In-person events are back! As we transition back to “normal” there are several local events and celebrations for the whole family to enjoy this 4^th of July! Some cities were not able to pull off such large events given the timing of opening and the circumstances surrounding the pandemic, but there are some great options in both Snohomish and King counties! Check it out:

Edmonds

https://edmondschamber.com/community_events/main_events/an_edmonds_kind_of_fourth/

An “Edmonds Kind of 4th” is back!

– Beat Brackett 5k race (registrations online only)

– Main Street parade

– Fireworks at Civic Field

Everett

https://www.visiteverett.com/1440/Fourth-of-July

Everett’s iconic Thunder on the Bay fireworks show returns to Legion Memorial Park.

Also, Everett’s first in-person concert since COVID: Rock the Fourth @ Boxcar Park (21+) featuring: Nite Wave, Petty Thief & Road Trip.

Marysville

https://marysvillewa.gov/1009/Marysville-4th-of-July

Marysville’s third annual celebration will feature festive photo opportunities, food trucks and fireworks.

Monroe

https://evergreenspeedway.com/events/july-4th-2021-usa-birthday-bash-at-evergreen/

Rain or shine, Monroe’s USA Birthday Bash will feature a Demo Derby and Fireworks!

Bellevue

https://www.bellevuedowntown.com/events/family-4th

Bellevue Family 4^th will look a little different this year. There will not be any entertainment or other activities, but there will be a live firework show downtown.

Tacoma

http://freedomfair.com/

Tacoma’s Freedom Fair & Air Show will feature military and classic planes. It is a drive-in only event, so check the website for parking spot reservations.

Seattle

Seattle Seafair is NOT hosting an in-person Fourth of July fireworks show this year. The majority of the Seattle Seafair headline events will be virtual for the second year in a row. Despite the lifting of restrictions, there was not enough time to produce these very large events. More info: Hybrid Seafair Summer 4th 2021

• However, instead of the traditional Fourth of July Fireworks show over Lake Union, Seafair will produce an hour-long TV special featuring past fireworks shows. The show will air on KING 5 at 10 p.m. More info: Seafair’s Fourth of July fireworks in Seattle, hydroplane races to be virtual | king5.com

Here we are, one-third into 2021, and boy what a ride it has been so far. We all know that 2020 was a unique year full of challenges and change. The pandemic made us pause and reevaluate many aspects of our lives including where and how we live. The impact of the pandemic on the real estate market was significant, as people started to shift their housing priorities during the second half of 2020. Then the calendar turned to 2021 and the frenzy of all market frenzies began.

I had the misguided notion that closing out 2020 was going to lead to more normalcy in our industry as we all yearned to move on to the new year. Boy, was I shocked as Q1 unfolded; 2021 had its own agenda in store! What the new year brought, was its own set of drama as the economy headed towards recovery and the vaccine emerged. The continued historically low interest rates have fueled the housing pivots being made across our region and our country. Lifestyle moves have driven demand, but interest rates along with hearty equity levels have helped financially enable these life-changing moves. Interest rates have hovered around 3% since the beginning of the year. Additionally, 38% of all homeowners own their homes free and clear, and over 50% of homeowners have up to 50% equity.

The work-from-home phenomenon (either permanent or hybrid) has re-shaped the housing market, driving many people to consider the suburbs or rural locations. Eliminating the daily commute into urban work centers has created flexibility for homeowners to live farther away from work and enjoy larger spaces and more affordable housing in comparison to cities like Seattle and Bellevue. In fact, the median home price in Snohomish County is up 15% complete year-over-year in comparison to King County at 10%. This is proof that suburban and rural housing is on the rise.

Demand (defined above) has helped to push price appreciation levels along with a shortage in available inventory. We have functioned in a lower-than-normal inventory market for over six years now. Zero to three months of inventory is defined as a seller’s market, three to six months a balanced market, and over six months a buyer’s market. This figure is established by estimating how long it would take to sell out of homes based on the closing or pending rate if no new homes came to market. In the second half of 2018, we eclipsed three months briefly but have mainly existed under three months for quite a while. In 2021, we have not breached one month, and in many submarkets have only had up to two weeks of available inventory.

2020 left a void of available inventory because we were in quarantine and many people were not comfortable opening their homes up to strangers. Plus, some people needed to pause and see how this was all going to shake out for them. I think the turn of the new year coupled with the vaccine has empowered people to make the moves they have been considering while they won the wait at home. We have a smattering of generations at the helm all wanting to make moves for different reasons. First-time home buyers, retirees, and move-up buyers are all hoping to take advantage of low debt service and pivot to a home with a better fit for their lifestyle goals.

Lifestyle demands, low rates, scarce inventory, and formidable equity have created a very competitive market. Large down payments due to moving equity from one home to the next, along with strict lending requirements have propped up the stability of the housing market. I am often asked if we are headed towards a housing bubble because of the rate of home appreciation, but it is important to understand that home values are supported by strong loan-to-value ratios and scrutinized lending. Unlike the Great Recession of 2008, when predatory lending (that involved low to no down payments and undocumented loans) formed an unstable foundation that eventually crumbled.

The biggest challenge I see in the housing market in our region is affordability. It is expensive to live in the Greater Seattle area, plain and simple. The work-from-home option has provided flexibility to live farther out, which has put upward pressure on prices everywhere. We have had a re-organization of where people live and it has been surprising which communities have become attractive and in-demand. I predict at some point this will settle down as these newly refined housing needs find their place. Additionally, May through August is when we seasonally see more homes come to market. This should hopefully make it a bit easier for buyers to secure a home, and help soften the ramp-up on prices. This has already started to show itself over the last few weeks.

Financial indicators in our region are positive. Only 3.6% of homes in Washington state are in mortgage forbearance (a fraction of where we were at a year ago), tech jobs continue to drive employment, and the overall local economy and home equity are very strong. Your home is intended to be a long-term investment. If price appreciation starts to soften as we climb out of our inventory deficit this will be more sustainable for affordability. Buyers will still be on the road to building wealth with some of the lowest interest rates ever, and we must remember that homeownership is not just an investment but where we live and create memories. Sellers will continue to enjoy large payoffs as long-term equity growth is abundant. Keeping a grounded perspective will be key as the market twists and turns from the extremes. If there is anything I can guarantee it is that the market is always changing and it can change fast.

If you are curious about how today’s market relates to your lifestyle and financial goals, please reach out. I’d love to discuss your needs, curiosities, and concerns as this has been an intense and eventful start to 2021. It is always my goal to help keep my clients informed and empower strong decisions.

June 11th is our annual Windermere Community Service Day; our office will be volunteering alongside the Snohomish Garden Club helping plant nearly an acre of fruits and vegetables that will be harvested for local food banks. This will be our 5th year working on this project that yields thousands of pounds of fresh produce for the food insecure across our region.

Windermere Community Service Day is a 40-year long tradition of giving back to the communities in which we serve, it is a valued part of our Windermere culture. If you would like to donate to help us provide additional veggie starts and supplies, please reach out. I will report back on our project in my next newsletter, letting the planting begin!

Windermere and the Seattle Seahawks partnered for the fifth season to #TackleHomelessness, raising an additional $32,100 for Mary’s Place to support homeless children and families, bringing our total raised to $160,300! Read more on the Windermere blog.

Over the last 6 years, the median price for a single-family home in King County has grown by 65%, and in Snohomish County 69%. Above are examples of actual homes sold in late 2015 to early 2016 that also sold in early 2021. Note, they were not remodeled or significantly improved in between sales. These examples show the growth in home values that we have experienced over the last three years due to our thriving local economy. I pulled these examples to show you actual pound-for-pound market data versus the statistical percentages I often quote in these market updates. I thought these examples were pretty telling and quite exciting.

This phenomenon has been driven by interest rates being under 5% for the last five years and under 4% for the last 2 years. In addition to low debt service, the tech-influenced job market has kept the local economy humming. Couple all of this with the convergence of Millennials breaking into the market as first-timers or moving up, Gen-Xers moving up, and Baby Boomers cashing out to the right-size house in our area or relocating altogether, and demand is high. This high demand has put pressure on available inventory, driving up price appreciation.

The more recent influence on home values is the effect of the work-from-home lifestyle on housing. Many companies have announced that post-pandemic they plan to let their employees permanently work from home or do so in a hybrid model. This has changed the preference to be closer to the in-city job centers to avoid a long commute. Now, more and more people are attracted to the suburbs and in some cases more rural settings in order to enjoy larger interior and exterior spaces. According to Matthew Gardner, Windermere’s Chief Economist, over 30% of all homeowners in America have over 50% equity. These moves to the suburbs are also propped up on liquidating their equity elsewhere and utilizing it to make a large down payment on the next purchase. Check-out Matthew’s latest video update here.

I see this as a re-organization of lifestyle propped up by strong equity growth, low debt service, and the flexibility to live further from one’s job. Homes in-city are still experiencing favorable appreciation with the median price up 7% year-over-year in Seattle proper, but there is stronger year-over-year growth in suburban locations. For example, in Lynnwood the median price is up 11% year-over-year. Where this has been a challenge is the typical suburban buyer is now competing with far more buyers for these coveted locations. The former suburban buyer accepted a longer commute for a less expensive home. With commute times a lesser concern, now we have a larger audience vying for homes outside the in-city core, making the suburbs more expensive.

The large price gains might seem familiar to the gains of the previous up market of 2004-2007 that resulted in a bubble, but this environment is much different, which is why we are not headed toward a housing collapse. Previous lending practices allowed people to get into homes with risky debt-to-income ratios, minimal down payments, low credit scores, and undocumented incomes. A large part of why the housing bubble burst 14 years ago was due to people getting into mortgages that were not sustainable, which led to the eventual fall of sub-prime lending and the bubble bursting.

It is supply and demand that is creating these huge gains in prices, not predatory lending. We are starting to see an uptick in homes coming to market which is both seasonal and catch-up from the pause the pandemic created last spring. With the vaccine becoming more and more available, more home sellers will become more comfortable bringing their homes to market. The shake-out of the work-from-home shift will eventually temper as some will choose to stay closer in-city and some employers may revert back to in-person work forces. The suburbs are not for everyone, but for now the puzzle of how housing and lifestyle relate to one another is being re-built.

We are anticipating an increase in inventory as we head into spring and summer which will temper price growth and simmer the frenzy. Many folks who have been waiting out the pandemic to make a move based on retirement or upgrading homes are well-positioned to enter the market. If you are one of those people, I hope these examples provide insight on the increase in home values and how they might pertain to your goals.

Potential buyers might shy away from the market due to affordability. While it is expensive to buy a home in the Greater Seattle area, the people that have become homeowners over the last six years have built some amazing wealth. Interest rates remain low, helping to absorb the cost of a home in our area. Last month, I wrote an article about wanting to sell but needing to also buy, which helped layout some strategies to successfully participate in today’s market. If you or anyone you know is considering making a purchase, it is worth the read.

As we head into the active spring and summer months, if you’d like me to provide you a complimentary Comparable Market Analysis (CMA) on your home so you have a better understanding of your home’s value, I’d be happy to do that. This would be an important component in charting your 2021 financial goals. Please reach out, it is my goal to help keep my clients informed and empower strong decisions.

4211 Alderwood Mall Blvd, Lynnwood

We are partnering with Confidential Data Disposal for our 10th year; providing you with a safe, eco-friendly way to reduce your paper trail and help prevent identity theft.

Bring your sensitive documents to be professionally destroyed on-site. Limit 10 file boxes per visitor.

We will also be collecting donations to benefit Concern for Neighbors food bank. Donations are not required but are appreciated.
Hope to see you there!

**This is a Paper-Only event. No x-rays, electronics, recyclables, or any other materials.

Homeowners across our region are enjoying incredibly healthy equity levels due to an upswing in the real estate market over the last five years. In fact, the median price in King County is up 50% over the last five years and up 55% in Snohomish County. Over the last 10 years, the median price is up 96% in King County and 106% in Snohomish. This growth in equity has given homeowners the exciting option to sell their home for a high price and move on to their next chapter, such as a move-up, down-size, or second home. This price growth is great news and provides many opportunities; however, we have also faced some challenges in how to make these transitions due to tight inventory.

The biggest challenge for buyers, which is conversely a benefit for sellers in the marketplace right now, is limited inventory levels. Buyers who need to sell their homes first in order to buy want to benefit from the upward pressure on prices for their home sale but are fearful of finding their next home in a timely manner. Currently, King County sits at 0.6 months of inventory and 0.4 in Snohomish based on pending sales data. These levels create a multiple-offer environment that is tough for buyers whose down payment is not readily available. Historically, buyers that are also sellers (those who have their down payment tied up in the equity of their home) would commonly secure a new home contingent on the sale of their current home. Meaning the seller of the new home they are buying would give them a month or so to get their current house sold in order to buy theirs. In this market, that is only rarely an option- like unicorn status.

So, the million-dollar question is this: how does one who has gained so much equity, now itching to get that bigger house, more functional floorplan, different location, or perfect rambler for settling into retirement, make this transition? We need to get creative, have a strategy and be ready to take on some possible short-term discomfort for long-term gain. Three options that are proven to be successful are: negotiating a rent-back for my sellers, using the Windermere Bridge Loan program, or having the bold courage to sell first and possibly move twice.

1. RENT-BACK
First, negotiating a rent-back has become a great option for someone who needs to first sell their current home in order to buy. The way it works is we put their home on the market, price it competitively to create demand, and ask for a rent-back as one of the preferred terms. If this rent-back is successfully negotiated, then the seller closes on their home and collects their funds but gets to stay in the house anywhere from 30-60 days post-closing. This enables the seller, who is now a buyer, to have their cash-in-hand, time to find a new house, get it under contract, and close the sale when their rent-back is ending. This eliminates the need to move twice. There is a bit of calculated risk in this plan, but I’ve seen it work several times, always with a plan B (interim place to move) ready just in case. Rarely has plan B needed to be executed, and often we’ve even been able to negotiate under market rent rates during the rental period.

2. WINDERMERE BRIDGE LOAN
The second option is the Windermere Bridge Loan program. This is an amazing tool for homeowners that own their homes free and clear, or who have sizable equity. This is an efficient, low-cost option where a buyer who needs to sell can pull the equity out of their house prior to selling it in order to make a non-contingent offer. The way it works is we establish the market value of the house the homeowner currently owns, via comparative market analysis (CMA) that I complete and is signed off by my managing broker. We then take 75% of the CMA value and subtract any debt owed, and that is the maximum amount the homeowner can borrow for their next down payment (max limit $1M).

They can then make a non-contingent offer on a new home as long as their lender approves that they can hold the current home and qualify for the new mortgage at the same time. What is really great about this program, is that it doesn’t require an appraisal (like a HELOC does), and these can easily be turned around in 5-7 business days. This tool provides the opportunity to quickly and inexpensively utilize your equity, be competitive to win the next house, and eliminates the double move.

The fees associated with this program are a 1% loan fee on the equity that is pulled, a title report, and interest that is incurred between the loan funding and being paid off once the subject home is sold. That interest is conveniently wrapped up in the closing costs when they close the sale of their home, eliminating the need to make monthly interest payments. In a strategy that is somewhat mind-blowing- we can sometimes use these bridge loans and never have to actually fund them. For example, if we secure a property non-contingent with the bridge loan and immediately get the bridge loan home on the market, we can often secure a sale with a simultaneous closing, and never have to fund the loan. This eliminates the loan fee, interest, and the need to carry two mortgages.

3. SELL FIRST, MOVE TWICE
The third option is to tie up your bootstraps and get your home sold before you start actively shopping for the next.  By all means, study the market, get pre-approved and have an idea of where and what you want, but remain committed to selling your home first. The benefits of selling your home first are being up against less competition and knowing exactly how much money you have to work with in the end.

Typically, we see more inventory come to market in Q2 and Q3, the earlier in the year a home comes to market the less competition they experience which is always favorable for the seller’s financial outcome. Knowing exactly how much you are going to net from your home sale is an empowered position to be in as is having the cash in the bank when vying for your next home. In this market, we are seeing shocking price escalations and this “extra” cash could be the difference-maker to obtain your dream home.

It does take bold courage to sell your home first as it often requires a double move. I know, that sounds miserable, moving is hard and disruptive. What is also costly and miserable is spinning your wheels as a buyer as prices appreciate and missing out on opportunities. The advent of VRBO and AirBnB has created a much more available short-term rental market and can provide an interim place to land while you shop for your next home. Some folks have friends and family that will take them in, it’s all in the name of getting creative. Having your cash in hand will make you more competitive and you will have a clear financial picture. Most things in life that are meaningful are hard. If it was easy, everyone would do it. Be bold, be courageous! Short-term discomfort for long-term gain is the focus with this strategy and after 2020 our resilience muscle seems to be a bit stronger, making this option more viable.

If you are excited about the equity you have grown and want to pair it with today’s low interest rates to obtain your next home, but have been fearful of how to do it all – I can help! These three options, along with great attention to detail, hand-holding, and careful planning have helped many people make these exciting transitions. It is my goal to help keep my clients informed and empower strong decisions. Please contact me if you would like further information on how this might work for you or someone you know.

4211 Alderwood Mall Blvd, Lynnwood

We are partnering with Confidential Data Disposal for our 10th year; providing you with a safe, eco-friendly way to reduce your paper trail and help prevent identity theft.

Bring your sensitive documents to be professionally destroyed on-site. Limit 10 file boxes per visitor.

We will also be collecting donations to benefit Concern for Neighbors food bank. Donations are not required, but are appreciated.
Hope to see you there!

**This is a Paper-Only event. No x-rays, electronics, recyclables, or any other materials.

The 2021 real estate market is off to a very brisk start. Historically low interest rates are driving buyer demand. This is coupled with a needed “catch-up” in available homes for sale. In 2020, we saw a stall in new listings during our normally plentiful spring market due to the pandemic. From April to June of 2020, new listings were only a portion of what would have been typical for that time of year. Where it became tricky was in May of 2020 when buyer activity rebounded, and we started to record higher levels of pending sales in 2020 over 2019. This led to the inventory deficit that we currently find ourselves in.

The stats above for King and Snohomish counties highlight the January statistics. In both markets, prices are up year-over-year and well above average appreciation levels. This is due to the phenomenon described above which is a classic case of supply and demand. This has led to months of inventory remaining tight, with mere weeks’ worth of available homes. Days on market have reduced by 38% in King County and 41% in Snohomish County year-over-year, and homes are consistently selling at or above list price.

What does this market mean for sellers? We have already seen sellers that have come to market in Q1 enjoying large buyer audiences and great results. Note that the stats in the image are closed sales in January, which means most of them went under contract (pending) in December. Transactions that closed over the last 7 days and most likely went pending after the first of the year are recording very favorable results for sellers. For example, in King County, there were 305 closed sales from 2/9/21 to 2/15/21 with average days on market at 24 days and a 108% list-to-sale price ratio. In Snohomish County, there were 101 closings in the same timeframe, with average days on market at 14 days and a 104% list-to-sale price ratio. Tight inventory and motivated buyers are creating these results. As we head into spring, we expect to see more homes come to market which could soften these escalations. This would not be a bad thing as sellers are sitting on 9 years of equity growth and these recent gains have been a bonus.

What does this market mean for buyers? Well, you must have a plan! Pre-underwritten financing, pre-offer performed due diligence, organized funds for the down payment, and possible appraisal cushions have been key elements for success. In addition, aligning with a skilled broker to help a buyer prevail is paramount. A responsive broker who is a good communicator can be the difference-maker in winning a home. Listing agents and sellers will not only vet the elements of an offer, but they will also consider the working relationship established with buyers’ brokers as they review offers. There is a special magic to developing these relationships and it takes extra effort. Windermere as a company has been a market leader for many years and continues to work hard to make strong connections for success.

Buyers are anxious to secure their next home with today’s interest rates helping to off-set the expense of price appreciation. With debt service so low, buyers are hungry for more inventory and will most likely start to see an increase in selection in the spring and summer months. Fortitude is the name of the game for buyers, but it will be worth it in the end as the interest rates are amazing and price gains don’t seem to be going away anytime soon.

If you are curious about how today’s market relates to your real estate goals or know someone that needs real estate assistance, please reach out. I am constantly studying the activity in the market to anticipate where we are headed in order to provide sound guidance. It is always my goal to help keep my clients informed and empower strong decisions.

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 $43 million in the past 32 years for low-income and homeless families right here in our local community.

In 2020, the Windermere Foundation provided over $2.5M in funds to 569 organizations, while keeping administrative expenses to 2%. The Foundation has been dedicated to helping homeless and low-income families and individuals since 1989. A portion of every commission is donated to this effort along with funds raised from special projects in individual offices.

In 2020, my office donated 5,600 lbs of food and $24K to various food banks associated with The Volunteers of America of Snohomish County as a result of four separate food drives we held throughout the year. We partnered with the YMCA’s Camps Orkila and Colman and donated just over $9K in order to keep the camp operating even though they were not able to open due to the pandemic. This will ensure they will be ready to have kids enjoy the benefits of camp when it is safe. We also sponsored 24 teenage foster boys at Christmas and made sure they had gifts on Christmas morning. We aligned with Pioneer Human Services to create this connection as well as provided grocery gift cards totaling over $3K to eleven families so they could enjoy well-stocked cupboards during the holidays. These opportunities to give back bring purpose to our work and we will continue to work with these organizations in 2021.

Home values appreciated by about ten percent in 2020, and they’re forecast to appreciate by about five percent this year. This has some voicing concern that we may be in another housing bubble like the one we experienced a little over a decade ago. Here are three reasons why this market is totally different.

1. This time, housing supply is extremely limited

The price of any market item is determined by supply and demand. If supply is high and demand is low, prices normally decrease. If supply is low and demand is high, prices naturally increase.

In real estate, supply and demand are measured in “months’ supply of inventory,” which is based on the number of current homes for sale compared to the number of buyers in the market. The normal months’ supply of inventory for the market is about 6 months. Anything above that defines a buyers’ market, indicating prices will soften. Anything below that defines a sellers’ market in which prices normally appreciate.

Between 2006 and 2008, the months’ supply of inventory increased from just over 5 months to 11 months. The months’ supply was over 7 months in twenty-seven of those thirty-six months, yet home values continued to rise.

Months’ inventory has been under 5 months for the last 3 years, under 4 for thirteen of the last fourteen months, under 3 for the last six months, and currently stands at 1.9 months – a historic low.

Remember, if supply is low and demand is high, prices naturally increase.

2. This time, housing demand is real

During the housing boom in the mid-2000s, there was what Robert Schiller, a fellow at the Yale School of Management’s International Center for Finance, called “irrational exuberance.” The definition of the term is, “unfounded market optimism that lacks a real foundation of fundamental valuation, but instead rests on psychological factors.” Without considering historic market trends, people got caught up in the frenzy and bought houses based on an unrealistic belief that housing values would continue to escalate.

The mortgage industry fed into this craziness by making mortgage money available to just about anyone, as shown in the Mortgage Credit Availability Index (MCAI) published by the Mortgage Bankers Association. The higher the index, the easier it is to get a mortgage; the lower the index, the more difficult it is to obtain one. Prior to the housing boom, the index stood just below 400. In 2006, the index hit an all-time high of over 868. Again, just about anyone could get a mortgage. Today, the index stands at 122.5, which is well below even the pre-boom level.

In the current real estate market, demand is real, not fabricated. Millennials, the largest generation in the country, have come of age to marry and have children, which are two major drivers for homeownership. The health crisis is also challenging every household to redefine the meaning of “home” and to re-evaluate whether their current home meets that new definition. This desire to own, coupled with historically low mortgage rates, makes purchasing a home today a strong, sound financial decision. Therefore, today’s demand is very real.

Remember, if supply is low and demand is high, prices naturally increase.

3. This time, households have plenty of equity

Again, during the housing boom, it wasn’t just purchasers who got caught up in the frenzy. Existing homeowners started using their homes like ATM machines. There was a wave of cash-out refinances, which enabled homeowners to leverage the equity in their homes. From 2005 through 2007, Americans pulled out $824 billion dollars in equity. That left many homeowners with little or no equity in their homes at a critical time. As prices began to drop, some homeowners found themselves in a negative equity situation where the mortgage was higher than the value of their home. Many defaulted on their payments, which led to an avalanche of foreclosures.

Today, the banks and the American people have shown they learned a valuable lesson from the housing crisis a little over a decade ago. Cash-out refinance volume over the last three years was less than a third of what it was compared to the 3 years leading up to the crash.

This conservative approach has created levels of equity never seen before. According to Census Bureau data, over 38% of owner-occupied housing units are owned ‘free and clear’ (without any mortgage). Also, ATTOM Data Solutions just released their fourth quarter 2020 U.S. Home Equity Report, which revealed:

“17.8 million residential properties in the United States were considered equity-rich, meaning that the combined estimated amount of loans secured by those properties was 50 percent or less of their estimated market value…The count of equity-rich properties in the fourth quarter of 2020 represented 30.2 percent, or about one in three, of the 59 million mortgaged homes in the United States.”

If we combine the 38% of homes that are owned free and clear with the 18.7% of all homes that have at least 50% equity (30.2% of the remaining 62% with a mortgage), we realize that 56.7% of all homes in this country have a minimum of 50% equity. That’s significantly better than the equity situation in 2008.

Bottom Line

This time, housing supply is at a historic low. Demand is real and rightly motivated. Even if there were to be a drop in prices, homeowners have enough equity to be able to weather a dip in home values. This is nothing like 2008. In fact, it’s the exact opposite.

Source: Keeping Current Matters