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Market Maker Recap: Keynote Speaker Jonathan Woloshin Of UBS Wealth Management And Expert Panelists Provide Insights Into Today’s Regional And National Real Estate Ecosystem And Opportunities

By RSIR Staff |

Realogics Sotheby’s International Realty (RSIR) welcomed more than 100 brokers, industry experts, and keynote speaker Jonathan Woloshin, CFA and CIO of Global Wealth Management, UBS, to the second Market Maker event held at our Kirkland office so far in 2024—providing those in attendance with expert predictions on where the market is headed and how brokers can navigate this inflection point. For more insights from Jonathan, check out the most recent episode of RSIR’s podcast series Market Perspectives here

Prior to the presentation, RSIR President and CEO, Dean Jones, hosted Jonathan for an impromptu podcast interview on Market Perspectives to discuss the high-level trends and draw summary conclusions. At this time of change, it’s critical to be informed about the trajectory of the markets and Dean noted that Jonathan is at the forefront of the date, seeing the trendlines before the headlines. That’s because UBS represents more than half of the world’s wealthiest investors with the largest, such as Blackstone, being clients that have real-time data, well ahead of Census data, government reports, or even industry updates.

Jonathan Woloshin, CFA and CIO of Global Wealth Management, UBS provides market predictions.

The event kicked off with a presentation by world-class luminary Jonathan Woloshin who enlightened the crowd with his knowledge on everything from the trajectory of commercial real estate today, the issue of unaffordability with residential housing due to factors like mortgage rates and median incomes, a snapshot of our local market, and more.

Jonathan reassured the crowd that he is not worried about an impending banking crisis and does not think we will have a repeat of 2008/2009 events in the residential and commercial real estate markets. Yes, there will be some failures as loan maturities come due, and lenders become building owners, but there will be consolidation and resolution, perhaps similar to how UBS acquired Credit Swiss during that event. He described commercial real estate as a “slow-moving, long-duration asset,” which favors the patient and those who can weather volatile or uncertain market conditions.

The presentation then transitioned into residential real estate, and the fact that owning a home is proving to be unaffordable and extremely difficult for many people today, in part due to a lack of inventory, and as we see specifically in Seattle, a lack of multi-family developments to allow for more “missing middle” housing. For those who currently already own a home, if they secured a mortgage rate before the major spikes, they’re understandably hesitant to trade in their 3 percent rate for one over 6 percent.

Housing policies, the upcoming election, and state politics were also discussed concerning their effects on where the market is heading. Jonathan recommended looking at data with an unbiased, dispassionate approach to grasp a full, uncolored understanding of our local market. The event proceeded with a question-and-answer portion with Jonathan weighing in on everything from the lack of condominium conversions to the first-time buyer tax credit. He was clear that working with a local, knowledgeable real estate professional was key, and fortunately, the audience was full of the industry’s leading advisors to catch the conversation.

Vivian Hsieh, Christine Madrid, Dehlan Gwo, Josh Nasvik, and Erik Mehr give expert insights in a panel lead by Dean Jones.

After Jonathan wrapped up, the first expert panel, The Condominium Conundrum, began. The panel featured Vivian Hsieh of Da-Li Development, Christine Madrid of Movement Mortgage, Dehlan Gwo of RSIR, Josh Nasvik of Polaris Pacific, and Erik Mehr of Erik Mehr and Associates, and was hosted by our very own CEO and President of RSIR Dean Jones. The conversation was unanimous regarding the importance of condominium inventory and the dearth of new condominium supply in the coming years, noting that current sales velocities are occurring at twice the pace of sellouts in the next two years. The challenge is with anticipated drops in mortgage interest rates, the residential renaissance in downtown Seattle (and downtown Bellevue), and the lack of groundbreakings for new condominiums, adding up to a reality where demand will spike at a time of zero supply. Such is the issue with high-rise development and many other dynamics.

Yet the opportunity is now with 100% of the available new condominium supply represented by the panel – each broker acknowledged that their clients had “marked to market” an average of 20-30% over the past four years to drive the sales velocity required to be conforming with Fannie Mae mortgage guidelines, and of course, to repay construction loans and exit the developments successfully. That means that current offerings are being sold well below replacement costs, and it would take resale and new construction inventory value increases of 30-40% before the next round of condominiums come to market, and until then, the supply and demand balance will likely accrue to the benefit of savvy buyers and knowledgeable brokers who understand how the market cycles evolve.

History is repeating itself just as the market witnessed zero new supply from 2011-2014 after the Great Recession, the current dynamics are setting up for development deja vu with no supply from 2025 to at least 2027 under current projections.  

>EXPLORE THE CONDOMINIUM CONUNDRUM REPORT BY DEAN JONES HERE

Tadashi Shiga guides the second panel of the event featuring Kelly Mann, Sean Northrups, Matt Van Damm, Rob de Clerk, and Jon Rose.

The second panel, Developer Dynamics, featured Kelly Mann of RSIR, Sean Northrup of Trailside Homes, Matt Van Damm of Terrene Homes, Rob de Clerk of JayMarc Homes, and Jon Rose of Port Gamble Development and was hosted by RSIR’s Land Division’s Executive Director Tadashi Shiga. Panelists spoke on Seattle’s lack of inventory, issues developers have faced, and how developers continue to see opportunities in potential build sites. A fundamental finding is that the consumer demand is evolving to exurban locales given the work-from-home and hybrid workweek phenomenon and with major transportation corridors opening up new markets, like the billion-dollar I-90 East Expansion Project, the Kitsap County Fast Ferry service route, and Sound Transit 3 with light rail access, where and how we’ll live tomorrow is changing before our eyes. Some of the beneficiaries, such as Port Gamble in Kitsap County or Ederra in Cle Elum started their entitlements and masterplan communities decades ago, but what they have in common is they are present today with immediate opportunities for buyers and brokers to benefit from the maturing trends.

Attendees were then invited to participate in a champagne toast, courtesy of Movement Mortgage, and they enjoyed delectable crepes from J&Y mobile creperie as they mingled and continued the exciting market discussions amongst each other.

 

Listen to RSIR’s Market Perspectives podcast series featuring some of the top industry experts in the region here or check out the videos of the interviews here