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A Busy Legislative Session for Housing: 10 Bills Passed That Will Affect Housing in Our State

On April 23rd the Washington State Legislature adjourned after passing 10 new bills that will affect housing. Some of the bills are geared toward creating more transparency around brokerage transactions, some are intended to institute more opportunities for building density to provide more affordable housing, and some are more regulatory to help guide and ease the permitting process for building and development.  

The bills that will improve real estate brokerage services are centered in transparency and cleaning up some laws that do not trend with market conditions. As of January 1, 2024, all real estate brokers will be required to engage in a buyer service agreement with the buyers they work with, similar to the requirement of having a listing agreement with a seller (SB 5191). These service agreements, better known as Buyer Agency Agreements (BAA) will address compensation, exclusivity, the duration of the relationship, and establish written consent for dual agency. This will create clearly defined broker representation for buyers from the onset of the relationship.

Short-term seller rent-backs after closing are now carved out of the landlord-tenant act if the rent-back is less than 90 days (SHB 1070). This will ease the angst involved with tenant rights, as the goal of a rent-back is to create a convenient transitionary period that intends for the seller to vacate, minimizing their tenant rights. This change aligns with the trends in the marketplace and makes this solution-based approach less tenuous. Lifetime listing agreements were also shortened (SSB 5399).

Washington State ranks last in the number of housing units per family nationally and officials project that the state will need roughly one million new homes by 2044. Many of the bills that passed last month will create policies to help provide more housing units and affordability. Matthew Gardner, Windermere's Chief Economist has been speaking about our state's lack of affordability for years and shares his thoughts here on the HB 1110 which will allow for the development of middle housing.

HB 1110, SB 5258, HB 1042, and HB 1337 were all created to create more housing units. HB 1110 addresses middle housing, SB 5258 modifies several laws relating to the construction of condos and townhomes, HB 1042 enables the creation of housing in existing, underutilized buildings, and HB 1337 will make it easier to build Accessory Dwelling Units (ADUs) in urban growth areas.

SB 5412, SB 5290, and HB 1293 are intended to ease the permitting and design review processes when applying for a building permit. These should help streamline and accelerate getting from point A to point B on a building project. With the goal of providing more housing units, the backend systems needed to be reevaluated to meet these goals in a timely fashion while adhering to important guidelines and procedures.

Lastly, HB 1474 will increase the document recording fees by $100 to fund a new state program to provide down payment and closing cost assistance to people, or heirs, impacted by racially restrictive covenants. This program is set to raise $75 million per year to improve housing affordability. The State also committed over $1.1 billion in budget funds to work towards investing in housing supply and homelessness prevention.

Click here for a detailed review of each new bill and the budget changes. It is always my goal to help keep my clients well-informed about the real estate market and in this case, knowing the direction our state is headed with the laws surrounding real estate and housing. If you have additional questions or want to discuss how these changes may affect your housing goals, please reach out.

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Windermere Community Service Day is coming up and we’d love your help!

Since 1984, Windermere associates have dedicated a day of work to complete neighborhood improvement projects as part of Windermere's Community Service Day. After all, real estate is rooted in our communities. And an investment in our neighborhoods gives us all a better place to call home.

Our office will spend June 9th with the Snohomish Garden Club working to put fresh produce on the tables of local families who need a little help. We will plant over a half-acre of veggies and fruits that will be harvested over the summer and into the fall.

If you'd like to pitch in, we are looking for additional veggie starts. Let us know if you have some starts already going or if you would like to prepare some now that you would be willing to donate.

The garden specifically needs:

  • Scallions
  • Snow/Pod Peas (please no shelling peas)
  • Chard
  • Lettuce (the food banks require headed varieties, rather than loose-leaf)
  • Squash (any kind, EXCEPT yellow crookneck)
  • Cabbage/Broccoli/Kohlrabi/Cauliflower/Collards/Kale
  • Peppers (early maturing varieties work great: ~70-day range)
  • Herbs (never enough Basil and Parsley!)
  • Flowers (marigolds, nasturtiums, or any annuals)
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The Difference Between Long-Term & Short-Term Interest Rates

It is very important that consumers understand the difference between long-term interest rates and short-term interest rates. Long-term rates involve home mortgages such as conventional 30-year fixed, Jumbo, FHA, and VA loans. Short-term rates involve car loans, credit cards, and Home Equity Lines of Credit (HELOCs). While both types of rates have gone up over the course of the last year, they have not had the same trajectory.

In an effort to combat inflation and slow spending, the Fed has made consistent increases to the short-term rate over the last year. I am sure you are running out of fingers on your hands to count the number of times you have heard this as a top story on the news: "The Fed Raises Rates!" A huge misconception has been that the rates the Fed are referring to are mortgage rates.

As you can see from the chart above, the short-term rate has had a consistent upward trend and the long-term rate has had a more volatile journey. In some cases, when the Fed has increased the short-term rate, the long-term rate has gone down! My point in all of this is to illustrate that what the media reports is not always about mortgage rates and that it is important to stay connected to accurate data.


Matthew Gardner, Windermere's Chief Economist recently recorded a video update featured below that speaks to some of the misconceptions about interest rates, specifically mortgage rates. Many consumers are confused and misinformed which is dangerous. Investing in real estate is the single largest wealth-building opportunity and to not be accurately connected to the latest trends could get in the way of a successful financial picture.

Prices in many markets have already bottomed out from the 2022 correction and mortgage rates have come down off the peak. In some areas, we are already seeing appreciation again! This quote from Matthew sums up where we are headed:

"Myself, and every economist I know, believe that rates will slowly pull back as we move through 2023, and I haven't seen a single forecast suggesting that mortgage rates will rise to a level this country hasn't seen in decades."


With inflation slowing and year-over-year CPI (Consumer Price Index) numbers becoming less extreme, mortgage rates will start to soften. In fact, there are some important reports coming up in May that will tell this story. Real estate is a long-term hold investment that has been the cornerstone of wealth in our country. The wave we have had to ride post-pandemic related to supply chain issues and consumer demand is coming to the shore and real estate will remain an investment safe haven.

Another point to consider is while real estate is an investment, it is also where you live. Life changes - good or bad - lead to moves. All this to say: remain nimble by being well-informed. Knowledge empowers strong decisions, and accuracy matters. You can count on me to provide you with the information you need to successfully navigate your real estate decisions. Please reach out if you'd like to discuss how the current trends relate to your goals.

Shred Day & Food Drive was a huge success!

Big thank you to everyone who came by to utilize our free shredding services and drop off food or cash donations for the Volunteers of America Western Washington food banks!

We filled two trucks of shredding and collected over 2,000 pounds of food and $3,372 which will go to our neighbors in need. Thank you for your generosity!

ATTENTION GARDENERS: Windermere Community Service Day is coming up and we’d love your help!

Since 1984, Windermere associates have dedicated a day of work to complete neighborhood improvement projects as part of Windermere's Community Service Day. After all, real estate is rooted in our communities. And an investment in our neighborhoods gives us all a better place to call home.

Our office will spend the day with the Snohomish Garden Club working to put fresh produce on the tables of local families who need a little help. We will plant over a half-acre of veggies and fruits that will be harvested over the summer and into the fall.

If you'd like to pitch in, we are looking for additional veggie starts. Let me know if you have some starts already going or if you would like to prepare some now that you would be willing to donate. Our planting day is Friday, June 9th; I can arrange the details with you for drop off or pick up! 

The garden specifically needs:

  • Scallions
  • Snow/Pod Peas (please no shelling peas)
  • Chard
  • Lettuce (the food banks require headed varieties, rather than loose-leaf)
  • Squash (any kind, EXCEPT yellow crookneck)
  • Cabbage/Broccoli/Kohlrabi/Cauliflower/Collards/Kale
  • Peppers (early maturing varieties work great: ~70-day range)
  • Herbs (never enough Basil and Parsley!)
  • Flowers (marigolds, nasturtiums, or any annuals)
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Housing Absorption Trends, Interest Rates Hovering, and Inventory Constricting

Three key elements to pay attention to when assessing prices and the real estate market.

As we round out the first quarter of 2023, three real-time trends to pay close attention to in order to truly understand what is happening in the real estate market are absorption data, interest rates, and inventory levels. Right now, we are in the midst of the market heating up due to seasonality, pent-up buyer demand, and rates finding their new normal. The media will often lag in reporting the latest information (pending sale data) and will latch onto closed sale data, which is outdated. I am here to keep you on the frontline of market activity so you are connected to the most current data to keep you well informed.

Let's start with absorption data. Month-to-date (3/1/23-3/27/23), days on market are shrinking and sale price to original list price ratios are climbing. This means that houses are selling faster and negotiations are becoming more competitive for buyers. I was able to determine that these trends are fluid from Snohomish County to King County by analyzing four zip codes: 98296 (City of Snohomish), 98020 (Edmonds), 98155 (East Shoreline), 98117 (Ballard).

Available inventory is constricting due to an increase in absorption and new listings lagging. As we head into spring, we will see a seasonal uptick in new listings which will be welcomed by a healthy buyer audience. Month-to-date, inventory levels based on pending sales show a seller's market (0-2 months). You calculate months of inventory by taking the number of available homes and dividing it by the number of pending sales. If no new homes came to market the trend suggests we would sell out of homes in this amount of time. Month-to-date the actual number of homes available in each zip code is quite limited and a welcome sign for more new listings as we head into Spring.  Again, I pulled the data for the four zip codes to represent a sampling of both Snohomish and King Counties.


Both of the trends above have been determined by buyers becoming more comfortable with the new normal of interest rates. The correction in the market that we experienced in 2022 was a result of a 3-point increase in interest rates. After prices adjusted to levels that would work with the higher rates, buyers started to return to the market. 2-3% and maybe even 4% interest rates will be folklore we tell our grandchildren about. People that want to make a move have come to terms with adapting to the higher rates and making these important life transitions. Today's rates are much more in line with the average over the last 30 years.

At the start of 2023, the 30-year fixed mortgage was at 6.48%, then dropped to 5.99% in early February, peaked at 7.1% in early March, and is now back down to 6.54% at press time. Rates have been volatile as the Fed tries to manage inflation. You can access a video below from Matthew Gardner explaining the effect of the Fed and the recent bank failures on interest rates and the real estate market overall.

One item to note is that mortgage rates are long-term interest rates, and when you hear about the Fed raising rates they are referring to short-term rates such as car loans, credit cards, and home equity loans. The media does not make that distinction, often confusing the public. In fact, in some cases when the short-term rate has been increased, we have seen mortgage rates drop. Below is a link to a great website to follow to get a real-time read on rates.

Interest rates finding their way, the psychological acceptance of the new normal, and people needing to make moves to adapt to their life changes have led to prices starting to stabilize and even grow in some markets. I pulled the month-to-date median price data for the four zip codes and it appears prices are leveling and growth is happening or will be in the near future. Bear in mind, that the bottom often comes in the form of a bounce before there is a consistent straight shot up.  All signs are pointing to recovery from the correction in these areas noted. This growth will be added to the immense long-term price gains we have seen. Currently, 93% of all homeowners in the U.S. have positive home equity and 48% of homeowners have more than 50% equity.

During this time of change, it is important that each neighborhood and price point is researched individually. From the four zip code breakdowns above, it is clear that the trends vary. When I am asked the question, "How's the Market?", I am always curious to know what you have heard and what you want to learn about. Sweeping statements are dangerous and I am committed to diving into the data to educate my clients on how the trends affect their investments and their lifestyle.

With the market correction of 2022 in the rearview mirror and the recovering market of 2023 upon us it is important to understand that opportunity abounds. That opportunity is rooted in research. Solid research and discerning the data gathered help empower strong decisions and build trust. This is my process and my passion and it is all about helping people! If you are curious about how the latest trends match up with your investment and lifestyle goals, please reach out and we can dive in.

Mortgage News Daily is a great website to follow for real-time read on rates:


Watch Matthew’s 3-minute video on the recent bank failures:



You’re invited to our annual Paper Shredding Event & Food Drive. We partner with Confidential Data Disposal to provide a safe, eco-friendly way to reduce your paper trail and help prevent identity theft.

Saturday, April 15th, 10AM to 2PM* 
4211 Alderwood Mall Blvd, Lynnwood 
Bring your sensitive documents to be professionally destroyed on-site. Limit 10 file boxes per visitor. 

This is a paper-only event. No x-rays, electronics, recyclables, or any other materials. 
We will also be collecting non-perishable food and cash donations to benefit Volunteers of America Western Washington food banks. Donations are not required, but are appreciated. Hope to see you there! 
*Or until the trucks are full 


Which is Better, Renting or Buying?

The Financial Benefits of Owning Real Estate

Whether you're a first-time homebuyer, looking to purchase a second home, or considering assisting your adult children in buying a home, owning real estate can offer significant long-term financial benefits. While renting may be a more immediate and accessible option, the benefits of homeownership can outweigh the temporary convenience of renting.

In becoming a homeowner, you'll need to have a stable employment history, good credit, and some form of down payment. While having a sizable down payment can be beneficial, there are many loan programs available that require only 3-5% down. Additionally, your nest egg that you would put into a home purchase is a powerful investment vehicle that can lead to significant financial growth and security over time. Read on to discover more benefits in owning, and check out the video link from Matthew Gardner, Windermere's Chief Economist, who also weighs in on this subject.

Did you know that the average net worth of a homeowner is 40 times higher than that of a renter? This statistic alone shows the incredible financial benefits of owning real estate. As a homeowner, you have the opportunity to build equity over time and benefit from historical home price appreciation, which has averaged 3-5% annually. While there may be occasional dips in the market, real estate is a solid long-term investment that can provide shelter and financial opportunity.

One of the biggest advantages of buying a home is that every mortgage payment goes towards paying down your loan principle, essentially serving as a forced savings account. Unlike rent, which provides no return on investment, owning real estate allows you to allocate a portion of your income towards an asset that is growing in value. Additionally, it provides tax benefits such as real estate tax and mortgage interest deductions, as well as capital gains tax exemptions on a primary residence.

If you already own a home and are considering purchasing a second property, diversifying your investments by adding another property to your portfolio can be very valuable. Real estate provides tangible benefits such as the ability to make improvements to the property and enjoy them while increasing the value of the asset. It also provides the opportunity to generate rental income or flip the property for a profit.

If you are considering assisting your adult children with purchasing a home, it can be a wise financial decision that can benefit them in the long run. Not only can it provide a place for them to live while they build their own financial stability, but it can also serve as an investment tool for their future.

I will leave you with this: it can seem overwhelming to take on the task of buying another home or to help prepare your adult children to purchase. Start by shopping in an affordable price range. Often people want to get their forever home right off the bat and that makes the accomplishment of becoming a homeowner much harder. Figure out how much you can afford now and put your nest egg to work sooner rather than later to start building wealth. Maybe it is a small condo that fits your budget now, but over time the money saved and the equity built can turn into the down payment needed to purchase your forever home. 

Investing in real estate is a step-by-step journey that takes time and sacrifice. Your patience and commitment will be rewarded with compounded savings which will lead to building long-term wealth. It also creates a fond memory lane of that first condo or small house that you loved making a home, which then becomes the vehicle to afford the next home that better suits your lifestyle. If you are curious about the prospect of owning additional real estate or have a special person in your life who is poised to become a homeowner, please reach out. It is my goal to help people understand the process, align them with a trusted lender, help them make strong financial decisions, and match their living situation to their lifestyle.

You’re invited to our annual Paper Shredding Event & Food Drive. We partner with Confidential Data Disposal to provide a safe, eco-friendly way to reduce your paper trail and help prevent identity theft.

Saturday, April 15th, 10AM to 2PM* 
4211 Alderwood Mall Blvd, Lynnwood 
Bring your sensitive documents to be professionally destroyed on-site. Limit 10 file boxes per visitor. 

This is a paper-only event. No x-rays, electronics, recyclables, or any other materials. 
We will also be collecting non-perishable food and cash donations to benefit Volunteers of America Western Washington food banks. Donations are not required, but are appreciated. Hope to see you there! 
*Or until the trucks are full 

Jill-Langer-Feb-2023-Blog Featured Image

Holy Shift, Again!

Most of the Market Correction Behind Us & Growth Ahead!

Markets change fast! We experienced a substantial shift in 2022 with the first half of the year feeling like a completely different market than the second half of the year. A 3-point increase in interest rate was the main culprit along with inflation and affordability for the 2022 market correction we experienced.

A market correction is defined by prices reverting by 10% or more. In January 2022 the median price in Snohomish County started at $700,000 then peaked at $830,000 in April, and ended the year at $689,000 (-17%). In King County, the median price started at $794,000 then peaked at $1,000,000 in May, and ended the year at $820,000 (-18%). Bear in mind that the December 2022 median price was also up 17% over the January 2021 median price in Snohomish County and up 12% in King County. This illustrates that the correction was only off the peak of spring 2022 not off of the strong equity that was built prior to that intense run-up.

As we find ourselves in mid-Q1 2023 all data points and anecdotal stories are pointing to the worst of the market correction being behind us and yet again, another shift. Interest rates peaked in November 2022 at just over 7% and have since come down. Experts are predicting rates to find themselves under 6% as we travel through the easing of inflation in 2023.

The well-defined price correction and interest rates lowering have brought many buyers back to the market. In fact, pending sales in Snohomish County in January 2023 were up 52% over December 2022 and were up 3% over January 2022. Even more so an indicator: pending sales are up 80% month-to-date (MTD) in February over January 2023! In King County, pending sales in January 2023 were up 63% over December 2022 and were up 2% over January 2022, and up 61% MTD over January 2023.

This pent-up demand has come at a time when listing inventory is seasonally scarce and has tilted the market from a balanced market back to a seller's market in many areas. Months of inventory is how we define market conditions. 0-2 months is a seller's market, 2-4 months a balanced market, and 4 months plus a buyer's market. In Snohomish County, we ended 2022 with 2.3 months of inventory based on pending sales, and in January 2023 had 1.2 months, and MTD is sitting at 0.9 months. In King County, we ended 2022 with 2.6 months of inventory based on pending sales, and in January 2023 had 1.3 months, and MTD is sitting at 1.1 months.

After months of price reductions and searching for the bottom, we are now starting to come across some multiple offers and price increases. This is leaving clues that the bottom was reached and that we are now stabilizing and looking toward the predicted growth that 2023 has to offer. Buyers are eager for additional selection and will welcome the spring influx of new listings. If sellers are ready, they should not hesitate. Should rates lower as the new listings arrive, sellers will be well supported by a willing buyer audience ready to absorb any growth in inventory.

Buyers need to understand that rates and prices are closely related and that waiting for rates to hit a certain point may be detrimental to securing a stabilized price. Many buyers are heading into today's market with a refinance in mind down the road. They are aware that prices will rise as rates lower, so they are looking to obtain a lower price now with a higher rate and once the rate hits their desired level, they will refinance to lower their payment all while holding on to their lower basis point.

For example, if a buyer bought now at $750,000 with 20% down and a rate of 6.5% their monthly principal and interest payment would be $3,792. If a year from now, rates are at 5.5% and prices are up 5% and that same buyer refinances, they will save $364 a month on their payment and $37,500 in principle. This would also be $192 lower than what the payment would be at the appreciated price with the lower rate!

Real estate moves are driven by life changes. It was completely understandable that many buyers took a pause as the market corrected. Now that the market is showing signs of stabilizing these life changes are pushing buyers to find the home that better fits their lifestyle. Sellers need to keep in mind that their homes need to be priced right and show up to the market well-appointed and properly prepared to get the best results.

We've learned a lot over the last year. Once the historical 3-4% interest rate disappeared, consumers had to adapt to the new normal. Now that consumer sentiment is leaning towards a resurgence in demand, opportunity abounds for sellers who are ready to make a move. Please reach out if you are curious about the market trends and want to discuss your goals. It is always my goal to help keep my clients well-informed and empower strong decisions. 2023 is going to be a great year for real estate, I can feel it!

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Jill-Langer-1.3 Pendings
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Jill-Langer-2 Foundation

At Windermere we help people buy and sell homes, but we also help build community. I’m proud to support the Windermere Foundation which has raised over $50 million in the past 34 years for low-income and homeless families right here in our local community.


By Matthew Gardner

This video is the latest in our Monday with Matthew series with Windermere Chief Economist Matthew Gardner. Each month, he analyzes the most up-to-date U.S. housing data to keep you well-informed about what’s going on in the real estate market.

Hello there, I’m Windermere’s Real Estate’s Chief Economist Matthew Gardner and welcome to the first episode of “Monday with Matthew” for 2023. As has become tradition, this first episode of the year will be dedicated to my real estate forecast for the U.S. housing market, so let’s get straight to it.

2023 Real Estate Forecast

Existing Home Sales & Forecast

From Matthew Gardner's 2023 real estate forecast, a bar graph showing the existing home sales for the years 2015 through 2021, plus forecasts for 2022 and 2023. The y-axis is in millions and the x-axis contains the years. The numbers are as follows (in millions): 5.3 in 2015, 5.5 in 2016 and 2017, 5.3 in 2018 and 2019, 5.6 in 2020, 6.1 in 2021, 5.1 (forecasted) in 2022, and 4.8 (forecasted) in 2023.

Image Source: Matthew Gardner

U.S. home sales trended lower through all of 2022 and, although I believe that sales will still have held above five million, this certainly won’t be the case in 2023. Affordability and higher financing costs will continue to act as headwinds when it comes to sales, but I think that the bigger issue will be that listing activity will not rise significantly as we move through the year.

As I have been saying for several months now, I don’t see why many households who don’t have to move will move and lose the historically low interest rate that they currently benefit from. That said, sales will still occur this year but at just 4.8 million, sales will be lower than we have seen since 2014.

Annual Change in Median Sale Prices

From Matthew Gardner's 2023 real estate forecast, a bar graph showing the annual change in median sale prices for homes in the U.S. real estate market. The years 2015 through 2023 are on the x-axis and percentages -4% through 20% run the length of the y-axis. The numbers are as follows: 6.8% in 2015, 5.1% in 2016, 5.7% in 2017, 4.9% in 2018 and 2019, 9.1% in 2020, 18.2% in 2021, 8.7% (forecasted) in 2022, and -1.1% (forecasted) in 2023.

Image Source: Matthew Gardner

Much has been said about the future of home prices, with some forecasters even suggesting that housing prices will collapse in a similar fashion to that seen following the bursting of the housing bubble back in 2008. Now, although price growth through the pandemic period was clearly excessive, fundamentally speaking, the two periods cannot be considered to be similar at all.

It’s my opinion that sale prices in 2023 will be very modestly lower than last year and I certainly don’t expect to see a collapse in home values.

But not all markets are created equal. The pandemic created what has become known as “Zoom-Towns.” These were cheap markets that affluent buyers flocked to because of their newly found ability to work from home and this led sale prices there to soar. It’s these locations that will likely see prices fall more significantly. Ultimately, expect to see prices fall through the first half of this year before starting to recover in the second half.

New Home Starts & Forecast (Single Family)

From Matthew Gardner's 2023 real estate forecast, a bar graph of the single-family new home starts. The y-axis shows numbers in thousands from 0 to 1,200 and the x-axis shows the years 2015 through 2023. The numbers are as follows: 715 in 2015, 782 in 2016, 849 in 2017, 876 in 2018, 888 in 2019, 991 in 2020, 1,127 in 2021, 1,009 (forecasted) in 2022, and 837 (forecasted) in 2023.

Image Source: Matthew Gardner

Looking now at the new construction market, housing starts fell last year as construction costs remained high and mortgage rates rose which lowered demand.  And I’m afraid that I do not see 2023 as being one where builders will deliver more inventory, with starts pulling back to a level the country hasn’t seen since 2016. That said, I am expecting a recovery in 2024 when new home starts will break back above the 1,000,000 level.

New Home Sales Forecast

From Matthew Gardner's 2023 real estate forecast, a bar graph showing the new home sales numbers from the U.S. housing market. The y-axis shows (in thousands) the numbers 200 to 900 and the x-axis shows the years 2015 through 2023. The number of new home sales are as follows (in thousands): 501 in 2015, 561 in 2016, 613 in 2017, 617 in 2018, 683 in 2019, 822 in 2020, 771 in 2021, 653 (forecasted) in 2022, and 584 (forecasted) in 2023.

Image Source: Matthew Gardner

New home sales in 2023 will fall further coming in below 600,000 but there is some light at the end of the tunnel with sales picking up fairly significantly again in 2024. We all understand that the country has a significant undersupply of ownership housing, but the costs associated with building new homes is still making it remarkably hard for builders even though they understand that demand will be significant for at least the next decade and a half given current demographics.

But the problem they will continue to face is that demand will primarily come from entry level buyers and, simply put, the cost to build a home precludes many developers from being able to meet this demand.

Average 30-Year Mortgage Rate & Forecast

A bar graph showing the average 30-year mortgage rate for the years 2015 through 2023. The y-axis shows percentages ranging from 0% to 7% and the years are displayed on the x-axis. The numbers are as follows: 3.9% in 2015, 3.7% in 2016, 4% in 2017, 4.5% in 2018, 3.9% in 2019, 3.1% in 2020, 3% in 2021, 5.4% in 2022, and 6.1% (forecasted) in 2023. This is the mortgage rate component of Matthew Gardner's 2023 real estate forecast.

Image Source: Matthew Gardner

And finally, my forecast for mortgage rates in 2023. Although this might not look good at all, as they say, “the devil is in the details.” Rates skyrocketed last year as the Fed stopped buying treasuries and mortgage-backed securities and, although they are off the highs we saw toward the end of last year, they are still significantly higher today than the market has become used to seeing.

As you can see here, I’m anticipating the average 30-year conventional rate to average 6.1% in 2023, but my forecast is actually a bit better than this shows.

Average 30-Year Mortgage Rate Forecast 2023

A bar graph showing the average 30-year mortgage rate in recent quarters, plus a forecast of the mortgage rate for each quarter in 2023. The y-axis displays percentages ranging from 0% to 7% and the x-axis displays the quarters from Q4 2021 to Q4 2023. The numbers are as follows: 3.1% in Q4 2021, 3.8% in Q1 2022, 5.3% in Q2 2022, 5.6% in Q3 2022, 6.8% in Q4 2022, 6.4% (forecasted) in Q1 2023, 6.1% (forecasted) in Q2 2023, 6% (forecasted) in Q3 2023, and 5.6% (forecasted) in Q4 2023. This is the mortgage rate component to Matthew Gardner's 2023 real estate forecast.

Image Source: Matthew Gardner

You see, my quarterly forecast suggests that rates have actually already peaked, and that they will trend lower as we move through this year and break below 6% by the fourth quarter. I would add that if anything my forecast may be a little pessimistic, and rates may end 2023 a little lower than I am showing here.

But that will depend on the Fed, and how long they will continue raising rates, and how long it will take before they start to lower them if the US enters a recession this year, which many forecasters including myself believe will be the case.

So, there you have it, my 2023 U.S. housing forecast. I will leave you with this one last thought. 2023 will be a transition year when the housing market will come off the “high” we saw during the pandemic and borrowing costs were artificially low.

I don’t see any reason for buyers or sellers to panic though. By the end of 2023, most markets will have corrected themselves and I believe we will see prices and demand start to pick up again toward the end of this year, but at a far more normalized pace.

As always, I look forward to your comments on my forecasts and I’ll see you all again next month. Take care now.

About Matthew Gardner

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.

An Economic & Housing Forecast for 2023 by Economist Matthew Gardner

Last week, my office had the pleasure of hosting Windermere's Chief Economist, Matthew Gardner for his 2023 Economic and Housing Forecast. During this jam-packed hour of insightful delivery, he reported on the U.S. and local economies along with the U.S. and local housing markets specific to King and Snohomish Counties. If you are interested in receiving the recording of the event and/or his PowerPoint slides, please reach out. You can also access the link at the bottom of this newsletter to get his concise forecast for the U.S. housing market.

Across the nation, we saw a real estate market correction in 2022 as interest rates doubled. Interest rates started the year at just over 3%, peaked in November at just over 7%, and ended at just under 6.5%. Since the first of the year, we are closer to 6% and anticipate rates to continue to improve towards 5% throughout 2023. The Feds utilized rising interest rates to combat inflation in an effort to create a short recession to slow the cost of all products and services after record-breaking increases during the pandemic. This has reduced spending due to money becoming more expensive to borrow and corrected prices across many industries, including housing.

The trends across the nation are consistent, but as your local expert, along with the national forecast I am committed to reporting hyper-local facts, figures, and trends to help you understand what is happening and what will happen right in our own backyard. Our local housing market was not immune to the effects of rising interest rates. Our prices peaked in the spring and as rates climbed over 6%, prices took a tumble from the spring highs inflated by cheap money. However, prices are still higher than they were in 2021 which was a recording-breaking year of price growth.

In King County, prices were up 22% in 2021, and in Snohomish County, they were up 23%. We started 2023 with higher prices over 2021, but off the peak of 2022. This is a price reversion, not a housing recession! In fact, in King County, 64% of homeowners with a mortgage have over 50% home equity and in Snohomish County, 63% of homeowners with a mortgage have over 50% home equity. Homeowners are fortified with strong cash positions which is a clear indicator we are nowhere near a housing crisis; we are actually incredibly healthy! While the highs of 2022 were wiped out, the long-term growth we have had over the last decade is the foundation and guiding light of our market. If you bought in 2022, don't fret, just hold, values will eventually return.

The worst of this correction seems to be behind us as rates are expected to continue to improve throughout 2023 and consumers are adjusting to a more normalized market. Prices are starting to stabilize and are near, if not at the bottom, and should have modest growth in the second half of 2023. We are already starting to see pending sales pick up. Month-to-date (MTD), pending sales are up 25% in King County over December (month-over-month, MOM) and up 21% MOM in Snohomish County. This increase in pending sales is coupled with available inventory being down 15% MOM in King County and down 18% MOM in Snohomish County. Inventory remains tight with MTD inventory levels shifting from a balanced market to a moderate seller's market based on pending sales rates in both counties.

It seems that buyer demand is improving and activity is becoming more plentiful. Buyers should take note and be ready to transact if they are poised to make a move. It is a delicate dance between prices and interest rates. Buyers must understand that they can't change their sale price once they've bought, but they can always refinance and change their rate. I have even heard of lenders guaranteeing a future refinance when the rate hits a certain point. Real estate is a long-term hold investment and also where you live. If where you are at doesn't currently meet your needs, consider a move if you plan to stay there for 5+ years.

Affordability has been a challenge in our area, so if a buyer can obtain a good price this year and then adjust their rate later by refinancing, they will have a much more affordable monthly payment down the road. This takes strategizing and planning and the guidance of a trusted lender and real estate broker. Utilizing adjustable-rate mortgages, rate buydowns, and other creative financing options has put savvy buyers in the catbird seat as they navigate this environment and make exciting moves.

Matthew's closing words summarized the wild ride of coming off of the pandemic and where we are headed. "2023 will be a transition year when the housing market comes off the high that we saw during the pandemic when borrowing costs were artificially low. I don’t see any reason for buyers or sellers to panic at all! By the end of this year, most markets will have already corrected themselves and we will see prices and demand pick up again, but at a far more normalized pace.”

Real estate is an investment and a lifestyle decision. I am committed to following experts like Matthew and others. I also study the local market trends daily. Markets change quickly and the changes are often reported far after the actual shift. I have understood these shifts due to my daily connection to the market. I take great pride in helping empower my clients to make well-informed decisions about where they live and the financial impact it has on their lives. I love what I do because it is centered in helping people with one of the biggest decisions they will make in their life. If you or someone you know are curious about how the trends relate to your goals, please reach out. I'd be honored to help educate you and help guide and strategize your next move. Here's to a happy and healthy 2023!



Between holiday parties, family obligations, work, and the pressure of finding the perfect gift, this time of year can come and go in a flash. At Windermere North, we never want this season to go by without coming together to lift up our community and give back in meaningful ways.

Our office-wide annual holiday giving project is in two parts. First, all the brokers in my office joined together to provide $4,242 in grocery gift cards for 16 families, comprised of 48 individuals. Some of these families are dealing with grief and loss this season, some are coming out of domestic violence, some are homeless or unemployed. It is our privilege to partner with Pioneer Human Services for this every year, to help lift some of the burdens for these families.We also had the joy of helping to bring some holiday cheer for homeless youth in our area. We partnered with WA Kids in Transition who works with social workers in Edmonds School District schools to collect wish lists from homeless students living in shelters, tents, cars, transitional housing or other temporary housing. We fulfilled the wish lists for 14 kids, plus several hygiene kits.

The other Windermere North holiday giving tradition that I love is volunteering at Christmas House in Everett. Christmas House is a 100% volunteer, non-profit organization that provides an opportunity for qualifying, low-income, Snohomish County parents to select free holiday gifts for their children age infant-18. This is an amazing day helping families in need have a joyful Christmas.


What better way to celebrate Windermere’s 50th anniversary than reaching $50 million in total donations to the Windermere Foundation? Windermere offices across the Western U.S. came together to raise over $4 million this year for low-income and homeless families! Thank you to everyone who helped us get here by giving their time and donating funds. To my clients: a portion of every home sold or purchased goes to the Windermere Foundation, so we couldn’t have done it without you. Here’s to $50 million raised!


Are you curious about the economy during these changing times?  
Are you trying to make plans, but crave credible information to assist you?Please join me for a very special virtual live event: AN ECONOMIC FORECAST FOR 2023 & BEYOND with Matthew GardnerChief Economist for Windermere Real Estate
Wednesday, January 18, 2023    6:30pm – 8pm

Presentation from 6:30-7:30pm, Q&A to follow

Please RSVP by phone/text or email by January 13th, 2023 to receive an emailed link prior to the event.

Key Factors to Note as the Market Recalibrates in the New Year

2022 has been an eventful year in the real estate market and the economy. After 2 years of pandemic-fueled demand and historically low interest rates, we experienced a shift. The Fed quickly raised rates (by 2 points) from April to October to combat inflation, curbing buyer demand as affordability took a hit. The overall economy is starting to settle back to pre-pandemic levels and the second half of 2022 was the time that was needed to make this adjustment.

We have recently seen rates drop as year-over-year inflation numbers start to show improvement. We anticipate this trend to continue slowly but surely as we head into 2023 and beyond. The upward trend in rates has put downward pressure on prices, but they are starting to stabilize as the new normal sets in. Price appreciation is still up year-over-year when you look at the average of the last 12 months and compare them to the previous 12 months, and certainly over the last 3-10 years as a whole.

We started 2022 at 3.5%, peaked at just over 7%, and now find rates in the low to mid-6%.  Experts like Matthew Gardner are anticipating rates to settle in the high 5% sometime in 2023, which would be 2 points below the historical average. Currently, buyers are enjoying more favorable negotiations and are securing sale prices that are not escalating at a feverish pitch.

Some buyers are getting creative and using seller credits for a rate buy-down, some are securing adjustable-rate mortgages, and some just plan to re-finance when rates come down further next year. It is important for buyers to understand that as rates come down prices will start to fortify again.

Besides rates and prices, which are related, two additional factors to pay attention to are our local job market and estimating the recession. We have recently experienced some layoffs in our region, particularly in the tech sector. See the video from Matthew Gardner here which speaks to this. The bottom line is over 20,000 jobs were added in the information sector during the pandemic, and that number is now receding. Just like prices grew exponentially during the pandemic, so did many other aspects of the economy and everything is finding its equilibrium as we return to our new normal. Bear in mind, there are other sectors of our local job market that are growing.

I’d like to leave you with two pieces of advice as we head into 2023 and are forced to jump on the media roller coaster of their reporting economic and real estate news. Pay attention to long-term figures and understand that real estate is a lifestyle move, not just a financial chess move.

The media will paint the picture that the sky is falling and it simply is not. The recession is predicted to be short, much like the recession of 1990-91. Some economists are claiming that we are already through the worst of it.  This will be nothing like the Great Recession of 2007-2012, nothing!  It just happens to be the one closest in our rear-view mirror and easiest to recall, but that was made up of entirely different factors that do not compare to our current environment. Please reach out if you’d like to further discuss the differences.

We are not headed toward a bubble in the real estate market. Homeowner equity is incredibly strong with over 50% of all homeowners in WA state having over 50% home equity. Homes are not foreclosed on when there is equity—period, end of story. As numbers are reported in the first half of 2023 they will be compared to the peak prices of 2022 and those numbers will create negative headlines. We will spend the first half of 2023 adjusting off of those peaks, but where I am sure the media will fall short is reporting the overall growth in values since 2019.

Real estate is a long-term hold investment, it always has been. The ramp-up of the pandemic years may have clouded that long-term truth, but I can assure you double-digit and certainly 20%+ annual appreciation is not normal. The historical norm is 3-5% annually.

For example, in Snohomish County when you take the last 12 months of median price and average it and compare it to the previous 12 months, prices are up 15%. When you take the median price in Nov 2022 and compare it to the median price in Nov 2021, prices are up 3%. Further, when you take the median price in Nov 2022 and compare it to the median price two years ago in Nov 2020, prices are up 22%. We are experiencing a correction off of the peak, not a tumbling of long-term values. Hence, why there is no bubble.

In fact, experts are anticipating that we end 2023 with positive, yet slight year-over-year appreciation. This is more reflective of historical norms and much calmer than the intense pandemic-fueled years that were inflated with rates that we will quite possibly never see again in our lifetime.

Lastly and most importantly, real estate moves are most often motivated by life changes. Job changes, familial changes, and financial shifts lead to people changing their housing and location. These big life changes are delicate and exciting, and require strategic planning and care. I am all about helping my clients obtain successful financial results, but I am also committed to helping my clients navigate the details, challenges, emotions, and logistics of a move. I always approach the process with the end in mind, but also with the journey prioritized to be smooth and enjoyable.

I hope you call on me when your curiosity is piqued or you have an emergent need in your world related to real estate. I take pride in understanding the latest trends and helping you apply them to your goals. Also, if you know of anyone that needs real estate help, please pass my name along or get me in touch with them. Your people are my people, and helping them stay well-informed to empower strong decisions is my mission. As we encounter change and recalibrate, this expertise will be more important than ever; I am honored to have your trust and endorsement.

Holiday Events = Holiday Giving
at Windermere North

We have been busy at our office holding various holiday events that have included the opportunity to give back to the local food banks through holiday food drives. When we bring people together to celebrate it is also a priority to weave in giving back to our community. When we do this, we are always thrilled to partner with Volunteers of America of Snohomish County who support various food banks and food pantries across the county. Just this week, VOA picked up a total of 1,820 pounds of food and $2,480 that resulted from our holiday events.

With inflation still high, food insecurity is prevalent making these food drives an easy choice to direct our giving. If you are looking for a way to give back this holiday season, please reach out to VOA. They are a trusted local organization that will make sure your donation is placed to benefit those in need.









Matthew Gardner’s Top 10 Predictions for 2023

1 There Is No Housing Bubble
Mortgage rates rose steeply in 2022 which, when coupled with the massive run-up in home prices, has some suggesting that we are recreating the housing bubble of 2007. But that could not be further from the truth.

Over the past couple of years, home prices got ahead of themselves due to a perfect storm of massive pandemic-induced demand and historically low mortgage rates. While I expect year-over-year price declines in 2023, I don’t believe there will be a systemic drop in home values. Furthermore, as financing costs start to pull back in 2023, I expect that will allow prices to resume their long-term average pace of growth.

2 Mortgage Rates Will Drop
Mortgage rates started to skyrocket at the start of 2022 as the Federal Reserve announced their intent to address inflation. While the Fed doesn’t control mortgage rates, they can influence them, which we saw with the 30-year rate rising from 3.2% in early 2022 to over 7% by October.

Their efforts so far have yet to significantly reduce inflation, but they have increased the likelihood of a recession in 2023. Therefore, early in the year I expect the Fed to start pulling back from their aggressive policy stance, and this will allow rates to begin slowly stabilizing. Rates will remain above 6% until the fall of 2023 when they should dip into the high 5% range. While this is higher than we have become used to, it’s still more than 2% lower than the historic average.

3 Don’t Expect Inventory to Grow Significantly
Although inventory levels rose in 2022, they are still well below their long-term average. In 2023 I don’t expect a significant increase in the number of homes for sale, as many homeowners do not want to lose their low mortgage rate. In fact, I estimate that 25-30 million homeowners have mortgage rates around 3% or lower.

Of course, homes will be listed for sale for the usual reasons of career changes, death, and divorce, but the 2023 market will not have the normal turnover in housing that we have seen in recent years.

4 No Buyer’s Market But a More Balanced One
With supply levels expected to remain well below normal, it’s unlikely that we will see a buyer’s market in 2023. A buyer’s market is usually defined as having more than six months of available inventory, and the last time we reached that level was in 2012 when we were recovering from the housing bubble. To get to six months of inventory, we would have to reach two million listings, which hasn’t happened since 2015. In addition, monthly sales would have to drop below 325,000, a number we haven’t seen in over a decade. While a buyer’s market in 2023 is unlikely, I do expect a return to a far more balanced one.

5 Sellers Will Have to Become More Realistic
We all know that home sellers have had the upper hand for several years, but those days are behind us. That said, while the market has slowed, there are still buyers out there. The difference now is that higher mortgage rates and lower affordability are limiting how much buyers can pay for a home. Because of this, I expect listing prices to pull back further in the coming year, which will make accurate pricing more important than ever when selling a home.

6 Workers Return to Work (Sort of)
The pandemic’s impact on where many people could work was profound, as it allowed buyers to look further away from their workplaces and into more affordable markets. Many businesses are still determining their long-term work-from-home policies, but in the coming year I expect there will be more clarity for workers. This could be the catalyst for those who have been waiting to buy until they know how often they’re expected to work at the office.

7 New Construction Activity Is Unlikely to Increase
Permits for new home construction are down by over 17% year over year, as are new home starts. I predict that builders will pull back further in 2023, with new starts coming in at a level we haven’t seen since before the pandemic.

Builders will start seeing some easing in the supply chain issues that hit them hard over the past two years, but development costs will still be high. Trying to balance homebuilding costs with what a consumer can pay (given higher mortgage rates) will likely lead builders to slow activity. This will actually support the resale market, as fewer new homes will increase the demand for existing homes.

8 Not All Markets Are Created Equal
Markets where home price growth rose the fastest in recent years are expected to experience a disproportionate swing to the downside. For example, markets in areas that had an influx of remote workers, who flocked to cheaper housing during the pandemic, will likely see prices fall by a greater percentage than other parts of the country. That said, even those markets will start to see prices stabilize by the end of 2023 and resume a more reasonable pace of price growth.

9 Affordability Will Continue to Be a Major Issue
In most markets, home prices will not increase in 2023, but any price drop will not be enough to make housing more affordable. And with mortgage rates remaining higher than they’ve been in over a decade, affordability will continue to be a problem in the coming year, which is a concerning outlook for first-time buyers.

Over the past two years, many renters have had aspirations of buying but the timing wasn’t quite right for them. With both prices and mortgage rates spiraling upward in 2022, it’s likely that many renters are now in a situation where the dream of homeownership has gone. That’s not to say they will never be able to buy a home, just that they may have to wait a lot longer than they had hoped.

10 Government Needs to Take Housing More Seriously
Over the past two years, the market has risen to such an extent that it has priced out millions of potential home buyers. With a wave of demand coming from Millennials and Gen Z, the pace of housing production must increase significantly, but many markets simply don’t have enough land to build on. This is why I expect more cities, counties, and states to start adjusting their land use policies to free up more land for housing.

But it’s not just land supply that can help. Elected officials can assist housing developers by utilizing Tax Increment Financing tools, whereby the government reimburses a private developer as incremental taxes are generated from housing development. There are many tools like this at the government’s disposal to help boost housing supply, and I sincerely hope that they start to take this critical issue more seriously.



As we approach the Thanksgiving holiday, I want to let you know how grateful I am for YOU! Your friendship, support, and referrals have helped fuel my business and support my family. Thank you!

Real estate is a career that gives me the opportunity to be a meaningful part of my clients’ lives as they navigate important moves that have a great financial impact. I take the responsibility of guiding my clients through this process very seriously and know that when someone places this trust in me that it is a big deal! It is an honor to be a part of your big-picture planning and to help you execute these life changes with care and success.

My Thanksgiving would not be complete without taking a moment to say, thank you and that I appreciate you so much!  I hope your holiday is filled with happiness, rest, and all the people that are nearest and dearest to your heart.



In honor of Windermere’s 50th anniversary, we’ve set a goal to reach $50 million in total donations to the Windermere Foundation in 2022 for our 50 in 50 campaign. To reach our goal, we need to raise $4 million in donations this year.

So far this year, through the month of October, $3,594,552 in donations has been raised for the Windermere Foundation. Click here if you’d like to help us reach our goal!