Condo prices in Seattle continue to speak to the strength of the real estate market

images

You may have heard Seattle is experiencing a cool down. Not so fast.

The market is definitely slowing within the city (if not Thurston County), but that doesn’t mean that prices have dipped all that much. The median closed sale price fell by about $45,000 from the month before, but it was still up $30,000 from the same time last year, according to the latest Northwest Multiple Listing Service report.

The NWMLS report writes, nearly 60 percent of the current inventory of homes and condos has an asking price of $750,000 or higher, making affordability an ongoing concern. And while the single-family home is still king in Seattle and King County, condos are also seeing higher prices.

The median closed sale price for condos in Seattle during August (the last month for which information was available) was $504,500. That’s a 6.21 percent increase from the same time last year.  Area-wide, that jump looks more like 8.1 percent, while across King County the jump in median condo prices was 11.3 percent.

Some good news is that condo prices are going through the same market-wide cool down as single-family homes: Active listings jumped nearly 58 percent, and closed transactions dropped off by about 15 percent.

But that’s not necessarily enough to turn what was once seen as a “starter home” into an affordable option. It’s also not a sign of a pending bubble or rapid inflation, as far as brokers can tell; like all the other changes in the city, blame it on the strong local economy.

“Even with some doom and gloom about sales being down in many counties, inventory doubling in some areas, and appreciation holding at around 8 percent for the year, our market is still very healthy and recovering from the depleted inventory of the past three years,” George Moorhead, designated broker and owner, Bentley Properties, Bothell said in the report.

~Zosha Millman, Seattle PI

In Seattle real estate market, inventory is finally up

shutterstock_1009748581.0

According to the Northwest Multiple Listing Service (NWMLS) Seattle ended June with more than a month of inventory for the first time since September 2016.

In the Seattle city limits in June 2018, NWMLS saw 1,246 active listings, a 75.5 percent increase from the year before. Seattle ended last month with 1.2 months of inventory—a figure based on number of homes for sale and typical sales time—which is nearly double what the market had the previous year.

While this didn’t translate to a decrease in housing prices, they did rise less than last month or last year. Median closing prices rose 8 percent compared to June of last year—but at that time, home values had risen 17 percent. So although the median closing price for last month in Seattle was a whopping $740,000, or $812,500 for a single-family home, it rose far less quickly than this time last year.

County-wide, the inventory picture also improved, although home prices continue to rise; King County ended the month with 1.3 months of inventory compared to .84 last year. And while home prices are rising less quickly than this time last year, too, it’s not by as much. County-wide, home prices rose 10.2 percent over last year—compared to 15.7 percent over the previous year.

Even if home values are rising less quickly, they’re still already high—and still, according to the Puget Sound Regional Council, going up by about $5 every hour of every day. With renters already cost-burdened at a higher rate than homeowners, there seem to be fewer options for entering into homeownership. For people already priced out, there’s not a lot of good news here.

But it’s decent news for current househunters worried about getting priced out before they can get an offer accepted, agents short on listings, or current homeowners sitting on their properties because they’re worried about their next steps.

Meanwhile, though, there’s not much relief in sight for would-be homebuyers in Tacoma. As the City of Destiny’s rent rises faster than Seattle, closing prices have jumped more than 13 percent in Pierce County. Inventory is down and median sale prices are up across the city proper, with the biggest jump in home price, 34.6 percent, in central Tacoma.

~Sarah Anne Lloyd, Curbed Seattle

How Much it Costs to Buy a House in the Hottest Housing Markets of 2018

seattle

Most areas of the country are in a seller’s market, meaning there’s not enough inventory for all the interested homebuyers. About half of all the homes in the country are worth as much or more than they were in April 2007 — the height of America’s housing boom.

This is all good news if you’re planning to sell your home. It’s less good news if you’re trying to find one. But as with most things when it comes to buying a house, like what kind of hidden fees you can expect during the process, where you live matters. Certain areas of the country are exploding in popularity, which is driving up the cost of homes.

Ahead, check out how much it costs to buy a home in the hottest real estate markets of 2018 according to Zillow’s latest housing report.  Hottest Housing Markets

Will tax reform end the American dream of owning a home?

Screen Shot 2017-11-24 at 10.09.36 AM

If a U.S. tax reform measure targeting the popular mortgage interest deduction is adopted, values of homes could drop 10 percent on average nationally, Lawrence Yun told 20,000 real estate agents gathered for the National Association of Realtors conference last week.

Home owners would be leery of trading up to bigger, more expensive homes, because the cap would fall to $500,000 from the current $1 million, while renters would lose a tax benefit that could be a key incentive in the decision to buy, said Yun, chief economist of the real estate brokers group.

“This will greatly disincentivize buying homes,” he said. “There will steadily be fewer home buyers over time.”

The NAR is launching an offensive against the tax bill introduced last week by Republicans in the House of Representatives and anything similar that arises in the Senate. Finalizing a measure remains a long way off.

But real estate agents are worried. The potential change comes when many Americans still are reluctant to buy homes after the trauma of the 2008 housing crash, said Kenneth Rosen, chairman of Rosen Consulting Group. Home ownership remains near a 50-year low, with potential homebuyers still suffering from “post-foreclosure stress disorder,” he says.

Currently 63.9 percent households are homeowners, compared with the 69 percent pre-financial crisis.

Since a final tax change is a moving target that could disturb future housing prices, it may be prudent to put home buying on hold while awaiting clarity from Capitol Hill.

“If changes in your tax liability would make buying a house unfeasible, it probably would be worth sitting on the fence,” said Ralph McLaughlin, economist for Trulia, an online real estate service that is a unit of Zillow Group Inc.

BIGGER STANDARD DEDUCTION

To understand the potential impact, do not look directly at the mortgage interest deduction. Under the House plan, most middle class homeowners still will be allowed to take that popular deduction because the tax plan does not wipe it out for except for the portion of a mortgage over $500,000.

Still, the tax plan essentially renders the deduction worthless to the middle class, and that is what Yun expects to injure the housing market.

The reason for the mortgage deduction’s loss of power: a key part of the GOP tax plan almost doubles the standard deduction for taxpayers. Couples could claim a standard deduction of $24,400 rather than the current $12,700; singles could claim $12,200 rather than $6,350.

Instead of buying a house or scouring checking accounts for possible other deductions, a middle class taxpayer simply could claim a standard deduction that would protect a much larger chunk of income from taxes than current law provides.

With the higher standard deduction, the math turns the decision to buy or rent upside down from current conditions, said Trulia’s McLaughlin.

After a sharp rise in rents, buying has recently been a better deal in 100 of the nation’s largest markets. But the tax changes could make renting more economical, and real estate agents could find it more difficult to turn renters into buyers. Often the agents use tax deductions as a selling point when dealing with younger would-be buyers.

Eventually, however, there is potential for change and an improvement in housing market as young adults amass the down payments they have struggled to accumulate, McLaughlin noted.

In the association’s recent survey, about 25 percent of potential first-time homebuyers said amassing a down payment was a problem.

Renters who get an extra $11,700 each year from the higher standard deduction could sock away those tax savings, if they do not have to use it for student loans or decide on other purchases.

And homes could become more affordable if sluggish buying drives prices down. According to the National Association of Realtors, home prices rose 48 percent during the last six years, while incomes climbed just 15 percent. The nation’s median home price is $235,000.

For expensive homes, the standard deduction will be inadequate to make up for the mortgage deduction, and large families will face even more difficulty since the tax plan also takes away the $4,050 dependent exemptions for each person, according to McLaughlin.

“Realtors use the tax deduction to educate first-time home-buyers, and if they lose it, that could be detrimental for home buying,” said Elizabeth Mendenhall, chief executive of Re/Max Boone Realty in Columbia, Missouri and president-elect of the National Association of Realtors.

(The opinions expressed here are those of the author, a columnist for Reuters)

~Gail MarksJarvis, Reuters

Republican tax plan would hit Seattle, Eastside homebuyers dealing with pricey market

mortgage-calculator-tennesseeAspiring homeowners in the Seattle region, dealing with the hottest housing
market in the country, would be hit especially hard by the new GOP tax plan
unveiled Thursday.
The proposal would cap the federal mortgage-interest deduction at $500,000
for new-home purchases, down from the limit of $1 million. Basically, new
homeowners would only be able to deduct the interest on the first $500,000
of their mortgage.

This won’t impact most Americans because they don’t own homes that expensive. But it’s a big deal locally, where the median single-family houseselling today is worth $725,000 in Seattle and $855,000 on the Eastside.

Even with a regular down payment, lots of buyers here take out a mortgage
that’s over half-a-million dollars, and they would lose out on some of their
itemized tax benefits if the Republican tax plan passes.

The change wouldn’t apply to current mortgages — only new sales going
forward. And it wouldn’t impact anyone who takes the standard deduction,
which would nearly double under the tax plan, because the mortgage-interest
break is only used by people who itemize their deductions.

But the potential impact — combined with proposed limits on two other tax breaks, for home flippers and mansion owners — looks large. So far this year, 30 percent of all sold homes and refinances in King County used mortgages above $500,000. Looking at single-family houses, 36 percent of
new mortgages this year were above half-a-million dollars. Those rates are
likely to rise in future years as home prices here go up faster than anywhere
in the country.

More than 11,000 King County homebuyers so far this year took out a
mortgage over $500,000, including 4,500 in Seattle, 1,090 in Bellevue, 760
in Kirkland, 660 in Redmond and 560 in Issaquah, according to Attom. Most
of those are single-family houses, but also about 1,200 condos in Seattle,
mostly downtown.

Homes with mortgages over $500,000 made up half of new sales this year in
Sammamish, 35 percent in Bellevue, Redmond and Issaquah, and 29 percent
in Seattle. On the other end, less than 5 percent of new mortgages this year
topped half a million dollars in Tukwila, SeaTac, Kent and Des Moines.
The savings from the tax break can add up. Across the Seattle metro area, the
typical homeowner who used the deduction claimed $11,540 last year.
There are two other possible impacts from the tax plan that would serve to
make housing more unaffordable, said Windermere chief economist Matthew
Gardner.

First, homeowners could be less likely to sell, preferring instead to benefit
from their grandfathered tax credit on their current home. That would starve
a market of homes for sale at a time when inventory is at record lows.
Second, interested buyers might rush to purchase to be eligible for the tax
credit before the plan could pass, increasing demand during what is typically
a slow time of year. “The longer-term effects could be substantial,” he said.

He noted that homebuilders and other special-interest groups have or are
likely to come out against the plan, and called the proposal a “first stab at a
remarkably complex issue.”

The changes would impact people the most in the early years after they buy,
since mortgage payments initially are mostly interest, which is what the tax
break is used for.

Two other elements of the tax overhaul could cost local homeowners as well.
The proposal would also limit capital-gains-tax breaks on home sales.
Currently, homeowners can generally exclude from gross income up to
$500,000 profit on a home sale if they’ve used the house as a principal
residence for two out of the previous five years. The GOP proposal would
change that so the exemption would be applied only if people lived in the
home as their primary residence for five out of the prior eight years. And
they’d be able to use the exemption only once every five years, targeting
speculators and home flippers.

What’s more, the plan would cap property-tax deductions at $10,000. Most
locals wouldn’t be affected. The average homeowner in King County pays
about $5,600 in property taxes; even on expensive Mercer Island, the typical
tax bill is $8,800. But some owners of large homes have bills that top
$10,000; in Medina, the typical homeowner pays $15,200 a year in property
taxes, and on Hunts Point, where the typical home value tops $3 million,
homeowners pay $22,300 in property taxes.

~Mike Rosenberg, Seattle Times

Six Ways to Rustle Up a Down Payment for a Home

MW-FI523_arr_re_20170320161938_ZH

The down payment. It’s the only thing keeping you from a home of your own. You’ve got a good job, you’re paying down debt, and mortgage rates are still remarkably low. And rental rates are getting ridiculous.

Let’s see if we can break down this home buying barrier.

It doesn’t always take 20% down

If you’re a first-time home buyer, the down payment hurdle you have to clear may be quite a bit lower than you think. Traditionally, lenders have preferred 20% down, but a lot of low down payment options are available, especially to first-time buyers.

Mortgages guaranteed by the Federal Housing Administration, Department of Veterans Affairs or Agriculture Department can be go-to low down payment loans. In fact, mortgages backed by the VA and the USDA — for those who qualify — usually don’t require a down payment at all. A funding fee is charged on VA loans, but even that can be rolled into your monthly loan payment.

You could get an FHA-backed loan with as little as 3.5% down, but you’d have to pay mortgage insurance to help lenders defray the costs of loans that default.

Conventional loans, which aren’t backed by the government, also offer low down payment programs to first-time buyers. Down payments of just 3% are common. Some lenders will offer 0% down loans. Mortgage insurance will enter the picture here, too.

However, a lower down payment usually means you’ll pay a higher interest rate.

Crowdfunding a down payment

Crowdfunding is the ultimate dream for snagging sudden money from strangers, other than the lottery. It can be done, but there are some catches.

First, you’re not going to get this done on Kickstarter; personal fundraising isn’t allowed there. Sites like GoFundMe are best suited for hard-luck appeals like medical expenses for life-threatening diseases, so it’s unlikely you’ll get a lot of help there when you’re pitching to raise money for a mortgage down payment. But who knows?

FeatherTheNest.com might be an option to consider. It lets you build an online profile for a gift registry where contributions to your down payment can be funneled into a linked bank account. The service seems particularly suited for engaged couples and newlyweds. The transaction fees are pretty stout, though — totaling about 8% on each donation.

Family down payment gifts and loans

Getting help from family members might be another way to go.

Garrett Clayton, CEO of AmCap Mortgage in Houston, cautions that receiving a gift toward a down payment takes a “full circle” of documentation to satisfy a mortgage lender’s requirements. The donors will have to verify in writing not only that they made the gift but that they have the financial ability to make such a donation. That will require them to provide bank statements as proof, along with a letter confirming that the donation is a gift and not a loan.

“From a lender perspective, if it is something that will be required to be paid back, then we would need to take those terms of repayment into the calculation of the borrower’s [debt-to-income] ratio, to make sure they still qualify,” Clayton says.

However, while properly documented gifts are acceptable to lenders, you might not want to rely exclusively on the kindness of family members, he adds.

“We see that borrowers that have none of their own money in the transaction are way more likely to default on loans,” Clayton says. “I would much rather do a loan to a 600 FICO client that has 100% of their own down payment, versus a 780 client that is getting 100% [of their down payment as a] gift.”

State and local down payment assistance

Here’s a little-known source of down payment help: state and local assistance programs. Rob Chrane, CEO of Atlanta-based DownPaymentResource.com, says the service has identified close to 2,500 initiatives across the nation.

There are programs in every state, implemented by government agencies, nonprofits, foundations and even employers. Assistance can have a geographic focus as wide as the nation or as narrow as a city — all the way to hyperlocal initiatives targeted as tightly as neighborhoods, and even house by house.

Programs change often; they’re funded, defunded and sometimes funded again.

Often, it’s a matter of matching a property to a program, Chrane says, based on a home’s location and price. Assistance requirements typically set a maximum sale price for a county or other geographic definition. Obviously, these programs aren’t meant to help borrowers buy million-dollar homes or vacation properties, he says.

“There’s typically some maximum household income limit,” Chrane adds. That can vary by location, as well as the number of members in a household, he says. Even statewide programs will have income requirements that are often higher in metropolitan areas and lower in rural areas.

A 2016 study by Attom Data Solutions determined that the typical down payment assistance program benefit, calculated over the life of a loan, was $17,000. The total combined an average savings of nearly $6,000 on the down payment with over $11,000 in monthly house payment savings over the life of a loan.

Benefits can be layered. Chrane says users of the website who were eligible for assistance qualified for an average of eight programs last year.

“There are some myths and misperceptions around this,” Chrane says. “Sometimes people think, ‘Oh, this is only for really low-cost housing, in targeted census tracts, distressed neighborhoods…and very low-income households. It’s much more widely available than that.”

Tapping retirement accounts

If you have a retirement nest egg, you might be tempted to tap a portion of it to help with the down payment. Employer-sponsored 401(k) plans often allow for penalty-free hardship withdrawals or loans. But if you’re under 59½, you’ll pay income taxes and a 10% penalty on the withdrawal. And loans can trigger an immediate repayment — or taxes and a penalty — if you lose your job.

IRA withdrawals for home purchases are allowed, up to $10,000. Roth withdrawals are tax-free and without penalty if you’ve had the account for at least five years. Tapping a traditional IRA will trigger income taxes.

The most obvious strategy
There’s always the spend-less-than-you-earn-and-save-it strategy to building a down payment fund. Maybe a few savings tips can help you there.

More than likely, it may take a combination of strategies to get you into a home with a decent down payment — and still have a little left over to cover those unexpected homeownership expenses.

~Hal Bundrick, NerdWallet

Twenty-Five Tips for First-Time Home Buyers

iStock_000014947826_Small-11

Buying a home can be nervewracking, especially if you’re a first-time home buyer. Not only is it probably the biggest purchase of your life, but the process is complicated and fraught with unfamiliar lingo and surprise expenses.

To make the first-time home buying journey a little less stressful, NerdWallet has compiled these 25 tips to help you navigate the process more smoothly and save money.

1. Start saving for a down payment early
It’s common to put 20% down, but many lenders now permit much less, and first-time home buyer programs allow as little as 3% down. But putting down less than 20% may mean higher costs and paying for private mortgage insurance, and even a small down payment can still be hefty. For example, a 5% down payment on a $200,000 home is $10,000. Play around with a down payment calculator to help you land on a goal amount. Some tips for saving for a down payment include setting aside tax refunds and work bonuses, setting up an automatic savings plan and using an app to track your progress.

2. Check your credit
When you’re taking out a mortgage loan, your credit will be one of the key factors in whether you’re approved, and it will help determine your interest rate and possibly the loan terms. So check your credit before you begin the home buying process. Dispute any errors that could be dragging down your credit score and look for opportunities to improve your credit, such as making a dent in any outstanding debts.

3. Pause any new credit activity
Any time you open a new credit account, whether to take out an auto loan or get a new credit card, the lender runs a hard inquiry, which can temporarily ding your credit score. If you’re applying for a mortgage soon, avoid opening new credit accounts to keep your score from dipping.

4. Determine how much home you can afford
Before you start looking for your dream home, you need to know what’s actually within your price range. Use a home affordability calculator to determine how much you can safely afford to spend.

5. Explore your down payment options
Struggling to come up with enough money for a down payment? First-time home buyer programs are plentiful, including federal mortgage programs with Fannie Mae and Freddie Mac that allow loans with only 3% down, plus Federal Housing Administration loans and Veterans Affairs loans. You could also try crowdfunding or asking if family members are willing to pitch in with a gift.

6. Research state and local assistance programs
In addition to federal programs, many states offer assistance programs for first-time home buyers with perks such as tax credits, low down payment loans and interest free loans up to a certain amount. Your county or municipality may also have first-time home buyer programs.

7. Budget for closing costs
In addition to saving for a down payment, you’ll need to budget for the money required to close your mortgage, which can be significant. Closing costs generally run between 2% and 5% of your loan amount. You can shop around and compare prices for certain closing expenses, such as homeowners insurance, home inspections and title searches. You can also defray costs by asking the seller to pay for a portion of your closing costs or negotiating your real estate agent’s commission.

8. Set aside more money for after move-in
Sorry, that’s not all you need to save up for before home shopping. Once you’ve saved for your down payment and budgeted for closing costs, you should also set aside a buffer to pay for what will go inside the house. This includes furnishings, appliances, rugs, updated fixtures, new paint and any other touches you’ll want to have when you move in.

9. Consider what type of property to buy
You may assume you’ll buy a single-family home, and that could be ideal if you want a large lot or a lot of room. But if you’re willing to sacrifice space for less maintenance and extra amenities, and you don’t mind paying a homeowners association fee, a condo or townhome could be a better fit.

10. Research mortgage options
Is a 30-year, fixed rate mortgage a given, or is another loan type right for you? If you can afford larger monthly payments, you can get a lower interest rate with a 20-year or 15-year fixed loan. Or you may prefer an adjustable-rate mortgage, which is riskier but guarantees a low interest rate for the first few years of your mortgage.

11. Compare mortgage rates
Many homebuyers get a rate quote from only one lender, but this often leaves money on the table. Comparing mortgage rates from at least three lenders can save you more than $3,500 over the first five years of your loan, according to the Consumer Financial Protection Bureau. Get at least three quotes and compare both rates and fees.

12. Decide if paying points makes sense
Lenders often allow you to buy discount points, which means prepaying interest upfront to secure a lower interest rate. There may also be an option for negative points, in which the lender pays some of your closing costs in exchange for a higher interest rate. How long you plan to stay in the house is one of the key factors in whether buying points makes sense. You’ll need to do some calculations or speak to a mortgage broker or loan officer to help you decide if buying points is worth it for you.

13. Get a preapproval letter
You can get prequalified, which simply gives you an estimate of how much a lender may be willing to lend based on your income and debts. But as you get closer to buying a home, it’s smart to get a preapproval, where the lender thoroughly examines your finances and confirms in writing how much it’s willing to lend you and at what terms. Having a preapproval letter in hand makes you look much more serious to a seller and can give you an upper hand over buyers who haven’t taken this step.

14. Hire the right buyers agent
You’ll be working closely with your real estate agent, so it’s essential that you find someone you get along with well. The right buyers agent should be highly skilled, motivated and knowledgeable about the area.

15. Stay under your preapproval limit
As your agent shows you homes, look for properties that cost a little less than the amount you were approved for. While you can technically afford that amount, it’s the ceiling — and it doesn’t account for a broken washer or dryer or any other expenses that arise during homeownership, especially right after you buy. Rather than maxing out that amount, set a lower purchase budget to leave yourself wiggle room for unexpected costs.

16. Pick the right neighborhood
Finding the right neighborhood is just as important as locating the right house. Research the schools, even if you don’t have kids, since that affects a home’s value. Look at local safety and crime statistics. How close are the nearest hospital, pharmacy, grocery store and other amenities you’ll use? Also, drive through the neighborhood on various days and at different times to check out traffic, noise and activity levels.

17. Make the most of an open house
Use this as another opportunity to scope out the neighborhood and your potential neighbors. During the open house, pay close attention to the home’s overall condition and look for any smells, stains or items in disrepair. Ask a lot of questions about the home, such as when it was built, when items were last replaced and how old key systems like the air conditioning and the heating are. If several other potential buyers are viewing the home at the same time as you, don’t hesitate to schedule a second or third visit to get a closer look and ask more questions.

18. Buy a home for tomorrow
It’s easy to look at properties that meet your current needs. But if you plan to start or expand your family, it may be preferable to buy a larger home you can grow into. Consider your future needs and wants and whether this home will suit them.

19. Let little things go
When you’re looking at a home, it’s easy to get caught up on superficial details like paint color, fixtures and carpets. These features are easy to change once the home is yours, so don’t let those little details get in the way.

20. Be prepared to compromise
It’s rare to find a house that’s perfect in every way, so think carefully about what you’re willing to compromise on and what you’re not. Perhaps no walk-in closet in the master bedroom is a deal breaker, but an outdated guest bathroom will be tolerable until you can renovate it.

21. Make a strong offer
Your real estate agent can help you with this, but consider how much under or over the asking price you’re willing to pay to obtain your dream home. If there are multiple bids, think about tactics to win over the seller, such as a personalized letter.

22. Avoid a bidding war that blows your budget
In a competitive real estate market with limited inventory, it’s likely you’ll bidding on houses that get multiple offers. When you find a home you love, it’s tempting to make a high-priced offer that’s sure to win. But don’t let your emotions take over; stick to your purchase budget to avoid getting stuck with a mortgage payment you can’t afford.

23. Negotiate
A lot can be up for negotiation in the homebuying process, which can result in major savings. Are there any major repairs you can get the seller to cover, either by fully handling them or by giving you a credit adjustment at closing? Is the seller willing to pay for any of the closing costs? If you’re in a buyers market, you may find the seller will bargain with you to get the house off the market.

24. Buy homeowners insurance
Before you close on your new house, your lender will require you to buy homeowners insurance. Shop around and compare rates to find the best price. Look closely at what’s covered in the policies; going with a less expensive policy usually means fewer protections and more out-of-pocket expenses if you file a claim. Be aware that your insurer can drop your property if it thinks the home’s condition isn’t up to snuff, so you may have to be prepared to find a new policy quickly if it sends someone out to look at the property and isn’t happy with what it finds. Also, flood damage isn’t covered by homeowners insurance, so if your new home is in a flood-prone area, you may want to buy separate flood insurance.

25. Know the limits of a home inspection
Once your offer is accepted, you’ll pay for a home inspection to examine the property’s condition inside and out. But not all inspections test for things like radon, mold or pests, so be sure you know what’s included. Make sure the inspector can access every part of the home, such as the roof and any crawl spaces. Attend the inspection and pay close attention. Don’t be afraid to ask your inspector to take a look — or a closer look — at something and ask questions. No inspector will answer the question, “Should I buy this house?”, so you’ll have to make this decision after reviewing the reports and seeing what the seller is willing to fix.

~Emily Starbuck Crone

Buying Is Now Thirty-Seven Percent Cheaper Than Renting

20161025-Share-KCM-1

The results of the latest Rent vs. Buy Report from Trulia show that homeownership remains cheaper than renting with a traditional 30-year fixed rate mortgage in the 100 largest metro areas in the United States.

The updated numbers actually show that the range is an average of 17.4% less expensive in Honolulu (HI), all the way up to 53.2% less expensive in Miami & West Palm Beach (FL), and 37.7% nationwide!

Other interesting findings in the report include:
Interest rates have remained low, and even though home prices have appreciated around the country, they haven’t greatly outpaced rental appreciation.

Home prices would have to appreciate by a range of over 23% in Honolulu (HI), up to over 45% in Ventura County (CA), to reach the tipping point of renting being less expensive than buying.
Nationally, rates would have to reach 9.1%, a 145% increase over today’s average of 3.7%, for renting to be cheaper than buying. Rates haven’t been that high since January of 1995, according to Freddie Mac.
Bottom Line

Buying a home makes sense socially and financially. If you are one of the many renters out there who would like to evaluate your ability to buy this year, meet with a local real estate professional who can help you find your dream home.

~Courtesy “Keeping Current Matters”

2015 State of the Real Estate Market

home

The NW Multiple Listing Service recently sent out their annual summary of the year that was in Western Washington real estate. We probably don’t need to tell you that most of those numbers are up, up, up. Especially if you’ve been trying to buy a house all year long. We perused the report, which was chocked full of numbers, and picked out some of the most shocking, revealing and fascinating numbers within.

 

 

2015 saw 88,331 closed sales amongst NWMLS members in 2015, up 14.3 percent from 77,276 in 2014.

The value of every NWMLS member single-family home & condo sale was over $34 billion, up almost 23 percent from 2014.

Both of those numbers are higher than the previous highs of 2007 when the housing market peaked.

Average area-wide supply was 2.4 month, down from the 3.5 months number of 2014. King County was the lowest of all, averaging only 1.3 months of supply. 4-to-6 month supply is considered a balanced housing market.

2,676 single family homes sold at $1 million or more, which was up over 29 percent from 2014. Add 237 condos priced at $1 million and up in as well.

The median price for a 3-BR home was $283,250, about 7.9 percent higher than 2014. Highest median price for 3-BRs came courtesy of San Juan County with $452,500.

Six of every 10 condo sales (61.9 percent) were located in King County.

As well as older sales did, new construction sales did even better. 8,548 newly-built single family homes sold for a median price of $425,000 while 1,018 new condos sold for a median price of $449,950.

The highest-priced single family home sold in 2015 by a NWMLS member? This $13.8 million Mercer Island estate. Topping the chart of high-priced condos was an Escala 3-BR that went for just over $3.1M.

There was a tie atop the list of cities with the most $5M+ home sales. Mercer Island and Bellevue both saw seven, while Clyde Hill (5), Medina (4) and Seattle (4) were close behind.

~ Sean Keeley

Scary buying a new home?

36% of Americans think they need a 20% down payment to buy a home. 44% of Millennials who purchased a home this year have put down less than 10%.

71% of loan applications were approved last month

The average credit score of approved loans was 723 in September (the lowest recorded score since Ellie Mae began tracking in August 2011).

Get the facts – contact me!