Snohomish County removes Design Review Board!

Snohomish County Council approves plan to remove Design Review Board | HeraldNet.com

A recent update to Snohomish County Council rules and regulations has approved the elimination of the Urban Center Design Review Board. This removes a discretionary review layer previously required for certain urban growth area developments and shifts design review to an administrative, staff-based process.

Ultimately, we envision this will reduce entitlement risk, improved timeline predictability, and potential reduction in soft costs for qualifying projects. It’s a modest, but meaningful, improvement to development feasibility in unincorporated Snohomish County.

Previously, certain projects were subject to review by a volunteer design board. The board subjected projects to discretionary design feedback beyond baseline code compliance. Now projects run directly through the Planning and Development Services. This means review is administrative and based on objective code standards; no public board presentation is required. Design standards do still exist but enforcement is staff driven rather than board driven.

Weitz Take: 

LOVE this. Imagine spending millions on a project and having it held up by a subjective volunteer review Board?! As long as city code is met, projects can get approved quicker allowing for less carrying costs and presumably much needed building around Snohomish County. Kudos to the County for seeing these issues and addressing them!

For more information on Snohomish County Commercial Real Estate, consider contacting an Everett Based Commercial broker. 

Our Firm: 

Weitz Commercial

2716 Colby Ave

Everett, WA 98201

t: (206) 306-4034

Scott@Weitzcommercial.com 

Trump announces proposal to ban institutional buyers from buying single family homes.

 

Trump announced steps to ban to large institutional investors from buying homes. He intends to seek Congress to 'codify' (pass a law) that would make it a formality. 

Weitz Take: Love him or hate him, I do like this policy. Companies like Invitation Homes should build housing like multi-family rather than extract from current inventory. As is, they take homes off the market and provide far less inventory to people looking to purchase homes and skewing natural supply/ demand. 

It's important to note that this may certainly affect Western Washington. I can tell you with certainty that Invitation Homes was a huge purchaser of homes about 10-15 years ago in the area. I don't know what they have done recently but removing them as a potential buyer and possibly pushing them to sell what inventory they do have (it's uncertain whether this is a part of the proposal from Trump) would lead to a lot more supply on the market and likely hurt pricing overall in the area. 

That said, I don't make strong assertions on a law until we see the actual language. As usual, the devil is in the details. 

Ray Dalio Comments on 2025 and beyond

 Below is a summary of a recent article by Ray Dalio. For those that may not be familiar with Mr. Dalio, he started what became the world's largest hedge fund from his apartment. That said, when he talks, we listen. We found these takes particularly interesting: 

2025 Wasn’t About AI Stocks — It Was About the Value of Money

In his year-end reflection, Ray Dalio argues that most investors misunderstood the real story of 2025. While headlines focused on the surge in U.S. stocks—especially AI-related names—the true driver of global market performance was the decline in the value of money itself, particularly fiat currencies.

The Biggest Market Move of 2025: Currency Debasement

Dalio points out that nearly all major fiat currencies weakened last year, with the U.S. dollar falling meaningfully against both hard currencies and gold. Gold, which Dalio views as the only major non-fiat reserve currency, rose roughly 65% in dollar terms, making it the best-performing major asset class of the year.

This matters because returns depend on the currency you measure them in. While the S&P 500 rose about 18% for U.S.-based investors, those same returns were far less impressive—or outright negative—when measured in stronger currencies like the Swiss franc or gold. In gold terms, U.S. equities actually lost nearly 30% of their value.

Dalio’s core point: when money weakens, assets priced in that money can appear to rise even if real purchasing power is falling.

Bonds and Cash Quietly Lost Purchasing Power

Although U.S. Treasury bonds produced positive nominal returns, Dalio emphasizes that bonds are ultimately promises to deliver future money. When money is being debased, the real value of those promises declines. Measured in strong currencies or gold, long-duration bonds and cash were among the worst investments of the year.

With nearly $10 trillion of U.S. debt needing to be rolled in coming years—and the Federal Reserve likely biased toward easier policy—Dalio sees long-term debt as structurally unattractive, especially if inflationary pressures persist and the yield curve steepens further.

U.S. Stocks Underperformed the World

Despite solid earnings growth, U.S. equities significantly underperformed international markets. European, Chinese, Japanese, and emerging-market stocks all delivered stronger relative returns, reflecting a meaningful shift in global capital flows away from U.S. assets.

Dalio views this as part of a broader rebalancing: foreign investors reducing exposure to U.S. stocks, bonds, and cash, while increasing diversification into non-U.S. markets and gold.

Earnings Were Strong — But Political Risk Is Rising

U.S. corporate earnings grew by about 12% in 2025, driven by both higher sales and expanding profit margins. However, Dalio warns that margins may become a political flashpoint. Productivity gains—some driven by technology and AI—have disproportionately benefited capital owners rather than workers, widening wealth and income gaps.

That dynamic, he argues, is fueling rising political tension between pro-capitalist and redistributive forces, a conflict that could directly affect taxes, regulation, and future corporate profitability.

Valuations Look Stretched Heading Into 2026

With equity valuations high, credit spreads tight, and liquidity abundant, Dalio estimates long-term expected equity returns at roughly 4–5%, well below historical norms and only marginally above bond yields. In his framework, that implies low future returns and elevated downside risk if interest rates rise or liquidity tightens.

Illiquid assets—such as private equity, venture capital, and some real estate—have not benefited as much from reflation and may face increasing pressure as refinancing costs rise and liquidity premiums normalize.

Politics, Geopolitics, and the “Big Cycle”

Dalio places 2025 squarely within what he calls the Big Cycle - a period marked by high debt levels, monetary debasement, political polarization, and rising geopolitical conflict.

He highlights:

• A shift toward government-directed capitalism in the U.S.

• Growing use of sanctions, tariffs, and unilateral economic power

• Increased military spending and borrowing globally

• Continued demand for gold amid declining trust in fiat systems

• Early signs of a speculative AI-driven bubble

These forces, he argues, will remain dominant drivers of markets and economic outcomes in the years ahead.

The Takeaway

Dalio’s core message is simple but uncomfortable: nominal gains can hide real losses. Investors who focus only on headline returns may miss what’s happening to purchasing power, currency strength, and long-term risk.

Rather than chasing recent winners, he urges investors to understand how money, debt, politics, and productivity interact—and to build portfolios that can withstand the full cycle, not just the next rally.

Our take

Hard to add much to Dalio. We have the utmost respect for his takes on the markets and global movements. In sum, we think cautious optimism in certain areas that provide zoning opportunities is a solid strategy as we face many uncertainties both nationally and globally. 

For more information on Everett Commercial Real Estate invests, we are always happy to chat. 

Scott Weitz

Scott@Weitzcommercial.com

C: 206.306.4034. 

2025 Recap and 2026 Predictions

Well, the time has come for the annual predictions and what we can expect for 2026. We are going to take a swing for the fences here as we have both some major macro-economic factors that we don’t like, but some more local factors in Washington that we think provide tremendous value add potential. In sum, my prediction for the years is to expect the unexpected. 

As we head into the year, it's important to note where we are and what many of the ‘experts’ predict for the year. 

2025 RECAP

1. Home price growth was very modest compared with recent years. According to the FHFA House Price Index, U.S. house prices rose around ~2.2% year-over-year by late 2025, with quarterly growth essentially flat — reflecting persistent affordability pressures and elevated mortgage rates; 

2. Interest rates have remained stubbornly high ‘trapping’ a lot of people into their current low rate mortgages; that said, overall, the 30 year fixed rate did fall from 7% to about 6.25%  

3. The U.S. stock market experienced significant volatility, including a major sell-off tied to tariff announcements in April 2025, which wiped out trillions in market value before a rebound later in the year ending the year at up 17% to 20% amongst the major indices.

What the Experts are saying about 2026

U.S. Housing Market: National Association of Realtors. NAR 2026 Prediction

Overall trend: Gradual improvement with modest growth.

• Home sales are broadly expected to rise in 2026, with the National Association of REALTORS® forecasting a ~14% increase in existing-home sales and a rise in mortgage rates toward ~6% (still high by historical standards).
  
  

• Price expectations vary by source, but many forecasts call for modest price growth rather than large declines — estimates cluster in the ~1%–4% range nationally.

U.S. Commercial Real Estate Market: based on Colliers CRE Group Colliers 2026 Report

Sentiment: Renewed optimism, with nuanced sector performance.

• CRE fundamentals are stabilizing — financing conditions easing, occupier demand firming in key segments, and investor confidence improving. 

• Multifamily, industrial/logistics, and select retail continue to show solid demand and could benefit from lower rates and economic growth.

Stocks/ Equities: (Forbes) 

Many banks and market strategists forecast continued stock market gains in 2026, driven by strong corporate earnings, including productivity gains from AI and resilient economic growth. Forbes Stock predictions up 15-20% across the major markets. 

WEITZ 2026 PREDICTIONS: A Background

With that foundation set, I’m going to go totally off the general way of thinking and make some fairly bold predictions both nationally and locally. As someone that worked heavily in the sector through the 2008-2012 Real Estate Crisis, I feel I have a fairly unique lens on the situation. I predicted that crash as a black sheep, and I will circle the wagons and do so again for 2026 and beyond. In my opinion, we have a perfect storm that has formed that will provide some very challenging headwinds. 

If you look back to the history of the Great Depression, I think you can make some strong parallels from that period to now which I will go into below. Please note I am not predicting a ‘great depression’ as the economy structures were VERY different then in that:

    1) We did not have the FDIC to back bank deposits which led to a run on the banks and depositors being completely wiped out;

    2) the Federal Reserve / Federal Government then failed miserably for several reasons in that they

        i) allowed thousands of banks to fail;

        ii) did not expand the money supply as needed by;

        iii) keeping credit tight when it should have been doing the opposite.

Note that Ben Bernanke (Former Fed Reserve Chairman) during the last crisis of ‘08 had studied the Great Depression at length while studying at Princeton and thus did the opposite by i) bailing out the banks, ii) utilizing massive quantitative easing (printing money) and generally propping up the economy in any way that he could. The argument can be made that the previous version is a healthy reset vs. 'bailing out' the banks, but that's a discussion for another day, but its clear the 2008 version did not utilize the austerity measures of the late 1920s/ early 30s.

With that foundation set, it's important to note that the late 1910s also had a major financial correction which was similar to that of 2008-2012; then we had the roaring 1920s which looked much like the last 10 years where some would say it was the ultimate 'bait and switch' where most of the ‘demand’ for assets was pulled forward. My opinion is that the COVID financial response contributed to this type of 'boom' on steroids as we printed more money than ever before (4.5 Trillion from the EDIL loans, PPP loans, to unemployment payments, etc, etc). Now, to be fully transparent, I applauded those at the time as to not have that money would have crippled our debt based society for small businesses, etc. Loans and leases would have defaulted left and right...it could have been a total financial catastrophe.

Today, we find ourselves in an incredibly odd and arguably unprecedented situation for a variety of reasons:

1) Office Space usage was transformed during COVID - even with people coming back to work, they seem to be doing so in a hybrid fashion where companies establish work locations where computers can simply be plugged in rather than having your traditional personal office environment - this naturally will lead to smaller square footage (SF) being taken up upon lease renewal.

2) Real Estate Residential inventory has remained historically low. Note an article from 2020 where inventory in the Seattle area was 25,373 Seattle PI article where now we have approximately 4810 according to FRED as of late November, 2025;

3) AI, for better or worse is transforming the job market. I’ve heard arguments on both sides of this, but the reality is - go talk to a 24-year-old college grad and go talk to programmers…. this job market is simply brutal and I expect job displacement to increase as companies become more and more familiar with the tools AI offers and learn to efficiently utilize them. 

With that depressing foundation set, here are the predictions for 2026:

2026 PREDICTIONS

1) Residential Real Estate Weakness throughout the year

2) Residential Inventory climbs from current levels

3) Commercial Real Estate continued weakness

4) Media coverage on Economic situation heightens/ turns negative

5) ADU and DADU explosion (locally)

1. Residential Real Estate pricing weakness throughout the year: 

I think the easiest of the predictions that is probably the most ‘black sheep’ compared to most pundits is that residential real estate will show considerable signs of weakness (down 3-7% this year - perhaps more). 

2. Inventory/ real estate listings will rise: Either via natural listings, or distressed sales, I’m confident Inventory will finally start to rise. I would not be surprised at all if, like 2008-2011, distressed assets will be the leader of inventory increases. 

Here’s the data I’m looking at: 

Inventory Increasing in 2025

1. In October 2025, King County had about 3,972 homes for sale, which was a ~36% increase compared with the year prior

2. 2.7 months of supply in October 2025, up from roughly 2.0 months in October 2024 — indicating more homes relative to sales activity. 

Foreclosure weakness data shows an increase in distressed assets (these are national figures) 

3. In Q2 2025, there were ~100,687 foreclosure filings in the U.S., up ~13% from a year earlier. PR Newswire
   
   

4. In Q3 2025, ~72,317 properties started foreclosure, up ~16% year-over-year. rei-ink.com
   

                    e. October 2025 foreclosure starts were up ~20% from a year earlier with ~25,129 filings. rei-ink.com

Simply put, if you have inventory rising, and foreclosures rising, its hard to see prices not dropping unless mortgage rates drop dramatically, but I don’t see that happening until late 2026 given the political back and forth between President Trump and Fed Chair Powell. Once inventory rises considerably, it will be too late. The supply/ demand equation will force prices down and the negative cycle will begin (ie. Short sales, foreclosures, forced sales, etc). 

            3) Commercial Real Estate pricing continues to struggle and ends down YOY

Commercial RE is tougher to predict with supply so tight. It's a different world entirely from Residential, but I think some areas will continue to show signs of weakness.

Rationale:

According to CBRE Report, “National office vacancy remains elevated but improving, with the vacancy rate around 18.6% – 18.8% in late 2025 — down modestly year-over-year, marking one of the first annual declines in vacancy since 2020. This indicates some stabilization after years of pandemic pressures”. 

Ummm… don’t piss on my leg and tell me it's raining. An 18% vacancy rate is not a ‘stabilizing force. It signifies that we have far too much office space available and not enough tenants. Don’t get me wrong, trophy Class A properties will likely do well. Large, well-capitalized tenants want the best of the best, but the lower to bottom sector of the market will struggle having to lower rents to fill their space - lower rents lead to lower NOI, and lower NOI leads to lower Cap Rates...... which leads to lower valuations. 

CMBS (Commercial Mortgage-Backed Securities) Concerns

CMBS delinquency rates are a widely tracked indicator of stress in commercial property lending. Lower rates mean less people defaulting; higher = more). Here are the latest numbers I could find:

1. Overall CMBS delinquency rate:
   Around ~7.2%–7.5% in late 2025 — elevated compared with prior years and up significantly from earlier in the decade. MBA report 

2. Monthly trends:
   Trepp data showed the rate climbed to ~7.46% in October 2025, up sharply year-over-year, then a pullback to ~7.26% in November 2025. CRE Daily+1
   
   

3. Record highs in some property types:
   
   

• Office CMBS delinquency: ~11.7–11.8%, among the highest levels seen in the modern data era. SP Global report

• Multifamily CMBS delinquency: ~~7.0–7.1%, the highest in about a decade before a slight retreat in November. Multi-family report 

• Retail CMBS delinquency: Roughly mid-6% range, also elevated but lower than office and multifamily. CRE Daily 

Sorry - I don’t care how you spin this, it's simply not good…. and almost never talked about. The reality is that many of these defaults not being called due is simply just kicking the can down the road. Why?: rates are too high to re-finance, and banks don’t want to take back the asset (foreclose) as it would force them to ‘mark to market’ and thus take massive losses…it's a complete and utter ‘pass the buck’ that seemingly only delays the inevitable unless we see a massive turn around in pricing (higher) and/ or rate cuts…neither of which seems likely. Even if one of those occurs (say rate cuts), that means the general market likely isn’t doing well either so it's a bit of a ‘Catch-22’ - damned if you do, damned if you don’t. 

        4) Increased media reports about weak economics

For better or worse, 2026 is a mid-term year and I imagine many Democrats are extremely motivated to take back the House and the Senate. As such, from purely a political standpoint, it would be wise to focus on the economy if it is showing signs of weakness as predicted above. If any of the previous predictions are accurate, Democrats will pounce on the opportunity and use whatever resources they have in the media to spread that message to the public. This isn't meant to be political in any way, but it is what it is. Either party would do it if the other was in control. Look for negative comments from the democratic leaders and media, and a significant push to expose any/ all weakness with the economy. Frankly, this will likely throw fuel on the fire of the above issues and change public perception. For a good read, check out renowned economist Robert Shiller and his book “Animal Spirits: Human Psychology and how it drives the markets”... I think it's highly likely that concept will play itself out this year. 

(Local - King and Snohomish County Prediction only) 

        5) A Massive increase in DADUs/ ADUs and Middle Housing in Washington State

With the implementation of the State laws for DADUs, ADUs and Middle housing (House Bill 1337 and others), we have had a zoning change UNPRECENDENTED in Washington that is slowly being implemented all around the State (varying timelines depending on each County). If you drive around in Seattle, Kirkland, or Everett, you can already see the ‘ball in motion’. We think it's a bright spot in the market and going to get more and more attention. If done properly, the State is giving a gift to homeowners with land that can easily be divided (or appropriately condomized) thus essentially providing a major value add for those who take advantage of it early. Additionally, we will likely see much more opportunity / listings which will effect pricing and make it easier for new home buyers to enter the market.

We absolutely love this law as a win-win for many, but also a big threat to the supply/ demand equation of increased supply.... if we over build these units and rates stay high, home will sit on the market and/or need to have prices lowered. Its already happening with a large number of sellers pulling their homes from the market recently.

There you have it. 5 predictions for 2026. We will track them at the end of the year and see how we fared.

Have a terrific New Year everyone. Whether you love or hate these, there will always be opportunity to be found so hopefully this may help in whatever planning you may have for your estate/ investing. 

For more investing on Everett Commercial Real Estate or Investing in Everett Commercial Real Estate, please find our information below.

Regards,

Scott Weitz, President / Designated Broker

Scott@WeitzCommercial.com

T: 206.306.4034