How Trump’s tax plan affects homeowners

President Donald Trump signed the Republican tax bill into law at the end of December.

The new tax law makes sweeping changes to the tax code for businesses and, on average, American taxpayers. It changes a few longstanding tax benefits for homeowners, too.

Under the new law, the deduction for state and local property taxes is capped at $10,000. Plus, homeowners who deduct mortgage interest are limited to the amount they pay on $750,000 worth of debt, down from $1 million. On the flip side, the standard deduction has doubled, likely leading fewer homeowners to itemize their taxes.

These changes may weaken incentives for homeownership, especially in expensive coastal markets in California and the Northeast where home prices are high and residents pay state taxes on income as well as property. Homeowners in these markets will see the biggest change in their housing-related tax deductions.

“The impact of the changes is felt disproportionately in left-leaning parts of the country,” writes Chris Salviati, a housing economist at Apartment List, in a new report. “There are 15 states in which the median homeowner will receive at least $100 less in housing tax deductions under the new plan — President Trump carried none of these states in the 2016 election.”

Apartment List analyzed the affect of Trump’s new tax law on homeowners with home values below, at, and above the median in the largest metros in the US. They estimated the overall tax bill for a married couple filing jointly with a dependent child under the previous tax code and the new tax code.

In much of the US, only owners of the most expensive homes in a local market will see a loss in housing tax deductions. But on the California coast and along the Northeastern seaboard, most homeowners — even those with homes valued below the median — will lose deductions they had pre-tax reform.

For homeowners of a median-priced house in the Bay Area, the loss of mortgage interest and property tax deductions could total more than $100,000 over the course of a 30-year mortgage, according to Salviati’s calculations. The estimation does not factor in projected home price changes over that time period, however.

You can see the effect of Trump’s tax law on homeowners of the highest-value homes — the 75th percentile — in 27 of the largest US metros, ranked by home value, using Salviati’s calculations here: Tax Effects.

~Tanza Loudenbeck, Business Insider

Home buyers, sellers feel “looming pressure” but Western Washington market stays strong


Interest rates are creeping up, inventory is still squeezed, and some feared revised tax laws would have a chilling effect on home sales, but Northwest Multiple Listing Service leaders say the local market remains competitive.

“It seemed like there would have been a chilling effect on the real estate market at the start of 2018 with the newly revised tax laws limiting mortgage interest deductions,” suggested Gary O’Leyar, designated broker and owner at Berkshire Hathaway HomeServices Signature Properties. “Not only did the revisions not have a chilling effect, if anything, the local market has been even hotter and more competitive than last year at this time,” he added in commenting on new MLS numbers summarizing February activity.

Northwest MLS figures for last month show a slight year-over-year decrease (about 2.8 percent) in overall pending sales, a likely consequence of inventory being down nearly 12.9 percent. Other key indicators of the market – new listings, closed sales, and selling prices – all showed gains in February compared to 12 months ago.

The just-released report from Northwest MLS shows 7,980 pending sales last month, down from the year-ago volume of 8,209 mutually accepted offers for single family homes and condos. Thirteen of the 23 counties in the report had more pending sales than at this time last year.

Closed sales outgained last year’s volume, 5,548 to 5,358, for an increase of nearly 3.6 percent. Median prices on those sales surged almost 14.8 percent area-wide, rising from the year ago figure of $335,515 to last month’s price of $385,000.

Among the four Puget Sound area counties, Snohomish had the largest year-over-year price increase at 18.8 percent. Its countywide median price for February’s sales spiked to $460,000 from $387,250, but that is $130,000 below the $590,000 median price for transactions that closed in King County last month.

For single family homes (excluding condos), prices rose 13.7 percent overall, from $343,000 to $390,000. Within King County, the median price was $649,950, with three areas (Mercer Island, Bellevue west of I-405, and Kirkland-Bridle Trails) reporting median prices of more than $1 million for single family homes.

“As was the case the last two years, home values spiked in February, thanks to a cyclical low point in supply,” commented Robert Wasser, owner/broker at Prospera Real Estate. Prices are now back around the peak levels of last summer, and cyclically speaking, are headed for additional increases until summer arrives,” commented Wasser, a board member at Northwest MLS.

Brokers added 7,284 new listings of single family homes and condos during February, an improvement of nearly 6.4 percent from a year ago when they added 6,848 new listings. Like many months during 2017, last month’s pending sales (7,980) outgained new listings (7,284), keeping inventory depleted in many areas.

There is about 1.4 months of supply area-wide, but both King and Snohomish counties have less than a month’s supply. For condos, there is only 0.88 months of supply – and even less than that in King, Snohomish, and Kitsap counties.

Many brokers expect inventory levels to improve. “The arrival of daylight savings triggers a burst in new listings,” proclaimed J. Lennox Scott, chairman and CEO of John L. Scott Real Estate. “More listings lead to more sales. In real estate, it’s all about the new listing,” he stated.

Scott expects the boost in home price appreciation during the winter market when inventory is reduced will moderate. “Over the second half of the year, as more listings come on the market, home price appreciation tends to flatten out,” he explained while noting small upticks in mortgage interest rates. Such increases have led to slightly higher mortgage payments, Scott said, “but they have not put a damper on the market.”

New construction could also help ease some of the pressure, suggests Mike Grady, president and COO at Coldwell Banker Bain. “Even though Commerce Department data show purchases of newly built single-family homes nationwide fell 7.8 percent in January after dropping 7.6 percent in December, and purchases have declined for four of the past six months, we are not seeing that trend in the Northwest.”

Inventory is improving in some areas, Grady noted, adding, “The hyper job market in the Pacific Northwest continues to outpace almost every metro area in the nation, and thus our housing market is booming; for now, there is no end in sight.”

Ken Anderson, president/owner and designated broker at Coldwell Banker Evergreen in Olympia, noted some buyers are frustrated with what appears to be lack of choice. “The reality is, we have an 8-year high in the number of homes coming to market in Thurston County,” he stated. His analysis of MLS data show the total number of new listings added in that county in the first two months of this year is at the highest level since 2010.

“The challenge is that the number of buyers is near record highs, too,” said Anderson. Given this competition, he believes “The right plan, including help from a skilled broker, can help buyers find success in this fast-paced market.”

“Many buyers and sellers feel looming pressure, and with a mix of doom and elation, both are preparing for a flurry of activity,” reported George Moorhead, designated broker at Bentley Properties. “We have not seen the typical aggressive spring market yet,” he added, noting “Buyers are coming to the harsh reality that high home prices are here to stay” and they need to consider smaller homes or longer than hoped-for drive times.

Moorhead also noted 30-year mortgage rates climbed slightly for the seventh consecutive weekly increase, but he said these small increases “are not yet creating too much of a stir.” Conversations with buyers are “more around the cost of commuting and time away from home versus floor plan and home size.”

For some wage earners in the Seattle area, “Kitsap looks very affordable,” said Northwest MLS board member Frank Wilson. “Kitsap’s real estate market continues at a flurry pace with homes going off the market almost as fast as they come on. Available inventory in our county is down 32 percent compared to a year ago, which continues to put upward pressure on prices and buyer’s nerves,” stated Wilson, the branch managing broker at John L. Scott Real Estate in Poulsbo.

As commuters flock to the more affordable side of the sound, “affordability gets further and further in the rearview mirror for many,” Wilson lamented. MLS statistics for February show year-over-year prices in Kitsap County jumped more than 15.7 percent, with single family home prices up 17.5 percent. Compared to January, last month’s prices for homes and condos in that county rose another $25,000 (8.3 percent).


“History tells us that the real estate market is cyclical,” acknowledged O’Leyar, who also mentioned the Federal Reserve chairman hinting at further rate increases and possible impacts on the pace of appreciation and the availability of listings. “Hopefully,” he suggested, “Any changes in interest rates will have a moderating effect, easing the extremely difficult times some buyers are having in purchasing real estate in the Greater Seattle/Puget Sound market.”

~NW Multiple Listing Service

How to Buy a Home When Mortgage Rates Are Rising


Mortgage rates have risen about half a percentage point since September. What does that mean for you if you’re buying a home now or plan to buy one soon?

For starters, don’t panic.

When you’re buying a home, the mortgage rate matters, but it shouldn’t monopolize your attention, says Robert Frick, corporate economist for Navy Federal Credit Union. “You shouldn’t focus on the rate and let that scare you into making a hasty decision about buying a house,” he says.

How rising rates affect your monthly payment

The average rate on the 30-year fixed-rate mortgage rose to 4.54% on Feb. 16, 2018, according to NerdWallet’s daily rate survey. It averaged 3.99% on Sept. 26, 2017 — meaning it has gone up more than half a percentage point in less than five months.

While a half-point increase doesn’t have a major impact on the monthly payment, the added cost does add up over time. On a 30-year loan for $200,000, the monthly payment would be nearly $59 more at a 4.5% interest rate than at a 4% interest rate. That adds up to more than $21,000 over 30 years.

What to do when rates rise

Mortgage rate fluctuations have been catching home buyers off guard for generations. Your forebears have developed tried-and-true strategies to cope with rising rates. Here are some things you can do when mortgage rates trend higher:

No. 1: Lock your mortgage rate. With a mortgage rate lock, the lender promises a defined combo of interest rate and points. If you close the home loan by the specified date, the rate can’t go up. You can use this tactic after the lender has approved you for a mortgage for a specific house. Some lenders offer a one-time “float down” option allowing you to secure a lower interest rate if rates go down; this option is more common for construction loans and long-term rate locks.

No. 2: Buy “points” to reduce the interest rate. If you have the cash, you can pay for discount points — in effect, prepaying some of the interest in exchange for a lower mortgage rate. One point equals 1% of the loan amount. The discount you get for one point varies as mortgage rates fluctuate. But as a rule of thumb, paying one point often gives a rate cut of one-quarter of a percentage point.

No. 3: Revise your price range. A higher mortgage rate brings higher monthly payments. When you begin your home search, determine a range of interest rates that will still allow you to afford the type of home you want without stretching your budget past the point of reason. Or, rising rates might force you to adjust your home-price range downward. Start with this loan affordability calculator and click “Edit rate” on the right side.

Why rates are rising now

This recent rise in mortgage rates arrived in two stages:

The first happened in the weeks after the passage of tax reform in late December
The second happened Feb. 2, 2018, when the January employment report indicated that hourly wages had risen 2.9% compared with 12 months before
The tax cuts and the wage report were both regarded as inflationary, because when people have more money in their pockets, they tend to spend it, driving up prices. And higher inflation tends to bring higher interest rates for everything, including mortgages.

On top of that, futures traders expect the Federal Reserve to raise short-term interest rates at least two, if not three, times this year, which could exert upward pressure on long-term mortgage rates.

Frick says businesses and governments around the world are ramping up their borrowing. As they compete with one another to borrow money, they bid up interest rates. This upward pressure trickles down to consumers, who end up paying higher interest rates for everything from credit cards to mortgages.

Are higher rates the ‘new normal’?

Talk to any housing economist about mortgage rates, and you’ll hear that rates have been abnormally low in the decade since the housing crash.

“I remember in the mid-’90s, getting a 7% rate, being happy with that,” says Dean Baker, senior economist and co-founder of the Center for Economic and Policy Research. “The rates we’re looking at today are still, by any measure, pretty low. So it’s basically the economy getting back closer to normal.”

Frick says: “People have gotten kind of lulled into these low rates, and a lot of people think this is normal, but this is not normal. We’re returning to normal, and that’s still going to be a painful process because we’ve gotten used to low rates.”

Holden Lewis, NerdWallet

Seattle home inventory is even lower than this time last year


Heading into 2017, the number of homes on the market in the Seattle metropolitan area had dropped 10 percent from the previous year. Now, at that same time in 2018, inventory is even lower, dropping an additional 19 percent from this time last year, according to a report by real estate group Zillow.

In the metropolitan area, which includes Pierce and Snohomish counties, that inventory drop drove bidding wars in 2017; per Zillow, 52.4 percent of home sales ended up above asking. The report speculates that with an even bigger inventory crunch, that’s not expected to stop anytime soon.

Initial listing prices have grown, too—not a huge surprise to anyone who’s been watching home values for the past several years. Specifically, Seattle-area homes saw a year-over-year increase of 13 percent, with a median home value of $472,900 for the whole metro. (In the Seattle city limits, that number is, of course, much bigger; Zillow estimates $727,400.)

As prices have grown, sales times have shrunk to less than half what they were in 2010. Average days on the market in the metro was 51 days in 2017, per Zillow, compared to 58 in 2016 or 114 in 2010.

The bottom line: Zillow’s numbers point an exaggerated version of the same this year, with a cutthroat market, rising sales costs, and not enough homes to go around.

Sarah Anne Lloyd, Curbed Seattle

Homebuilders shrug off higher mortgage rates, stay optimistic on economic boost from tax cuts

imagesTax cuts are still making homebuilders feel better, even as mortgage rates rise to the highest level in more than four years.

Builder confidence was unchanged in February from the prior month, remaining at 72 on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI). Anything above 50 is considered positive sentiment.

The index is up from 65 in February 2017 and hit a cyclical high of 74 last December, just as the Republican tax cut plan was being passed.

“Builders are excited about the pro-business political climate that will strengthen the housing market and support overall economic growth,” said NAHB chairman Randy Noel, a custom home builder from LaPlace, LA.

“However, they need to manage supply-side construction hurdles, such as shortages of labor and lots and building material price increases,” he added.

Future sales expectations appear to be driving builder confidence.

“With ongoing job creation, increasing owner-occupied household formation, and a tight supply of existing home inventory, the single-family housing sector should continue to strengthen at a gradual but consistent pace,” said NAHB chief cconomist Robert Dietz.

One headwind for builders, however, is rising mortgage rates. Mortgage applications to purchase a newly built home jumped 18 percent in January year-over-year, according to the Mortgage Bankers Association, but rates moved even higher in the first two weeks of February.

The average rate on the 30-year fixed is now up more than 50 basis points since the beginning of the year. Not only do higher rates translate to less purchasing power for buyers, they also make it harder for some buyers on the margins of good credit to qualify for a home loan.

Builders are benefiting from the severe shortage of existing homes for sale, but new construction comes at a premium. Buyers may have rushed in in January, fearing rates would rise even more, which they did. If rates continue to move higher, some buyers will be priced out.

Looking at the three-month moving averages for regional HMI scores, the Midwest rose two points to 72, the South increased one point to 74, the West remained unchanged at 81, and Northeast fell two points to 56.


~Diana Olick, CNBC

Home Buyers Still Competing for Sparse Inventory in Western Washington, Driving Up Prices – Especially for Sought-After Condominiums

“The Seattle area real estate market hasn’t skipped a beat with pent-up demand from buyers is stronger than ever,” remarked broker John Deely in reacting to the latest statistics from Northwest Multiple Listing Service. The report on January activity shows a slight year-over-year gain in pending sales, a double-digit increase in prices, and continued shortages of inventory.


“Sellers that have put their properties on the market early this year have less competition and are seeing multiple offers. Open houses are experiencing heavy traffic with hundreds of potential buyers attending,” reported Deely.

Of 23 counties served by Northwest MLS, eight counties, including three in the Puget Sound region (King, Kitsap and Snohomish), reported fewer pending sales than a year ago. In King County, where acute inventory shortages exist in many neighborhoods, pending sales dropped 7.5 percent and closings dropped 18.5 percent.

“The decline in sales last month can’t be blamed on the holidays, weather or football. It’s simply due to the ongoing shortage of housing that continues to plague markets throughout Western Washington,” said OB Jacobi, the president of Windermere Real Estate. The number of total active listings at month end stood at 8,037 homes and condos, down nearly 17.6 percent from a year ago. Measured by months of supply, there was only about 1.5 months overall, well below the 4-to-6 month level many industry experts use as a gauge of a balanced market.

Condo inventory is especially tight in Snohomish County (0.8 months of supply) and King County (0.92 months). System-wide there is under a month’s supply (0.93 months). For the four-county Puget Sound region, there were only 427 active condo listings at month end, down almost 31 percent from a year ago.

Despite the sparse selection, brokers expect inventory to improve.

“I actually believe 2018 will bring us moderately more listings, which should help offset the growing demand that continues to result from the area’s strong economy,” remarked Jacobi.

“The month of March can’t come soon enough for home buyers,” said J. Lennox Scott, chairman and CEO of John L. Scott Real Estate. “In March, the number of new listings will bump up substantially from the low number of new listings typical for winter months. Better selection will start in March as we enter the spring housing season,” Scott predicts.

In the meantime, Scott reported “a multiple-offer everything, virtually sold out market” in all price ranges close to job centers and in the more affordable and mid-price ranges in surrounding counties. “Sellers are receiving premium pricing and home buyers are pouncing on each new listing,” he added.

Prices continue to rise in all but a few counties, even as the volume of closed sales fell about 9.3 percent. For January’s 5,325 closed sales, the median price was $363,500, a jump of about 11 percent from the year-ago figure of $327,500. Twelve counties reported double-digit spikes.

Within the four-county Puget Sound region, King County had the largest year-over-year gain. Prices for homes and condos combined shot up 20.3 percent in that county, rising from $475,000 to $571,250. Pierce County reported a jump of 15 percent, followed by Snohomish County at about 12.2 percent and Kitsap County at nearly 3.5 percent.

The depleted supply of condos meant premium prices. Area-wide the median price for last month’s completed transactions rose nearly 18.6 percent, from $269,900 to $320,000. Snohomish County’s condo prices surged nearly 25.5 percent, followed by King County at nearly 22.6 percent.

Some brokers expect the hefty price gains to ease.

“As interest rates rise, the rate of price increases will slow down,” predicts Northwest MLS director Dick Beeson, principal managing broker at RE/MAX Professionals in Gig Harbor. Despite this expectation, he believes sparse supply and the area’s appeal both nationally and internationally will mean ongoing competition and multiple offer situations.


The luxury market is also off to a quick start in 2018. “Close to job centers, the luxury market is gaining positive momentum due to the wealth effect of the stock market, the strength of the U.S. economy, and homebuyers from the Pacific Rim, especially China,” noted Lennox Scott.

Northwest MLS figures show sales of homes selling for $2 million or more are far outpacing year-ago activity. Last month, member-brokers reported selling 55 residences at this price threshold. That’s up 66 percent from the same month a year ago when brokers sold 33 such homes.

~Northwest Multiple Listing Service

The Market Is Hot – Is It Smart To Go FSBO?

The market is hot in the downtown Seattle area as well as the Eastside. Many sellers are considering selling FSBO to save money. Market inventory is low, and agents and buyers have been known to approach potential sellers to encourage a private sale. Is it a good idea?
The best answer very well may be a resounding “no.” Top real estate experts are saying that the greatest expense a seller faces in this current market is the money they would lose if they do not get full market exposure.
According to “Statistics show that selling your home with the assistance of a professional real estate agent will garner you a higher profit, enough to cover the commission as well as put more money in your pocket. According to the National Association of Realtor®’s 2016 Profile of Home Buyers and Sellers, the average FSBO sales price was $185,000, while the average price for a home represented by an agent was $245,000. That’s a difference of $60,000!”
I know my marketing plan has helped my sellers get top dollar in several different neighborhoods.
The KCM blog has an overview of five reasons you may not want to go FSBO:

In today’s market, with homes selling quickly and prices rising, some homeowners might consider trying to sell their home on their own, known in the industry as a For Sale by Owner (FSBO). There are several reasons this might not be a good idea for the vast majority of sellers.
Here are five of those reasons:
1. There Are Too Many People to Negotiate With
Here is a list of some of the people with whom you must be prepared to negotiate if you decide to For Sale By Owner:
• The buyer who wants the best deal possible
• The buyer’s agent who solely represents the best interest of the buyer
• The buyer’s attorney (in some parts of the country)
• The home inspection companies, which work for the buyer and will almost always find some problems with the house
• The appraiser if there is a question of value
2. Exposure to Prospective Purchasers
Recent studies have shown that 89% of buyers search online for a home. That is in comparison to only 20% looking at print newspaper ads. Most real estate agents have an internet strategy to promote the sale of your home. Do you?
3. Results Come from the Internet
Where do buyers find the home they actually purchased?
• 44% on the internet
• 33% from a Real Estate Agent
• 9% from a yard sign
• 1% from newspaper
The days of selling your house by just putting up a sign and putting it in the paper are long gone. Having a strong internet strategy is crucial.
4. FSBOing has Become More and More Difficult
The paperwork involved in selling and buying a home has increased dramatically as industry disclosures and regulations have become mandatory. This is one of the reasons that the percentage of people FSBOing has dropped from 19% to 8% over the last 20+ years.
The 8% share represents the lowest recorded figure since NAR began collecting data in 1981.
5. You Net More Money when Using an Agent
Many homeowners believe that they will save the real estate commission by selling on their own. Realize that the main reason buyers look at FSBOs is because they also believe they can save the real estate agent’s commission. The seller and buyer can’t both save the commission.
Studies have shown that the typical house sold by the homeowner sells for $210,000 while the typical house sold by an agent sells for $249,000.
Bottom Line
Before you decide to take on the challenges of selling your house on your own, sit with a reputable real estate professional in your marketplace and see what they have to offer. I’d welcome the opportunity to share a marketing plan that has helped my sellers obtain top dollar for their homes.

What First-Time Home Buyers Need To Know

My team and I regularly come in contact with first-time homebuyers looking for some guidance. The prospect of buying your first home can be an anxiety-inducing one, especially if you don’t know where to start. I’ve spent my career helping thousands of people find the perfect home, so I’m happy to shed some light on the subject for those new to the process.

Patience is key.

Even after you spend hours searching through listings and going to showings, your journey is far from over. Getting a mortgage, having the home inspected and going through the closing process all take time. General wisdom suggests that the process could last from 30-90 days, but that depends on a lot of extenuating factors.

The neighborhood you choose is important.

We believe the neighborhood you live in is just as important as the home you live in. When you make a purchase based solely on the number of bedrooms and bathrooms or square footage, you’re missing out on the lifestyle component of your new home. Where you live will determine not only obvious factors like where your children go to school and how much you pay in taxes, but it also determines more nuanced factors, like how you spend your weekends. Spend time in an area before deciding to buy there, and see if you can really imagine yourself living there on a day-to-day basis.

Have your documentation ready.

Keeping everything digitally organized — rather than trying to keep track of a stack of papers — will help immensely. Have pay stub statements, proof of assets and any loan or credit card debt documentation readily available. Expect to present more paperwork than you might think they need to see. Like a Boy Scout, the key here is to always be prepared!

Be flexible.

One sentiment that almost all of the homeowners we asked expressed is just that: the importance of being flexible. You may have a list of features that make up your perfect home but ultimately discover that you are unable to find all of those features within your budget. Know which “must-haves” you’re willing to compromise on and which ones you really need. If a short commute is most important to you, you may be willing to sacrifice an extra bathroom or granite countertops to be closer to work.

Follow guidelines.

In other words, don’t buy beyond your means. Deferring principal payments in order to get into a bigger home is often a risky proposition that can lead to financial strain. Work out a budget that’s realistic, and then stick to it. Not sure how much house you can actually afford? NerdWallet provides a calculator to help you determine that based on location.

Shop around.

Like any other major purchase, it’s important when buying a home to weigh your mortgage options. Different banks may offer different rates, so getting a wide range of offers can save you money. Planning ahead is your friend in this scenario — as soon as you think you may be interested in buying a home, start the mortgage process. This will also help you determine how much you can feasibly afford.

Don’t let fear stop you.

There’s no doubt that the home-buying process can be daunting — and for first-time buyers, the uncertainty can lead to dread. You will experience a range of emotions in the pursuit of finding your perfect home, but it will be worthwhile when you finally settle in.

At the end of the day, buying your first home will be an intensive process, but it doesn’t need to be a scary one. If you go in with a strong plan and know your facts, you’ll avoid making the wrong choice or missing out on a great deal.

~Bill Ness, Forbes Community Voice

Why Single Women Build Less Equity in Homes than Men

Female homeowners are still earning less equity than their male counterparts, according to an August 2017 study by Redfin. The disparity remains because women still make less money than their male counterparts, put down a smaller down payment and often carry a higher student loan level, said Nela Richardson, a chief economist for Redfin.


The Seattle-based real estate brokerage examined 199,387 homes that were sold in 18 of the largest metros in 2012. In the five years following their purchase, women earned a median $171,313 of home equity compared to $186,403 of equity earned by men, or 8.1% less than men.

The gap in gender equity was the largest in Seattle, where women earned 6.3%, or $20,983, less equity over the five-year period. The second-largest gap occurred in Columbus, Ohio with 6.2% less, followed by 6.2% less in Baltimore, 6.0% less in San Francisco and 5.8% less in San Diego.

This phenomenon was reversed only in New Orleans, where women earned more home equity than males by 8%, or $8,784. The gap was narrower in Omaha, Neb., with women earning 0.5% less equity, Portland with 0.8% less, Denver with 2.0% less and Oakland, Calif., with 2.0% less.

The home equity was calculated by adding the initial equity from the down payment and the principal paid on the mortgage to the appreciation of the home since its purchase date. The appreciation was determined by subtracting the original purchase price of the home from the current estimate on Redfin’s website.

Mind the Gap

The workplace gender pay gap is one of the largest contributors and leads to women spending $25,000 less on homes than their male counterparts, Redfin’s analysis said. The more expensive homes were also more likely to be in better neighborhoods where the appreciation occurred faster.

The playing field could be evened out by more women owning homes, which remains the single largest factor for middle class employees to “create wealth over the long term,” she said.

Single women can create more home equity by shopping around for financing and saving for a larger down payment, which immediately gives them more equity in stable markets. A larger down payment usually means they can qualify for a lower interest rate on their mortgage.

Making an extra payment once a year or even paying a little extra each month means homeowners can pay down the principal instead of their interest much faster.

Women have more student loan debt than men, according to 2016 data from Credit Sesame, a San Francisco-based credit advice site, said CEO Adrian Nazari. The National Center of Education Statistics reported that in the fall of 2016, 11.7 million females attended college, compared to only 8.8 million males.

“Women have 21% more debt than men and this, coupled with making less than men, is putting women at a disadvantage when it comes to home buying,” he said.

Another major factor is that women tend to have lower credit scores than men, which means they are being offered higher-rate loans on their mortgages, which adds up quickly over 30 years. While men usually only have credit scores that are 10 to 20 points higher, the difference can put one gender into the prime category vs. and subprime credit categories.

“Combined with the lower income and higher debt experience, this means women are buying ‘less home’ because their money is going into interest to the bank instead of building equity, as part of the mortgage principal,” Nazari said.

~Ellen Chang, The Street


Half of Seattle homes selling above list price


More than half the homes sold in Seattle last year–52.4% according to real estate website Zillow–were sold for more than the asking price. That’s an increase from 20.3 percent five years earlier. That’s the largest increase in any market that Zillow tracked.

The median amount paid above the list price was $21,000.

Nationwide, 24.1 percent of homes sold above asking price compared to 17.8 percent in 2012. The median amount paid above list price was $7,000.

Zillow cites strong demand, limited supply, and low-interest rates in the U.S. housing market, with a steady decline in inventory over the past three years.

The average home in Seattle sells in less than 50 days, according to Zillow. That’s faster than the nationwide average of 80 days.

“The typical buyer spends more than four months home shopping and has to make multiple offers before an offer is accepted,” Zillow said in a statement.

San Jose had the highest percentage of buyers who paid above price for homes — 68.5 percent — with the median amount spent at $62,000 over list price. San Francisco was second — 64.5 percent — and with the median amount spent at $41,000 over the list.

“In the booming tech capitals of the California Bay Area and Pacific Northwest, paying above list price is now the norm. In the face of historically tight inventory, buyers have had to be more aggressive in their offers,” Zillow Senior Economist Aaron Terrazas said in a statement. He added that he does not see the trend changing in 2018.


~Travis Pittman, King 5 News