working from home continues, many homeowners are making the decision to move. Whether the motivation for relocating is to lower the cost of living, to be closer to family, or simply a fresh start, there are various factors to keep in mind when relocating for remote work.

Before You Relocate

Before you make the jump to a new life in a new place, making time for some strategic planning will help ensure your relocation goes as smoothly as possible. A logical first step is to consider the financial impact of your move. Depending on your company’s policy, there may be adjustments to your pay when you relocate. If this is the case, factor in your pay change as you form your relocation budget. Research the cost of living in your new hometown to understand how a compensation adjustment may affect your home search and your lifestyle once you move.

If you are moving out of state, relocating could affect your benefits and your taxes as well. There’s a chance that your employer’s health insurance plan does not offer coverage in the state you’re moving to. Talk to your employer to discuss your options. Before moving out-of-state, find out whether the two states have a reciprocal tax agreement, especially if you’re moving between states that have differing income tax regulations.

Your New Home for Remote Work

Working remote has given homeowners the freedom to choose their desired location, unbound by a work commute, especially if their company has indicated that there are no clear signs of returning to in-person work anytime soon. Knowing your desired work environment will help to tailor your home search. If you’re looking for peace and quiet while you work, explore listings in rural areas. If the hubbub of city life is your idea of a comforting backdrop, direct your attention to metropolitan areas.

For the remote worker, it’s more important than ever that your home accommodates your working needs. As many homeowners have experienced throughout the pandemic, you spend a great deal of time in your home office, so finding the home with the best workspace for you should be a priority. If you desire a private area where you can focus, a home with an open floor plan may not be the best choice. Instead, you may want to look for homes with a separate bonus room or extra bedroom.

Once you’ve moved into your new home, it’s time to put together your home office. Whether your previous home office was a professionally curated environment or a makeshift workspace in the corner of a room, a new home means a fresh start for your remote work. Like many homeowners, by now you’ve likely got a solid grasp on what your ideal home office looks like. Keep those elements alive when you relocate and enjoy productive workdays in your new home.

Buying March 5, 2021

What to Consider Before Buying an Equestrian Property

Buying a horse property is a very different experience from a conventional home purchase. The first and most important step is to work with an experienced equestrian specialist, but there are some additional items you should also consider before buying.

Location, Location, Location

When looking at equestrian properties, one of the most important things to consider is location. You want to make sure the property is near resources you will need like feed and tack stores, local vets, and more. You should also consider everyday needs, such as groceries, gas, shopping, and community amenities.

Knowing Your Needs

Having a clear vision of your specific needs is a very important step when buying an equestrian property. For example,  a casual rider doesn’t require the same capability and organization as a professional equestrian, and similarly, a professional will often need a horse property with strict specifications.

Property Features and Facilities

Something to consider is the soil type on the land you’re looking at. There are 12 different soil types and some of the best for horses are sandy, loamy, organic soils. Not only is this the best option for your animals, but these characteristics will also impact the quality of grasses for pasture growth. Whether you decide to pasture or hay feed, ensure there is adequate hay storage, especially for winter months when, depending on what part of the country you live in, grass may not be as ample.

Other important features to consider:

  • Does it have indoor stalls?
  • Does it have multiple fenced pastures for rotating your livestock? This will ensure the ultimate health of your pasture and the grass that is produced.
  • Are riding trails nearby or will you have to trailer to get to trails?
  • Is there an indoor or outdoor arena? These are important for training, breaking, and even veterinary care, at times.
  • Does it have a secure tack room that rodents cannot penetrate?

Accessibility

Accessibility is another important factor to consider. This includes the convenience of your land but also important resources like water. Each horse will drink approximately 5-10 gallons of water per day; therefore, readily available potable water is vital. The accessibility of your horse property is crucial for bringing in vets, food supplies, and getting around quickly in emergencies. The navigation around your property should be easy to swiftly get from the home to the barn or other facilities. Suitable access to the barn with wide turnaround driveways is essential, which may include grading an additional access road.

Flexibility is Key!

The more specific your property criteria, the more challenging it may be to check everything off your wish list. While it’s important to know what you want from the property, it’s equally important to be open minded and realize that the property may require some extra work to meet all your needs.

Design March 3, 2021

What Is a Craftsman Home?

The Craftsman home has a distinct look and definitive features, whose origins date back to nineteenth-century Britain. Their popularity can be attributed to the simple ideas behind their design and their focus on functional living.

Types of Craftsman Homes

Craftsman Bungalow

For many people, the type of Craftsman home that immediately comes to mind is the Craftsman Bungalow. Bungalows are of modest size, with a covered porch and tapered columns supporting a low-pitched roof. Often, you’ll see these homes with double gable roofs, where the front porch will extend beyond the house. Bungalows are typically one or one-and-a-half stories.

Four Square Craftsman

The Four Square Craftsman is a larger, two-story version of the Bungalow, meant for bigger families. Accordingly, their construction saw a significant increase as soldiers returned from World War I. Their name comes from their design of four rooms on the first and second floors, one in each corner.

Prairie Craftsman

The Prairie Craftsman style can be traced back to renowned American architect Frank Lloyd Wright. Known for their low profile and powerful horizontal lines, Prairie Craftsman homes typically have an open floor plan and harmonize with their surrounding landscape.

Mission Revival

Borrowing greatly from the style of the Prairie Craftsman, the Spanish influences of the Mission Revival make it a unique Craftsman home. Typical features include a stucco exterior, arches, and open interior spaces with terracotta detailing. If someone points out a house as a “Spanish Bungalow,” you’re looking at a Mission Revival Craftsman.

 

Characteristics of Craftsman homes

Exterior

Highly identifiable, Craftsman homes share many commonalities, but seemingly, no two are identical. A covered porch with tapered columns is the first indicator you’re looking at a Craftsman. The roofs are low-pitched with overhanging eaves, giving way to exposed rafters underneath. It’s common for the windows to be double-paned, while the front doors will typically contain their panes in the upper section.

Interior

Known for their open floor plans, ample seating, and plenty of built-in shelving, the inside of a Craftsman home is a comfortable place to be. Reflecting the hard-working nature of their style, you’ll find plenty of handcrafted woodwork, stonemasonry, and brickwork throughout the interior. Fireplaces are often the central feature of Craftsman living rooms.

 

Now that you know a bit more about the Craftsman home and how to identify it, look for examples of these characteristics in your neighborhood. Due to the widespread popularity of the Craftsman style, chances are you won’t have to look too far.

Living March 1, 2021

Simple Bathroom Upgrades

The thought of upgrading a bathroom often brings to mind large-scale renovations, demolition, and hefty price tags. Even projects like replacing a backsplash or repairing tile can be more involved than you might think. However, it’s possible to give your bathroom a makeover without breaking the bank (or your back). Whether you’re looking to just freshen it up or make it feel like your own personal spa, these simple projects can help take your bathroom to the next level.

Upgrade Your Décor

If you want to make a big splash without spending big money, consider upgrading your bathroom with new décor. A fresh coat of paint on the walls or a bold, patterned wallpaper can completely change the character of the space, while accent pieces like a new shower curtain and towel racks can reinforce your color choices. Installing shelving is a simple, functional tactic that gives dimension to your walls. Whether it’s in the shower, above your toilet, or beside your vanity, a shelf can save surface space while helping to tie the room together.

Upgrade Your Tub

Upgrading your tub doesn’t have to mean buying a replacement. Simply refinishing your tub will have it looking brand new and helps you save money. Over time, tubs accumulate cracks, dings, and discoloration due to mold, but refinishing can cure these imperfections right away. Start by removing all hardware from the tub. Sand the whole surface, fill in any cracks or holes with putty or epoxy, then sand them smooth. Apply multiple layers of primer and topcoat, give it a buff, and enjoy your brand-new bathtub.

If refinishing your tub is too much to handle, consider simply touching it up. Fill in any cracks and apply a fresh line of caulking around the surface. After this is done, shop around for new tub hardware to polish off your cost-effective bathtub makeover.

Upgrade Your Vanity

With just a few tweaks, you can turn your vanity area from a mirror with counter space to an impactful centerpiece. Instead of going all out with a new cabinet install, simply replacing your cabinet hardware and drawer pulls can make a big difference. Think of ways your new hardware can reinforce the style of your bathroom. Match them with your shower rod, faucet, and showerhead to make your bathroom more eye-catching.

Your vanity also offers a great opportunity to add some color to your bathroom. Giving it a fresh coat of paint will help to liven up the space at a low cost. For wooden vanities, a re-stain is a great way to give them new life. Start by removing the doors and drawers. Apply wood stripping to all surfaces, then let them sit for the recommended time. Now you can begin to scrape away the old finish. Sand down all surfaces and apply the primer before staining the wood. Once your stain settles in, apply a second coat and your vanity will be good as new.

Finishing Touches

Well-organized surfaces and compartments will help to create serenity in your bathroom. Whether it’s in the shower, the medicine cabinet, or below the vanity, look for multipurpose organizers that help cut down on bathroom clutter and save space. Add in natural elements like bamboo and river rocks to make your bathroom feel like a soothing sanctuary.

 

For more ideas on affordable home makeovers, check out our tips for upgrading your bedroom, home office, and kitchen.

Buying February 24, 2021

The Importance of Pre-Approval

To set yourself up for a smooth and successful home purchase, getting pre-approved is perhaps the most productive first step you can take. It strengthens your buying credibility, informs your home search, and speeds up the closing process.

The Pre-Approval Process 

There is an important distinction to made between two important steps of your mortgage application process: pre-qualification and pre-approval. They are similar in that they both help to inform your financial standing, but there are key differences between the two.

Pre-qualification

Pre-qualification is the first step in your mortgage application process. It will help you to understand the approximate loan amount you can expect to qualify for. You’ll begin by sharing your financial information—debt, income, assets, etc.—with you bank or lender. After reviewing the information, the bank or lender will give a loan estimate. The process is relatively simple, only taking a few business days to process.

Pre-approval

The pre-approval process is more involved than pre-qualification. After submitting a mortgage application, your lender will require all the necessary info to conduct a thorough credit history check and review of your financial health. Getting pre-approved will give you a better idea of how much you can borrow, estimated monthly costs, and what interest rates you can expect on your loans. Mortgage pre-approvals are typically valid for 60 to 90 days.

Once you’re pre-approved, it’s helpful to know which homes you can afford. Use our free Home Monthly Payment Calculator by clicking the button below. With current rates based on national averages and customizable mortgage terms, you can experiment with different values to get an estimate of your monthly payment for any listing price. 

Benefits of Pre-Approval

Credibility

The truth is, each home on the market can only go to one buyer. To maximize the chance that your offer is accepted, sellers need to know that your offer is serious. Getting pre-approved shows that you are financially prepared and, in the event that your offer is accepted, there will be no hold ups in obtaining your mortgage. This assurance is what sellers want to know about their potential buyers, especially in a seller’s market.

Home Search

Not only does pre-approval help to bolster your case as a buyer, but it also Indicates your affordable price range. By knowing your budget, you will be able to hone your home search and start preparing offers, eliminating any potential wasted time looking at houses you can’t afford.

Closing Process

Once your offer is accepted, you’ll be counting down the days to move-in. Unfortunately, the closing process can often drag on, leaving buyers feeling like they’re in post-purchase limbo. Pre-approval will speed up the closing process, since the mortgage approvals have already been taken care of, allowing you to focus on next steps like appraisals and inspections.

When to Get Pre-Approved

Being financially prepared for a home purchase is a solid indicator that you’re ready to go about getting pre-approved, but what does that look like? Buying a house means taking on serious debt, so it’s worth your while to begin forming a long-term strategy for paying off outstanding debt before getting pre-approved. Having adequate savings for a down payment is a sign that you’re ready to make your offer.

For any questions about the home buying process, click the button below to connect with an experienced Windermere Real Estate agent.

 

Market News February 22, 2021

Matthew Gardner Housing & Economic Update: 02/22/2021

 

Hello there and welcome to February’s edition of Mondays with Matthew.

Well, there were a lot of housing-related data releases in the month that are worthy of discussion so let’s get straight to it. I am going to start out with the latest homeownership data that was just released by the Census Bureau.

 

Line graph showing the U.S. Homeownership Rate from 2006 to 2020. In the middle there' a red line showing the long-term average sitting at 65%.

 

Those of you who regularly watch my videos may remember that last year I suggested that the data may have been a little bit suspect – specifically when it came to the second and third quarter ownership rates.

Anyway, for those that didn’t see me address this, or if you have forgotten, I had a concern about the significant spike in the ownership rate that you can see here, and I suggested that it might be suspect because of the way the data was gathered during the early days of COVID. You see, the survey was done via telephone and not in person – as it usually is – because of COVID-19 restrictions and I believe that this actually led to an over-reporting of the real ownership rate.

Following the massive spike we saw in the second quarter, it appears that they have found a way to more accurately gather the data and the rate has now pulled back to a level that, at least for me, passes my “sniff test”! However, even though the share of US households who own their homes did drop, it still remains above the long-term average and stands at a level we haven’t seen since 2012.

 

Line graph showing the U.S. Homeownership rate where the homeowner is under the age of 35 between 2006 and 2020.

Younger Households Continue to Buy

 

And when we drill down into the data and look at the ownership rate for Millennials – I know, I harp on about them a lot – but you can clearly see that they really are becoming homeowners in increasing numbers and the current rate of 38.5% is a share not seen since 2011 and I expect to see this number grow over the next several years.

Demographics are driving them into homeownership as they are all getting older, many now starting families and they want to own a home. I would also add that I would not be surprised to see them shift toward ownership at even faster rates if they are allowed to work from home which may lead more of them to leave expensive cities and move to markets where it’s more affordable to buy.

 

Bar graph showing age cohorts and their share of borrowing per quarter from quarter 2 2019 to quarter 4 2020. Ages 30-39 and 40-49 are consistently the tallest bars in each quarter sitting between 25 and 30 pecrent.

 

And to give you a different perspective on these younger buyers, last week the New York Fed released their report on household debt that included numbers regarding the share of mortgage borrowing by age. Well, you can see in the above graph, that younger buyers continue to account for a major share of total mortgage borrowing and are borrowing pretty substantial amounts too.

In fact, in 2020 Millennial and Gen Z households borrowed over $1.3 trillion to buy homes and that’s over 35% of total new mortgage debt on a dollar basis. Although I think it’s great to see younger households grow as homeowners and the overall homeownership rate rising, all is not as I would like to see it – especially when we break down the homeownership rate by ethnicity.

 

Bar graph showing homeownership rates for each year from 2016 to 2020 organized by ethnicity. White and non-Hispanic groups are consistently the tallest bars hitting about 70% each year. Black populations range from 41.6% in 2016 to 45.4% in 2020. Asian populations own at rates around 55-60 percent. Hispanic populations homeownership rates slowly raise from 45.9% in 2016 to 50.1% in 2020.

 

And the above report, again from the Census Bureau, showed that although the share of white households who own their homes ticked up it also showed some significant disparities with the ownership rate for black households – although up a little – still well below the levels seen with other ethnicities.

This is a long-term, and systemic issue, that needs to be addressed.

The bottom line is that the ownership rate for Black families was 25 percentage points lower than that for white families in 2020 and was even higher in the 4th quarter of the year when it almost hit 30%.

I am pleased that the Biden administration does have plans to try to address this inequality by looking to expand the ability of the Federal Housing Authority to provide mortgages and this might, if it gets approved, start to address this very significant issue. Of course, nothing will be fixed immediately, but it is a major concern and sincerely hope that, over time, this discrepancy will be addressed.

 

Table showing the population growth in 12 metro areas, ranked by absolute change. At the top is Dallas-Fort Worth-Arilington, TX at 18.5% change, Seattle-Tacoma-Bellevue, WA is ranked 7th with a 15.4% change. Denver-Aurora-Lakewood, CO is ranked 10 at 16.2% change.

 

We had a very significant data drop – again from the Census Bureau – who provided their population estimates for 2019.  The data may be old, but it is interesting all the same. This table shows the markets with the greatest increase in population between 2010 and 2019.

I will be honest with you that I was not surprised to see Texas lead the way, but it was interesting to see the greater Seattle region, Denver, and Riverside, California all make it close to the top of the list.

 

Table showing the population growth in 16 Metro areas between 2010 and 2019, ranked by percentage change. Bend, Oregon is ranked #1 with 25.3% change, Boise Idaho is ranked 2nd with 21.3% change. Fort Collins Colorado and Denver-Auroroa-Lakewood Colorado are ranked 3rd and 4th with 18.8% and 16.2% change respectively. Las Vegas-Paradise Nevada is ranked 5th with 16.1% change. Seattle-Bellevue-Kent, Washington is ranked 6th at 15.9% change and Olympia-Lacey-Tumwater Washington is ranked 6th with 14.8% change. Colorado Springs Colorado increased their population by 14.6% ranking them 7th in this table. Ogden-Clearfeild, Utah is next with a 14% change and Tacoma Washington is 10th at 12.9% change.

 

And because a couple of markets that were close to the top of the list are of interest to Windermere (as we have offices in these areas) I thought that it would be interesting to look at how some of the other markets where we have a presence are doing and the numbers are equally as impressive.

Of course, markets are of different sizes, so to balance this out, the data here shows growth in percentage terms and the numbers are again very impressive.

 

Table showing the top 16 metro areas in the Western U.S. with the most population growth between 2017 nd 2019. Greeley Colorado is the top metro area with 6.1% population growth. Bend, Oregon is 2nd at 5.9%, Boise Idaho is 3rd with 5.6%, Coeur d'Alene Idaho i 4th with 5.3% and Idaho Falls is 5th at 5.3%.

 

And when I focused on 2-year growth, well it’s again very impressive with significant increases seen in Colorado, several Idaho markets, Las Vegas, Western Washington, and Utah.

And I would also add that Greeley was number one here, but also ranked 4th nationally. Bend came in 7th, Boise 9th, and Coeur d’Alene 10th. Yes, I know that this data is old – it’s an issue I fight with every day – but I still see it as being meaningful.

Of course, I will be very interested to see the 2020 numbers as they will give us an indication as to how COVID-19 really is impacting where we choose to live, but we will have to wait for that!

I did read a very interesting report that was recently published by North American Moving Services where they looked at where households who moved between states moved to last year. Of course, it is not a perfect analysis, but it does give us an idea as to not just where people moved to, but where they moved from, in 2020.

 

Map of the U.S with states highlights red for states with significant outbound population and blue for inbound population. White marks states with balanced population in and out. In the West, California is highlighted red for outbound population. Idaho, Colorado and Arizona are blue for inbound population.

 

Unsurprisingly, the largest out-migration states included California – where people were mainly moving to Texas and Idaho – but there was also significant out-migration from Illinois, New York, and New Jersey.

As far as where most people migrated to, in addition to Idaho, movers were also attracted to Arizona, Colorado, Tennessee, and North and South Carolina.

Interestingly, Northeastern states make up four out of the seven states with the most outbound moves, and none of them make the top eight for inbound moves. Number one was New York which saw significant out-migration. Number 2 was New Jersey and Maryland was just beaten into 4th place by California.

But as far as the western US is concerned, – other than California – people are consistently moving in, and not out.

Also supported by the census numbers we just discussed, the number of households relocating to Idaho has been significant for the past five years and I would add that Colorado has also been in the top-10, or very close to it for the past five years.

 

Two line graphs, on the left shows the V-shaped recover of Building Permits 2019-2021. On the right shows the v-shaped recovery of Home Starts Jun 2019-Jan 2021.

 

Last week we saw the latest data on building permits and starts and although there was a softening in the number of starts in January, permit activity continues to grow significantly with single-family permits up by a massive 3.8% month over month, and 30% higher than seen a year ago. This is good news!

As far as the weakness of starts is concerned, this was primarily due to some builders who remain worried about increasing lumber and other construction material costs, as well as concerns over delays in obtaining building materials because of COVID-19 supply chain issues.

I would add that although single-family starts did drop, the number of homes under construction continued to trend higher.  And for those of you who might be wondering how new starts can drop but the number of homes being built can increase, it’s purely terminology. You see, a housing “start” is where a foundation has been poured, but it doesn’t mean that vertical construction has started.

In fact, the number of homes under construction in January was up by 1.1% on the month and is over 16% higher than seen a year ago.

 

Two line graphs showing the National Association of Home Builders Market Index. On the left shows the NAHB U.S. Houing Market Index showing a v-shaped recover between Dec 2019 and Feb 2021. On the right shows the Housing MArekt Index for Single Family Sales, Expectations, and Traffic. They all follow the same V-shaped trend with traffic lower than Single Family Sales and Expectations.

 

Last week we also got the February take on builder confidence and it was interesting to see it ticking back up as strong buyer demand helped to offset the supply chain challenges and surging lumber prices.

On the right, you will see the three components of the index which showed the gauge of current sales conditions holding steady at 90, while the component measuring sales expectations in the next six months fell three points to 80 but the gauge charting traffic of prospective buyers rising by four points to 72.

Although all are off their peak that was seen last fall, all are above 50 meaning that more builders find the market favorable than not.

So, this was a pretty mixed bag, but the Market Index numbers are more current than the permit and starts report so I will be interested to see what the February housing starts looks like – it wouldn’t surprise me to see a slight uptick in the number.

And finally, the January US housing sales numbers were released by the National Association of Realtors and, well, they were – again – record breaking!

 

line graph showing the inventory of homes for sale in the U.S. showing a downward trend from January 2021 at the height of above 2.5, and January 21 at the low very close to 1.0.

Inventory levels are still woefully low.

 

On the supply side, any hopes that we might have seen the number of listings rise in January were dashed with total inventory coming in at a measly 1.04 million homes for sale – that’s down 25.7% year-over-year and a new record low in absolute terms, but also a record percentage drop between January of 2020 and January of 2021.

Breaking it down, the number of single-family homes on the market remained static at 880,000 units, but the number of condominium listings dropped a little to 164,000 listings – that’s down from 179,000 in December.

Given the very low number of listings – and sales still very robust – there was just 1.9-months of supply – matching the all-time low we saw in December.

 

Bar graph showing the average offers for homes sold in the U.S. January 2019 is highlighted at 2.1 average, January 2020 is highlighted at 2.3, and January 2021 is highlighted at 3.7.

 

I always find this data set fascinating – and another record has been broken. For every sale that was agreed in January there were an average of 3.7 offers! That’s a massive increase from the old record of 3.5 set just the month before.

But even with record-low inventory, the number of sales remains very impressive.

 

Line graph showing the v-shaped recover of existing home sales in the U.S. with the low of the V at May 2020.

Sales would have been even higher if there were just more homes to buy!

 

Total sales of single-family and multifamily units came in at an annual rate of 6.69 million units in January. That is 0.6% higher than seen in December, and up by a massive 23.7% from a year ago. Sales of single-family homes rose by 23% to an annual rate of 5.93 million units while sales of condos rose by 28.8% to an annual rate of 760,000 units.

Now, some of you may be wondering how this can be? How can sales rise when there are so few homes for sale? And that is a very reasonable question.

You see, the number of homes for sale is the total available on the last day of the month, but sales can still increase because if a home is listed for sale and goes under contract in the same month, well it isn’t included in the inventory numbers for that month.

And in January, properties averaged just 21 days on the market with 71% of them selling within the month.

 

Bar graph of First Time Buyers at 32 and 33% in January 2020 and January 2021. Sales to Investors are at 17 adn 15 percent, All-Cash sales are at 21 and 19 percent, and distressed sales are 2 and 1 percent.

Still significant demand from first-time buyers and second home buyers.

 

And when we look at the details it was pleasing to see the share of homes that sold to first-time buyers up a little. Sales to investors – and these numbers include many second-home buyers – pulled back a little, but again, not a concern.

And finally, no surprises here – with many homes in forbearance, the share of distressed sales was just 1 percent.

 

2 graphs side by side. On the left is a line graph for the Media Sale Price of Existing Homes with the line growing from January 20 to May 20, a dip from May to June 2020, and then rising into a curve to a downward trend from October 2020 to January 2021.

 

The median sale price in January was $303,900 and that’s up by 14.1% year-over-year. Now, before you get worried about the fact that it appears that prices have plateaued, it’s actually not surprising as it’s mainly a function of seasonality, as well as the limited choice of homes to buy.

Sales of homes in the US priced below $100,000 were down 28% year over year, while sales of homes priced between $500,000 and $750,000 were up 53% year over year, and sales of million-dollar-plus homes were up by 76.7% from a year ago. Geographically, price growth was most robust in the west where they were up by 16.1% year over year. Also, $1 million-plus sales accounted for over 11% of all sales in the western US too.

As I worked through the January numbers, it remains very clear to me that housing remains a shining light as we move through this pandemic period, and I expect this to continue with 2021 being another very good year for the housing market, and home sales rising even more as a vaccine gets more broadly distributed and we reopen more of the country.

So, there you have it. My take on the January housing-related data releases.