Market Trends • April 26, 2021

April Market Update – Matthew Gardner Report

by Marnie Oshan

Hello there and welcome to the April edition of Mondays with Matthew. I’m Windermere Real Estate’s Chief Economist, Matthew Gardner

There were a lot of rich, housing-related datasets released this month so let’s get going.

And first up, I want to look at mortgage applications.

Line graph showing mortgage purchases from January 6th to April 21st. The line shows that applications slowed before picking back up at the end of February into March. Then the trend falls in early April and in the last 2 weeks of April the line shows an increase in applications again.

Source: MBA

You may remember last month we discussed what was going on with mortgage rates as they had started to trend higher beginning in the New Year. Well, as rates rose, you can see here that mortgage applications slowed before picking back up in at the end of February, which was interesting as rates were still rising at that time.

And for those who find it curious that applications picked up even as rates were rising, well it was partly because buyers started to believe that rates would not be headed back down, and they wanted to get locked in for fear that they would continue trending higher.

Now, this pattern did reverse at the end of March as rising rates started to take a toll on would be buyers and affordability issues started to come more into play, but as mortgage rates pulled back in April, applications picked up again – albeit modestly.

Next to the Mortgage purchase graph, on the right we see the weekly mortgage purchase index which looks at the year over year data. Here we see that since this time last year, there are 58.2 percent more mortgage applications.

Source: MBA

But when we take a look at the data on a year-over-year basis. Well, WOW!

Applications were up by over 58%! But remember what happened in March of last year? Who can forget….?

And its therefore really not surprising to see this kind of spike, but, I would caution you all that almost any dataset that compares current numbers to those seen a year ago – well, they are likely to paint far too rosy a picture, and one that is removed from reality.

Something to be aware of.

Next up, we got several datasets regarding the new home market March and we will start off with permits and starts.

Two line graphs next to each other. The one on the left shows the single family building permits from January 2019 to March 2021. Overall the trend is upward, with a large dip from March to May 2021, but they soon recover as if that dip never happened. From January to March 2021 there was another small dip, but there’s already proof of improvement back from that. On the right, the graph shows the single family home starts, again overall starts have increased since January 2019 to March 2021, with a few peaks and valleys in between, included a recent dip from November 2020 to February 2021, but they’re back on the rise since then.

Source: Census Bureau

Following the pullback in permit applications that was seen in February, builders were more optimistic in March with single family permits up by 4.6% on the month and 35.6% higher than a year ago – but don’t forget what we just said about year over year data!

Looking at housing starts – well they pulled back in January and February, but also saw a solid 15% monthly increase in March.

Interestingly, there was a massive spike in starts in the mid-west where they were up by 109% month-over-month, but they were actually down by over 12% out here in the west.

I would also let you know that the number of homes under construction rose by 1.6% versus February and this was particularly pleasing given that construction costs remain very elevated.

And it hasn’t just been material costs that have been hitting home builders, they have also seen significant pressures with labor costs and here’s why…

One line graph to the left, with space to the right for another. Data shows total employment in construction from January 2010 to February 2021. Overall trend shows constant growth since 2012, with a sharp dip in 2020 from the pandemic.

Source: BLS

This chart shows how many people are employed in the construction of single-family homes and, at face value, it looks pretty good with constant growth seen since 2012 – of course, ignoring the impact of the pandemic but….

On the same slide as the total employment in construction, to the right of that graph there’s total employment in Construction from January 2000 to January 2021, which shows an overall trend of decrease in jobs. A peak in 2006 soon falls to a very low valley in 2012.

Source: BLS

Looking at a longer timeline, it doesn’t paint as good a picture. At its peak in 2006, there were almost 650,000 people employed building homes, but the number today is just 60% of that.

Of course, there are fewer homes being started today than there were back in those halcyon days but starts today aren’t 40% lower, so the job market remains tight. In fact, there are over 260,000 job openings in the construction sector. Of course, not all of them are for the single-family construction market, but we do know that builder’s cost of labor is rising and that, in concert with higher land and material costs continue to impact builder’s ability to bring homes to market that are relatively affordable as the increase in costs is transferred directly into the price that a home must sell for and that brings me to data on new home listings, sales and prices in March.

Two graphs side by side, on the left is a line graph showing the Single Family New Homes for Sale in the US. This graph shows an overall trend of decrease in new homes for sale from 2019, but increased since the lowest point in the fall of 2020. On the right is a bar graph showing the houses for sale by stage of construction. The grey line represents “not started,” light blue represents “Under construction,” and navy represents “completed.” The light blue lines showing under construction are constantly the highest bars hovering between 150,000 and 200,000.

Source: Census Bureau

Even with new housing permits and starts rising significantly the seasonally adjusted estimate of new houses for sale at the end of March was 307,000. This represents a supply of 3.6 months at the current sales rate.

The number of new homes for sale was down by 7% from a year ago, but I do expect that the increase in permits and starts bodes well for this arena, and I do expect to see more listings come online over time.

If you look at the chart to the right, you will notice that the number of homes for sale that have yet to be started continues to rise. This is because builders want some certainty that the home will be sold, and it’s, therefore, easier to sell before you build it.

Source: Census Bureau

And when we look at sales, well they rise by 20.7% in March to an annual rate of over 1 million units and clearly rebounded from the previous month when we saw a massive drop as severe winter storms wreaked havoc across much of the country.

Interestingly, you will see that as many homes sold that hadn’t yet started as were under construction. Clearly, demand is robust to the degree that buyers willing to commit to buying a home that hasn’t yet been built.

The median new home sale price came in at $330,800 – that’s down by 4.4% on the month but 0.8% higher than a year ago.

Source: NAR

OK – now we have covered the new home market, let’s take a look at how the resale market fared in March.

The number of homes for sale remains at almost historically low levels with marginally more than 1 million units on the market. Now there maybe some of you out there who say that is inaccurate as NAR is reporting 1.07 million homes for sale, and you’d be absolutely correct. But I have adjusted the data to account for seasonality, so it is slightly different.

Anyway, with such limited choice across the country, it wasn’t a surprise to see sales pulling back, with the total number of closings running at an annual rate of 6 million units – that’s down by 3.7% month over month, and down by 12.3% when compared to March of 2020.

Am I worried about this? No, I am not. Why? Well, as I just mentioned, just look at the inventory numbers. With little choice, it’s not at all surprising to see sales pull back but I would add that the market still hit 6 million transactions and that was in the face of the increase in mortgage rates that we saw last month so, to tell you the truth, I was actually a little surprised to see that the number held above that 6 million level.

Source: NAR

But even as sales pulled back a little, prices didn’t, and more records were broken with the median sale price hitting an all-time high, and year-over-year price growth above 17% was another record shattered.

Source: NAR

And if you need further proof that there is little to be concerned about when it comes to sales pulling back, you only need to look at these charts. Low supply, but still very robust demand has months of supply at levels that indicate a highly unbalanced market. Nationally, I like to see somewhere between 4 and 6 months of supply, not 2.1…

But look at the right. For every offer accepted in March, there were 3.8 additional offers, and I would also tell you that the average length of time it took to sell a home in March was just 18 days and that’s down by one day from February but down by eleven days when compared to a year ago.

Surely if demand was waning, wouldn’t the number of offers be going down, and days on market going up?

Source: NAR with Windermere Economics seasonal adjustments

And when we separate out the single-family market, you can see that listings notched very slightly higher – up by 1.2%, but the level is still close to an all-time low with listings down by over 31% year over year.

As far as sales are concerned, well they also pulled back a little and were down by 1.3% versus February but were 14% higher year over year.

Source: NAR

And as we discussed earlier, even with lower sales activity, sale prices are still rising at a very rapid pace and are now over 18% higher than seen a year ago and a remarkable 6.2% higher than seen in February.

The median price also broke above $330,000 for the first time.

Source: NAR with Windermere Economics Seasonal Adjustments

Moving on to the condominium market, we saw listings rise as the pandemic took hold, and there were concerns back then that we were at the start of a systemic increase in listings with people fleeing cities over fears of COVID-19, as well as the ability to work remotely, but the increase soon wore off, even if it rise by 9% in March when compared to February, but there were 5.1% fewer listings than seen a year ago.

But on the sales front – and with listings rising – we saw demand for those homes with sales up by 5% versus February and 36.4% higher than seen in March of 2020.

Source: NAR

In a similar fashion to single-family prices, sale prices for condominium units saw a spike in price in March and were up by 4.9% versus February and almost 10% higher than seen a year ago.

Although you will see that annual sale price growth did turn negative last May – due to COVID – it is actually rare to see this. We did see a tiny drop back in 2018 but you will likely remember that mortgage rates were rising then and knocking on the door of 5%.

Anyway, since last May, sale prices have picked back up very nicely and worries of any significant drop in condo prices appears to be overblown.

As far as the ownership market is concerned, I am far less worried that mortgage rates have been ticking higher than I am that there are just not enough homes for sale to meet demand.

We had seen some growth in the new construction arena – and that took just a tiny bit of heat off the resale arena – but demand continues to exceed supply, and that is pushing prices higher and affordability issues have already started to appear in several markets across the country.

At some point, we will see price growth slow, but I think that it will be far more to do with affordability limitations than it will rising mortgage rates.

So, there you have it. My thoughts on the housing market in March.

As always, if you have any questions or comments about the numbers, we have looked at today, feel free to reach out. I would love to hear from you.

In the meantime, thank you for watching, stay safe out there, and I look forward to visiting with you again, next month.

Bye now.

First Time Buyer • Home Buying • April 20, 2021

Why is This Home Called a Condo?

by Marnie Oshan

If you have done any house hunting around Seattle in the past few years you may have come across a property that feels like a single-family home, but is confusingly classified as a condo. These homes are called “detached condos” and are becoming quite common.

What is a Detached Condo?

Detached condos, also called “free-standing condos” or “ground condos”, have been a development style in planned communities for several years and are increasingly being brought into cities as infill construction. Detached condos are a way to gently add density to neighborhoods that have historically only had single-family homes. In general, the main difference between traditional single-family homes, and detached condos is that these homes have a Homeowner’s Association (HOA) and Codes, Covenants and Restrictions (CC&R’s). The HOA and CC&R’s will help to protect the new owners’ investment in the long run, as their property and neighboring properties will be well maintained.

What Does the HOA Cover?

The HOA will typically be jointly managed by the homeowners, though they have the option to hire a management company if they choose. When the HOA is established there will be several documents created including a Public Offering Statement, HOA Bylaws, and a Property Map. The Condo Documents will identify the rules and boundaries of the detached condo units. All of these documents should be available to buyers before they put in an offer on the home.

Typically, the HOA dues on detached condos are very small and only cover very basic items. The Budget should outline the initial HOA fees for each homeowner. If they choose, the homeowners can elect to share additional expenses such as utilities, yard maintenance, etc. that are not pre-determined in the Condo Documents, through the HOA.

What Do I Actually Own?

Ownership of these homes is very similar to ownership of a traditional single-family property. Each homeowner owns their entire structure as well as their individual parcel unit as described in the Condo Declaration. Each unit will have a separate Tax ID Number and the homeowners will only pay the taxes as assessed for their individual parcel and unit. Additionally, any land between each unit parcel, if any, is considered common space, which may consist of driveways or walkways.

Just like with a single-family home, each homeowner is responsible for the maintenance of both the interior and the exterior of their own property, which includes the land within their designated parcel. Any interior updates or changes are fully up to the discretion of each homeowner, though decisions that would change the exterior of the home will typically need to be agreed upon with the other HOA member(s).

What About Utilities?

With detached condos, there may be some shared utilities such as water and gas, that can either be paid jointly through the head of the HOA, or separately metered by a third-party company if the homeowners decide to go that route. Typically, electricity will be separately metered to each unit, though depending on how the property was built, this may also be a shared utility. This is another item that will be explained in the Condo Documents.

In most circumstances, detached condos are extremely similar to single family homes, with only very minor differences. Each owner owns the home and the land within their own parcel and is responsible for taking care of both the interior and exterior of their own property. Savvy buyers are finding detached condos to be a great way to gain access to unattached homeownership through this type of property purchase.

* This is not intended as legal advice, consult an attorney with legal questions.

Home Maintenance • Selling • March 15, 2021

The Benefits of a Pre-Listing Inspection

by Marnie Oshan

Previously published on the Windermere Blog by Sandy Dodge

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

What is a Home Inspection?

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

Pre-Listing Inspections

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

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

The Benefits of a Pre-Listing Inspection

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

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

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

If you have any questions about home inspections or any of the steps in the selling process, please reach out to me!

Home Maintenance • Home Renovations • March 15, 2021

How to Prevent Water Damage to Your Home

by Marnie Oshan

Previously published on the Windermere Blog – Written by Sandy Dodge

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

How to Prevent Water Damage

Leaks

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

Gutter drainage

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

Sump pump

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

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

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

Uncategorized • March 4, 2021

A Brief History of Women in the U.S. Real Estate Industry

by Marnie Oshan

Photos of women, a brief history of women in real estate

March is Women’s History Month

and, so I thought it would be fitting to create a timeline of the history of Women in Real Estate. It is notable that though we were initially excluded from taking part in real estate, not only as business professionals, but also as land owners, women now make up a healthy majority of professionals in the industry. Women have blazed trails as leaders and have formed influential organizations such as the Women’s Council of Realtors and continue to shape the industry.

I hope you enjoy this brief history, feel free to share amazing accomplishments by women in this field.

Uncategorized • March 3, 2021

What Is a Craftsman Home?

by Marnie Oshan

By by Sandy Dodge – previously on the Windermere Blog

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

Types of Craftsman Homes

Craftsman Bungalow

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

Four Square Craftsman

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

Prairie Craftsman

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

Mission Revival

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

Characteristics of Craftsman homes

Exterior

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

Interior

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

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

First Time Buyer • Home Buying • February 24, 2021

The Importance of Pre-Approval

by Marnie Oshan

Woman sitting at a computer looking at documents

Written by Sandy Dodge – previously posted on the Windermere Blog

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

The Pre-Approval Process

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

Pre-qualification

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

Pre-approval

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

Benefits of Pre-Approval

Credibility

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

Home search

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

Closing process

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

When to Get Pre-Approved

Being financially prepared for a home purchase is a solid indicator that you’re ready to go about getting pre-approved, but what does that look like? Buying a house means taking on serious debt, so it’s important to either have your remaining debt paid off or have a clear path to becoming debt-free before getting pre-approved. Having adequate savings for a down payment is a sign that you’re ready to make your offer. For any questions about the pre-approval process and to get connected to a mortgage professional, contact me, your Windermere agent.

Market Trends • January 28, 2021

Top 10 Things to Look Out for in 2021 – From Windermere’s Chief Economist Matthew Gardner

by Marnie Oshan

Top 10 Provided by Windermere’s Chief Economist Matthew Gardner

1. Economic Growth Will Pick up – But Not Until the Summer

I am expecting solid employment gains in 2021, but growth is likely to start in earnest in the second half of the year once the vaccine has been more widely distributed. I believe job growth will increase as spending rises. Once people feel more comfortable going out again it will give a much-needed boost to the economy and job market.

2. The Move to the Suburbs is Real – But Don’t Get Carried Away!

There has been a lot of talk about a COVID-19 induced flight away from cities and into the suburbs and outlining areas. While I do believe there will be a migration away from some of our core cities this year, most people won’t move far as working from home will not be a full-time situation for many workers who will split their time between home and office.

3. Not all Apartment Markets are Created Equal

Apartment owners in pricey markets across the country will continue to suffer in 2021, but after many years of being overlooked, smaller cities will perform rather well. It is my prediction that apartment developers will start to turn their attention toward suburban markets and away from many of these larger cities. We haven’t seen that in over a decade.

4. The Luxury Housing Market Will Continue to Perform Very Well

The luxury housing market, which performed far better than anyone expected in 2020, will continue to be robust in 2021. The primary reason for this will be interest rates. Jumbo mortgage rates saw a spike at the start of the pandemic but have since dropped significantly which is benefitting luxury home buyers. Furthermore, as the country starts to reopen postCOVID, I believe we will see a rebound in foreign buyers.

5. Cities will Start to Pay More Attention to Zoning (at Long Last!)

Although it won’t happen overnight, I am hopeful that discussions around zoning changes will start to pick up steam this year. I believe there will be more attention by legislators on increasing the supply of land for residential construction and many will do this by adjusting current zoning policies to free up more land on which to build.

6. Adaptive Reuse Will Gain More Traction

Developers will pay more attention to the potential for repositioning existing buildings, as well as ground-up construction. Although I don’t see developers looking to convert office buildings into residential uses, I am watching hotels (mainly motels and inns), which are likely going to continue to be hard hit for years, and alternative uses may make sense. Additionally, strip malls and regional malls may become of interest to developers. I believe there is the potential for some regional malls to be converted into mixed-use projects, while strip malls may get rezoned into single residential use.

7. What’s important in a post-COVID-19 home?

Due to COVID-19, homeowners want more space and builders have taken note. After several years of building smaller homes, the average new home size is actually starting to increase. I also expect to see buyers listing high-speed internet access as a requirement rather than an option (mainly in rural areas), and open floor plans that were once a must, will be replaced with more room separation.

8. Worries About Forbearance are Overblown.

I do not anticipate a wave of foreclosures following the end of forbearance, and foreclosures that do occur will have a limited impact on the broader housing market. A lot of people fear that when forbearance expires, we will see a tsunami of foreclosed homes and that this increase in supply will lead to homes values dropping. I say it won’t happen, and here’s why. Firstly, the number of homes in forbearance is already down by 43% from its May peak. The trend is headed in the right direction. Secondly, I believe as owners start to get back to work again, many will be able to either refinance their loans, or work with their lenders to extend the term of their mortgages in order to make up missed payments and avoid foreclosure. I would also add that if there are homeowners who can’t get back on track, they will sell their homes to keep the equity they have built. In most markets across the country, there will be enough buyer demand that they will be able to get out from under forbearance by selling and paying off the mortgage and missed payments. All that said, I am a little worried about urban condominium owners who are in forbearance, as the supply of these properties is already on the rise, causing price growth to soften relative to single-family homes. This may be an obstacle to some condo owners who want to get out from under forbearance by selling.

9. Mortgage Rates Will Rise – But Don’t Worry

Rates for 30-year conforming mortgages have broken below all-time lows 16 times since the pandemic started; however, they are unlikely to drop much more. That said, I don’t anticipate them rising too much this year, averaging around 3.2%.

10.US Home Sales Will Rise Significantly, but Price Growth Will Moderate

There will be even more demand from buyers this year, and the good news is that I expect listings to increase as people look to relocate. This will allow 2021 home sales to rise to a level we haven’t seen since 2006! Big players in the market to buy this year will be renters who will choose to move out of expensive cities because they are working from home and no longer need to live close to their office. My forecast is for existing home sales to rise by 7.7% in 2021 to around 6.2 million units. I will also predict that home prices will increase in 2021 but slowly rising mortgage rates, combined with affordability constraints in many markets, will act as a headwind and slow appreciation. Average prices will rise by a relatively modest 4.1% in 2021.

Top 10 Provided by Windermere’s Chief Economist Matthew Gardner

Home Renovations • January 21, 2021

Incorporate Pantone’s Color of 2021 Into Your Home

by Marnie Oshan

Two color swatches. One of them is gray, the other is yellow. They are the 2021 Pantone Color of the Year.

previously published on Windermere.com by Sandy Dodge

For the second time ever, Pantone’s Color of the Year is actually two colors: Ultimate Gray and Illuminating Yellow. Ultimate Gray is emblematic of natural elements that stand the test of time, while Illuminating Yellow is a cheerful sunshine yellow, symbolizing energy and clarity.

Here are some ways you can harness this color harmony in your home.

Brighten Your Bedroom

With a foundation of Ultimate Gray, Illuminating yellow will brighten your bedroom, livening up the space and radiating positivity. Mix and match different furniture and accent wall combinations to get the right balance of sunny yellow and solid gray.

Refresh Your Home Office

Home offices have become more important than ever. As working from home continues in 2021, your remote workspace is the perfect location to add in Pantone’s Color of the Year. We all could use some added stimulation to keep our workdays going smoothly and productively. Use Illuminating to add some colorful accents or to paint your wall, balance it out with some Ultimate Gray, and let the positivity fill your home office.

A modern home office with a yellow wall.

Accents In Your Living Room

Pantone’s Illuminating is a perfect accent color for your home. Incorporate this energetic sunshine yellow in your living room in the form of decorative throw pillows, blankets, and accent décor pieces like vases and curtains. Ultimate Gray is a perfect color for large furniture items and will help to balance out the tone of your living room. It provides a neutral backdrop, which gives you the freedom to decorate brightly.

Make A Statement With Your Front Door

Your front entrance plays a significant role in the first impressions of your home. What better way to use Pantone’s striking yellow than a front door makeover? Illuminating yellow presents an opportunity to bring a little sunshine to your family and guests every time they approach. Ultimate Gray as both a wall color and an accent color will help to solidify your new, strikingly optimistic front door. Accent pieces like house numbers, your mailbox, and plant pots will help create harmony between the two colors.

A yellow front door against a gray wall.

Read more about this year’s color trends and how you can incorporate them into your home here: 2021 Paint Color Trends

Home Renovations • January 21, 2021

Renovating Your Vacation Home

by Marnie Oshan

A man and a woman look at their home renovation blueprints.

(Previously published on Windermere.com – by Sandy Dodge)

Owning a vacation home comes with the reward of having your own slice of paradise, but it can also present some unique challenges if you need to make renovations. It’s important to understand how you will use your second home before diving into any renovation projects. This will help keep you organized and on track throughout the renovation process as you transform your space into a true vacation retreat.

Take Your Time

Before you start in on any renovations, take time to think about how you will use your second home. For example, if you plan on eventually retiring to your vacation home, you can prioritize projects that increase the quality of your time spent there over the years.

If your vacation home is intended to be a place for large family gatherings, you’ll want to consider bedroom and bathroom accommodations accordingly. Vacation homes often have greater flexibility when it comes to sleeping arrangements, just be sure to understand the code limitations of your property before proceeding.

If you are looking to sell in the future, you will likely prioritize renovations that help increase the home’s resale value. Keep in mind that the some renovation projects in a primary residence may not have the same effect on the value of a vacation home. Your best bet is to talk to your Windermere agent about how different renovation projects may affect the value of your property.

Renovating By Season

Is your vacation home primarily a summer getaway or a winter retreat? The seasonality of your stay will help to prioritize your projects as well, regardless of your local climate.

Winter – Early Spring

The early months of the new year are actually a great time to start additions to your home. Winter conditions are typically better for digging foundation and pouring concrete. Winter is also the perfect time to get started on any indoor painting projects you have in mind.

Spring – Early Summer

Always the busy season for builders and contractors, the spring-to-early-summer months are perfect for outdoor projects like patios and decks, knowing they’ll be completed just in time for summer. Depending on your local climate, you may want to start a deck or patio earlier in the year, giving the wood ample time to stabilize and avoid early damage from too much sun exposure.

Summer – Fall

A fresh coat of paint gives your home new life. Depending on the paint you’re using, temperatures need to remain above 40-50 degrees while your painting project is taking place. Accordingly, the summer—and depending on where you live, early fall—months are a safe bet for making your exterior paint project a success.

Fall – Winter

If you’re looking to get new appliances in your vacation home, look to the fall and early winter months for holiday deals. If your vacation home is the rendezvous for family holiday gatherings, you’ll want to make sure any large-scale renovations are finished before the holidays come around.