Annual Report 2021
Racial Discrimination in Real Estate
This room might seem simple to you, but to me, it marks the saddest day in my career. 💔
This picture was taken shortly after I had finished staging one of my client’s homes. I wanted to show the owners all I had done – admittedly looking for a pat on the back. Although I was showered with compliments for almost every other room in the home (all boho-themed to my aesthetic), I was given an off-putting request when they saw this photo.
“Can you remove the painting?”
Having fallen in love with this painting months ago, I was fairly disappointed and a bit taken back by the request. I decided to inquire about the reasoning behind the request and my client’s response broke my heart into a million little pieces.
“We are afraid we’ll get less money if people know we’re Black.”
I was speechless.
In an attempt to comfort my clients and resolve the issue I made the mistake of saying ignorant things such as “that’s not as prevalent on the west coast” and “it’s just art, it won’t tell people who you are.” Ultimately though, the panting came down and was replaced by a lovely little beach scene.
Recently I was reminded of this interaction in the most heartbreaking way. In December of 2021 residents of San Francisco, California filed a lawsuit against their appraiser whose estimated value of the home came in nearly half a million dollars less than market value. After removing their family photos from the home and having it re-appraised it was clear that this discrepancy was in no small part due to the family’s race. You can read more about the story here.
My client was right. The fight is nowhere near over.
The real estate industry has a long and troubling history when it comes to the struggles of racial divide in America. In many ways, the housing industry served and serves as a stronghold for preserving racial discrimination long past the judicial end of segregation. In Richard Rothstein’s book The Color of Law, he delves into the multitude of ways in which the real estate industry fought to preserve racial segregation using subversive tactics that appeared innocent. By discreetly elongating the effects of racial segregation within the housing industry, the inability for people of color to obtain reasonable homes helped to widen the American wealth gap further than anyone thought possible.
How could the housing industry make such a profound impact on the financial prosperity of America’s minorities? The answer to this question is LONG and although I am not a professional economist, I can give you the two biggest reasons.
Real Estate is the Best Source of Generational Wealth
It is no surprise to anyone that land is one of, if not the most, finite resource we have in this world. Sure, there are always going to be those few who talk about building an underwater civilization or creating an outpost on Mars. However, if we are to assume that we do not live in a Syfy film – what we got is what we got. This means that real estate is one of the most secure investments you can make. Without the ability to create more supply and the fact that it is a basic necessity for all humans, the value of property really has little way to go other than up. This makes it a major player when it comes to building generational wealth.
A home is a unique asset in the fact that it not only provides vital accommodations to its owners but also greatly increases in value through the years and can be passed down from generation to generation. On top of that, those who own homes can withdraw equity from those homes to re-invest and grow that wealth even further.
This asset was withheld from minorities for multiple generations through the process of redlining while being generously provided to their Caucasian counterparts. By excluding minorities (especially the Black community) from the ability to build this kind of compound wealth, the prospect of even being able to buy into the investment grew further and further away with every increase in market prices. By the time segregation and redlining “ended,” the ability for minorities to purchase a suitable home was already too far gone and it would take more than just a few generations to close the gap.
Housing Taxes are Connected to Education
One of the cleaver and subversive ways in which the housing industry was able to sustain discrimination in real estate and the wealth gap was through intertwining housing taxes with access to education. By excluding minorities from suitable housing which was projected to rise in value at a far greater rate, early real estate developers were successfully able to ensure educational discrepancies between the two communities.
In exclusively Caucasian communities where home values greatly exceed their minority counterparts, schools were well funded through the taxation of those higher valued properties. As a result, the children of those communities were granted better educational programs, higher paid and more competent teachers, as well as better recognition from potential universities. Later in life, this would result in better and higher-paying jobs for the children of those exclusively Caucasian communities.
In contrast, the home systematically set aside for minority communities did not come close to meeting the values of their Caucasian counterparts. The result of this was that children raised in these communities would have fewer educational programs, poorly paid teachers, and would often have a “black mark” on their college applications due to their school’s reputation. As adults this lack of suitable education would result in working lower-paying jobs – only greatening the wealth divide.
Unfortunately, minorities today still face discrimination through illegal real estate practices such as steering and, as we saw with the San Francisco family, discriminatory appraisals. For people like me, it can be easy to think such things as “that’s all in the past” or “minorities can’t possibly still be affected by this.” However, it is through the fear in my client’s eyes as they looked at that beautiful painting that I see the truth – this battle is so far from over.
I am grateful, however, to work with Windermere Real Estate in fighting this injustice within our industry. In 2020 Windermere heard the call for equality and chose to answer. Windermere is one of the few Real Estate companies in the nation that have chosen to hire a consulting agency to help them promote Diversity, Equity, and Inclusion within our industry. Step-by-step they are helping their brokerages learn what it truly means to be inclusive and how we can all help to close the gap.
You can help too! Windermere Real Estate is partnering with HomeSight to increase Black homeownership in Washington state through what they are calling the “Hi Neighbor” fund. Through this fund, HomeSight is bridging the affordability gap for Black homebuyers so that they can increase their purchasing power. Starting in 2022 I will do my part by giving a portion of every commission I make to the fund. To learn more about this fund and to donate, click here!
This beautifully written article was submitted by our very own, Victoria Paris to discover more articles written by our agents click here.
The Benefits of Putting 20% Down on a House
If you read our, “How Long Does it Take to Save For a Down Payment?” article back in October, you know you don’t need a 20% downpayment to purchase a home because there are many alternative options available to you. However, while there are a plethora of options that you might qualify for, let’s look deeper into how putting 20% down could benefit you overall. You can find tried and true suggestions for saving up your downpayment here if you don’t have 20% saved up already. Keep in mind you can connect with us at any time to get personalized suggestions for what would work best for you in your unique situation.
In this article we are going to discuss how putting 20% down can help you get a lower interest rate, pay less overall, stand out in this competitive market, and avoid paying for PMI. Let’s get started.
Lower your interest rate:
A 20% down payment vs. a 3-5% down payment demonstrates to your lender that you are financially stable and not a large credit risk. The more confident your lender is in your credit score and your ability to pay your loan, the lower the mortgage interest rate will likely be.
Pay less overall:
The larger your down payment, the smaller your loan amount will be for your mortgage. If you are able to pay 20% of the cost of your new home at the start of the transaction, you will only pay interest on the remaining 80% of the cost of the home. If you put down 3.5 %, the additional 16.5% will be added to your loan and will accrue interest over time. This will end up costing you significantly more over the lifetime of your home loan.
Stand out in this competitive market:
In a market where many buyers are competing for the same home, sellers often like to see offers come in with 20% or larger down payments. Many buyers were hoping for the typical winter “slow-down” where they could see a less competitive market but that has proven not to be the case this year. Read more in our article, “Thinking the Housing Market is Going to Slow down this Winter? Think Again!” The seller in this current scenario gains the same confidence as the lender. You are seen as a stronger buyer with financing that is more likely to be approved. Therefore, there is a significantly higher chance that the deal will go through with a 20% downpayment.
Avoid paying for PMI:
You might be asking yourself, what is PMI? Freddie Mac explains,
“For homeowners who put less than 20% down, Private Mortgage Insurance or PMI is an added insurance policy for homeowners that protects the lender if you are unable to pay your mortgage.
It is not the same thing as homeowner’s insurance. It’s a monthly fee, rolled into your mortgage payment, that’s required if you make a down payment less than 20%. . . . Once you’ve built equity of 20% in your home, you can cancel your PMI and remove that expense from your monthly payment.”
As mentioned earlier, if you put down less than 20% when buying a home, your lender will see your loan as having more risk than those who do put 20% down. PMI helps lenders recover their investment in you in the case that you are unable to pay your loan. However, this insurance is not required if you are able to put down 20% or more. In turn, this saves you from paying those extra fees.
Oftentimes, sellers looking to move to a larger or more expensive home are able to take the equity they earn from the sale of their house to put 20% down on their next home. The equity homeowners have today, creates an advantageous opportunity to put those savings toward a larger down payment on a new home.
If you are considering buying or selling or just want to talk about this in more detail, connect with us. We are here to help.
Q3, 2021 Gardner Report | Western Washington
Natures Halloween Decorations
Dun dun. Dun dun. Dun dun…. They’re here….. nature’s Halloween decoration…
It’s Spider Season!
It comes without fail every year. In what feels like a blink of an eye every tree, bush, and building corner is covered in shiny interwoven silk with a beady-eyed creature lurking somewhere nearby.
If you’re like most people, this is probably your least favorite time of the year. The occurrence of these little eight-legged animals provokes feelings ranging from mild disgust to outlandish fear. A lot of this fear comes from misinformation we’ve been given for a long time. So, let’s debunk some of these myths, shall we?
Myth #1 – “Spiders have dangerous venom that could kill.”
Although it is true all spiders have venom (yes, ALL spiders); only a VERY small number have the ability to harm humans, and of those, few are fatal. Even a bite from the most notorious arachnid, the Black Widow, is mostly non-life-threatening for healthy adults. Thanks to modern medicine our access to antivenom has increased dramatically.
Myth #2 – “We have Brown Recluses and Black Widows on Whidbey Island.”
No, you did not see a Brown Recluse in your bathtub and the black spider on the bush outside is not a Black Widow. Although these spiders do live in Washington State, the vast majority of them live on the east side of the Cascade Mountains. Sightings of these spiders in western Washington is very rare and practically unheard of for Whidbey Island.
So, what is the “scary” brown spider in your bathtub? We’re glad you asked! Here are 3 of the most common spiders to see on Whidbey:
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The Common House Spider
Yes, there is a spider called the Common House Spider. Although there are several subspecies, they are all harmless but enjoy dry, warmer areas. You’ll often spot these spiders in the unused corners of your house hanging out and waiting for a fly to make its way towards them.
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Wolf Spiders
This was probably the spider is the bathtub! Also called a Wood Spider, these little eight-legged friends are plentiful on the island and admittedly a little intimidating. To an untrained eye, these guys look a lot like a Brown Recluse; however, they are actually a little bigger and 100% harmless. You’ll find them mostly outside on the ground as they are not the best climbers and typically don’t build webs.
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European Cross Spider
Probably the most majestic of our Whidbey Island spiders, you can thank these large rear-ended arachnids for the early Halloween decorations you find in your trees and bushes. Found almost exclusively outside, these beauties are the kings of web making. They are one of the few spider species that weave circular webs. Although mildly annoying, you can’t help but admire their workmanship.
So, there you have it. No need to take a torch to that tree this fall or scream when you see the tiny brown friend hiding in the corner. Just scoop them up and take them outside! Spiders are actually a great help when it comes to getting rid of actual pests like mosquitos or termites, and with any luck, they might just do the Halloween decorating for you this year.
Is the Oak Harbor Housing Market Getting Squishy?
Written by: Kristen Stavros
16 September 2021
There is a general feeling amongst brokers that the Oak Harbor market has softened up just a bit. As Branch Manager and Co-owner of Windermere Whidbey Island I pay close attention to what my brokers are seeing and feeling out there in the market. When I begin to sense a theme I go to the numbers to see if they are telling the same story.
I’ll be really curious to see how these numbers change when we can add September data to them but I’m seeing the teensiest sign that there may be some easing.
For the first time all year, we’ve seen a dip in closed sales in August.
At the same time, new listings continue to rise every month.
Average days on market has plateaued.
Does this mean buyers can start getting homes for less $$$?
The answer is emphatically, NO. As you can see from the graphs below prices continue to climb, inventory is still at a record low, and homes are still moving off the market incredibly fast. This just means that instead of being up against 10 other buyers you now may be up against just 2-3 other qualified buyers. Instead of great homes going for up to 10-20% over list price, the good ones may just end up 5-8% over list. The pressure on buyers is still decidedly strong but the dial has been turned down ever so slightly.
Average Price Per Square Foot.
Months’ Supply of Homes (based on closed sales).
Average Days on Market.
Sellers still have a fantastic advantage in this market but things are changing weekly so we are encouraging sellers to not get too greedy or assured because doing so may mean you overprice the market, lose the opportunity to garner multiple offers out of the gate, and ultimately make less profit on your home.
Working with a smart and sophisticated listing agent has never been more important in the previous 3 years than it is RIGHT NOW. You need someone who is really going to take their time analyzing the market against your specific home before giving you pricing advice. Call us today to be connected with a market pricing expert!
This analysis focuses just on the Oak Harbor market but we have the same analysis going on for all of Whidbey Island! If you are interested in knowing more about any aspect of Whidbey Island real estate let us know and we are happy to share.