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

ECONOMIC OVERVIEW 

Oregon added 29,500 new jobs over the past 12 months, representing an annual growth rate of 1.5%. The current pace of job growth continues the slowdown that started in mid-2018. I am not overly concerned by this slowdown in growth, as it is typical for this stage in the economic cycle.

The Southwest Washington market (Clark, Cowlitz, Skamania, and Klickitat counties) added 4,490 new jobs over the past 12 months, which represents an annual growth rate of 2.1%.

Oregon’s unemployment rate was 4.4% in February, up from 4.2% a year ago. In Southwest Washington, the unemployment rate was 5.5%, down from 5.9% in February of 2018.

HOME SALES

• First quarter home sales dropped 13.1% compared to the same period last year, with a total of 10,516 transactions.
• Year-over-year sales rose in five counties, remained static in one, but dropped in the other 21 counties contained in this report.
• Sales rose the most in Crook County, which saw a massive 110% increase compared to the first quarter of 2018, though this was an increase of only 11 sales. There were also solid increases in Jefferson and Cowlitz counties. Home sales fell the most in the small Tillamook, Skamania, and Hood River counties.
• Sales in the first quarter were clearly a disappointment, but I don’t believe this is a systemic drop in demand.  I am confident the spring will bring more buyers and sales will pick back up in many markets.

HOME PRICES

• The average home price in the region rose 2.2% year-over-year to $369,721, but the market saw a drop of 1.4% compared to the fourth quarter of 2018.
• Eighteen of the counties contained in this report experienced price growth compared to the first quarter of 2018. Eight counties saw price contractions.
• Klamath County led the market with the strongest annual price growth. Homes there sold for 11.1% more than a year ago. Crook, Tillamook, and Klickitat counties experienced the largest drop in home prices, but these are small counties, making them more prone  to significant swings.
• The takeaway is that price growth continues to moderate, but I expect it to pick up in the second quarter given the drop in interest rates earlier this year.

DAYS ON MARKET

• The average number of days it took to sell a home in the region dropped 3 days compared to a year ago, but was up by 16 days compared to the final quarter of 2018.
• Twelve counties saw the length of time it took to sell a home drop compared to a year ago. Fourteen counties saw market time rise.
• The average time it took to sell a home last quarter was 90 days.
• Homes again sold the fastest in Washington (43 days) and Cowlitz (45 days) counties.

CONCLUSIONS

The speedometer reflects the state of the region’s real estate market using housing inventory, price gains, home sales, interest rates, and larger economic factors.

I believe listing inventories will continue to rise as we move through the spring months. We will also see more buyers start their search for a new home to take advantage of the drop in interest rates. With all of this in mind, I have moved the needle further toward buyers because they have more choice and price growth has slowed. That said, in aggregate, the market still favors home sellers.

As Chief Economist for Windermere Real Estate, Matthew Gardner is responsible for analyzing and interpreting economic data and its impact on the real estate market on both a local and national level. Matthew has over 30 years of professional experience both in the U.S. and U.K.

In addition to his day-to-day responsibilties, Matthew sits on the Washington State Governors Council of Economic Advisors; chairs and the Board of Trustees at the Washington Center for Real Estate Research at the University of Washington; and is an Advisory Board Member at the Runstad Center for Real Estate Studies at the University of Washington where he also lectures in real estate economics. 

What’s your home worth?

It seems like a simple question, but finding that answer is more complicated than it might seem. Sites like Zillow, Redfin, Eppraisal, and others have built-in home valuation tools that make it seem easy, but how accurate are they? And which one do you believe if you get three different answers? Online valuation tools have become a key part of the home buying and selling process, but they’ve been proven to be highly unreliable in certain instances. One thing that is for certain is that these valuation tools have reinforced that real estate agents are as vital to the process of pricing a home as they ever were – and maybe even more so now.

There are limitations to every online valuation tool. Most are readily acknowledged by their providers, such as Zillow’s “Zestimate”, which clearly states that it offers a median error rate of 5%, with varying accuracy across the country. That may not sound like a lot, but keep in mind that amounts to a difference of about $35,000 for a $700,000 home. For Redfin and Trulia, there are similar ranges in results. When you dig deeper into these valuation tools, it’s no small wonder that there are discrepancies, as they rely on a range of different sources for information, some more reliable than others.

Redfin’s tool pulls information directly from multiple listing services (MLSs) all over the country. Others negotiate limited data sharing deals with those same services, but also rely on public records, as well as homeowners’ records. This can lead to gaps in coverage. These tools can serve as helpful pieces of the puzzle when buying or selling a home, but the acknowledged error rate is a reminder of the dangers of relying too heavily on them.

Home valuation tools can be a useful starting point in the real estate process, but nothing compares to the level of detail and knowledge a professional real estate agent offers when pricing a home. An algorithm can’t possibly know about a home’s unique characteristics or those of the surrounding neighborhood. They also can’t answer your questions about what improvements you can make to get top dollar or how buyer behaviors are shaping the market. All of this – and more – can only be delivered by a trusted professional whose number one priority is getting you the best price in a time frame that meets your needs.

If you’re curious what your home might be worth, Windermere offers a tool that provides a series of evaluations about your property and the surrounding market. And once you’re ready, we’re happy to connect you with a Windermere agent who can clarify this information and perform a Comparative Market Analysis to get an even more accurate estimate of what your home could sell for in today’s market.

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

ECONOMIC OVERVIEW

Washington State employment slowed to an annual growth rate of 1.7% — a level not seen since 2012 — and continues a trend of slowing that started in the summer of 2018. I was a little surprised to see such a significant drop in employment growth, but it may be due to the state re-benchmarking their data (which they do annually). As such, I am not overly concerned about the lower-than-expected numbers but will be watching to see if this trend continues as we move through the spring months. The state unemployment rate was 4.5%, marginally below the 4.6% level a year ago.

My latest economic forecast suggests that statewide job growth in 2019 will be positive but is expected to slow. We should see an additional 84,000 new jobs, which would be a year-over-year increase of 2.2%.

HOME SALES

• There were 13,292 home sales during the first quarter of 2019. Year-over-year, sales were down 12.3% and were 23.4% lower than the fourth quarter of 2018.​
• It is quite likely that part of the slowdown can be attributed to the very poor weather in February. That said, anecdotal information from our brokers suggests that March was a very active month and I expect to see sales rise again through the spring selling season. Notably, pending home sales were only off by 3.5% from the first quarter of 2018.​
• All counties contained in this report saw sales drop when compared to a year ago. The greatest drops were in the relatively small counties of San Juan, Clallam, Island, and Kitsap.​
• The decline in interest rates during the first two months of the quarter nudged many home buyers off the fence. I believe this will cause a significant bump in sales activity in the second quarter numbers.

HOME PRICES

• In combination with the factors discussed earlier, the 40% increase in listings has caused home price growth to taper to a year-over-year increase of 3.3%.
• Home prices were higher in every county except Clallam. While the growth of prices is slowing, the strong local economy, combined with lower interest rates, will cause home prices to continue rising through 2019.
• When compared to the same period a year ago, price growth was strongest in San Juan County, where home prices were up 36.4%. Only one other county experienced a double-digit price increase.
• As I have said for quite some time now, there must always be a relationship between incomes and home prices, and many areas around Western Washington are testing this ceiling. That said, the region’s economy continues to perform well and incomes are rising, which, in concert with low interest rates, will allow prices to continue to rise but at a significantly slower pace.

DAYS ON MARKET

• The average number of days it took to sell a home matched the same quarter of 2018.
• Pierce County was the tightest market in Western Washington, with homes taking an average of 40 days to sell. There were seven counties that saw the length of time it took to sell a home drop compared to the same period a year ago. Market time rose in seven counties and one was unchanged.
• Across the entire region, it took an average of 61 days to sell a home in the first quarter of 2019. This matches the level seen a year ago but is up by 10 days when compared to the fourth quarter of 2018.
• In the last two Gardner Reports, I suggested that we should be prepared for days-on-market to increase, and that is now occurring. Given projected increases in inventory, this trend will continue, but this is typical of a regional market that is moving back toward balance.

CONCLUSIONS

This speedometer reflects the state of the region’s real estate market using housing inventory, price gains, home sales, interest rates, and larger economic factors. I am again moving the needle toward buyers as price growth moderates and listing inventory continues to rise.

I do not see any clouds on the horizon that suggest we will see a downturn in sales activity in 2019. That said, this will be the year we move closer to balance. Buyers who were sidelined by the significant increase in listings in the second half of 2018 are starting to get off the fence as mortgage rates drop. I foresee a buoyant spring market ahead.

As Chief Economist for Windermere Real Estate, Matthew Gardner is responsible for analyzing and interpreting economic data and its impact on the real estate market on both a local and national level. Matthew has over 30 years of professional experience both in the U.S. and U.K.

In addition to his day-to-day responsibilities, Matthew sits on the Washington State Governors Council of Economic Advisors; chairs the Board of Trustees at the Washington Center for Real Estate Research at the University of Washington; and is an Advisory Board Member at the Runstad Center for Real Estate Studies at the University of Washington where he also lectures in real estate economics.

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