2019 Economic Forecast

2019 Economic and Housing Forecast 
By Matthew Gardner, Chief Economist, Windermere Real Estate 

What a year it has been for both for the U.S. economy and the national housing market. After several years of above-average economic and home price growth, 2018 marked the start of a slowdown in the residential real estate market. As the year comes to a close, it’s time for me to dust off my crystal ball to see what we can expect in 2019.

The U.S. Economy

Despite the turbulence that the ongoing trade wars with China are causing, I still expect the U.S. economy to have one more year of relatively solid growth before we likely enter a recession in 2020. Yes, it’s the dreaded “R” word, but before you panic, there are some things to bear in mind.

Firstly, any cyclical downturn will not be driven by housing. Although it is almost impossible to predict exactly what will be the “straw that breaks the camel’s back”, I believe it will likely be caused by one of the following three things: an ongoing trade war, the Federal Reserve raising interest rates too quickly, or excessive corporate debt levels. That said, we still have another year of solid growth ahead of us, so I think it’s more important to focus on 2019 for now.

The U.S. Housing Market

Existing Home Sales
This paper is being written well before the year-end numbers come out, but I expect 2018 home sales will be about 3.5% lower than the prior year. Sales started to slow last spring as we breached affordability limits and more homes came on the market. In 2019, I anticipate that home sales will rebound modestly and rise by 1.9% to a little over 5.4 million units.

Existing Home Prices
We will likely end 2018 with a median home price of about $260,000 – up 5.4% from 2017. In 2019 I expect prices to continue rising, but at a slower rate as we move toward a more balanced housing market. I’m forecasting the median home price to increase by 4.4% as rising mortgage rates continue to act as a headwind to home price growth.

New Home Sales
In a somewhat similar manner to existing home sales, new home sales started to slow in the spring of 2018, but the overall trend has been positive since 2011. I expect that to continue in 2019 with sales increasing by 6.9% to 695,000 units – the highest level seen since 2007.

That being said, the level of new construction remains well below the long-term average. Builders continue to struggle with land, labor, and material costs, and this is an issue that is not likely to be solved in 2019. Furthermore, these constraints are forcing developers to primarily build higher-priced homes, which does little to meet the substantial demand by first-time buyers.

Mortgage Rates
In last year’s forecast I suggested that 5% interest rates would be a 2019 story, not a 2018 story. This prediction has proven accurate with the average 30-year conforming rates measured at 4.87% in November, and highly unlikely to breach the 5% barrier before the end of the year.

In 2019, I expect interest rates to continue trending higher, but we may see periods of modest contraction or levelling. We will likely end the year with the 30-year fixed rate at around 5.7%, which means that 6% interest rates are more apt to be a 2020 story.

I also believe that non-conforming (or jumbo) rates will remain remarkably competitive. Banks appear to be comfortable with the risk and ultimately, the return, that this product offers, so expect jumbo loan yields to track conforming loans quite closely.

Conclusions
There are still voices out there that seem to suggest the housing market is headed for calamity and that another housing bubble is forming, or in some cases, is already deflating.  In all the data that I review, I just don’t see this happening. Credit quality for new mortgage holders remains very high and the median down payment (as a percentage of home price) is at its highest level since 2004.

That is not to say that there aren’t several markets around the country that are overpriced, but just because a market is overvalued, does not mean that a bubble is in place. It simply means that forward price growth in these markets will be lower to allow income levels to rise sufficiently.

Finally, if there is a big story for 2019, I believe it will be the ongoing resurgence of first-time buyers. While these buyers face challenges regarding student debt and the ability to save for a down payment, they are definitely on the comeback and likely to purchase more homes next year than any other buyer demographic.

 

Posted on December 18, 2018 at 6:22 pm
Marysville Office | Category: Uncategorized

Holiday decor

The holiday season is here and for many of us, that means it’s time to deck the halls. If you’re looking for some inspiration and a place to start, here are some ideas that are certain to get everyone in the spirit.

 

A Tree of a Different Color

Photo Credit: Left – Lushome, Center – HGTV, Right – Christmas365

For many, there’s nothing more quintessential during the holidays than a Christmas tree decked out in ornaments. But acquiring a tree can be challenging and expensive. Moreover, housing a tree consumes time and space. That’s why we love the idea of an alternative tree. There are plenty of options you can buy online or create yourself using things you probably already have around the house. And if you miss the smell of a real tree, try a scented candle or essential oils.

 

The Season of Lights

Photo Credit: Amara

There’s something perpetually charming about twinkling lights. Whether you’re wrapping them around your front porch or adorning your fireplace mantle, extra lights deliver a warm glow during the holiday season. Getting creative and adding light to otherwise unexpected places, including bookcases, around headboards, or even in glassware, is a great way to keep everything looking merry and bright.

 

Act Natural

Photo Credit: Better Homes & Gardens

Not all holiday climates are built alike. If you’re expecting a white Christmas, you’re probably used to pine trees and winter brush, but for those of you located in regions where the mercury doesn’t drop, sprinkling in natural elements can transform your home into a wintery oasis. Holly and pine needles add a traditional touch, or consider a wreath of olive branches with some sleigh bells interspersed.

 

Bring it All Home at Dinner

Photo Credit: Amara

When decorating for the holidays, don’t forget the table! A sprig of holly adds a festive touch to your place settings. And instead of the traditional centerpiece, try placing candles in glass vases or mason jars to give your tablescape that added touch of holiday pizzazz.

Posted on December 11, 2018 at 7:09 pm
Marysville Office | Category: Uncategorized

Moving on

It is with mixed emotions that I am selling my family homestead, after 62 years of family ownership. My parents had this house built in 1956, moving in when I was one. I lived there until moving to Hawaii in 1978 (except for college fraternity life at the UW). Mom passed in 2011 and Dad moved into a retirement home in 2013, so we rented the home for the past 5 ½ years. But with Dad’s recent passing, it is time to move on and give it (not literally) to a family that will hopefully enjoy living there as much as we did.

There are so many memories with so many friends in my youth who spent countless hours at my house. As I walked through it the other day, I could picture Mike Larson eating dinner with us at the kitchen table & laughing at my brother (David Peterson) and me going at it; Thomas Bosket & I laying on the floor in front of the stereo in the living room, endlessly listening to The Monkees between 1966-67; Guy Willett trying to teach Tom Bosket & I how to ‘fast’ dance in that same living room before a Jr. High sock hop; Thomas Rohde & I kicking a paper football with our fingers in the living room, seeing who could break our own distance world record; Jim Donnelson, Dan Durland & I playing chicken on the basement pool table…and somehow not breaking our fingers; skipping high school assemblies with Bart Wiersma & Dave Espedal to play billiards at the house, which was only a few blocks away; Norris Sturgeon & I staying up all night watching Monster movies downstairs while in grade school; learning my chops on the basement ping pong table with my Dad & brother (which turned into 2 Jr. High School championships for me); laying on the steps to the basement with the door closed, talking to Janet Walker Pearson for hours while in 9th grade; sucking on my Mom’s unlit cigarettes with Eric Swensen in the 6th grade (both of us turned green and had to put our heads in the toilet; playing WAR (card game) all summer long with John J Otness, while eating ginger snaps & drinking milk; and of course often running home during high school tennis practice with Tom Rohde to eat ice cream in the kitchen, while the rest of the team was running the cross country course to get in shape.

This home was a great place to grow up, with a great location in the town of Arlington. It is sad to see it go, but it is time. After all, it is just a house.

Posted on July 20, 2018 at 8:34 pm
Marysville Office | Category: Uncategorized

February Home Maintenance Checklist

It’s February – winter’s not over yet, but spring is right around the corner. If you have cabin fever from being inside, cleaning and freshening up your house can help you get through this last month of winter and be ready to get outside when spring arrives.

Once you check these items off your to-do list, you’ll be able to relax by the fire with a good book and enjoy the last few weeks of winter.

  • Mop entryway floors. Clean your floors regularly to prevent damage from road salt and melting snow. Place a basket of old towels near the door to wipe up water and salt as soon as it is tracked inside.
  • Rotate or flip your mattress. Extend the life and comfort of your mattress by flipping or rotating it. At the same time, vacuum box springs and the mattress to eliminate allergy causing dust- mites.
  • Organize your laundry room. Scrape dried-on laundry detergent from the ridges in your washer. Throw away laundry products you never use and replace damaged sorting bins.
  • Clean out your spice cabinet. Throw away expired spices and other seasonings, which may not only lose their taste, but could harbor mold and bacteria.
  • Sanitize hand-held devices. Prevent germs that cause the spread of colds and the flu by disinfecting your phone, remote controls, tablets, as well as your door and cabinet knobs.
  • Dust blinds, ceiling fans and fixtures. Wipe down or use a feather duster to remove the dirt that builds up on blinds, ceiling fans, light fixtures other small electronics.
  • Add color to your table. Treat yourself to some fresh flowers to add cheer to your kitchen table while waiting for spring blooms to make their first appearance.
  • Plan your summer vacation. Reserve your vacation home now to get the best selection of available properties. Start your planning today at Long & Foster’s Vacation Rentals website.
Posted on February 27, 2018 at 7:16 pm
Marysville Office | Category: Uncategorized

8 Laundry Room Updates to Fit Any Budget

Hoping to transform your tired laundry room into a sparkling clean, efficiently working space, but without the major costs of a full remodel? By not changing the layout or adding square feet, you can bring costs down while still making meaningful changes to your space. Use this guide to help you decide what to prioritize and what to put on the back burner, and give your laundry room an update that works with your space — whether your budget is $100 or $10,000.

 

Laundry 1Sharon Barrett Interiors, original photo on Houzz

 

If your budget is about $100: Clean, declutter and upgrade laundry baskets that have seen better days. It’s worth spending a little more for hampers that can stand up to heavy use.

Also think about which features would be most helpful to have, such as hampers on wheels, triple-sorter bins or stackable baskets that can tuck out of the way when you’re not using them.

 

Laundry 2David Charlez Designs, original photo on Houzz

 

If your budget is about $300: Clean up, get hampers and then give the walls a fresh coat of paint. A cheerful color can make your laundry room feel brand-new without breaking the budget — especially if you’re willing to DIY.

 

If your budget is about $500: Get hampers, fresh paint and then a soft new rug. You’ll appreciate the dose of color as much as the softness underfoot. If moisture is a concern (for example, if your laundry room is in the basement), you may want to choose a sturdy indoor-outdoor rug.

 

Laundry 3ACQUIRE, original photo on Houzz

 

If your budget is about $700: Get hampers, fresh paint and a new rug, and then swap out the lighting.

Ample lighting is important when you’re trying to check laundry for stains and read labels, so pay attention to the recommended wattage of any light fixture you are considering — anything less than 75 watts may not shed enough light (especially if it’s the sole light source in the room).

 

Laundry 4CVI Design – Carly Visser, original photo on Houzz

 

If your budget is about $1,200: Tackle all the above, and then treat your space to some bonus storage and extras, like an ironing station, a drying rack or open shelves. If your laundry room is small, look for space-saving designs like folding drying racks, retractable clotheslines and wall-mounted ironing boards.

 

If your budget is about $3,500: What’s next? New appliances! A new washer and dryer can work more efficiently than older models, operate more quietly and get your clothes cleaner.

If you’re going from top-loading to front-loading machines, consider adding a countertop above to hold supplies and act as a surface for folding. Not in the market for a new set? Give your old machines a thorough cleaning to keep them running well (and smelling fresh).

 

Laundry 5colorTHEORY Boston, original photo on Houzz

 

If your budget is about $5,000: If you have more room in the budget, think about replacing the laundry room sink and faucet. If you’re hoping to avoid additional installation costs, choose a new model that is the same size as the old one. If you don’t already have a sink in the laundry room, adding one will require more extensive help from a plumber, and costs will be significantly more.

 

Related: Get a Sturdy Utility Sink for the Laundry Room

 

Laundry 6Dina Bandman Interiors, original photo on Houzz

 

If your budget is about $10,000: So you have the hampers, paint, rug, lighting, storage, appliances and sink. If you still have room in the budget, think about tackling a bigger project like installing a new tile floor or a pet-washing station. Your furry friend may not thank you but sure will look cute sitting in that tub.

Posted on February 14, 2018 at 9:51 pm
Marysville Office | Category: Uncategorized

Empty Nesters: Remodel or Sell?

 

 

Your kids have moved out and now you’re living in a big house with way more space than you need. You have two choices – remodel your existing home or move. Here are some things to consider about each option.

 

Choice No. 1: Remodel your existing home to better fit your current needs.

  • Remodeling gives you lots of options, but some choices can reduce the value of your home. You can combine two bedrooms into a master suite or change another bedroom into a spa area. But reducing the number of bedrooms can dramatically decrease the value of your house when you go to sell, making it much less desirable to a typical buyer with a family.
  • The ROI on remodeling is generally poor. You should remodel because it’s something that makes your home more appealing for you, not because you want to increase the value of your home. According to a recent study, on average you’ll recoup just 64 percent of a remodeling project’s investment when you go to sell.
  • Remodeling is stressful. Living in a construction zone is no fun, and an extensive remodel may mean that you have to move out of your home for a while. Staying on budget is also challenging. Remodels often end up taking much more time and much more money than homeowners expect.

 

Choice No. 2: Sell your existing home and buy your empty nest dream home.

  • You can downsize to a single-level residence and upsize your lifestyle. Many people planning for their later years prefer a home that is all on one level and has less square footage. But downsizing doesn’t mean scrimping. You may be able to funnel the proceeds of the sale of your existing home into a great view or high-end amenities.
  • A “lock-and-leave” home offers more freedom. As your time becomes more flexible, you may want to travel more. Or maybe you’d like to spend winters in a sunnier climate. You may want to trade your existing home for the security and low maintenance of condominium living.
  • There has never been a better time to sell. Our area is one of the top in the country for sellers to get the greatest return on investment. Real estate is cyclical, so the current boom is bound to moderate at some point. If you’re thinking about selling, take advantage of this strong seller’s market and do it now.

 

Bottom Line

If your current home no longer works for you, consider looking at homes that would meet your lifestyle needs before taking on the cost and hassle of remodeling. Get in touch with a Windermere Real Estate broker to discuss the best option for you.

Posted on January 17, 2018 at 10:12 pm
Marysville Office | Category: Uncategorized

Creating Comfort Through Interior Design

Just because the Christmas decor is put away and the festive mood of the holidays is over doesn’t mean we have to stop creating a snug and cozy home. It’s a good time to embrace winter Hygge! If you aren’t familiar with Hygge, it’s a Danish word for feeling content and cozy.

Here are seven ways to bring Hygge style comfort to your home, even during the dreariest winter month of the year!

LAYERED LIGHTS

Even if you feel like you’re lacking in the cozy department, simply addressing your lighting will make a huge difference. Layers of lighting make every room feel more welcoming. In the daytime, natural light is ideal. But for evenings, it’s nice to add a cozy glow. A good rule of thumb is to try to have a least three light sources in every room. Use a mix of table lamps, floor lamps, task lamps, and overhead lighting. Consider using warmer lightbulbs for the coziest ambience.

COMFORTING MOMENTS

Your home will offer a sense of comfort when you incorporate some favorite photos of loved ones, treasured hand-me-downs, antiques or flea-market finds, eye-catching conversation starters, art that inspires you, special mementos, or simply things that make you smile.

AN INVITING AROMA

What aroma feels ‘cozy’ to you? Set the tone for your home by filling it up with winter scents that inspire you.

TOUCHABLE TEXTURES

The coziest homes contain a variety different textures that delight the eye. Incorporate different touch-worthy materials through pillows, drapery, throw blankets, rugs, lamps, and furniture. The fabric possibilities are endless: velvet, woven, knit, embroidered, grain sack, faux fur, tweed, etc. You can also consider creating contrast with varying materials like metal, wood, glass, rattan, mirrored, painted, and more.

A PLACE TO CURL UP

Make yourself a special cozy place to relax. A reading chair will be extra cozy with some good books nearby in a basket, a lamp, a footstool, a side table to set a cup of tea, and a soft blanket you can curl up in.

A BIT OF WARMTH

Every home can benefit from warmth. No matter what your color scheme, you can add warmth through natural tones like wood, leather, jute, warm metals, etc.

SOMETHING LIVING

A room comes to life when an organic element is incorporated into the decor. Every room can benefit from having at least one plant, bouquet of flowers, or even a sprig of greenery like eucalyptus to remind us that spring is on its way.

Posted on January 17, 2018 at 10:08 pm
Marysville Office | Category: Uncategorized

Get ready for FOOTBALL!!!!

Posted on August 7, 2017 at 6:12 pm
Marysville Office | Category: Uncategorized

Time to Sell (your stuff, not your home)?

Time to De-Clutter? Some Tips for Selling Your Stuff

 

If you are looking around your home and thinking to yourself that it’s time to de-clutter, the summer months provide an ideal time to hold a garage sale. But if that sounds like too big of an undertaking, there are other options available to you thanks to popular resale sites like eBay and Craigslist. And if even that sounds like too much effort, you might also consider donating lightly used items to charity or sending them off to the dump. Here are some questions to help you decide which method is best for you.

 

How much stuff do you have?  Are you liquidating your space of large furniture items, a large quantity or quality items, or do you have a small pile of electronics?

If you have yards worth of stuff to get rid of, you definitely want to consider a garage sale. Getting rid of multiple items on Craig’s list can be time consuming, and shipping items sold on eBay can be expensive and eat into your profits. On the other hand, if your items are easily shippable or you have a small enough quantity to take quality photos and post online, then you can save time by using eBay or Craig’s list – and potentially make more money too.

 

What type of stuff am I getting rid of? Is it worth anything?

 If you have large furniture or unique/valuable pieces it may be worth the time to take some quality photos and try to sell these items on Craigslist first. Generally Craigslist works as “first come, first serve” so be prepared to respond to inquiries quickly. If you have small items that have some value, you may want to consider eBay. You reach a much larger audience through eBay which can result in a greater financial return.

 

How much time do I have?

Garage/yard sales are by far the most time intensive of your options. If you choose to hold a garage sale, you will likely need to dedicate at least three days for prep, clean-up, and the sale itself. All items should be cleaned up, priced, and neatly displayed for sale. Signage should be prominently placed around your neighborhood. You can also place an ad in your local classifieds or on Craigslist to attract a larger crowd.  

 

Will your home/community accommodate a Garage Sale?

Garage and yard sales are generally held at a single-family residence. If you live in an apartment or condo, you may want to consider alternatives due to limited public space. You may also want to consider your community traffic. If you live on a quiet street, you may not get enough customers to generate sales. 

 

Can you enhance a sale by joining with neighbors, friends and family?

Some communities hold an annual neighborhood garage sale, encouraging all neighbors to participate on the same day. This increases your ability to market the event and attract a larger audience.

 

Want more information on hosting a garage sale? Go here.

Posted on June 20, 2017 at 8:54 pm
Marysville Office | Category: Uncategorized

Keeping your Sanity on a Home Remodel

12 Sanity Savers to Get You Through Your Home Remodel

Posted in Houzz.com by Houzz.com

It’s easy to get excited about a home project at the beginning, when the work seems theoretical and you hear yourself saying things like, “Oh, we could just knock all of these walls out, no problem!” Then reality sets in. The workers you hired go AWOL, your budget is blown and you can’t find your good shoes under the pile of scrap wood and duct tape. It’s time to take a deep breath and make a plan. Read on to find a dozen ways to stay sane while you are creating your dream home, no matter how long it takes.

 

Sanity Saver 1: Richard Bubnowski Design LLC, original photo on Houzz

 

1. Have a plan A … and a plan B and C too. Even when you set what seem like perfectly reasonable goals, things have a way of coming up unexpectedly to bump your project completion date further and further back. Having a back-up plan (or two) is key.

I find it helps immensely to think of your goal in three parts. There is the ideal goal — if everything went right and there were no snafus, this is what you would want done by a certain date. Then there is your plan B, where you pare down your list to the essentials. To make a plan C, pick just one thing that if you got done would still make you feel somewhat accomplished.

 

Sanity Saver 2: Soorikian Architecture, original photo on Houzz

 

2. Take “before” photos. In fact, take lots of photos throughout the process. When you feel motivation beginning to falter, take a look at pictures from early on in the process to remind yourself just how far you have come.

 

Sanity Saver 3: Young House Love, original photo on Houzz

 

3. Start a blog. Just like many diet and exercise programs recommend sharing your plans with supportive friends and family members, I advocate starting a blog as a way of holding yourself accountable during the renovation process. After a rough day, when nothing went as planned, at least you can vent your frustrations in a blog post and get kind words of support in return from readers all over the world.

 

They did it: Sherry and John started their blog Young House Love while they were fixing up their first home, and it became a wildly popular and award-winning site that attracts many visitors each day. Realistically, most of us won’t become the next Young House Love, but starting a blog can still be a worthwhile project and documentation of your home progress.

 

4. Focus on making it livable first. This may sound obvious, but it is all too easy at the beginning of a project to take on too much. By saving some of the cosmetic changes (like decorative tilework) for later and choosing to focus on essentials (like plumbing) now, you will make your life much easier.

 

Sanity Saver 4: Richard Bubnowski Design LLC, original photo on Houzz

 

5. Schedule your renovation in stages. During an extensive renovation, be smart about the order you work on things if you are staying in the house at the same time. Work to finish bedrooms and a bathroom first, so you can have a comfortable area to live in while other changes are going on.

 

6. Set one small, attainable goal each week. Tasks like putting up new house numbers, ordering something you need online, or patching holes in a wall do not take very long, yet being able to cross something off your list — and see visible improvement— will help keep you motivated.

 

Sanity Saver 5: Holly Marder, original photo on Houzz

 

7. Help the pros by doing your job: Be decisive. Yes, contractors, architects and designers can sometimes go beyond the original schedule, but each time you change your mind or put off key decisions, know that the process will take that much longer. The best thing you can do to speed progress is to maintain a clear vision of what you want and communicate it clearly to all of those involved in the project.

 

8. Stay busy during downtime. It is inevitable that there will be times it seems that nothing is happening. Whether due to a tight budget, workers vanishing midproject or simply a stretch of bad weather, it is important to keep your spirits up when work stalls out.

Try keeping a list of simple tasks that you can do anytime. Then, when you start feeling antsy, pull out your list and get to work. Cleaning, organizing, decluttering and doing small repairs are all good places to start.

 

Sanity Saver 6: decordemon, original photo on Houzz

 

9. Pitch in and do some work yourself. Even if you’ve hired pros to do the bulk of your renovation, consider taking on a small DIY project of your own. Using your own hands to pitch in and improve your home can be incredibly satisfying.

 

10. Make your bedroom a refuge. Even if outside your door is quite literally a disaster area, having a calm, relaxing spot to rest and recharge can do wonders for your spirit.

 

Sanity Saver 7: Mykonos Panormos Villas, original photo on Houzz

 

11. Use your outdoor space. If the weather is good and your project is taking place indoors, setting up a comfortable outdoor living space is a wonderful way to get away from the noise and chaos of the renovation. I’ve heard of people setting up full outdoor kitchens to use while the indoor kitchen is being remodeled, and I think it’s a wonderful idea.

Related: Pull Together Outdoor Furniture Pieces to Relax On

 

12. Remind yourself why you are doing this … Clicking through your inspiration photos is a great way to get juiced up about your project all over again. You can also try simply closing your eyes and visualizing your home project completed, vividly imagining every little detail, and how wonderful it will feel to have it all done.

 

… and know when to get out of town. Of course there are times when it’s best to admit it’s time for a break. When the entire house in in utter disarray, taking a spontaneous weekend getaway can be just what the doctor ordered.

 

By Laura Gaskill, Houzz

Posted on June 20, 2017 at 8:50 pm
Marysville Office | Category: Uncategorized

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