Market News • October 31, 2023

Q3 2023 Eastern Washington Real Estate Market Update

by Windermere Economics

Q3 2023 Eastern Washington Real Estate Market Trends

The following analysis of select counties of the Eastern Washington real estate market is provided by Windermere Real Estate. 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

Year over year, Eastern Washington gained 4,515 jobs, representing a significant slowdown from the pace of growth during the post-pandemic recovery. On a percentage basis, the region’s job market grew by only .9%. The fastest growing county was Spokane, where employment rose 2.2%. This was followed by Walla Walla (+1.4%) and Benton (+1.1%) counties. Employment growth was negative in the rest of the markets contained in this report.

Unadjusted for seasonality, the regional unemployment rate was 4.2%, which is down from 5.2% during the same period in 2022. When seasonally adjusted, the jobless rate was 4.4%, which was down from 5.5% at the same time in 2022.

Eastern Washington Home Sales

❱ In the third quarter of 2023, 2,647 homes sold. This was 21.2% lower than in the third quarter of 2022 but was up 1.8% compared to the second quarter of this year.

❱ The modest increase in sales may be attributable to the 35% increase in the number of homes for sale. Even more impressive was that sales grew in the face of significantly higher mortgage rates.

❱ Year over year, sales fell across the region except in Lincoln County, where they were flat. However, compared to the second quarter of this year, sales were higher in Spokane, Benton, and Franklin counties.

❱ Pending sales fell 6.8%, which suggests that sales were likely pulled forward due to rising interest rates and that closings in the final quarter of 2023 may also be down.

A graph showing the annual change in home sales by county in Eastern Washington from Q3 2022 to Q3 2023. Lincoln had 0% change, while Whitman had the largest change at -38.1%. Spokane is in the middle with a 20% decrease.

Eastern Washington Home Prices

❱ Year over year, the average home price in Eastern Washington rose .8% to $466,007. Prices rose 3.4% compared to the second quarter of 2023.

❱ Of note was that median list prices rose 4.4% between the second and third quarters of this year. Sellers still appear to be confident in the value of their homes despite mortgage rates that are at their highest levels in over two decades.

❱ Prices rose in five of the counties contained in this report but fell in two when compared to the same period in 2022. The same was true for quarterly growth, with average prices rising in every county other than Whitman and Walla Walla.

❱ Though home price growth was positive, it has certainly slowed. Some of this may be attributable to increased supply levels, but I believe that mortgage rates are acting as the most significant headwind. I expect price growth to slow further as we enter the final quarter of the year, and there’s a possibility it will turn negative across the region.

A map showing the real estate home prices percentage changes for various counties in Eastern Washington. Different colors correspond to different tiers of percentage change. Grant County had a change of more than 5% and is represented in the corresponding navy color. Franklin and Walla Walla were in the 1.5-4.9% range. Lincoln and Spokane were in the -2% to 1.4% range. Benton County was in -5.5% to -2.1% range. Whitman was in the -5.6% to -9% range and is represented in the light grey color on the map.

A bar graph showing the annual change in home sale prices by county in Eastern Washington from Q3 2022 to Q3 2023. Lincoln had the lowest change at 0.3% and Whitman had the biggest decrease at -9% while Grant had the greatest increase at 5.2 percent.

Mortgage Rates

Mortgage rates continued trending higher in the third quarter of 2023 and are now at levels we have not seen since the fall of 2000. Mortgage rates are tied to the interest rate (yield) on 10-year treasuries, and they move in the opposite direction of the economy. Unfortunately for mortgage rates, the economy remains relatively buoyant, and though inflation is down significantly from its high, it is still elevated. These major factors and many minor ones are pushing Treasury yields higher, which is pushing mortgage rates up. Given the current position of the Federal Reserve, which intends to keep rates “higher for longer,” it is unlikely that home buyers will get much reprieve when it comes to borrowing costs any time soon.

With such a persistently positive economy, I have had to revise my forecast yet again. I now believe rates will hold at current levels before starting to trend down in the spring of next year.

A bar graph showing the mortgage rates from Q3 2021 to the present, as well as Matthew Gardner's forecasted mortgage rates through Q3 2024. In Q3 2023 Mortgage Rates hit 7.04% and Matthew Gardner predicts rates will decrease steadily over the next 4 quarters.

Eastern Washington Days on Market

❱ The average time it took to sell a home in Eastern Washington in the third quarter of 2023 was 37 days, which is 13 more days than during the same period of 2022.

❱ Compared to the second quarter of this year, average days on market fell in Grant, Lincoln, Franklin, and Whitman counties but rose in the rest of the markets. In aggregate, market time was down by one day.

❱ All counties saw market time rise compared to the same period in 2022.

❱ Buyers were still actively looking during the quarter, but they were a little choosier than they have been due to there being more homes for sale.

A bar graph showing the days on market by county for homes in Eastern Washington in Q3 2023. Spokane and Franklin Counties had the lowest DOM at 23, while Lincoln County had the highest at 57. Walla Walla is in the middle of the chart at 41 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 market appears to be in a period of transition. Although sales were still happening, the pace of growth during the third quarter was modest. Moreover, listing inventory has risen significantly, which favors home buyers who are faced with decades-high mortgage rates.

Home sale prices were higher and asking prices were up significantly, which is a little counterintuitive given where mortgage rates are sitting. Sellers appear to still be confident.

The market is clearly in a state of flux and will likely continue to be in the coming
months. Buyers are hoping that mortgage rates have peaked, and may even come down by the new year, which is leading to a lot of fence-sitters.

A speedometer graph indicating the market in Eastern Washington for Q3 2023. The meter is solidly in the “balanced market” portion pointing to the right half of the section toward “Seller’s market.”

As such, the needle moves back
a little from sellers, but it remains in the
balanced quadrant, as neither side has an
overriding advantage.

Market News • October 30, 2023

Q3 2023 Colorado Real Estate Market Update

by Windermere Economics

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

Regional Economic Overview

The pace of job gains in Colorado picked up in the third quarter. The state added 42,700 new jobs over the past year, representing a growth rate of 1.5%. That said, growth has certainly slowed from what we saw over the past two years. The Denver and Colorado Springs metro areas saw jobs rise by only .1%; the Boulder metro area saw jobs rise .2%; Greeley rose .6%; and the Fort Collins metro area grew 1.7%.

The state unemployment rate in August was 3.1%, up from 2.6% in the third quarter of 2022. By metro area, jobless rates ranged from a low of 3.2% in Boulder to a high of 3.8% in the Colorado Springs metropolitan area.

Colorado Home Sales

❱ In the third quarter of 2023, 8,597 homes sold, representing a drop of 20.9% from the same period in 2022. Sales were down 11.2% from the second quarter of this year.

❱ Year over year, sales fell across all the markets covered by this report except for Clear Creek County. Compared to the second quarter of this year, sales fell in every county except Clear Creek and Gilpin.

❱ The year-over-year drop in sales is not a surprise given that mortgage rates are significantly higher today and inventory is lower. What is of some concern is that inventory was up more than 36% from the second quarter, yet sales still fell. It appears that higher mortgage rates are now having an impact on the market.

❱ Pending sales, which are an indicator of future closings, fell 14.3% from the second quarter, suggesting that sales may be lackluster in the final quarter of the year.

A graph showing the annual change in home sales by county in Colorado from Q3 2022 to Q3 2023. El Paso County had the least drastic change at -9.7%, while Gilpin had the largest change at -41.3%. Clear Creek is the only county with an increase, sitting at the top of the bar graph with 20.5 percent.

Colorado Home Prices

❱ The average home sale price rose 1.7% from the same period in 2022 to $665,725. Prices were 1.1% lower than in the second quarter of this year.

❱ Compared to the second quarter, prices rose in Adams, Larimer, Gilpin, and El Paso counties but fell in the balance of the market areas.

❱ Year over year, prices rose in eight counties and fell in four. Clear Creek County saw a significant drop but since very few home sales happen there, it’s not uncommon for prices to experience significant swings.

❱ List prices are a leading indicator that I follow closely, and given that they were lower in all markets except Weld County compared to the second quarter of this year, it appears that sellers have started reacting to higher mortgage rates. This will likely lead home prices to fall a little further as we move toward the end of the year.

A map showing the real estate home prices percentage changes for various counties in Colorado. Different colors correspond to different tiers of percentage change. Larimer, Arapahoe, and Park had percentage changes above 3% and are represented in the corresponding navy color. Weld, Boulder, Gilpin, Adams, Jefferson, and El Paso were in the -.5% to 2.9% range. Denver and Douglas were in the -4% to -.06%. Clear Creek was in the -11% to -7.9% range and is represented in the light grey color on the map.

A bar graph showing the annual change in home sale prices by county in Colorado from Q3 2022 to Q3 2023. Boulder had the lowest change at -0.3% and Clear Creek had the biggest decrease at 10.7% while Larimer and Arapahoe had the greatest increases at 5.7% and 5.5% respectively.

Mortgage Rates

With such a persistently positive economy, I have had to revise my forecast yet again. I now believe rates will hold at current levels before starting to trend down in the spring of next year.

Colorado Days on Market

❱ The average time it took to sell a home in the markets contained in this report rose four days compared to the same period in 2022.

❱ The length of time it took to sell a home compared to the second quarter of this year fell in Boulder, Clear Creek, Gilpin, and Park counties, but rose across the rest of the market areas.

❱ It took an average of 25 days to sell a home in the region, which is five fewer days than in the second quarter of 2023.

❱ Despite having more choice in the market, buyers picked up the pace a little in the quarter. It remains to be seen whether this will continue given stubbornly high financing costs.

A bar graph showing the days on market by county for homes in Colorado in Q3 2023. Gilpin County had the lowest DOM at 18, while Park County had the highest at 44. Denver and Douglas are in the middle of the chart at 24 and 25 days respectively.

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.

Job growth is still significantly slower than it has been over the past two years. A slowing economy and decades-high mortgage rates are a recipe for a sluggish housing market, but Colorado appears to be rather resilient.

That said, with rising inventories, slowing sales, and lower list prices, it can hardly be described as a traditional seller’s market. In last quarter’s market update it was said that sellers appeared to have the edge over buyers, but it’s now clear that the market is starting to respond to higher mortgage rates.

A speedometer graph indicating the market in Colorado for Q3 2023. The meter is solidly in the “balanced market” portion pointing to the right half of the section toward “Seller’s market.”

Although the market conditions described above favor home buyers, they’re not totally in the driver’s seat. As such, the needle moved into the balanced quadrant. As we move through the winter and into the spring of 2024, we hope that we will have more clarity on the direction of the housing market.

Market News • October 30, 2023

Q3 2023 Southern California Real Estate Market Update

by Windermere Economics

Q3 2023 Southern California Real Estate Market Trends

The following analysis of select counties of the Southern California real estate market is provided by Windermere Real Estate. We hope that this information may assist you with making better-informed real estate decisions. For further information about the housing market in your area, please don’t hesitate to contact your Windermere Real Estate agent.

Regional Economic Overview

The Southern California market areas contained in this report have been experiencing a fairly significant slowdown in job growth. That said, the region has added 164,700 jobs since the third quarter of 2022, representing a growth rate of 1.7%. The end of the writers’ strike will add a little boost to the Los Angeles area, which has still added over 89,000 jobs over the past 12 months. Orange County employment has grown by 34,100 jobs; San Diego County is higher by 31,400; and employment was up 9,700 jobs in Riverside.

The region’s unemployment rate in August was 5.2%, which was up from 4.2% in the third quarter of 2022. The lowest jobless rate was in San Diego County, where it was 4.3%. The highest rate was in Los Angeles County, where 5.8% of the workforce was without a job.

Southern California Home Sales

❱ In the third quarter of 2023, 32,398 homes sold, which was 16% lower than in the third quarter of 2022 and down 8.6% compared to the second quarter of this year.

❱ Pending home sales, which are an indicator of future closings, were 8.2% lower than in the second quarter, suggesting that closing numbers may be down in the final quarter of 2023.

❱ Compared to the third quarter of 2022, sales fell the most in San Bernardino County, though there was a significant decline in all markets. The quarter-over-quarter decline was disconcerting given that the number of homes for sale rose more than 14%. Rising mortgage rates are clearly taking their toll on the market.

❱ It’s discouraging that there were fewer sales despite rising inventory levels. Mortgage rates are definitely hobbling the market and until they start to drop, I think things will continue to be lackluster. List prices have started to pull back in response, as sellers realize that the market is not what it once was.

A graph showing the annual change in home sales by county in Southern California from Q3 2022 to Q3 2023. Orange County had the least drastic change at -12.1%, while San Bernardino had the largest change at -18.9%. San Diego and Riverside County are in the middle at -17.1 percent.

Southern California Home Prices

❱ Home sale prices were up 5.7% from the third quarter of 2022 and were 3.8% higher than in the second quarter of 2023.

❱ Affordability continues to be a major constraint in the region, which is being magnified by persistently high mortgage rates. Prices are holding, but growth has slowed significantly.

❱ Year over year, prices rose in all the markets contained in this report, with significant increases in San Diego and Orange counties. Compared to the second quarter of 2023, Riverside County saw prices fall by 5.8%, but they rose in the balance of the market areas.

❱ I expect price growth in Southern California to hold at or near the current pace. However, it’s very possible that home sale prices could drop a little if list prices fall further.

A map showing the real estate home prices percentage changes for various counties in Southern California. Different colors correspond to different tiers of percentage change. San Diego had percentage change above 5% and is represented in the corresponding navy color. Los Angeles and San Bernardino were in the 2-2.9% range. Riverside was in the -1-1.9% range and is represented in the light grey color on the map.

A bar graph showing the annual change in home sale prices by county in Southern California from Q3 2022 to Q3 2023. Riverside County is represented by the at the bottom at 1.2% increase. San Diego is at the top with a 11.1% increase.

Mortgage Rates

With such a persistently positive economy, I have had to revise my forecast yet again. I now believe rates will hold at current levels before starting to trend down in the spring of next year.

Southern California Days on Market

❱ In the third quarter of 2023, the average time it took to sell a home in the region was 27 days. This was up two days compared to the same period of 2022.

❱ Compared to the second quarter of 2023, market time fell six days and was lower across all counties covered by this report.

❱ Homes in San Diego County continue to sell at a faster rate than other markets in the region, but it took two fewer days to sell a home than it did in the third quarter of 2022. Orange County saw days on market fall by one day compared to the third quarter of 2022, but market time rose everywhere else.

❱ Homebuyers saw rising inventories, and those who chose to make offers did so relatively quickly, even though the total number of sales fell. If the number of homes for sale continues to rise, it may also cause market time to rise as buyers become more selective.

A bar graph showing the days on market by county for homes in Southern California in Q3 2023. San Diego County had the lowest DOM at 19, while Riverside County had the highest at 35. Los Angeles is in the middle at 26 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.

With inventory levels rising, and sales and asking prices falling, it would be easy to suggest that home buyers have the upper hand. However, home prices are still rising, albeit slowly, which tends to favor sellers.

The quandary really comes down to the fact that while inventory levels have risen, they remain remarkably low compared to historic averages. It’s also likely that the buyers who are still in the market are looking to move more from necessity than desire, which makes sense given today’s high mortgage rates.

A speedometer graph indicating a light seller's market in Southern California for Q3 2023. The meter is solidly in the “balanced market” portion of the chart leaning closer to “seller’s market” than the center of “balanced market.”

That has put us in a very unusual situation. Although sellers are being a little more competitive, as evidenced by the drop in list prices, they have not totally capitulated. Taking all these factors into consideration, the needle moves back to the middle of the speedometer. We simply don’t see either side as having the upper hand at the present time.

Market News • October 27, 2023

Q3 2023 Central and Southern Oregon Real Estate Market Update

by Windermere Economics

Q3 2023 Central & Southern Oregon Real Estate Market Trends

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

Regional Economic Overview

The Central and Southern Oregon counties covered by this report added 1,180 new jobs over the past 12 months, which represents an annual growth rate of .5%. Deschutes, Jefferson, and Klamath counties had solid job gains, but Jackson, Crook, and Josephine counties saw employment levels fall.

The unemployment rate across the region was 4.2%, down from 5% in the third quarter of 2022. By county, the lowest jobless rate was in Bend, where 3.7% of the labor force was jobless. The highest rate was in Crook County, where 5.4% of the labor force is still without a job.

Central and Southern Oregon Home Sales

❱ In the third quarter of 2023, 2,137 homes sold, representing a drop of 15.8% compared to the same period in 2022. However, sales were 7.2% higher than in the second quarter of this year.

❱ Compared to the second quarter of 2023, sales rose in all counties other than Crook and Jefferson, where they fell 1.2% and 10.2%, respectively.

❱ Sales fell across the board in all counties compared to the third quarter of 2022, with significant declines in all markets except Crook and Josephine counties.

❱ A possible explanation for the growth in sales between the second and third quarters could be that buyers saw mortgage rates starting to rise, which spurred sales. Given that we do not expect rates to fall in the fourth quarter, it will be interesting to see if sales continue to grow.

A graph showing the annual change in home sales by county in Central and Southern Oregon from Q3 2022 to Q3 2023. Josephine County had the least drastic change at -0.7%, while Jefferson County had the largest change at -27.9%. Klamath County is in the middle at -16.6 percent.

Central and Southern Oregon Home Prices

❱ The average home sale price in the region fell .4% year over year to $599,486. Prices were 1.8% higher than in the second quarter of 2023.

❱ Compared to the second quarter of this year, average prices rose in Deschutes, Jackson, Jefferson, and Josephine counties but fell in Crook and Klamath counties.

❱ Prices in every county other than Jefferson fell year over year. Crook County saw the greatest drop.

❱ The median listing price of a home rose 3.6% compared to the second quarter of this year. All markets except Jackson County raised asking prices.

A map showing the real estate home prices percentage changes for various counties in Central and Southern Oregon. Different colors correspond to different tiers of percentage change. Jefferson had percentage change above 5% and is represented in the corresponding navy color. Deschutes, Jackson, and Josephine were in the -6% to -0.6% range. Klamath was in the -11.5% to -6.1% range. Crook County was in the -17% to -11.6% range and is represented in the light grey color on the map.

A bar graph showing the annual change in home sale prices by county in Central and Southern Oregon from Q3 2022 to Q3 2023. Jackson County is represented by the bar second from the top with a -0.6% change. Jefferson is on the top of the bar graph showing an 10.5% increase and Crook is at the bottom of the graph with a 17% decrease in sale price.

Mortgage Rates

With such a persistently positive economy, I have had to revise my forecast yet again. I now believe rates will hold at current levels before starting to trend down in the spring of next year.

Central and Southern Oregon Days on Market

❱ The average time it took to sell a home in the region rose 21 days compared to the third quarter of 2022. Market time in the third quarter matched what we saw in the second quarter of this year.

❱ The average time it took to sell a home in the third quarter of 2023 was 53 days.

❱ All counties saw market time rise compared to the same period in 2022. Although the average days on market was static between the second and third quarters, this was due to a significant increase in market time in Jefferson County, which offset lower days on market across the balance of the region.

❱ The market appears to still be seeing demand from buyers, but this may not continue if mortgage rates stay at current levels.

A bar graph showing the days on market by county for homes in Central and Southern Oregon in Q3 2023. Deschutes County had the lowest DOM at 33, while Jefferson County had the highest at 67. Klamath and Josephine Counties were in the middle at 52 and 58 days respectively.

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.

Higher sales as well as higher list and sale prices suggest that the market still favors
sellers. That said, it’s unclear whether the market can continue to allow prices to rise
much more given that mortgage rates are unlikely to fall meaningfully in the near future.

A speedometer graph indicating a light seller's market in Central and Southern Oregon for Q3 2023. The meter sits on the “seller’s market” side of the border next to “balanced market.”

As such, the needle stays in the same position as in the second quarter: favoring sellers, but only marginally.

Market News • October 27, 2023

Q3 2023 Northwest Oregon and Southwest Washington Real Estate Market Update

by Windermere Economics

Q3 2023 Oregon & Southwest Washington Real Estate Market Trends

The following analysis of select counties of the Northwest Oregon and Southwest Washington real estate market is provided by Windermere Real Estate. 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

Employment growth in the Oregon counties covered by this report continues to slow. With 13,370 jobs added over the last 12 months, the growth rate was only .9%. Non-agricultural employment in Northwest Oregon is still down 11,690 jobs compared to its pre-COVID 2020 peak. That said, the jobless rate pulled back to 3.3% from 4.1% in the third quarter of 2022.

In the Southwest Washington market areas, the pace of job gains picked up a little. The areas covered by this report added 7,997 jobs over the past year, which represented an annual growth rate of 3.4%. Unemployment was 4.2%, which is up from the 5.2% level we saw in August 2022.

Northwest Oregon and Southwest Washington Home Sales

❱ In the third quarter of 2023, 10,279 homes sold. This was down 21% from the same period in 2022 and was 1.3% lower than in the second quarter of this year.

❱ Compared to the second quarter of this year, sales fell in eight counties but rose in ten. Klickitat and Hood River counties had significant growth; however, sales fell more than 10% in Lincoln, Skamania, and Wasco counties.

❱ Sales fell in every county compared to the third quarter of 2022, with significant declines in every county other than Klickitat.

❱ It appears as if higher mortgage rates are now starting to impact the market. Additionally, inventory levels did not rise in any of the counties in this report, which could also be a factor in slowing sales activity.

A graph showing the annual change in home sales by county in Northwest Oregon and Southwest Washington from Q3 2022 to Q3 2023. Klickitat WA had the least drastic change at -7.4%, while Skamania WA had the largest change at -36%. Areas like Clark and Lincoln were in the middle at just over -20%.

Northwest Oregon and Southwest Washington Home Prices

❱ The average price that a home sold for in the region fell .1% year over year and was essentially flat compared to the second quarter of 2023.

❱ On average, the median listing price of a home rose a modest 1.9% compared to the second quarter of this year, suggesting that home sellers are starting to be realistic about the impact higher mortgage rates are having on buyers.

❱ Average sale prices rose in 10 counties compared to the third quarter of 2022, while eight saw prices fall. Wasco and Clatsop counties experienced fairly significant declines in prices, but these are relatively small markets where significant swings can occur. The same can be said when looking at markets where prices rose, with prices in Klickitat County up more than 10%.

❱ Price growth appears to have stalled out, which isn’t surprising given that mortgage rates were above 7% for almost the entire quarter. I expect home prices to remain fairly static for the fourth quarter as buyers and sellers wait to see where mortgage rates are headed.

A map showing the real estate home prices percentage changes for various counties in Northwest Oregon and Southwest Washington. Different colors correspond to different tiers of percentage change. Klickitat had percentage change above 6% and is represented in the corresponding navy color. Cowlitz, Skamania, Clackamas, Lane, Yamhill, Clark, Benton, Maroon, and Hood River Counties were in the 0-5.9% range. Polk, Washington, Linn, Multnomah, Lincoln, and Columbia were in the -6% to -0.1% range. Clatsop and Wasco Counties were in the -18 to -12.1% range and were represented in the light grey color on the map.

A bar graph showing the annual change in home sale prices by county in Northwest Oregon and Southwest Washington from Q3 2022 to Q3 2023. Hood River County is represented by the bar in the middle with the least change at 0.1% increase. Klickitat WA is on the top of the bar graph showing an 11% increase and Wasco is at the bottom of the graph with a 17.3% decrease in sale price.

Mortgage Rates

With such a persistently positive economy, I have had to revise my forecast yet again. I now believe rates will hold at current levels before starting to trend down in the spring of next year.

Northwest Oregon and Southwest Washington Days on Market

❱ The average time it took to sell a home in the third quarter of 2023 was 49 days.

❱ The average time it took to sell a home in the region rose eight days compared to the same period in 2022, but it took seven fewer days for a home to sell compared to the second quarter of 2023.

❱ Except for Benton and Skamania Counties, all counties in this report saw the length of time it took for a home to sell rise compared to the third quarter of 2022. Compared to the second quarter of 2023, market time fell in 13 counties. Days on market rose in Clackamas, Hood River, Marion, and Multnomah counties.

❱ The numbers seem to suggest that buyers are moving relatively swiftly when they do find a home that they want, even in the face of higher mortgage rates.

A bar graph showing the days on market by county for homes in Northwest Oregon and Southwest Washington in Q3 2023. Washington County had the lowest DOM at 22, while Polk County had the highest at 88. Skamania and Columbia Counties were in the middle at 33 and 37 days respectively.

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.

Although modestly lower home sales could suggest that buyers are in a better position when it comes to negotiating for a home, list prices, sale prices, and shorter market time favor home sellers.

In the second quarter market update, it was suggested that the market was returning to one that favors sellers and moved the needle accordingly. This is still the case, but mortgage rates remain a significant obstacle. Therefore the needle stays in the same position as last quarter: very slightly favoring sellers, but not by much.

A speedometer graph indicating a light seller's market in Northwest Oregon and Southwest Washington for Q3 2023. The meter sits on the “balanced market” side of the border next to “seller’s market.”

Market News • October 26, 2023

Q3 2023 Western Washington Real Estate Market Update

by Windermere Economics

Q3 2023 Western Washington Real Estate Market Trends

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

Regional Economic Overview

The pace of job growth continues to slow in Western Washington, as the region added only 21,907 new positions over the past 12 months. This represented a growth rate of 1.4%, which was the lowest pace of new jobs added since the pandemic ended.

The regional unemployment rate in August was 5.8%, which was marginally below the 6% rate we saw in the same quarter in 2022. A few smaller counties lost jobs over the past 12 months while King County’s employment levels rose a meager .4%, mainly due to job losses in the technology sector. I’ve said before that I’m not convinced that the U.S. is going to enter a recession; I still stand by that theory. Slowing job growth does not necessarily need to be a precursor to a recession, but I expect that we will see lackluster growth until next spring at the earliest.

Western Washington Home Sales

❱ In the third quarter of 2023, 14,970 homes sold. This was down 22% from the third quarter of 2022 and 1% lower than in the second quarter of this year.

❱ Sales fell even as the average number of homes for sale increased 29.5% from the second quarter. This is clearly a sign that significantly higher mortgage rates are having an impact on the market.

❱ Sales fell in all counties except San Juan compared to the third quarter of 2022. They were up in 9 of the 14 counties covered in this report compared to the second quarter of 2023. San Juan, Mason, Grays Harbor, and Whatcom counties saw significant increases.

❱ Pending sales fell 6% compared to the second quarter of this year, suggesting that closings in the upcoming quarter may be lackluster unless mortgage rates fall, which I think is highly unlikely.

A graph showing the annual change in home sales by county in Western Washington from Q3 2022 to Q3 2023. San Juan had the least drastic change at 1.3%, while Kitsap had the largest change at -28.7%. Areas like Skagit and King were in the middle at -20.4% and -21% respectively.

Western Washington Home Prices

❱ Prices rose 2.8% compared to the third quarter of 2022 and were .6% higher than in the second quarter of this year. The average home sale price was $776,205.

❱ Compared to the second quarter of this year, sale prices were higher in all counties except Grays Harbor (-.5%), Kitsap (-1.5%), Clallam (-1.6%), Whatcom (-2.6%), and Skagit (-3%).

❱ Compared to the prior year, the pace of price growth slowed in the third quarter. This wasn’t too surprising given that the market was coming off record high
prices in the summer of 2022. But what was surprising was that prices rose over the previous quarter despite the fact that mortgage rates were above 7% for almost the entire quarter.

❱ I don’t expect prices to move far from current levels in the coming months, and they likely won’t rise again until mortgage rates start to fall. When prices do rise, I anticipate that the pace of growth will be far more modest than we have become accustomed to.

A map showing the real estate home prices percentage changes for various counties in Western Washington. Different colors correspond to different tiers of percentage change. Island and San Juan had percentage changes above 7% and are represented in the corresponding navy color. Lewis and Kitsap Counties were in the 4-6.9% range, King, Jefferson, Thurston, Grays Harbor, and Snohomish were in the 1-3.9% range. Clallam and Pierce were in the -2-0.9% range and Mason, Whatcom, and Skagit were between -5% and -2.1% represented in the light grey color on the map.

A bar graph showing the annual change in home sale prices by county in Western Washington from Q3 2022 to Q3 2023. Pierce County saw the least change with 0.2% increase, and Island saw the biggest increase at 11.8%. Skagit County's home prices decreased 5%.

Mortgage Rates

With such a persistently positive economy, I have had to revise my forecast yet again. I now believe rates will hold at current levels before starting to trend down in the spring of next year.

Western Washington Days on Market

❱ It took an average of 32 days for homes to sell in the third quarter of 2023. This was 8 more days than in the same quarter of 2022, but 3 fewer days compared to the second quarter of this year.

❱ Snohomish and King counties were the tightest markets in Western Washington, with homes taking an average of only 19 days to find a buyer. Homes for sale in San Juan County took the longest time to find a buyer (57 days).

❱ All counties except Snohomish saw average days on market rise from the same period in 2022. Market time fell in 9 of the 14 counties compared to the prior quarter.

❱ The greatest fall in market time compared to the second quarter was in San Juan County, where market time fell 23 days.

A bar graph showing the days on market by county for homes in Western Washington in Q3 2023. Snohomish County had the lowest DOM at 19, while San Juan had the highest at 57. Skagit and Mason Counties were in the middle at around 30 days on market.

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.

Although it was good that listing activity rose in the third quarter, it still remains well below levels that can be considered normal. This is unlikely to change anytime soon given that over 86% of Washington homeowners with mortgages have an interest rate below 5% and more than a quarter have rates at or below 3%. There is little incentive for them to sell if they don’t have to.

More germane is the disconnect between what homeowners believe their homes are worth and what buyers can afford with mortgage rates in the mid-7% range. Most sellers appear to be getting their asking prices, or very close to it, which reflects their confidence in the market. However, home buyers are being squeezed by multi-decade high borrowing costs.

It is all quite a quandary. However, taking all the factors into consideration, sellers still have the upper hand but not enough to move the needle from the position it was in last quarter

A speedometer graph indicating a light seller's market in Western Washington for Q3 2023. The meter sits in “seller’s market” but is close to the border of “balanced market.”

Given all the factors discussed above, the needle stays in the same position as the last quarter. The market still heavily favors sellers, but if rates rise much further, headwinds will likely increase.

Selling • October 25, 2023

Should I Tell Buyers My House is Haunted?

by David Chan

A street view of a run-down, haunted Victorian home in Saint John, New Brunswick.

This time of year is full of spooky moments. If you’re selling a home that has a history of paranormal activity, it could scare buyers away, or intrigue them. Haunted houses are a great attraction for thrill seekers, but buying one is a completely different matter. There’s one central question that haunts sellers who find themselves in this situation: Do I have to disclose that my house is haunted?

Selling a Haunted House

All sellers have to provide disclosure forms to illuminate issues with the property and the home listed for sale. Regulations vary by state, with some having certain language requiring that sellers disclose material facts that could affect the value and/or desirability of the home, while others do not have these requirements and caveat emptor or “buyer beware” applies instead. So, where does paranormal activity fit in? Again, it depends on where you live, but many states do not require such disclosures.

However, there have been legal cases where buyers have sued sellers for neglecting to mention the fact that the house they purchased was haunted. In the classic 1991 case Stambovsky v. Ackley, new homeowner Jeffrey Stambovsky won a lawsuit against the seller for not disclosing the home’s haunted history. In this case, stories about the previous owner’s experiences with paranormal activity in the home had been published in Reader’s Digest and the local newspaper, establishing the home as one with a spooky reputation. Though this case had a ripple effect in the housing industry, you should still check with your agent regarding the seller disclosure laws in your local market.

Although the laws around haunted disclosures are a bit murky, if a buyer asks about the history of the home, you as the seller have a duty to be honest. State laws even vary when it comes to disclosing recent deaths in the home, but if a buyer asks you specifically about whether such an event occurred, withholding that information from them could come back to haunt you, especially during negotiations.

How to Negotiate as a Seller

This time of year is full of ghostly tales, and there’s nothing more thrilling than that moment of fright we experience during a spooky story. But unfortunately, failing to disclose the fact that your house is haunted could send chills up your spine and cause the buyer to back out of the deal. As always, lean on your agent’s expertise for the best way to handle your unique situation. You never know, your haunted home may generate added interest to buyers who have an affinity for the paranormal!

For more tips on selling your home from list to closing, visit our comprehensive selling guide:

Featured Image Source: Getty Images – Image Credit: liquidfog

Market News • October 23, 2023

U.S. Housing Market 2023: Updated Analysis

by Afshan Adil

Windermere Chief Economist Matthew Gardner gives an updated analysis of the U.S. housing market in 2023, using data released by The National Association of REALTORS® on listing activity, home sales, price growth, and more.

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.

U.S. 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. The National Association of REALTORS® released their data on the U.S. housing market in August, and it contained a few things which I found interesting and wanted to share with you.

U.S. Housing Market 2023: Home Prices, Demographics, and More

Listing Activity

A triple line graph showing the inventory of homes for sale in the U.S. from 2000 to 2023, U.S. single-family homes for sale from 2013 to 2023, and U.S. condo/co-op homes for sale from 2013 to 2023. All three graphs show a downward trend from the mid-2010s to 2023.

As you can clearly see here, the number of homes for sale remains at close to historic lows. When adjusted for seasonality, there were just 1.03 million single-family and condominium homes for sale in the month of August, and that’s down 8.3% from a year ago and the second lowest level in 2023. When adjusted for seasonal variations, there were just over 911,000 single-family homes for sale in the month, that’s 15% lower than a year ago and 36% below August of 2019. And the condominium market is not faring any better with just over 123,000 units available for purchase, listing activity was down year-over-year by just over 9%.

Homes for Sale August 2023

A bar graph showing homes for sale in August from 2000 to 2023. Supply topped out in 2006 and 2007 at around nearly 4 million, before declining steadily to 2023, where supply is just over 1 million.

And to give you a little different perspective, this chart shows you the total number of units for sale in the month of August going back more than 20 years and I think it gives a pretty good indication as to how tight the U.S. housing market really is.

Now, we’ve talked before about the reasons why supply is so limited, and the blame is almost totally attributable to mortgage rates with sellers remarkably reluctant to move because that would mean losing the historically low mortgage rate that they currently benefit from. And as the old saying goes, “you can’t buy what’s not for sale,” and this is certainly true in the housing market today.

U.S. Housing Market 2023: Sales Activity

A triple line graph showing existing U.S. home sales from 2000 to 2023, U.S. single-family home sales from 2013 to 2023, and U.S. condo/co-op home sales from 2013 to 2023. All three graphs show a spike between 2020 and 2022 before declining sharply in 2023.

With such limited choice in the marketplace, it’s unsurprising to see home sales having plummeted following the pandemic induced surge we saw in 2021. At an annual sales rate of 4.04 million units, that is only 40,000 more than the low seen this January and we are now holding at levels we haven’t seen since 2010. Interestingly, single-family sales did see a little jump at the start of this year, but they have since pulled back—likely a function of rising financing costs, which were getting close to 7% in June.

But the condominium market, while certainly down significantly, appears to be somewhat more resilient. I find this interesting as we have not seen any palpable increase in listing activity for multifamily units.

Home Sale Prices Off All-Time High

A triple line graph showing the median sale price of U.S. Existing Homes from 2000 to 2023, the median sale price of single-family homes from 2013 to 2023, Median sale price of multifamily homes 2013 to 2023. All three show a gradual increase from 2013 to 2022, a peak in 2022, with the 2023 numbers being just below that peak.

When prices started to fall in the summer of 2022, many expected to see them continue to plunge in a manner similar to that seen following 2007 collapse, but that has certainly not been the case. Sale prices have rebounded and remain remarkably resilient—especially given significantly higher financing costs.

Although we did see a small drop in home prices between June and July of this year, U.S. home prices are only 1.6% below their 2022 peak; they’re up 3.9% year over year; and up by 11.1% from the start of 2023.

Single-family home prices paint a similar picture with prices down by 1.8% from peak; but up 3.7% year over year, and up 11.2% from the start of the year. Interestingly, sale prices in the Northeast were actually 3.5% higher in August than their 2022 peak. And condominium prices are just 0.1% below the high seen in June of last year. Prices are now up 6.2% year over year and are 11.6% higher than we saw at the end of 2022.

Now, of course the data shown here is unlikely to reflect the recent surge in mortgage rates so it will be interesting to see what impact that has not just on sales but sale prices when the September and October data is published.

My intuition suggests that—even with mortgage rates where they are today—as long as they don’t move significantly higher, prices at the national level are unlikely to collapse. But I do see sales volumes pulling back further as listing activity remains very constrained.

Price Growth vs Payment Growth

A double line graph showing price growth vs mortgage payment from Jan 2016 to July 2023. In 2023, mortgage payment growth sits at 26.5% while price growth is at 3.9%.

This chart shows a different way to look at the impact that mortgage rates are having on the market. The dark blue line shows year-over-year home price growth, and the light blue line shows the 12-month change in average mortgage payments.

Although we did see that annual growth in mortgage payments fall to just 10% in June of this year—the first time we have seen that since 2021—it has subsequently jumped back up. This means that a buyer of a median priced house in the U.S. is faced with payments that are 26 and a half percent higher than they were 12 months ago. At the same time, home price growth has stalled.

As I’ve mentioned in several past videos, I find it unlikely that inventory levels will increase significantly in 2023, and I also believe that supply will be constrained next year as well as rates remain at elevated levels.

As we know, it is this lack of inventory that has helped to support home prices; however, there is a breaking point. 10-year bond yields are holding at multi-year highs and do not appear to be thinking of pulling back at any time soon—especially given new bond issuances that the country is going bring to market in order to address our burgeoning debt levels.

And it’s because of this that I now expect to see rates remaining higher for longer, and the question then becomes how much tolerance will buyers have if mortgage rates hold where they are today or if they head closer to 8%.

Although I am not expecting this to happen, it is possible. And if it does, then sales will fall further and the underpinning of price stability will certainly be eroded. And there you have it. As always, I’d love to hear your thoughts on this subject so feel free to leave your comments below. Until next month, stay safe out there and I’ll see you soon. Bye now.

To see the latest housing data for your area, visit our quarterly Market Updates page.

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.

More • October 20, 2023

Windermere Offices Support Communities Through Donations & Volunteerism

by David Chan

A group of staff from Windermere Utah at the Out of the Darkness Community Walk to Benefit the American Foundation for Suicide Prevention.

Windermere Offices Donate to Local Organizations

The true essence of the Windermere Foundation’s work is to make enduring community connections . The relationship between Windermere Columbia River Gorge and SafeSpace Children’s Advocacy Center of the Gorge is a shining example of that mission. Last year, someone close to the Windermere Gorge family experienced an unfortunate and devastating situation. SafeSpace came in with open arms and resources to support all members of the family, and their care and dedication to the community struck a positive chord with Windermere Gorge owner Kim Salvesen. Feeling inspired to sing their praises, Salvesen hosted a podcast episode to help bring attention and donations to the business. She followed that up by making SafeSpace the beneficiary of her Windermere golf tournament in 2022. Sadly, Kim Salvesen passed away earlier this year. In her memory and her support of the organization, the Gorge office is donating $10,000 of Windermere Foundation funds to sponsor a room at SafeSpace’s new care facility. It will be named “The Kim Salvesen Room.”

The Windermere Coast offices in Oregon know that reading is the gateway to learning and opportunity for young children, a belief shared by local organization SMART Reading. For the past 13 years, they have supported SMART with their donations and volunteerism to help them continue to provide resources and education to local kids. This August, the offices were proud to present a $1,000 check to go toward their educational programs.

Five women hold up a check for $1,000 from the Windermere Oregon Coast offices to local organization SMART Reading.

Pictured L to R: Deborah Marion, Pam Ackley, Melissa Eddy, Stacy Goodwin, Sharon Benson | Image Source: Pam Ackley

For years, the Windermere Spokane offices have hosted a socks and shoes drive for local low-income schoolchildren. Over time, the event has picked up steam and continued to grow. For the local Windermere staff, seeing the smiles on the kids’ faces when they get to pick out a brand-new pair of shoes is the best part. This year, the Spokane offices put $6,484.49 toward the drive, providing 148 kids with new socks and shoes to go into the school year. It’s fulfilling for the Windermere folks to know that these kids children will walk into their new classrooms proudly.

A man holds up a pair of socks at a socks and shoes donation drive for local low-income schoolchildren in Spokane, WA.

Pictured: Terry McKanna | Image Source: Emma Reeves

This summer, Windermere Utah continued their tradition of supporting the local Make-A-Wish Foundation. Their support goes back several years to the point where now, Make-A-Wish is an ingrained part of our Windermere community in Utah. Windermere agent Cathy Sneyd has been volunteering with Make-A-Wish for years and is passionate about helping children live the best lives possible. She started the relationship several years ago with the idea of granting the wishes of local children experiencing critical illnesses. This has become a staple of Windermere Utah’s giving. This year, they made a $5,000 donation, which is enough to fund one full wish for a child in the Make-A-Wish program.

A man and a woman hold up a check for $5,000 from the Windermere Utah office, presented to the Make-A-Wish Foundation.

Pictured L to R: Summer Ehrmann and Grady Kohler | Image Source: Alisa Scott

This year, Windermere Gig Harbor made a lasting connection with a local organization. The NW Furniture Bank’s mission to help restore hope, dignity, and stability in the community by recycling donated furniture makes people feel at home, a notion that the Windermere Gig Harbor folks understand well.

They transformed their office parking lot into a quick and easy one-way drive-through for friends, neighbors, and clients to donate. NW Furniture Bank parked their box trucks on-site and the Windermere team got to work unloading, loading, passing out donation receipts, and cheering visitors on. They also presented the NW Furniture Bank with a $2,000 check of Windermere Foundation funds. Jeremy Simler, Executive Director of NW Furniture Bank said that the event “far surpassed their expectations” and that they “would love to make it an annual event.”

A group of Windermere agents and staff from Gig Harbor, WA present a $2,000 check to NW Furniture Bank | Image Source: Claudia Gentzkow

Other notable contributions from throughout the network included a $5,000 donation from the Windermere Sun River office in Oregon to Neighborhood Impact, a housing assistance program based out of Bend dedicated to strengthening the Central Oregon community through homeownership opportunities, and the Camano Island office’s backpack drive that donated over $800 worth of backpacks to local schoolchildren in need.

A group of staff from Windermere Camano Island hold up backpacks at a backpack drive for local schoolchildren.

Pictured L to R: Denise McDonald, Jerry Evans, Doug Nemo, Jill Vail, Dianna Pence | Image Source: Dianna Pence

The Salt Lake Parade of Homes brings awareness to homelessness in Utah by gathering community members from throughout the region. The Windermere Utah office was involved in this year’s parade, trading off shifts at the tiny home known as the HomeAid Collaboration Cottage. This project helped further HomeAid’s mission to build safe housing for the local homeless population by introducing visitors to their work. The cottage is one of 10 units in a planned village to provide affordable housing for those transitioning out of chronic homelessness.

Windermere Utah also recently gathered for an annual tradition: The Out of the Darkness Community Walk to Benefit the American Foundation for Suicide Prevention. This event is near and dear to the Windermere community, particularly agent Lisa Jungemann. Here’s what she had to say about this year’s effort:

“Windermere Real Estate Utah is proud to be a sponsor for the fourth year in a row. They have backed me and my team for several years. Our local chapter of the Windermere Foundation is focused on kid-related organizations in need of help, and we all know that suicide has wreaked havoc on our youth. We are very proud to be here and to step up our efforts by having our agents volunteer to help this year.”

The Utah office also donated $5,000, which will go toward bringing AFSP’s Interactive Screening Program to a college or university. The online program allows mental health services at institutions of higher education to provide a safe and confidential way for individuals to take screenings for mental health conditions and anonymously communicate with program counselors to receive support.

A group of staff from Windermere Utah at the Out of the Darkness Community Walk to Benefit the American Foundation for Suicide Prevention | Image Source: Alisa Scott

To learn more about the Windermere Foundation, visit windermerefoundation.com. To help support programs in your community, click the button below.

Featured Image Source: Alisa Scott, Windermere Utah

Design • October 18, 2023

9 Options to Remove, Hide or Play Down a Popcorn Ceiling

by Guest Author

A popcorn ceiling in a house with a chandelier hanging from the middle of the ceiling.

Don’t love your popcorn ceiling? You’re not the only one stuck with some unwanted stucco overhead. There are many options for moving on from it, but not all of them are equally effective—or equally easy. To help you decide how to address your popcorn problem, here are some top ways to remove, cover or distract from stucco ceilings.

A bathroom with a popcorn ceiling and decorative tile.

The Kitchen Source, Houzz

History of the Popcorn Ceiling

From the 1950s to the 1980s, so-called popcorn ceilings (with their prickly stucco texture resembling the popular movie theater snack) were a major architectural staple in America and many other nations. Eventually the asbestos commonly used in the application was found to be toxic, and demand severely dropped. However, a textured ceiling does have its advantages. It reduces echoes and hides ceiling plane imperfections, which is why it’s still used (in asbestos-free formulations) today, as shown in the bathroom here. Despite its practical uses, popcorn ceilings, for many people, are considered an unfashionable eyesore, especially with contemporary demand for “clean lines.” Also, popcorn ceilings can gather dust and be difficult to clean or repaint, which means they don’t always age beautifully. But don’t worry. You’ve got plenty of options.

5 Creative Ways to Dress Up a Ceiling

A living room with a popcorn ceiling and traditional interior design with blue tile vases and lamps and a modern glass coffee table.

Gia Interior Design, Houzz

Ceiling Scraping

The good news is a sprayed-on stucco coating can be scraped off to reveal the original ceiling surface, a process usually known simply as “ceiling scraping” or “stucco removal.” A specialist typically does this because (here’s the bad news) the process can be somewhat costly at around $1 to $2 per square foot. It’s a messy, labor-intensive process, hence the high cost.

Also, in some cases, the results may not achieve the crispness of a ceiling that had not been stuccoed in the first place, especially if the stucco has been painted over, which greatly complicates the removal process. Even in the best cases the exposed ceiling will typically require at least some smoothing and patching to create a more even and crisp final product, which makes this an extensive and relatively challenging undertaking for DIYers.

While ceiling stucco no longer uses asbestos in modern applications, homes built before 1980 (or even in the early ’80s while old stucco products were still stocked) may include asbestos. If there is any doubt, a professional asbestos test should be conducted before any resurfacing, which could release heavily toxic dust.

Ceiling Replacement

One of the simplest alternatives to scraping is removing and replacing the ceiling drywall. Alternately, you can have the ceiling layered over with new drywall. The drop in the ceiling plane will often be minimal, and this method can encase asbestos rather than releasing it into the air, delaying the issue, if not resolving it. Re-drywalling a ceiling will cost closer to $4 to $6 per square foot, but the results will be more predictable.

Covering Stucco

Speaking of layering, there are many other materials besides drywall that can be installed over a popcorn ceiling, many of which add extra personality to a room.

Beadboard

Classic beadboard makes a charming ceiling treatment, and not just in a rustic cottage. Painted white, the subtle texture of beadboard paneling works well in traditional spaces or modern ones, adding a layer of depth in an unconventional place. Panels of beadboard often cost less than 50 cents per square foot, making this a very affordable option, especially for handy DIYers. For a contemporary twist, try finishing the ceiling in a gloss paint, as shown here. This slow-drying finish will take more labor to complete, but the results have incredible depth and elegance.

Spinnaker Development, Houzz

Warm Wood

If you’re not into painted beadboard, try multitonal wood for a rich, inviting treatment that’s great for a den or sitting area. Contrast it with white molding and crossbeams, or let the wood speak for itself. This approach works well with rustic decor, as a gentle touch in a modernist space or somewhere in between.

Bravehart Design Build, Houzz

Pressed Tin

Whether you use true pressed tin tiles or a fiber substitute, this classic ceiling look recalls speak-easy style and makes a great cover-up for a kitchen ceiling. You can paint it white or pale gray to keep the look breezy, or an inky dark hue (like charcoal or navy) for moody atmosphere. Or choose a metallic finish for extra sheen and drama. Many companies now provide faux pressed tin and other panel systems specifically designed to cover stuccoed or damaged ceilings. They typically cost $1 to $5 per square foot. To have a professional install these materials for you, expect to pay several hundred dollars extra.

The Morson Collection, Houzz

Other Options

Lighting: Sometimes the best way to deal with ceiling stucco is to de-emphasize it, and smart lighting choices can go a long way toward that. Notice how the lighting hitting this stucco wall emphasizes the texture. Great when the effect is desired. To avoid highlighting unwanted ceiling stucco, choose lights that aim downward, rather than upward or outward, so light is cast on beautiful surfaces below and not on your ceiling itself. Try pot lights, or semi-flush-mounts (or pendants) with an opaque shade to aim light downward rather than multiple directions.
Paint: Ultimately, the best way to deal with a popcorn ceiling may simply be to learn to live with it. Think about it: How many people do you know who live with popcorn ceilings? I bet you can’t specifically remember who has it or doesn’t, because unless a ceiling is highlighted, we don’t typically spend much time looking at it.

Try painting the walls and the ceiling the same color to blur the lines between them, and then create drama at ground level to draw the eye down. You’ll soon forget about your stucco altogether.

By Yanic Simard. For more information , visit Houzz: How to Decorate Your Ceiling

Featured Image Source: Getty Images | Image Credit: ucpage