Has the Seattle Housing Market Gone Nuts? Yes! But why?

April 4, 2014

The market sure has heated up. Prices are going up and multiple buyers are competing for the few houses available.

So what’s going on?

– Seattle Unemployment is Low:

In February the Seattle area’s unemployment rate hit its lowest level since September 2008 at 5.1%. 

– Consumer Confidence is High:

Confidence is now at a new post-Financial Crisis high.

– Mortgage Rates are Still Attractive:

Current interest rates are roughly on par with where they were in August 2011 and still two points below the 6.41% average rate during the height of the housing bubble through 2006

– Limited Supply of Homes Available for Sale:

There is about a 1.8 month supply of homes for sale in King County. A 4-6 month supply is needed for a balanced market between home buyers and sellers. We are NOT in a balanced market – we have a strong seller’s market.

For much more detailed information, specific statistics and sources – see below:

Seattle-Area Unemployment at Late 2008 Levels

Let’s have a look at the jobs data for February and how the Seattle area’s unemployment rate and approximate labor participation rate alongside the national numbers.

In February the Seattle area’s unemployment rate hit its lowest level since September 2008 at 5.1%. The national unemployment rate is still a bit higher at 6.7%, also roughly on-par with late 2008 levels.

The Seattle-area labor participation inched up in February to 70.0%. The national labor force participation rate was steady at 63.0%.

For reference, in 2006 when everyone imagined the economy to be in great health, the local unemployment rate averaged 4.3% and the labor participation rate averaged 69.5%.

Here’s a look at the local and national unemployment rates:

 employment2

employment1

Consumer Confidence at now post-Financial Crisis High

The Latest Conference Board Consumer Confidence Index based on data collected through March 14 is at 82.3 and was 4.0 above the February reading of 78.3. This measure of confidence is now at a new post-Financial Crisis high.

At 81.0, the Present Situation Index increased 0.7% between February and March, and is up 34% from a year earlier. The Present Situation Index is currently up 301% from its December 2009 low point, and sits at its highest level since April 2008. The Expectations Index rose even further in March, increasing 9.2% from February.

 confidence

Mortgage rates still two point below average rate during the height of housing bubble through 2006

As of last week, the 30-year mortgage rate sits at 4.40%, down slightly from the high of 4.58% set back in August, but up more than a point from the low set in May of last year. Current interest rates are roughly on par with where they were in August 2011 and still two points below the 6.41% average rate during the height of the housing bubble through 2006 (source: Federal Reserve).

 Limited Inventory fuels Price Hikes / Multiple Offers

According to the statistics on the NWMLS (Northwest Multiple Listing Service – all real estate agents are members of this service), there is about a 1.8 month supply in King County and a 2.2 months of supply in Snohomish County.

In general, four-to-six months is the supply needed for a balanced market between home buyers and sellers. We are NOT in a balanced market – we have a strong seller’s market.

There are just about as many pending sales as last year this time but it appears, the only thing holding back more sales is the lack of inventory. It is not unusual to see homes get multiple offers, sometimes as many as 40+ in nice neighborhoods and most popular price ranges.

Happy House Hunting!  Contact us today if you are looking to buy a home or condo in the Greater Seattle Area.

Happy House Selling! Contact us today if you are looking to sell your home or condo in the Greater Seattle Area.  

kerstinweb

Kerstin G. Brooks
Brooks & Heinze Real Estate Team
Skyline Properties, Inc.
Cell: 206.276.5827
Web: http://www.propertyinseattle.com
Facebook: https://www.facebook.com/PropertyinSeattle


Brooks & Heinze Real Estate Team – First Quarter Newsletter 2013

March 2, 2013

As we are well into 2013, we are thankful for all of our past clients, current clients and the opportunities we have living in this wonderful area.  Now to the market update…

State of the Market and Home Values:

After years of grave losses, home values finally started to increase in the latter part of 2012 (March/April 2012 was the bottom).  Gains could be seen in most of the Greater Seattle area. If you are curious about the value of your home, feel free to contact us. We are happy to prepare a free market analysis for you.  This last year also saw the return of multiple offers on some homes, especially homes that did not fall into the category of short sales or fixers. Buyers are having to compete for homes due to low inventory and increased buyer confidence.  Cash investors entered the market in a big way, as well as many first time buyers who see the value in homeownership and real estate. The low inventory of homes for sale can be largely attributed  to the large number of “underwater” homeowners who are discouraged to sell because they owe more on their mortgage than their house is worth.  Predicting real estate values for the future is difficult but there appears to be a consensus among industry professionals that home prices will continue to rise. If prices continue to go up, more current home owners who have held off selling due to negative equity might list their home and offer more inventory and choices to home buyers.

We are optimistic that the housing market recovery will continue moderately in 2013.

Tips for Selling in 2013:

Be realistic – Yes, there has been a lot of news of recovery, rising prices and multiple offers. It’s all true but the reality is that values are still off considerably from what they used to be. If you price your home right from day one, you will get fair market value. We can help you price your home competitively so you are not giving anything away and get what the market dictates based on comparable sales and current market trends. We will market your property to make sure it gets the attention it needs to sell but proper marketing will never overcome an inflated price.

Be prepared – You might want to do a preinspection. This gives you an opportunity to find out what issues will likely come up when a buyer has your home inspected. You can also get bids and shop around for contractors at your leisure rather than under time constraints when under contract.  This allows you to address any issues before going on the market.

Declutter,  dress up and stow away – Simple home improvements and decluttering can make your home shine and attract the right attention.  Repainting and a thorough cleaning, inside and out (roof, gutter, windows, carpets, floors, etc. ) will help make the marketing materials shine and attract traffic. It will also make a lasting impression on touring buyers.  Replace any broken light bulbs and consider using higher wattage light bulbs, especially in the winter months to make your home look brighter.  Big remodels generally do not pay back, especially if the buyer does not share your taste of finishes. Defects such as drippy faucets, leaks, etc. should most definitely be addressed.  Unattended defects might deter potential buyers or may make them more likely to haggle on price.  Start packing any items you do not need on a daily basis and declutter.  Open and organized spaces make your home look bigger and more appealing.  Lock up or stow away any valuables and medications.

Timing  – The best time to sell is when consumer confidence is on the upswing, interest rates are low, unemployment is decreasing and there are more buyers in your local market than there are sellers .  Spring is usually a favored time for sellers to put their house on the market because of longer daylight hours and healthier looking yards, as well as a convenient time for families with school aged children. However, with inventory at an all time low right now and currently increasing buyer confidence, sellers have an edge with buyers competing for a few good homes.  It is a good time to sell now.

Tips for Buying in 2013:

Jump – If you have been wanting to buy but you have sat on the sidelines because you have been afraid to commit, wait no more. The bottom of the market has passed (which was March/April 2012). Prices and interest rates are still low which makes this a good time to buy.

Be prepared – Decide if homeownership is right for you and take the time to run the numbers. Real estate is a long term investment and if you think you will live in your home less than five years, you should think twice about buying. Buying and selling have associated costs. We can run the numbers for you. If you have decided that buying is for you, get preapproved for a loan before you start the house hunt. Have your mortgage broker run your credit and then fix any blips or inaccuracies to make sure your credit score reflects your true rating. Better scores qualify you for better rates and better rates mean lower payments. Your income, credit and down payment amount will also determine the types of loan programs you are eligible for.  You should understand what your options and payments will be before you commit. Ask us for a referral to a qualified mortgage broker.  Also, sellers will not entertain offer from buyers who cannot show that they actually have the funds in hand or qualify for financing.

Carefully consider the neighborhood – there are a number of online resources that let you check crime statistics and the national sex offender list. Check out the commute and public transportation options for different areas and research schools. Visit the neighborhoods at different hours of the day and ask residents in the area what they like and dislike about their neighborhood.

Ask lots of questions and actively engage in the process  – Most sellers will put on the lipstick when they put their house on the market. They clean and paint the house, use airfreshners, cover things up with throw rugs, etc. – you get the picture. When you are looking at homes, take the time to look at details, ask to see the seller disclosure form that will show defects the seller is aware of and ask questions if you see things that seem out of place. No house is perfect but you want to know what you are getting yourself into. Turn on the stove, run the faucets, look in the closets, be aware of stains and blotches and so on. Of course, you should hire a licensed home inspector once you have decided to buy a specific home but you can weed out a lot of homes that are not in acceptable selling condition by paying attention yourself.

Attend our free homebuyer seminar – Whether you’re a first time homebuyer or a move up buyer, you will learn valuable information at these free home buyer seminars. The class will cover the State of the Market, Important Steps of the Homebuying Process, Pros and Cons of Buying vs. Renting, and Financing Options. There will also be time for questions in the end to make sure individual interests and questions are answered.  Call or email Kerstin at 206.276.5827 / info@propertyinseattle.com .

New Listings

We have a new listing in Edmonds (Yost Park) neighborhood for $449,950.  It is 4 bedrooms, 2.5 bathrooms, 2-story with basement.  It has beautiful territorial views, a wine cellar, updated fixtures, spacious at about 2600 SQF and it is on a cul-de-sac, just minutes from downtown Edmonds.  Our first open house will be on Saturday, March 2nd, from 1-4pm and Sunday, March 3rd from 1-4pm.  Please let us know if you want more information.

Kerstin Brooks & Krisanne Heinze
Brooks & Heinze Real Estate Team
Skyline Properties, Inc.
Email: info@propertyinseattle.com
Web: www.propertyinseattle.com

 


Houses for Pennies on the Dollar? Really?

February 19, 2010

 Many buyers have heard that Seattle real estate is more affordable than ever. Yes, prices have dropped quite substantially but when I hear people saying or I read articles about “Houses for Pennies on the Dollar” I get a little perturbed.

 We have had a few people contact us with unrealistic expectations about what they can buy. We have had buyers asking us to find them large, updated homes with water views in nice neighborhoods like Greenlake, Richmond Beach, Queen Anne, etc. under $200,000. You’d be hard pressed to find a tiny tear down for that price in these neighborhoods. 

Don’t get me wrong, there are bargains to be had but one must be realistic. Foreclosures and Short Sales can be a good value but they often require work and patience.

Buyers want to look at bank foreclosures, but they don’t want to do any work if it needs repair. They expect all homes should sell at the bank foreclosure prices regardless of whether they need work or not.

The homes that need a lot of work are the ones that sell for bargain prices. So, if you want a steal be prepared to have to do some work.

Many buyers feel the foreclosures set the prices in the neighborhood even though they may be missing a bathroom, have a structural issue and need tens of thousands of dollars in updates. Buyers are quite often dissatisfied with the condition of the distressed properties, but they don’t want to look at a regular home that is all fixed up because it is not a perceived bargain (when they can be).

You could take two similar homes next door to each other, one being a foreclosure and needing $35,000 in repairs and another being a normal sale and in excellent condition. The bank foreclosure might be priced $35,000 below the normal home, but when the buyer sees it they’re turned off.  But then they’re also turned off by the price of the normal home because they feel it should be priced the same as the foreclosure fixer.

In short, there are bargains but be realistic. Either buy an updated home in good condition and get a fair price or get a fabulous bargain for a home that needs a lot of help and needs to be nursed back to health. Buying at a 20-30% discount compared to just a few years ago is a great deal and realistic. Homes for pennies to the dollar? Not in Seattle.

There are some great loan programs available for buying distressed and foreclosed homes that need repairs, such as the 203k FHA rehab loans & conventional construction loans.

For more information on these loan programs contact Michele Catoire at the Legacy Group in Bellevue, WA by email  at michelec@legacyg.com or by phone at (425) 818-5885.

 Michele Catoire

Happy bargain hunting!

Kerstin G. Brooks
Brooks & Heinze Team
Skyline Properties, Inc.
Cell:  206.276.5827
Email: info@propertyinseattle.com

www.propertyinseattle.com


Your buying opportunities are endless !

October 31, 2008

Buy now – don’t wait.

A lot of buyers are saying they want to buy but they are waiting until prices hit rock bottom. First, it is really hard to tell when the market has hit bottom. It does not matter if we are talking about gold, stocks or homes here. Trying to time the bottom is almost impossible.

Is it likely that prices will go down further? Yes, it is is. In fact, I do not believe that we have seen the bottom yet. However, I do not forsee any more drastic drops.

You should buy now because prices are low and financing rates are low. It is important to keep in mind that purchase price alone does not determine the cost of investment but the combination of purchase price and mortgage interest rate determine the true cost. For a more detailed explanation and some compelling examples take a look at my blog entry from Oct. 22, 2008.

If you are a cash buyer, feel free to wait what you perceive to be the bottom of the market. However, if you are like most buyers who need to get a loan to finance a home purchase, don’t wait to buy. Interest rates are great at the moment but everyone in the lending industry I have talked to says they will soon go up. Higher rates will affect your buying power or may even make it impossible for you to qualify alltogether. Just talk to some of your relatives or friends who bought in the eighties – the rate was 17.48% in January of 1982 (source Freddie Mac homepage). Now rates are going to jump that high overnight or perhaps ever again but I just wanted to make the point that you need to look at the cost of financing, as well as the purchase price.

Just for fun, take a look at the mortgage rate changes between 1971 – 2008.

So, don’t delay. Buy today. We would be happy to help you take advantage of this great buyer’s market. The opportunities are amazing.

Kerstin G. Brooks, ABR, Realtor

Brooks & Heinze Team at Skyline Properties, Inc.

Cell: 206.276.5827

Email: kerstinbrooks@earthlink.net

Web: www. propertyinseattle.com


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