Category Archives: Economy

Revolt Against the Elites

Source: Jim Rickards

You’re acquainted with recent demonstrations in Hong Kong. But this is not a local phenomenon. Protests bordering on riots are occurring in Barcelona, Paris, Santiago, Baghdad, Caracas and elsewhere. Meanwhile, the UK, Israel, Italy and the U.S. all have governments that are divided to the point of paralysis.

When you add it all up, it is reasonable to ask if we are watching the beginning of the end of the existing order.

This article offers a closer look at the situation in Santiago. But the larger point is that we are witnessing a global surge in urban protests against elites and governments that either deny human rights or block paths to economic progress or both.

Investors with gold, silver, land, hard assets, fine art and other tangibles are in the best position to survive the worst.

Comment from Bo Foster:

Real estate is a hard asset! No matter what one’s political views are, even with its own short term value fluctuations, long term, real estate is a lot more likely to survive economic upheavals.

Bo

Northwest MLS brokers say transition to fall creating opportunities for buyers

Source: NWMLS

KIRKLAND, Washington (October 7, 2019)

Northwest Multiple Listing Service brokers reported year-
over-year gains in pending sales, closed sales and prices, but its report summarizing September activity
also showed an 18% drop in inventory compared to a year ago.


“The transition into the fall housing market creates opportunities for homebuyers,” suggested J. Lennox
Scott, chairman and CEO of John L. Scott Real Estate. “Although there are fewer listings than what
buyers find during peak summer months, there is also less competition” for the available inventory, he
added.


While the intensity of sales activity is typically lower for new listings in the fall and winter, Scott noted
“It appears we are headed toward a more intense winter market than last year.” He said he expects the
number of unsold listings will continue to decrease once the winter “clean-up” of inventory begins.


At the end of September, MLS brokers reported 15,982 total active listings, down more than 18% from
the same month a year ago when the selection totaled 19,526 listings. Only three of the 23 counties served
by Northwest MLS – Clark, San Juan and Whatcom – had year-over-year gains in inventory, while 18
counties had double-digit drops. Thurston County reported the sharpest shrinkage, at nearly 35%.


“September’s housing market was a bit of a roller coaster, up in certain areas and down in others,”
commented OB Jacobi, president of Windermere Real Estate.. Within the four-county Puget Sound
region, Pierce County prices rose more than 10% thanks to high demand and low inventory, he noted.
“Buyers continue to be drawn to the area thanks to more affordable housing costs, but this influx is also
driving up prices,” he remarked.


MLS data show the median price for last month’s home sales in Pierce County ($379,950) was $213,800
less than the median price in King County ($593,750). A comparison of single family prices (excluding
condos) reveals a $275,500 difference between the two counties.


“In King County, prices were down nearly 2.7% while pending sales rose nearly 10%. This tells us there
is no shortage of buyers in the Greater Seattle area,” stated Jacobi. He also said home prices normally
start to taper off this time of year, “so this isn’t a major cause for concern.” Within King County, prices
rose in four of the six sub-markets; only Seattle (down 3.2%) and Vashon (down almost 28%) reported
drops.


The median price for single family homes and condos that sold last month in King County was $593,750,
down from the year-ago figure of $610,000 and the first time it dipped below $600,000 since January.
Three other counties, Okanogan, Pacific, and Clallam, also reported year-over-year price drops. Joining
Pierce County with double-digit price increases from a year ago were eight other counties.


System-wide, prices were up 5%, rising from $400,000 a year ago to $420,000. The volume of closed
sales increased about 4.4% from a year ago (7,962 versus 7,630).

The Future of the US Housing Market

Source: Peter DeVries, Loan Depot

This month marks the 11th anniversary of the government takeover of the mortgage giants Fannie Mae and Freddie Mac. Last Thursday, The Trump administration released its long-awaited blueprint to reform the nation’s housing finance system and privatize GSEs Fannie and Freddie.

The plan consists of a series of recommended legislative administrative reforms aimed to create a competitive mortgage market with a limited government role, protect American taxpayers against future bailouts, and help guide Americans toward the path to homeownership.

Whether the government successfully recapitalizes these agencies and ends this conservatorship or not, loanDepot is uniquely and proactively positioned with capital and a world class capital markets team to benefit from any changes that may transpire.

Home Price Trends

  • The CoreLogic HPI Forecast indicates that home prices will increase by 5.4% on a year-over-year basis from July 2019 to July 2020
  • Over a quarter of Millennials have expressed interest in buying a home in the next year
  • Connecticut and South Dakota were the only states to post declines in their year-over-year home prices

The expected reacceleration of home prices over the next year to just over 5% is caused by lower mortgage rates, making it more affordable for millennials to enter the market in the upcoming months. This increased demand for housing is the major driver for higher home prices, which we’ll likely continue to see rise for the foreseeable future.

Source: https://www.corelogic.com/insights-download/home-price-index.aspx

Home Price Trends

Mortgage rates dropped again this week! The 30-year fixed mortgage rate averaged 3.49% for the week ending September 5, a slight drop from 3.58% prior week. By contrast, mortgage rates stood at 4.54% a year ago, almost a full percentage higher than today. The historic low for 30-year rates was 3.31% in November 2012.

If you or your clients are in the market for a purchase or refinance, this fall may be a favorable time to apply for one and save on interest overtime. Don’t forget to ask me about loanDepot’s mello smartloan™ and how it could help enjoy a faster, more secure, stress-free mortgage process.

Source: http://www.freddiemac.com/pmms/

If you have any questions, contact me anytime! I can help your clients explore the best mortgage option for both purchase and refinancing.

Peter DeVries
NMLS# 1156114
Loan Consultant
1025 Black Lake Blvd SW Ste 1C
Olympia, WA 98502-1120
Office: (360) 706-6104
Cell: (360) 791-8064
My Website
Email Me

Home buyers seeking affordability are expanding search outside Greater Seattle job centers

Source: NWMLS

KIRKLAND, Washington (September 9, 2019) – Depleted inventory continues to frustrate would-be
buyers in Western Washington. Many of these potential homeowners are expanding their search beyond
the major job centers in King County, according to market watchers who commented on the latest
statistics from Northwest Multiple Listing Service.


The MLS report summarizing August activity shows less than two months of supply system-wide, and
only about 1.6 months of supply in the four-county Puget Sound region. The sparse selection is pushing
up prices. For last month’s sales of single family homes and condos across the 23 counties served by
Northwest MLS, prices rose nearly 6.2% compared to a year ago.


“Areas immediately outside the Puget Sound region and along the I-5 corridor continue to see double-
digit house price growth,” noted James Young, director of the Washington Center for Real Estate
Research (WCRER) at the University of Washington. He attributes the increase to high demand in these
areas “due to first-time homebuyers who struggle to afford housing in King and Snohomish counties as
well as from existing homeowners cashing out of Seattle and King County.”


“While August is always a slower time for listings and sales, what is really surprising this year is the
decrease in new listings taken, while pending sales increased,” observed Mike Grady, president and COO
of Coldwell Banker Bain.


A comparison of year-over-year statistics for August shows the volume of new listings dropped nearly
13% system-wide and 18.5% in King County. Last month’s total number of new listings (10,488)
declined 6.3% from July’s volume (11,193).


Brokers reported 10,602 pending sales (mutually accepted offers) during August for a 4.9% increase from
a year ago. Pending sales rose nearly 6.6% in the Puget Sound region, led by Snohomish County with a
gain of 15.8%. Six counties had double-digit gains while an equal number had declines.


Grady noted June and July were also lackluster this year with regard to listings “when typically they are
both still fairly active coming off spring. The pending sales numbers indicate that buyers are indeed out
there and willing to purchase, but there are simply not enough homes,” he commented, adding,
“Everything that is listed is getting sold and fairly quickly.”


The volume of total active listings is down more than 10% from a year ago, with only four of the 23
counties in the report showing a year-over-year increase (Chelan, Grays Harbor, San Juan and Whatcom).
Fourteen counties had double-digit drops. At month end there were 16,697 active listings in the MLS
database, down from the year-ago total of 18,580.


MLS figures show only seven counties have more than three months of supply, with four-to-six months
generally considered the volume needed for a balanced market.

Buyers getting “some relief” as key indicators point to strong summer for housing market

Source: NWMLS
KIRKLAND, Washington (July 8, 2019) – Inventory, pending sales and prices all increased during June
compared to a year ago, according to the latest report from Northwest Multiple Listing Service. The same
report, which covers 23 counties in Washington state, shows year-over-year drops area-wide in both the
volume of new listings and closed sales.


“Clearly we now see that the market is moderating – that is we’re definitely moving from a ‘hyper-
market’ to one where a correction is underway compared to last year,” remarked Mike Grady, president
and COO of Coldwell Banker Bain. “While it’s the best time to buy that we’ve seen in some time, and
buyers are getting some relief, it is still a seller’s market,” he added, noting some buyers are experiencing
multiple offer situations, or considering inspection waivers, or are even forced to consider markets outside
King County for affordability.


Three Northwest MLS directors from Pierce and Kitsap counties suggest their counties are attracting
some of the frustrated buyers from King County.


“The darling of the Puget Sound real estate market is Tacoma/Pierce County,” stated Dick Beeson,
principal managing broker at RE/MAX Northwest Realtors in Gig Harbor, pointing to low inventory and
appreciating values. “The secret is out about Pierce County,” agreed Mike Larson, the president at
ALLEN Realtors in Lakewood. “You can buy twice the house for about half the price. You just have to
be willing to deal with the traffic if you work north or south of here,” he proclaimed.


“The Kitsap market continues to be robust and is maintaining its velocity in sales,” added Frank C. Leach,
broker/owner at RE/MAX Platinum Services in Silverdale. He believes Kitsap County will continue to be
strong given its economic foundation together with its affordability factor and quick access to Seattle, but
noted it is constrained by available inventory (currently at 1.4 months of supply).


MLS figures show the median price for single family homes and condos that sold last month in King
County was $637,675. In Pierce County it was $372,500, about 58 percent of the King County price, and
in Kitsap County it was $387,000, about 60 percent of the sales price in King County.


System-wide prices increased more than 3.5 percent from a year ago, from $425,000 to $440,000,
although four counties registered declines, including Douglas, Ferry, Jefferson, and King. June’s median
price was unchanged from May.


At midyear, the overall median price was $424,517, which compares to $405,000 for the first six months
of 2018, an increase of 4.82 percent.


“As long as interest rates stay low and people seek value outside of King and Snohomish counties, house
prices should continue their upward momentum,” stated James Young, director of the Washington Center
for Real Estate Research (WCRER) at the University of Washington.

Northwest MLS Housing Report for April signals good news for home buyers

KIRKLAND, Washington (May 6, 2019) –

Housing activity during April signaled good news for buyers
in Western Washington as inventory continued to grow, the rate of price increases was slowing in many
areas (and even decreasing in a few counties), and mortgage rates remained low.


Northwest Multiple Listing Service statistics for last month show a 28.5 percent overall increase in active
listings compared to the same month a year ago, a 5.8 percent gain in pending sales, and a 2.4 percent rise
in median prices for sales of single family homes and condos that closed during April. The volume of
closings dipped slightly (down 1.9 percent).


“Listings were popping up like April flowers and the bloom has produced a vibrant and healthy market,”
exclaimed MLS director John Deely, principal managing broker at Coldwell Banker Bain. “With an
increased supply of listing inventory, low interest rates, and a positive economic climate, buyers are
confident that this is a good time to buy,” he reported, while noting a larger number of buyers are opting
out of competing with other buyers.


“This year’s buyers and sellers are approaching the market with more caution and a focus on an
analytical, versus emotional approach that has ruled the last several years,” Deely said.


Northwest MLS members added 11,697 new listings to inventory during April for a year-over-year gain
of nearly 3.8 percent. During the same period, brokers reported 11,188 pending sales (509 fewer than the
number of new listings), resulting in net gains in the number of active listings in many counties, but
changes in inventory were wide ranging across the 23 counties the MLS serves.


Seven counties had double-digit growth in inventory from a year ago, led by King County (up 78.5
percent) and Snohomish County (up nearly 57 percent). The number of active listings declined in 10
counties, with Jefferson County reporting the biggest drop at 24.8 percent. System-wide inventory at the
end of April totaled 12,955 active listings, which represents a 7.8 gain from March.


“The spring market has arrived, bringing new listings and sales,” stated Dean Rebhuhn, owner of Village
Homes and Properties in Woodinville. Sellers who have prepared their homes for sale are experiencing
brisk activity, and buyers are finding more opportunities to purchase, thanks to low mortgage rates and
increased inventory, according to Rebhuhn.


“As we head into the prime buying and selling season, we’re seeing better news for buyers in King
County, with statistics showing there’s a bit more time to look and make a decision,” said Mike Grady,
president and COO of Coldwell Banker Bain. Pointing to the 78 percent increase in total active listings in
King County and the 57 percent jump in inventory in Snohomish County, he described the year-over-year
gains as “impressive,” but noted there is still less than two months of inventory in many areas. “Buyers
now have three-to-four weeks instead of three-to-four days to make a decision, so it’s still quite a ways
from a balanced market,” he emphasized.

Homebuyers Resuming Search Amid Improving Inventory, Attractive Terms

Source: NWMLS

KIRKLAND, Washington (February 7, 2019) – Homebuyers around Washington state are making their
way back to the market, hoping to take advantage of improving inventory, attractive interest rates, and
more approachable sellers, according to officials with Northwest Multiple Listing Service.

Northwest MLS statistics for January show year-over-year improvement in the volume of new listings
and total inventory, along with moderating selling prices. Although fewer pending sales (mutually
accepted offers) were reported than a year ago (down about 3.3 percent), January was the smallest year-
over-year decline since May 2018 when the drop was about 2.7 percent.

Commenting on the MLS statistics summarizing last month’s activity, broker Gary O’Leyar said
January’s post-holiday real estate activity doesn’t normally pick up until later in the month, but this year
the uptick began early. “January started as a bit of a surprise. Open house activity was very robust, and we
saw multiple offers in numerous instances again,” reported O’Leyar, the owner of Berkshire Hathaway
HomeServices Signature Properties in Seattle.

Brokers tallied 7,564 pending sales during January, a decline from a year-ago when they recorded 7,820
transactions.

Seven counties had increases in pending sales of single family homes and condos compared with 12
months ago, including King (up nearly 7.5 percent) and Snohomish (up 3.8 percent).

James Young, director of the Washington Center for Real Estate Research at the University of
Washington, commented on pending sales. The mixed results, including “healthy growth” in King and
Snohomish counties, “corresponds well to upward movement in mortgage applications late in December,
a leading indicator for the month to follow,” he noted, adding, “One should expect to see increased sales
activity in the coming months throughout the region if mortgage applications continue to stabilize or
increase.”

J. Lennox Scott, chairman and CEO of John L. Scott Real Estate, said buyers “came out of the
woodwork” after the holidays, eager to take advantage of better housing conditions. “Areas close to the
job centers are seeing improved affordability from spring 2018,” he said, attributing it to lower interest
rates, strong job growth, and adjusted pricing.

Scott said buyers are also attracted by expanded inventory resulting from the addition of new listings and
a higher number of unsold inventory, although he noted “inventory levels are still considered a shortage.”
Prospective buyers who sat out the second half of 2018 or were pushed to the sidelines during last year’s
heated market are finding better buying conditions, agreed Robb Wasser, branch manager at Windermere
Real Estate/East. “Interest rates are near a nine month low and buyers have a stronger platform for
negotiating, which have helped drive a 9 percent increase in pending sales of single family homes in King
County,” Wasser stated.

Attentive Home Buyers Can Find “Good Values and Receptive Sellers”

Source: NWMLS

KIRKLAND, Washington (January 7, 2019) – December brought few surprises for real estate brokers in
Western Washington with holidays, fluctuating interest rates, and volatility in consumer confidence
contributing to slower activity. Several leaders from Northwest Multiple Listing Service described 2018
as a transition year for residential real estate.

New data from the MLS show inventory in its 23-county market area dipped below two months of supply
for the first time since July. A year-over-year comparison of the number of new listings, pending sales,
and closed sales show drops overall, while prices rose from the same month a year ago.

Member-brokers added 3,631 new listings of single family homes and condominiums during December
(10.4 percent fewer than a year ago), boosting total active listings to 12,275, up from the year-ago volume
of 8,553. Pending sales were down about 8.4 percent from twelve months ago (5,677 versus 6,198), and
the volume of closed sales dropped nearly 16.6 percent (6,374 versus 7,642).

For 2018, members of Northwest MLS reported completing 92,555 transactions, which compares with
99,345 closed sales during 2017 for a drop of about 6.8 percent. The median price on last year’s closed
sales of single family homes and condominiums combined was $402,000, up $32,000 (8.64 percent) from
2017.

Commenting on inventory, declines in closed sales and the drop in month’s supply, MLS director Dick
Beeson said, “There’s lots of speculation as to the reasons why. One thing for sure: this situation can
make for a deliciously deceptive market for either buyers or sellers.” The veteran Realtor said buyers who
are paying attention will find very good values and receptive sellers.

“Timing the interest rate market is beyond the capability of most everyone. Therefore, buyers should act
now, act deliberately, act decisively, and act in conjunction with an experienced real estate professional,”
advised Beeson, the principal managing broker at RE/MAX Northwest in Gig Harbor.
Brokers said many of last month’s buyers took advantage of the shifting market.

“Buyers in December were reaping the benefits of market-weary sellers who were willing to give up part
of their bloated home equity to make a deal and move on,” reported John Deely, principal managing
broker at Coldwell Banker Bain.

James Young, director of the Washington Center for Real Estate Research at the University of
Washington, noted last month was a very different December from a year ago. “While active listings are
up significantly (43.5 percent) from a year ago, interest rates have also gone up by over 80 basis points,
meaning the typical mortgage repayment has increased by about 10 percent for those looking to buy. That
limits spending power and stops buyers from bidding up for the house they want rather than the house
they can afford.”

Slower Market Means Homebuyers Have “Newfound ability to negotiate”

SOURCE: NWMLS

KIRKLAND, Washington (November 6, 2018) – Seven months of steadily rising housing inventory
reversed course in October when Northwest Multiple Listing Service brokers added the fewest new
listings since February, according to a new report. MLS members believe the onset of wintry weather and
transition to the holiday season are factors, but suggested the slower pace also signals improving
conditions for house-hunters.

“After months of inventory growth that more than quadrupled the number of homes buyers have to
choose from, things got back on a seasonal track with new listings and total supply falling in October,”
said Robert Wasser, a director with Northwest MLS, when comparing those metrics with September.
“Buyers are catching on to their newfound ability to negotiate. For the first time since 2012, closed sales
system-wide rose from September to October,” noted Wasser, a branch manager with Windermere Real
Estate in Bellevue.

Northwest MLS members added 8,865 new listings to inventory last month in the 23 counties it
encompasses, down from September’s volume of 10,458, but up 4.7 percent from the year-ago total of
8,466 new listings. Compared to September, last month’s number of total active listings shrunk nearly 6.7
percent, but year-over-year inventory rose 33.2 percent, from 13,680 to 18,223 offerings.

Brokers generally welcomed the bump-up in inventory.

Real estate veteran Mike Grady, the president and COO of Coldwell Banker Bain, commented on the
current “win-win” conditions. “We’re entering that time of year when historically the market slows a bit
as we head into the holidays. Buyers continue to see an improving market compared to last year with the
inventory increasingly to 2.4 months of supply in King County, compared to the year-ago figure of less
than a month (0.98),” he stated.

Area-wide there is nearly 2.3 months of inventory, slipping from more than 2.5 months in September, and
improving on the year-ago figure of about 1.5 months of supply.

The year-over-year gains in supply, while notable, are still “way off from a balanced market that provides
five to six months of inventory,” Grady remarked, adding, “Contrary to recent media reports, the sky is
not falling,” he emphasized, pointing to rising prices and strong jobs reports as factors for a positive
outlook. (The State Employment Security Department reported Washington gained 4,500 jobs in
September.)

“Home prices in King County are up nearly 8.6 percent year over year, so we’re still experiencing
significant appreciation,” Grady stated. Given continued reports of hiring by companies in the Puget
Sound region and recent increases in inventory, he expects homebuyers will continue entering the market,
adding, “And sellers can still expect to get good prices — all this without the frenzy. A win-win,” he
proclaimed.

Balance “Finally returning” to Housing Market as Buyers Welcome More Choices, Moderating Prices

Source: NWMLS

KIRKLAND, Washington (October 4, 2018) – Housing inventory continued to improve during September
while the pace of sales slowed in many counties served by Northwest Multiple Listing Service. “Balance is
finally returning to the market, and with it, slowing home price growth,” stated OB Jacobi, president of
Windermere Real Estate.

A new report from Northwest MLS shows double-digit increases in inventory in several of the 23 counties it
serves, led by a 78 percent year-over-year gain in King County. Despite improving selection in the central
Puget Sound region, a dozen counties reported drops in the number of active listings compared to last year.

System-wide, the month ended with 2.56 months of supply of single family homes and condos, well below
the 4-to-6 months analysts use as an indicator of a balanced market between sellers and buyers. The current
level is the highest since February 2015 when member-brokers reported 3.56 months of inventory. In King
County, supply exceeded two months for the first time since January 2015.

Condo inventory remains sparse, with only 0.34 months of supply area wide, despite improving inventory (up
nearly 70 percent from a year ago). The shortage is expected to ease as construction progresses on several
recently-announced high-rise projects.

Brokers added 10,458 new listings of single family homes and condos to the MLS database during
September, slightly more than the year-ago figure of 10,120. At month end, buyers could choose from 19,526
listings, a 22.9 percent improvement from twelve months ago when selection totaled 15,888 listings.

Commenting on the wider selection, Mike Grady said buyers “are at long last now seeing properties that stay
on the market longer.” Listings that are priced appropriately, “and not based on the feverish market we saw
just a few months ago are still selling quickly, and home prices are still showing 8 percent appreciation year-
over-year – more than double the rate of inflation,” added Grady, the president and COO of Coldwell Banker
Bain.

With improving inventory, some brokers suggest the market may be showing signs of pausing, if not
softening. A market shift may be under way, but they believe activity will stay strong.

J. Lennox Scott, chairman and CEO of John L. Scott Real Estate, encouraged would-be buyers to “put extra
focus on October,” which he described as the last great month for new listings until March 2019. “Over the
winter, new monthly resale listings will lower by approximately 50 percent compared to summer months.” He
also noted interest rates, currently in the upper 4 percent, are projected to rise in the coming months.

“This is a more traditional yearly market cycle taking the place of the unusually overheated real estate market
of the past several years,” said John Deely, principal managing broker at Coldwell Banker Bain.