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 – Fall Newsletter 2013 (mailed 10/18/13) – State of the Market, Winterizing your Home, When to Short Sell, and more

November 7, 2013

Dear Clients and Friends, 

What an exciting year 2013 has been for real estate so far.  I am sure you have heard the buzz of multiple offers returning to the market place.  Homes selling in a few days.  Home prices soaring.  But is that the whole story?  What does it all mean?

Please read our newsletter below to learn more about:

–  the State of the Market,

            –  Our New Listings,

            –  Keeping an Underwater Home and Short Sales, and

            –  Winterizing

State of the Market and Home Values:

Multiple offers on many homes are commonplace in the city, especially homes that do not fall into the category of short sales or fixers. Buyers prefer turn-key homes because lending is easier to obtain for these homes. Many buyers shy away from short sale homes because short sales can be difficult to negotiate and take a long time to close.

Buyers are having to compete for homes due to low inventory and increased buyer confidence. The low inventory of homes for sale can mostly be 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.  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.

The median home value in Seattle has increased about 15% over the last year (source: Zillow) and currently is at about $433,000. If you are interested in learning about the current value of your home, please feel free to contact us to get a free, no obligation comparative market analysis (CMA).

Recently, Bernard Bernanke startled many by announcing that the Fed will not wind down their bond buying program at this time. The program is part of an overall stimulus package geared at bringing back the national economy. The Fed’s purchase of these bonds over the last few years has driven mortgage rates to historic lows. The fear by many that there would be a reduction in bond purchases has caused mortgage rates to go upward briefly for a few months but for now, further rate increases seem less likely at least in the immediate future. This should continue to help keep housing affordable and aid the overall upward trend in the real estate market.

Our New Listings

Updated Mid-Century on large, private lot in Lynnwood.  $335,000. 3 bed/2 bath home on .31 acre lot! Large living room and dining room offer lots of space for play or entertainment.  French doors lead to large, private patio. Large master bedroom with beautifully updated bathroom. Don’t miss the soaking tub perfect for cooler fall and winter days. Plumbing has been updated.  Interior: 1608sqft / Lot 13,000sqft. + outbuilding for additional storage. Close to Interurban Trail, South Lynnwood Neighborhood Park. Easy access to I5, Hwy 99 & Transit Center. 6121 211th St SW.

Spacious Capitol Hill Condo.  $375,000.  1bd/1bth. Don’t miss this. Units are rarely available in Three19, a well-managed, newer building. This bright & spacious SE corner unit has tons of windows, hardwood floors& two decks. It offers custom blinds, closets & light fixtures as well as a gas FP, gas range, common garage parking & full-sized washer/dryer. You will have enough storage space with a walk-in closet, coat closet, pantry (yes!), laundry closet and a large storage unit. It shouts sophistication and style with its tasteful finishes. HO Dues $389/month, 819 SQF. 319 E. Summit Ave.

Shoreline Townhouse-Style Condo. $299, 950. A amazing amount of space and lives like a house. Three bedrooms, each with their own bath (1 full, one 3/4 & one 1/2 bath). Hard surface flooring, deck off master, new concrete patio & good sized private yard area. Close to Interurban Trail, shopping & Shoreline Community College. Low dues. New roof in 2013. Vinyl siding & low maintenance landscaping. Plenty of parking. Dead end street. Terrific unit and convenient to all. HO Dues $50/month. 812 N 145th Ct.

As always, more information and pictures of all our listings are available at  http://www.propertyinseattle.com/listings.html

Should you keep an underwater house? Is a short sale right for you? Three questions to ask:

Short sales are still commonplace as many homeowners still struggle with making payments or make the decision to sell an underwater home. When does it make sense to sell an underwater home?

‘Home’ for most of us evokes warm and fuzzy feelings about family, security, belonging and community. To some, suggesting they walk away from their home may produce some anxiety.

However, when housing is the biggest single expense in a family’s budget and is ‘breaking your back’ you,  it’s worth untangling emotions and look at financial facts.

Federal Housing Administration (FHA) guidelines provide for thirty-one percent of gross monthly income to be allocated to housing. That includes property taxes and insurance. In the great housing boom, the stampede to buy before the price of housing got further out of reach enticed many buyers to greatly exceed those limits.

Overpaying for houses was justified by telling ourselves that the equity in our house was also our retirement nest egg. Then housing values plummeted. So, what to do? What questions should you consider in making a decision on selling your house as a ‘short sale’?

First question:  Could you decrease your housing costs if you rented? If current housing expenditures are close to the cost of renting, then it makes little economic sense to change.

Second question: Is real estate the best use of the investment component? The answer will depend on how far underwater the house is in today’s market. How much needs to be paid down before the investment is worth as much as the debt? When weighing alternative investments it’s important to evaluate other holdings. If there is a defined benefit retirement plan or significant stock holdings, perhaps holding an underwater house for a decade may make sense.

Third question: Can you make the current house payment in retirement? The closer you are to retirement, the harder you need to think about whether a retirement income can fund the wait for housing values to improve.

Conclusion/further actions: If the status quo is unsustainable or inadvisable in keeping an underwater house, you should consult with an attorney and real estate agent on next steps, including analyzing other option such as loan modification, HARP refinance, bankruptcy and strategic foreclosure.

Time to Winterize and Protect your Home:

After an incredible summer here in Seattle, fall was eager to start with gusto. How about all the rain, wind and cool temperatures we’ve had already. Is your house ready for the change in season? In addition to having rain coats, sweaters, hats and mittens in your coat closet as you prepare for the cold months ahead, it is vital to winterize your home.

Clean your gutters. Remove leaves and other debris from your gutters by hand, scraper or spatula then rinse them out to allow freezing rain and melting snow to drain. Make sure that your pipes are not leaking or misaligned. Also, your gutters should drain water 10 feet away from the foundation of your house.

Check the furnace. Turn your furnace on now to make sure that it is working. Have it inspected and cleaned by a professional. Your furnace should be cleaned and tuned annually. Replace filters. Keep your ducts in good condition; your ducts should be vacuumed once every few years.

Caulk and change your windows. Put up storm windows in order to provide an extra layer of warmth. Caulk around the windows to prevent water intrusion and drafts.

Inspect  the chimney. Sweep out your chimney if necessary. Ideally, it should be inspected before it is turned on the first time in the winter. Cover your chimney with a protective cap that comes with a screen. Have a professional chimney sweep conduct an inspection/cleaning. If you own a wood stove, sweep it more than once a year, install a glass door on it and keep it closed when your stove is turned off. Close your chimney damper when the fireplace is not in use.

Reverse the direction your ceiling fan blows.  By reversing the direction your ceiling fan blows during the winter, it will push warm air downward.

Insulate those pipes. Freezing temperatures can lead to a burst pipe. Insulate your pipes by wrapping them with foam rubber sleeves or heating tape. You can also use fiberglass insulation.

Questions? Looking to buy/sell?

Have questions about anything real estate related? Ask us, we are happy to be your resource when it comes to real estate.

We would love to help sell your home if you are ready to make a move. We also appreciate your referrals to friends and family if they are looking to buy or sell.

Happy Fall,

Kerstin & Krisanne

Kerstin G. Brooks & Krisanne Heinze
Brooks & Heinze Real Estate Team
Skyline Properties, Inc.
Kerstin:  206.276.5827
Krisanne: 206.920.2541
Web: http://www.propertyinseattle.com


Competition is Fierce – Hot Seattle Housing Market

July 10, 2013

Multiple offers – Rising Property Prices – Rising Interest Rates – Low Inventory – Preinspections – Cash Offers, …. this is what my clients are dealing with everyday now. Yes the market is hot. It’s exciting and exhausting. The video below, recently aired on King 5, describes what buyers are going through well.

CLICK HERE FOR VIDEO

Working with an experienced agent who knows how to make your offer competitive is key in this market. To learn more about what sellers like to see in an offer, feel free to contact the Brooks & Heinze Real Estate Team.

Kerstin G. Brooks
Brooks & Heinze Real Estate Team
Skyline Properties, Inc.
www.propertyinseattle.com


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

 


Housing Recovery? Not so fast?

October 4, 2009

I received some feedback and questions about one of our July blog entries regarding signs of a recovery in the housing market. The entry was entitled: Housing Market is Showing Signs of Recovery. Some of my clients wanted to know if this meant they will stop “losing money” and that their property prices would go back to what they were.

There has been a lot of talk about a housing recovery. We, the Brooks and Heinze Team, have also reported on promising developments such as more sales in recent months, and multiple offers in some neighborhoods and other promising news.

After a long time of little or no movement in the market, this development certainly was worthwhile reporting and very encouraging. Some of the ‘flurry’ can be attributed to lower interest rates, greater affordability and the first time homebuyer tax credit.

However, for a sound recovery to take place which will stabilize prices and offer some growth in the future, the economy has to improve and good jobs need to be available. Real estate agents and economists know that the housing market cannot truly improve or recover unless the economy and with it the job market improve.

According to the Bureau of Labor Statistics, unemployment rates were higher in August than a year earlier in all 372 metropolitan areas, the U.S. Bureau of Labor Statistics reported today. Sixteen areas recorded jobless rates of at least 15.0 percent, while 9 areas registered rates below 5.0 percent. The national unemployment rate in August was 9.6 percent, not seasonally adjusted, up from 6.1 percent a year earlier. Among the 369 metropolitan areas for which nonfarm payroll employment data were available, 356 areas reported over-the-year decreases in payroll employment, 11 reported increases, and 2 had no change.

The economic downtown was created to a great extent by an insane housing bubble made possible by the availability of easy and cheap money or “bad loans”. People who should not have qualified for a loan were able to buy homes and other people who should have been able to buy a home were put into higher loans than they should have qualified for or were made loans that were structured in a way that made them unaffordable.

To make matters worse now, the number of good loans that are now going into default are surging as a result of the economy, not just poor loan underwriting. So, although the housing crisis may have help in the economic downturn, at this point the economic downturn is putting additional pressure back on the housing market due to job losses, and losses in property values; so even the once “good” loans are now going “bad”.

This brings me back to why I wrote this article. I want to make sure that our clients understand that there is some good news about the housing market but I also want them to understand that only as the economy at large improves and more good jobs are created, will the market and prices stabilize; and then I will be able to report that there has been a true recovery of the housing market.

Kerstin G. Brooks
Brooks & Heinze Real Estate Team

Phone: 206.276.5827
Email: kerstinbrooks@earthlink.net
Web: http://www.propertyinseattle.com/


Have we seen the bottom yet in Seattle?

June 16, 2009

Have we seen the bottom yet in Seattle? Maybe, maybe not. It depends what neighborhoods and price ranges you are talking about.

The suburbs are still struggling and many properties that have sat on the market for a long time in these areas continue to sit. Condos are tough to sell, as well, largely because financing is tricky for some of those. And homes in higher price ranges (above $600k) are also not moving as quickly (some neighborhoods excluded).

So, where are things turning around? Downtown and north of downtown to about 85th St. has seen a change in momentum in the last couple of months. Particularly in Fremont, Wallingford, Roosevelt, Ravenna, Ballard, Queen Anne, Wedgwood, Greenlake and Bryant where single family homes in good condition are selling quickly and occasionally two or three buyers are competing for the same home. There is an increased demand in the under $600k range.

If you are looking to buy in these more popular neighborhoods, wait no more, I think we have seen the bottom (dare I say it).

Properties south of downtown and north of 85th are more affordable than ever and some great deals are to be had. Take advantage of a strong buyer’s market, low interest rates and if you are a first-time homebuyer you most likely qualify for the $8000 tax credit (contact us for more information on who qualifies).

Pending sales are up even in these areas compared to a few months ago, some of which can be attributed to the time of the year (sales always go up in late spring/early summer) , some of it can be attributed to favorable terms for buyers such as low interest rates and the first-time homebuyer credit and I am hopeful it is actually a sign of a recovery.

The Seattle Metro area is one of the “10 Cities Most Likely to Bounce Back” according to Forbes Magazine. Forbes magazine has identified the top 10 cities that it believes are poised for recovery by examining unemployment figures, projected gross domestic product from Moody’s Economy.com, and housing affordability data from the National Association of Home Builders.

Here is Forbes’ top 10:

Austin-Roundrock, Texas
Fayetteville-Springdale-Rogers, Ark.
Boulder, Colo.
Huntsville, Ala.
San Antonio, Texas
Mobile, Ala.
Dallas-Fort Worth-Arlington, Texas
Washington-Arlington-Alexandria, D.C.-Va.-Md.-W.Va.
McAllen-Edinburg-Mission, Texas
Seattle-Tacoma-Bellevue, Wash.

Have a wonderful day,

Kerstin

Kerstin G. Brooks
Brooks & Heinze Team
Skyline Properties, Inc.
http://www.propertyinseattle.com/


What’s going on in the Seattle housing market?

July 7, 2008

So, what’s going on in the Seattle market? If you live in Seattle but listen to the national news, all you hear is about how the housing market is in the toilet. Yes, the housing market has slowed in Seattle over the last year but not as much as the national average (not by a long shot).

Well, there are a couple of things going on in Seattle that make this still a healthy real estate market. Of course, our market has slowed down and the changes in the mortgage industry, high fuel and food prices, credit crisis, sub-prime delinquencies, etc. are to blame for that. But our employment market is great and it is keeping our real estate market in good shape.

The good news is that Microsoft and Boeing are doing well and are adding jobs in the information services and manufacturing sector. The unemployment rate in the Seattle-Bellevue-Everett area has remained low at 4.1% in May (lower than the national 5.5% rate). Source: Bureau of Labor Statistics: http://www.bls.gov/news.release/archives/laus_06202008.htm

The U.S. Census Bureau estimates that there will be a 8.7% change in population in the U.S. between the years 2010 – 2020 and a change of 13.6% change in Washington State during the same period. The projected change in the U.S. between 2000 – 2030 is 29.2% and 46.3% change in Washington State during the same period. Source: U.S. Census Bureau: http://www.census.gov/population/projections/PressTab7.xls

Where are all these people going to live? In apartments, houses and condos, of course. If these projections are correct, there will be an increased need for housing in Washington, which should bode well for real estate values. Some areas are showing a projected decline in population, such as D. C., North Dakota and West Virginia.

In short, Seattle is affected by the national economy and prices have dropped which is great for buyers who can take advantage of some great deals. How long will it be a buyer’s market? Who knows … for a while longer; but the great employment opportunities, good income, population growth and limited availability of buildable land (due to geography and environmental protection laws) make for a strong housing market that is good now and will be fantastic in the future.

So, buy a house in Seattle!

Kerstin G. Brooks, ABR, Realtor
Brooks & Heinze Team
Remax NW Realtors
Phone: 206.276.5827
Email: kerstinbrooks@earthlink.net
Web: http://www.propertyinseattle.com/


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