Weekly Review
Newsletter - 06/27/2022

Week of June 20, 2022 in Review

Inventory issues continue to impact home sales and rental home prices, while Fed Chair Powell said a recession is “certainly a possibility.” Here are the key stories:

• Existing Home Sales Still Strong Into Summer
• The Real Scoop on New Home Inventory
• Fed Chair Powell Testifies That Recession Is “Certainly a Possibility”
• Single-family Rent Price Growth Hits New Record
• Is An Increase In Jobless Claims Ahead?

Existing Home Sales Still Strong Into Summer

Existing Home Sales, which measure closings on existing homes, showed sales were down 3.4% in May at a 5.41 million-unit annualized pace. This data likely reflects people shopping for homes in March and

Weekly Review
Newsletter - 06/21/2022

Week of June 13, 2022 in Review

A Fed rate hike, hot wholesale inflation, weakening builder confidence and signs of economic slowdown led to a volatile week in the markets. Here are the top headlines:

• Fed Rate Hike Largest Since 1994
• Wholesale Inflation Declines Slightly But Remains Elevated
• Builder Confidence Weakens as Homebuyer Traffic Slows
• Despite Slowing Housing Starts, Glimmer of Hope for Home Completions
• What to Look for in Jobless Claims Data
• More Signs of Economic Slowdown

Fed Rate Hike Largest Since 1994

The Fed was expected to hike its benchmark Fed Funds Rate by 50 basis points at its meeting last week, but instead acted more aggressively with a 75 basis point hike, due

The housing market is entering the ‘most significant contraction in activity since 2006,’ says Freddie Mac economist.

Cracks are beginning to appear in the red-hot housing market. The pandemic's housing boom is finally running on fumes. Home sales are falling. Inventory levels are rising. And home sellers are cutting list prices at the fastest clip since 2019.

Spiraling mortgage rates on top of record-high and still-rising home prices are leading many experts to predict the real estate market is on the verge of a correction—if it isn’t already in one. They anticipate home prices will flatten, or even go down a bit, in certain markets.

This Shift is a lot bigger than a seasonal cooldown. The economic shock of higher mortgage

Weekly Review
Newsletter - 06/13/2022

Week of June 6, 2022 in Review

Consumer inflation reached a 41-year high in May while annual home price appreciation tied another record high in April. Here are the key headlines:

• Consumer Inflation Hits Highest Level Since 1981
• Majority of Top Economists Do Not Believe We’re in a Housing Bubble
• Annual Home Price Appreciation Ties Record High
• Does the Rise in Initial Jobless Claims Signal a Slowdown?

Consumer Inflation Hits Highest Level Since 1981

The Consumer Price Index (CPI), which measures inflation on the consumer level, rose 1% in May, which was much higher than the expected 0.7% gain. On an annual basis, CPI rose from 8.3% to 8.6%, which is the hottest reading in 41 years. Core

• Home sellers really need to re-think their expectations.
•          The days of “multiple offers and waived inspections are behind us.”
•          Active Listings up a whopping 59% from a year ago.
•          Both pending sales (mutually accepted offers) and closed sales during May were down from a year ago.
•          Rising interest rates coupled with inflation are causing buyers that rely on conventional mortgages to reconsider the affordability.

“Home sellers really need to re-think their expectations,” suggested Mike Larson, a member of the board of directors at Northwest Multiple Listing Service (NWMLS) when commenting on statistics summarizing May activity. The new report showed a significant increase in active listings

1. What does the changing housing market mean for Sellers? 
    

This isn't 2008. Home prices haven't started falling. Looking at Western Washington: Area-wide prices for single family home sales (excluding condos) in King County also increased, climbing nearly 20% from a year ago, from $830,000 to $995,000.

And though the supply of newly built homes has increased, that's actually a small part of the overall market. Inventories of existing homes are still some of the lowest on record, as of April.

2. What do increasing interest rates mean for Buyers?

“We are starting to see signs of impact from the significant rise in mortgage rates earlier this year, such as an increase in active listings and months of inventory creeping

Weekly Review
Newsletter - 06/06/2022

Week of May 30, 2022 in Review

The Unemployment Rate held steady in May while home price appreciation surged above 20% on an annual basis in March. Here are the most crucial headlines:

• What the Unemployment Rate Really Shows
• May Private Payrolls Much Lower Than Expected
• What’s Ahead for Jobless Claims?
• Home Prices in March 20.6% Higher Than a Year Ago

What the Unemployment Rate Really Shows

The Bureau of Labor Statistics (BLS) reported that there were 390,000 jobs created in May, which was stronger than expectations of 320,000 new jobs. However, there were negative revisions to the data for March and April, removing 22,000 jobs in those months combined, which tempered the

Weekly Review
Newsletter - 05/31/2022

Week of May 23, 2022 in Review

Headlines showed that April brought moderating inflation and slower home sales, but that’s not the whole story. Low inventory and completion delays continued to impede home sales, and more signs of an economic slowdown are on the horizon.

Inflation Moderates in April, But Don’t Be Fooled

The Fed’s favorite measure of inflation, Personal Consumption Expenditures (PCE), showed that headline inflation rose 0.2% in April, cooler than estimates of 0.3%. This caused the year over year reading to decrease from 6.6% to 6.3%. Core PCE, which strips out volatile food and energy prices and is the Fed’s real focus, met estimates with a 0.3% rise. Year over year, Core PCE decreased from

The Real Estate Market “Shift” Is Here

Looks like America's home buying binge is winding down. There's a vibe shift visible in both the official data and in the anecdata from sellers, buyers, and brokers.

Why it matters: This is just what Jerome Powell ordered. The slowdown means the Fed's rate hikes are working — cooling demand in an overheated market.

"The buyers just stopped buying," said Shauna Pendleton, an agent with Redfin. Buyers who were flush with cash courtesy of the also formerly booming stock market have completely pulled back.

• Some listings now sit for weeks without even a showing. Some homes are sitting for 42 days without a single showing.
• Redfin agent Robin Glaysher said five people showed up to an open house last

Fueled by unprecedented gains in home values, Washington State’s red hot real estate market has led to “unprecedented” increases in home values that will drive up next year’s property tax bills, according to the King County assessor’s office.

 The Sammamish Plateau topped the list with a 52% increase from the previous year. That’s double the still eye-popping 26% increase in Federal Way. Other Eastside cities also saw staggering price increases; areas such as Redmond (43% on average), Woodinville (44%) and Kirkland (44.5%).

While not as extreme as on the Eastside, in Seattle proper, values are up 19% in Rainier Beach and 20% in Magnolia, according to the assessor’s office, which released a sample of data Thursday but is still finalizing values