A Love Letter to Buyers

 

We often share the advantages of this market for home sellers, which is unbelievably positive. However we thought it was time to give the potential buyers in our marketplace some love, hope, and of course data!

 

Dear Greater Seattle Home Buyer,

Let’s just be up front: buying a home in today’s market is not easy. Quite frankly, it can be a wild roller coaster ride with twists and turns; but remember, folks pay a lot of money and stand in long lines for roller coaster rides. Imagine the excited pit in your stomach as the cart clicks up to the highest point before you plunge down a steep drop, and the thrill of raising your hands up because you trust that you are going to be okay. These emotions also accurately reflect the feelings of today’s home buyer – it can be a wild ride! Let’s also note that many roller coaster riders return to the back of the line right after getting off. Home ownership is also a good exercise to repeat and is often the investment that leads to the most built wealth in one’s life.

So how does one ensure that they are not the Nervous Nelly who stands in line for over an hour, finally makes it to the front to be strapped in to the cart, but who then chooses to bow out? The one that sits on the sidelines watching others throw up their hands with a thrill in their eye; the one with that tinge of regret as their friends rejoin them back on hallowed ground to recount their adventure. Wow, this is getting dramatic! Here are a few tips to follow that will ensure that one can find success securing a home in today’s market and get on the equity building train.

 

Waiting is Even More Expensive
In 2017, the year-over-year median price gains across our region were strong. In fact, here is a little break down.

The appreciation is for real and as each month ticks by, prices are going up. That is why it is incredibly important to have a plan and realistic expectations. In referring to the chart above, it is plain to see the affordability of each area. Buyers have had to get creative and honest with themselves regarding the city or neighborhood in which they land. Commute times are one of the biggest indicators of home cost. It is paramount to line your budget up with a realistic commute time and then dig in. Too often we’ve seen buyers tightly grip to the idea of an in-city commute, only to have it end up being a more suburban choice in the end. The months wasted trying to perform in a market that didn’t match their budget ended up costing them at least 1% a month, based on last year’s appreciation. Getting real saves time, money, and heartache.

 

Interest Rates are Rising
This aspect is actually one to pay very close attention to. We have been amazingly spoiled with historically low interest rates over the last five years. In fact, there is an entire generation of buyers who only know rates that have hovered from 3.5 – 4.5% – that is close to 3 points under the 30-year average! A good rule of thumb regarding interest rates, is that for each 1-point increase a buyer loses 10% of their buying power. That means that if you have a $500,000 budget and the rate goes up by a point, that you are now shopping for a $450,000 house if you want the same payment. Note, that shift does not take appreciation into consideration. Today’s rates have helped buyers bear the home prices in our area. It is predicted that rates will rise in 2018 by .5 to 1%.

 

Rents are High and Don’t Build Wealth
Seattle is now the 5th most expensive city to rent in the country according to the US Census Bureau. With rising rental rates, still historically low interest rates, and home prices on the rise, the advantage of buying versus renting has become clear for folks who have a down payment saved, good debt-to-income ratios and strong credit. Currently, the breakeven horizon (the amount of time you need to own your home in order for owning to be a superior financial decision vs. renting) in the Greater Seattle area is 1.6 years according to Zillow research.

 

Partner with a Broker Who Will Get the Job Done
A broker that has a process is key! It starts with an initial buyer consultation. I liken the buyer consultation to the seat belt you would wear on the roller coaster ride. The buyer consultation aims to unearth a buyer’s goals, research the areas they are interested in, address financing, and illustrate the challenges of the environment, so one can be successful. Time is money, and this consultation brings clarity, efficiency and trust. This upfront education coupled with a high level of communication and availability is paramount. The depth of the relationship will lead to success, and is the ingredient that enables a buyer to throw up their hands and take the thrilling plunge. It is hard to do that without a seat belt!

 

Get Your Finances in Order
Aligning with a trusted real estate professional is key, but so is aligning with a reputable and responsive mortgage lender. Getting pre-approved is the minimum, but getting pre-underwritten is a game changer. Finding a lender that is willing to put in the work up-front to vet credit, income, savings, debt, and all other financial indicators will lead to being pre-underwritten, which listing agents and sellers appreciate! Also, be aware that you do not always need to have a huge down payment to make a purchase work. Employment, assets, credit, and what you have saved all work into your ability to acquire a loan. I have seen plenty of people secure a home with 3-5% down. Education and awareness create clarity, and investing into understanding your financial footing equals empowered and more efficient decisions. Note that I mentioned “responsive”. This is a 24/7 market, and lenders who don’t work evenings and weekends can get in the way of a buyer securing a home. If you need a short list of lenders that fit this description, please contact me.

 

‘Tis the Season – Inventory is Coming
Have hope! This is the time of year where we see inventory climb month over month. There will be more selection, but bear in mind it is also the time of year that the appreciation push happens. If you are feeling 75-80% in love with a home, it is one to act on. You’re never going to “get it all”, so a willingness to focus on priorities will pay off, because waiting will have an expense.

 

If you or someone you know is considering a purchase in today’s market, please contact us. It is our pleasure to take the time to educate, devise a plan, and help buyers find success in a challenging, yet advantageous market.

 

 

Posted on February 15, 2018 at 12:58 pm
Windermere Real Estate North | Category: Local Market Analysis | Tagged , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

Market Update – Q3


Inventory levels providing more choices for buyers; is the market starting to stabilize?

As we head into the fall and winter months after an incredibly eventful spring and summer, available inventory levels are starting to ease. It is still a seller’s market (3 months of inventory or less) in most areas, but one that is providing buyers increased options. The increase in available inventory is due to pent-up seller demand starting to come to market. The return of strong equity levels have brought sellers to market that have been waiting to jump in for some time. Continued buyer demand due to our flourishing job market and historically low interest rates have steadily absorbed new inventory, but we are finally starting to see a trend toward some more balance. This is good news! Additionally, lending requirements remain stringent and down payments are bigger, unlike the dreaded bubble market we experienced in 2007/2008. Educated pricing and sound condition is what will drive a buyer’s interest in a home. As the market stabilizes, it will be important for consumers to partner with a broker who closely follows the market to help them make informed decisions and develop winning strategies.

Read below for market details from Snohomish County down through south King County.

 

Snohomish CountySno Co

This graph shows that we currently sit at 1.6 months of inventory based on pending sales, which is the highest level we have seen in all of 2016! It is still a seller’s market (3 months or less), but one that is providing buyers increased options.  The average cumulative days on market reached 28 days in September, which was up 8% over August. Median price peaked in August at $401,000 and settled at $397,000 in September after hovering between $380,000 and $400,000 since April. For the first time since February, the average list to sale price ratio was 99% after sitting at 100-101% over the last six months.

The return of strong equity levels have brought sellers to market that have been waiting to jump in for some time. In fact, average prices have grown just over 20% over the last two years, freeing up sellers to make the moves they have been waiting for. Continued buyer demand due to our flourishing job market and historically low interest rates have steadily absorbed new inventory, but we are finally starting to see a trend toward some more balance. This is good news! We are still seeing multiple offers and quick market times, but not quite the frenzy that we experienced earlier this year.

All of these factors indicate that we may finally be headed towards a more stabilized market with positive attributes for both buyers and sellers.

 

South Snohomish County South Sno

This graph shows that we currently sit at 1.4 months of inventory based on pending sales, which is the highest level we have seen in all of 2016! It is still a seller’s market (three months or less), but one that is providing buyers increased options.  The average cumulative days on market reached 24 days in September, which was up 14% over August. Median price peaked in August at $453,000 and settled at $440,000 in September after hovering between $440,000 and $450,000 since March. For the first time since February, the average list to sale price ratio was 99% after sitting at 100-101% over the last six months.

The return of strong equity levels have brought sellers to market that have been waiting to jump in for some time. In fact, average prices have grown just over 20% over the last two years, freeing up sellers to make the moves they have been waiting for. Continued buyer demand due to our flourishing job market and historically low interest rates have steadily absorbed new inventory, but we are finally starting to see a trend toward some more balance. This is good news! We are still seeing multiple offers and quick market times, but not quite the frenzy that we experienced earlier this year.

All of these factors indicate that we may finally be headed towards a more stabilized market with positive attributes for both buyers and sellers.

 

North King County North King

This graph shows that we currently sit at 1.1 months of inventory based on pending sales, which is the highest level we have seen since January! It is certainly still a seller’s market (3 months or less), but one that is starting to provide buyers increased options.  In fact, we saw a 13% jump in new listings month-over-month. The average cumulative days on market reached 20 days in September, which was up 18% over August. Median price peaked in June at $650,000 and settled at $600,000 in September after hovering between $605,000 and $650,000 since March. In June, there were 95% more home sales above $1M over September. For the first time since February, the average list to sale price ratio was 101% after sitting at 102-104% over the last seven months.

The return of strong equity levels have brought sellers to market that have been waiting to jump in for some time. In fact, average prices have grown 21% over the last two years, freeing up sellers to make the moves they have been waiting for. Continued buyer demand due to our flourishing job market and historically low interest rates have steadily absorbed new inventory, but we are finally starting to see a trend toward some more balance. This is good news! We are still seeing multiple offers and quick market times, but not quite the frenzy that we experienced earlier this year.

All of these factors indicate that we may finally be headed towards a more stabilized market with positive attributes for both buyers and sellers.

 

Eastside Eastside

This graph shows that we currently sit at 1.5 months of inventory based on pending sales, which is the highest level we have seen in all of 2016! It is still a seller’s market (3 months or less), but one that is starting to provide buyers increased options. The average cumulative days on market reached 31 days in September which was up 24% over August. Median price peaked in August at $770,000 and settled at $750,000 in September after hovering between $737,000 and $770,000 since March. In June, there were 18% more home sales above $1M over September. Over the last two months, the average list to sale price ratio was 99% after sitting at 101-102% over the five months prior.

The return of strong equity levels have brought sellers to market that have been waiting to jump in for some time. In fact, average prices have grown 25% over the last two years, freeing up sellers to make the moves they have been waiting for. Continued buyer demand due to our flourishing job market and historically low interest rates have steadily absorbed new inventory, but we are finally starting to see a trend toward some more balance. This is good news! We are still seeing multiple offers and quick market times, but not quite the frenzy that we experienced earlier this year.

All of these factors indicate that we may finally be headed towards a more stabilized market with positive attributes for both buyers and sellers.

 

Seattle Metro Metro

This graph shows that we currently sit at 1.1 months of inventory based on pending sales, which is the highest level we have seen since January! It is certainly still a seller’s market (3 months or less), but one that is starting to provide buyers increased options. In fact, we saw a 16% jump in new listings month-over-month. The average cumulative days on market reached 21 days in September, which was up 31% over August. Median price peaked in June at $650,000 and settled at $605,000 in September after hovering between $608,000 and $650,000 since March. In June, there were 23% more home sales above $1M over September. For the first time since February, the average list to sale price ratio was 101% after sitting at 102-104% over the last seven months.

The return of strong equity levels have brought sellers to market that have been waiting to jump in for some time. In fact, average prices have grown 22% over the last two years, freeing up sellers to make the moves they have been waiting for. Continued buyer demand due to our flourishing job market and historically low interest rates have steadily absorbed new inventory, but we are finally starting to see a trend toward some more balance. This is good news! We are still seeing multiple offers and quick market times, but not quite the frenzy that we experienced earlier this year.

All of these factors indicate that we may finally be headed towards a more stabilized market with positive attributes for both buyers and sellers.

 

South King County South King

This graph shows that we currently sit at 1.7 months of inventory based on pending sales, which is the highest level we have seen in all of 2016! It is still a seller’s market (3 months or less), but one that is providing buyers increased options. The average cumulative days on market reached 27 days in both August and September, which was up 23% over July. Median price peaked in June at $371,000 and settled at $360,000 in September after hovering between $350,000 and $371,000 since March. For the first time since March, the average list to sale price ratio was 99% in August and September after sitting at 100-101% the prior four months.

The return of strong equity levels have brought sellers to market that have been waiting to jump in for some time. In fact, average prices have grown 16% over the last two years, freeing up sellers to make the moves they have been waiting for. Continued buyer demand due to our flourishing job market and historically low interest rates have steadily absorbed new inventory, but we are finally starting to see a trend toward some more balance. This is good news! We are still seeing multiple offers and quick market times, but not quite the frenzy that we experienced earlier this year.

All of these factors indicate that we may finally be headed towards a more stabilized market with positive attributes for both buyers and sellers.

 

These are only snapshots of  the trends in our area; please contact one of our agents if you would like further explanation of how the latest trends relate to you.

 

Posted on October 18, 2016 at 4:02 pm
Windermere Real Estate North | Category: Local Market Analysis | Tagged , , , , , , , , , , , , , , ,

How Much is Your Home Worth?

 

A Look at Local Home Value Growth Since 2012

Since 2012, home values have grown by around 10% each year, resulting in substantial return in pricing. Below are some examples of actual homes sold in 2012 and again in 2015 that were not remodeled or significantly improved in between sales. These examples show the return in home values that we have experienced since the economic downturn. We pulled these examples to show you actual pound-for-pound market data versus the statistical percentages often quoted in market updates. We think these examples are pretty telling and quite exciting!

As you can see in the current economic update from Matthew Gardner, inventory has been a challenge. Many folks have been waiting for their current home values to return in order to make big moves involving their retirement, upgrading homes, investing or even buying a second home. If you are one of those people, we hope these examples provide you insight on the increase in home values and how they might pertain to you. As we head into the New Year, if you'd like a Comparable Market Analysis (CMA) on your home so you have a better understanding of your home's value, any one of our agents would be happy to do that. This would be an important component in charting your 2016 financial goals, and what a great time of year to gather that information.

 

3 bedroom 3200 sq ft Edmonds home:

Sold in August 2012
$569,950

Sold in July 2015
$755,000

$185,050 INCREASE IN HOME VALUE: 32%!

 


4 bedroom 2100 sq ft Bothell home:

Sold in February 2012
$318,948

Sold in February 2015
$433,820

$114,872 INCREASE IN HOME VALUE: 36%!

 


3 bedroom 1400 sq ft Shoreline home:

Sold in June 2012
$313,000

Sold in March 2015
$415,250

$102,250 INCREASE IN HOME VALUE: 33%!

 


3 bedroom 1800 sq ft Lynnwood home:

Sold in December 2011
$220,000

Sold in May 2015
$315,000

$95,000 INCREASE IN HOME VALUE: 43%!

We are currently working on more examples in surrounding communities… check out our Price Appreciation Study for more. And contact any one of our agents for a Comparable Market Analysis on your home.

 

Posted on November 17, 2015 at 4:36 pm
Windermere Real Estate North | Category: Local Market Analysis | Tagged , , , , , , , ,