Take Advantage of Great Interest Rates

Most recently, buyers have enjoyed more selection in the marketplace which has led to more open negotiations versus bidding wars. This is illustrated by an increase in average Days on Market and a decrease in the average Sold-to-List Price Ratios complete-year over year (the last 12 months over the previous 12 months). In King County, the average Days on Market increased from 22 days to 36 days complete-year over year, and the Sold-to-List Price Ratio decreased from 101% to 98%. In Snohomish County, the average Days on Market increased from 25 to 35 days complete-year over year, and the Sold-to-List Price Ratio decreased from 100% to 98%.

Buyers have had more selection to choose from which has tempered price growth complete-year over year. Median price remains even in King County and up 3% in Snohomish County. Multiple offers are not as commonplace as they were, but terms such as inspection contingencies and home sale contingencies are doable in some areas and price ranges. This balancing out has created some more normal terms for buyers, while sellers are getting close to full price on average and cashing out on the above-average appreciation we enjoyed from 2012 to 2018.

It is still a seller’s market, yet we are heading towards balance. The months of available inventory based on pending sales (the amount of time it would take to sell out of homes if no new homes came to market) currently sits at 1.7 months in King County and 1.5 months in Snohomish County. Zero to 3 months is a seller’s market, 3-6 months a balanced market, and 6+ months a buyer’s market. In 2017 to early 2018, inventory levels were commonly under one month, which was a very volatile and constricted environment within which to purchase a home. The direction towards balance is welcome and providing much more comfort when making a move.

The inventory levels are an amazingly beneficial phenomenon due to the fact that buyers are simultaneously enjoying the lowest interest rates we’ve had since 2016! Currently, the 30-year mortgage rate is hovering around 3.6% and the 15-year around 3.07% according to Freddie Mac. Not only are rates the lowest we’ve seen in 3 years, but they are an entire point lower than they were in Q4 of 2018. When rates crested 4.5% last year, we saw a marked reduction in pending sales. This highlights the recent opportunities that have come alive for buyers to secure such low debt service and for sellers to have a larger audience. When rates rise, folks reassess and sometimes step aside, which is why this current opportunity should be taken advantage of.

This is meaningful because the rule of thumb is that for every one-point decrease in interest rate, a buyer gains ten percent in purchase power. For example, if a buyer is shopping for a $500,000 home and the rate decreases by a point during their search, they can up their price ceiling to $550,000 and keep the same monthly payment. This is huge, especially in the wake of intense price growth over the last 6-7 years, which priced many buyers out of the market. Buyers that took a break and stepped to the sidelines in the past may want to consider their opportunities now. This is the most favorable buyer environment (inside of a seller’s market) we’ve seen in some time!

This recent decrease in rate is helping the move-up market come alive. What is great about this, is that it opens up inventory for the first-time buyer and helps complete the market cycle. First-time buyers are abundant right now as the Millennial generation is gaining in age and making big life transitions such as buying real estate. According to Nerd Wallet, 49% of all Millennials have a home purchase in their 5-year plan. The rates are also providing very low debt service for investors, second-home buyers, and down-size buyers headed toward retirement.

Will these rates last forever? Simply put, no! According to Freddie Mac, rates should increase closer to the 4’s as we round out 2019 and head into 2020. While still staying well below the 30-year average of 6.85%, increases are increases, and securing today’s rate could be hugely beneficial from a cost-saving perspective. Just like the 1980’s when folks were securing mortgages at 18%, the people that lock down on a rate from today will be telling these stories to their grandchildren. Note the 30-year average – it is reasonable to think that higher rates must be in our future at some point.

So what does this mean for you? If you have considered making a move, or even your first purchase, today’s rates are a huge advantage in helping make a move more affordable. If you are a seller, bear in mind that today’s interest rate market is creating strong buyer demand, providing a healthy buyer pool for your home. As a homeowner who has no intention to make a move, now might be the time to consider a refinance. What is so exciting about these refinances, is that it is not only possible to reduce your monthly payment, but also your term, depending on which rate you would be coming down from.

If you would like additional information on how today’s interest rates pertain to your housing goals, please contact me. We would be happy to educate you on homes that are available, do a market analysis on your current home, and/or put you in touch with a reputable mortgage professional to help you crunch numbers. Real estate success is rooted in being accurately informed, and it is our goal to help empower you to make sound decisions for you and your family.

Posted on September 13, 2019 at 6:44 pm
Becky and Steve Larsen | Category: Statistical Information, Strategy, Uncategorized

2019 Q2 Quarterly Report Per County

 

North Snohomish County Quarterly Market Trends–Q2 2019

2019 provided a very healthy and more balanced spring market! Median price is up 8% complete year-over-year and up 3% from last June. Prices have started to find their balance as more inventory has come to market compared to the scarcity of years past.While buyers have had more choices over the last year,it is still a seller’s market with just 1.3 months of inventory based on pending sales, resulting in an average of 23 days on market and 100% list-to-sale price ratio in June. Low interest rates continue to drive demand, however sellers who overprice or don’t address condition issues will linger on the market,which is illustrated by the 15% increase in carryover inventory year-over-year.

Our real estate market continues to be driven by low interest rates, positive job creation, and upbeat consumer sentiment. Currently, interest rates sit around 4% which is still an historical low, affording buyers the ability to make moves and reduce their debt service. Price appreciation has started to temper to more normal rates, compared to the double-digit appreciation we experienced over the last 3 years due to more sellers coming to market. This has created more balance and greater opportunity for buyers.The generational shift we are experiencing as Baby Boomers move towards retirement and Millennials enter into their prime earning years is an exciting exchange happening in the market place right now.

This is only a snapshot of the trends in north Snohomish County; please contact us if you would like further explanation of how the latest trends relate to you.

 

 

South Snohomish County Quarterly Market Trends–Q2 2019

2019 provided a very healthy and more balanced spring market! Median price is up 3% complete year-over-year and up 1% from last June. Prices have started to find their balance as more inventory has come to market compared to the scarcity of years past. While buyers have had more choices over the last year,it is still a seller’s market with just 1.5 months of inventory based on pending sales, resulting in an average of 21 days on market and 99% list-to-sale price ratio in June. Low interest rates continue to drive demand, however sellers who overprice or don’t address condition issues will linger on the market, which is illustrated by the 16% increase in carryover inventory year-over-year.

Our real estate market continues to be driven by low interest rates, positive job creation, and upbeat consumer sentiment. Currently, interest rates sit around 4% which is still an historical low, affording buyers the ability to make moves and reduce their debt service. Price appreciation has started to temper to more normal rates, compared to the double-digit appreciation we experienced over the last 3 years due to more sellers coming to market. This has created more balance and greater opportunity for buyers.

The generational shift we are experiencing as Baby Boomers move towards retirement and Millennials enter into their prime earning years is an exciting exchange happening in the market place right now.

 

 

North King County Quarterly Market Trends–Q2 2019

2019 provided a very healthy and more balanced spring market! Median price is up 1% year-over-year at$760,000. Prices have started to find their balance as more inventory has come to market compared to the scarcity of years past.While buyers have had more choices over the last year, it is still a seller’s market with just 1.6 months of inventory based on pending sales, resulting in an average of 23 days on market and 99% list-to-sale price ratio in June. Low interest rates continue to drive demand, however sellers who overprice or don’t address condition issues will linger on the market, illustrated by the 60%increase in carryover inventory.

Our real estate market continues to be driven by low interest rates, positive job creation, and upbeat consumer sentiment. Currently, interest rates sit around 4% which is still an historical low, affording buyers the ability to make moves and reduce their debt service. Price appreciation has started to temper to more normal rates, compared to the double-digit appreciation we experienced over the last 3 years due to more sellers coming to market. This has created more balance and greater opportunity for buyers.The generational shift we are experiencing as Baby Boomers move towards retirement and Millennials enter into their prime earning years is an exciting exchange happening in the market place right now.

This is only a snapshot of the trends in north King County; please contact us if you would like further explanation of how the latest trends relate to you.

Seattle Metro Quarterly Market Trends–Q2 2019

2019 provided a very healthy and more balanced spring market! Median price is even year-over-year at $750,000. Prices have started to find their balance as more inventory has come to market compared to the scarcity of years past. While buyers have had more choices over the last year, it is still a seller’s market with just 1.7 months of inventory based on pending sales, resulting in an average of 23 days on market and 99% list-to-sale price ratio in June. Low interest rates continue to drive demand, however sellers who overprice or don’t address condition issues will linger on the market, illustrated by the 66% increase in carryover inventory.

 

Our real estate market continues to be driven by low interest rates, positive job creation, and upbeat consumer sentiment. Currently, interest rates sit around 4% which is still an historical low, affording buyers the ability to make moves and reduce their debt service. Price appreciation has started to temper to more normal rates, compared to the double-digit appreciation we experienced over the last 3 years due to more sellers coming to market. This has created more balance and greater opportunity for buyers. The generational shift we are experiencing as Baby Boomers move towards retirement and Millennials enter into their prime earning years is an exciting exchange happening in the market place right now.

 

This is only a snapshot of the trends in the Seattle Metro area; please contact us if you would like further explanation of how the latest trends relate to you.

Eastside Quarterly Market Trends–Q2 2019

2019 provided a very healthy and more balanced spring market! Median price is up 2% year-over-year at $925,000. Prices have started to find their balance as more inventory has come to market compared to the scarcity of years past. While buyers have had more choices over the last year, it is still a seller’s market with just 2 months of inventory based on pending sales, resulting in an average of 30 days on market and 98% list-to-sale price ratio in June. Low interest rates continue to drive demand, however sellers who overprice or don’t address condition issues will linger on the market, illustrated by the 27% increase in carryover inventory.

 

Our real estate market continues to be driven by low interest rates, positive job creation, and upbeat consumer sentiment. Currently, interest rates sit around 4% which is still an historical low, affording buyers the ability to make moves and reduce their debt service. Price appreciation has started to temper to more normal rates, compared to the double-digit appreciation we experienced over the last 3 years due to more sellers coming to market. This has created more balance and greater opportunity for buyers. The generational shift we are experiencing as Baby Boomers move towards retirement and Millennials enter into their prime earning years is an exciting exchange happening in the market place right now.

 

This is only a snapshot of the trends on the Eastside; please contact us if you would like further explanation of how the latest trends relate to you.

South King county Quarterly Market Trends–Q2 2019
2019 provided a very healthy and more balanced spring market! Median price is up 5% complete year-over-year and up 2% from last June. Prices have started to find their balance as more inventory has come to market compared to the scarcity of years past. While buyers have had more choices over the last year, it is still a seller’s market with just 1.3 months of inventory based on pending sales, resulting in an average of 28 days on market and 99% list-to-sale price ratio in June. Low interest rates continue to drive demand, however sellers who overprice or don’t address condition issues will linger on the market.

 

Our real estate market continues to be driven by low interest rates, positive job creation, and upbeat consumer sentiment. Currently, interest rates sit around 4% which is still an historical low, affording buyers the ability to make moves and reduce their debt service. Price appreciation has started to temper to more normal rates, compared to the double-digit appreciation we experienced over the last 3 years due to more sellers coming to market. This has created more balance and greater opportunity for buyers. The generational shift we are experiencing as Baby Boomers move towards retirement and Millennials enter into their prime earning years is an exciting exchange happening in the market place right now.

 

This is only a snapshot of the trends in south King County; please contact us if you would like further explanation of how the latest trends relate to you.

 

 

 

 

Posted on July 26, 2019 at 9:05 pm
Becky and Steve Larsen | Category: Quarterly Reports, Statistical Information

Q2 2019 Western Washington Gardner Report

 

The following analysis of the Western Washington real estate market is provided by Windermere Real Estate Chief Economist Matthew Gardner. We hope that this information may assist you with making better-informed real estate decisions. For further information about the housing market in your area, please don’t hesitate to contact your Windermere agent.

 

ECONOMIC OVERVIEW

Washington State employment jumped back up to an annual growth rate of 2.4% following a disappointing slowdown earlier in the spring. As stated in the first quarter Gardner Report, the dismal numbers earlier this year were a function of the state re-benchmarking its data (which they do annually).

The state unemployment rate was 4.7%, marginally up from 4.5% a year ago. My current economic forecast suggests that statewide job growth in 2019 will rise by 2.6%, with a total of 87,500 new jobs created.

HOME SALES

  • There were 22,281 home sales during the second quarter of 2019, representing a drop of 4.8% from the same period in 2018. On a more positive note, sales jumped 67.6% compared to the first quarterof this year.
  • Since the middle of last year, there has been a rapid rise in the number of homes for sale, which is likely the reason sales have slowed. More choice means buyers can be more selective and take their time when choosing a home to buy.
  • Compared to the second quarter of 2018, there were fewer sales in all counties except Whatcom and Lewis. The greatest declines were in Clallam, San Juan, and Jefferson counties.
  • Listings rose 19% compared to the second quarter of 2018, but there are still a number of very tight markets where inventory levels are lower than a year ago. Generally, these are the smaller — and more affordable — markets, which suggests that affordability remains an issue.

 

HOME PRICES

  • Year-over-year price growth in Western Washington continues to taper. The average home price during second quarter was $540,781, which is 2.8% higher than a year ago. When compared to first quarter of this year, prices were up 12%.
  • Home prices were higher in every county except King, which is unsurprising given the cost of homes in that area. Even though King County is home to the majority of jobs in the region, housing is out of reach for many and I anticipate that this will continue to act as a drag on price growth.
  • When compared to the same period a year ago, price growth was strongest in Lewis County, where home prices were up 15.9%. Double-digit price increases were also seen in Mason, Cowlitz, Grays Harbor, and Skagit counties.
  • The region’s economy remains robust, which should be a positive influence on price growth. That said, affordability issues are pervasive and will act as a headwind through the balance of the year, especially in those markets that are close to job centers. This will likely force some buyers to look further afield when searching for a new home.

 

 

DAYS ON MARKET

  • The average number of days it took to sell a home matched the second quarter of 2018.
  • Snohomish County was the tightest market in Western Washington, with homes taking an average of only 21 days to sell. There were five counties where the length of time it took to sell a home dropped compared to the same period a year ago. Market time rose in eight counties and two were unchanged.
  • Across the entire region, it took an average of 41 days to sell a home in the second quarter of 2019. This was the same as a year ago but is down 20 days compared to the first quarter of 2019.
  • As stated above, days-on-market dropped as we moved through the spring, but all markets are not equal. I suggest that this is not too much of an issue and that well-priced homes will continue to attract attention and sell fairly rapidly.

 

CONCLUSIONS

This speedometer reflects the state of the region’s real estate market using housing inventory, price gains, home sales, interest rates, and larger economic factors. I am leaving the needle in the same position as the first quarter as demand appears to still be strong.

The market has benefited from a fairly significant drop in mortgage rates. With average 30-year fixed rates still below 4%, I expect buyers who have been sitting on the fence will become more active, especially given that they have more homes to choose from.

 

Chief Economist for Windermere Real Estate, Matthew Gardner  7/25/2019

 

 

 

Posted on July 25, 2019 at 9:30 pm
Becky and Steve Larsen | Category: Helpful Information, Quarterly Reports, Statistical Information

25 Ways to Fix Your Finances Fast

 

Quickly give your finances a boost.

Some financial fixes – from repairing your credit score to funding your retirement – can take years to pull off. Others take just a few minutes. Click forward for 25 quick financial moves.

A businessman uses a magnifying glass to look over documents.
 CREDIT

Review your credit card statement.

Sit down with your credit card bill and conduct an audit of your expenditures, including ones made impulsively. Use this exercise to learn from your past emotional spending mistakes – and avoid them in the future.

About 90 percent of filers will either pay a tax preparer or use a computer software service to help with their federal tax returns this spring, a report says.
 CREDIT

Look at your tax refund.

Do you receive a big tax refund check from Uncle Sam each year? “You may want to speak with your tax professional and adjust your withholdings,” writes Brad Wright, a certified financial planner at New England Financial Planning Group in Burlington, Massachusetts. Think of your refund as an interest-free loan to Uncle Sam, Wright says.

Different types of insurance.
 CREDIT

Bundle your insurance.

Having one company cover your disparate insurance needs can be a money-smart move. “You may be entitled to a better rate if you bundle your homeowner’s, auto, and umbrella insurance policies under one company,” Wright writes.

watching football on tv
 CREDIT

Phone your cable company.

Dial up your cable provider at least once per year to renegotiate your cable package. You may be able to get your bill reduced.

Conceptual smartphone showing the dollar symbol on blue background
 CREDIT

Go digital.

Sign up for a digital money-management system, such as Quicken or Mint.com, to track your spending – and potentially reduce making impulse purchases and overdrawing your account.

young woman reading paperwork in her living room and holding a cup of coffee
 CREDIT

Request a free credit report.

Request your free annual credit report from each of the three credit-reporting bureaus at annualcreditreport.com. “Make sure you are aware of all the credit in your name and (that) you don’t have any unexpected outstanding debt,” writes Bethany Griffith, a certified financial planner in Columbia, South Carolina. “Reviewing your credit report is also a way to catch if you have been a victim of identity theft,” Griffith adds.

Email inbox
 CREDIT

Unsubscribe.

“You’ll be much less tempted to overspend on your clothing/tech/fun budget if you aren’t bombarded with daily emails about all the ‘stuff’ you could buy,” Griffith writes.

Car keys on the ground, appear to be lost.
 CREDIT

Raise your insurance deductible.

Carve out extra room in your monthly budget by raising your auto insurance deductible, thereby lowering your premiums.

A young businessman looks through binoculars.
 CREDIT

Find unclaimed cash.

Head to your state’s treasury website or unclaimed.org to locate property in your name. “It takes almost no time to come up with your own money in these various state-run ‘financial lost and founds,'” writes Michael Resnick, senior wealth management advisor and certified financial planner at GCG Financial in Deerfield, Illinois.

Person pumping air into tire.
 CREDIT

Inflate your tires.

Improve your gas mileage – and save money – by making sure that your tires are properly inflated. Doing this can improve mileage by 0.6% on average, and up to 3% in some instances, according to the U.S. Department of Energy.

Person holding two paychecks
 CREDIT

Automate your savings.

Set up an automatic siphon from your paycheck to your retirement account. Automate payments from your checking to your savings accounts. You’ll build savings without even noticing it.

Closeup of a pair of scissors about to cut a cable cord.
 CREDIT

Cut the cable.

If negotiating down your cable bill isn’t enough, consider cutting it entirely. Replace those channels with subscriptions to streaming services such as Netflix or Hulu, which can cost less per month than your typical cable bill.

Business woman at working with financial reports and using mobile smartphone in the office
 CREDIT

Start a virtual piggy bank.

Sign up for tools such as Acorns or Digit, which funnel spare change into an account to help you reach your savings goals, writes Natalie Colley, analyst at Francis Financial in New York City.

Dollar Bills
 CREDIT

Enroll in a high-yield checking and savings account.

Move your money into a high-yield account, writes Autumn K. Campbell, certified financial planner at The Planning Center in Tulsa, Oklahoma. Online-only banks may offer more competitive yields on checking and savings accounts than their brick-and-mortar counterparts.

A woman works at a desk next to a cash jar marked 401k.
 CREDIT

Take advantage of employer benefits.

If you’re not cashing in on an employer match by investing in the company-sponsored retirement account, consider remedying that. Contact your human resources department or consult your employee handbook for more information on securing the match. Overlooking that perk is like turning your nose up at free money.

Caucasian couple paying bills online together
 CREDIT

Check your Wi-Fi and cable bills.

“Some companies will charge you a ‘Router/Modem Fee,’ which could be around $8 a month,” writes Alex Rupert, senior associate for private client services at Sequoia Financial Group in Akron, Ohio. “Research the company’s website to determine which routers or modems are approved and then buy your own. I bought a used one off Amazon for $5.”

A woman holds a nest filled with money.
 CREDIT

Boost your retirement savings.

Log into your retirement account and increase the percentage you allocate to it by 1 or 2 percent. It will bring you that much closer to your retirement goals, and you won’t feel a difference in your paycheck.

Mixed race woman paying bills on laptop
 CREDIT

Determine whether you qualify for free tax filing.

If you made less than $66,000 in adjusted gross income in 2018, you qualify to file taxes for freethrough the IRS-partnered Free File Alliance. Bookmark this website today and use it come tax time instead of utilizing the so-called free services offered independently by tax software providers, which often include add-ons and upcharges.

Closeup of credit cards
 CREDIT

Request a credit-limit increase.

Log into your credit card account and request a limit increase. “Even if you don’t need it, a higher limit will bolster your percent of credit utilization and lead to an increase in your credit score,” writes Amy Hubble, a certified financial planner in Oklahoma City.

A man shops online using his laptop with his credit card in his hand.
 CREDIT

Automate your credit card payments.

Open your credit card account and put your payments on autopilot. It’s always best to repay the entire balance each month if you can afford to, so you won’t pay interest.

Man using calculator and calculate bills in home office.
 CREDIT

Fast-track your debt payoff goals.

Go into your student loan, mortgage or credit card account and add a few dollars or more to your automatic repayment amount. “You will be surprised how quickly these extra payments will help reduce your debt and the interest you are paying on it,” writes Jamie Ebersole, a certified financial planner in Wellesley Hills, Massachusetts.

A doctor with a stethoscope holds a piggy bank.
 CREDIT

Ramp up contributions to your health savings account.

Boost savings for medical expenses by increasing contributions to your health savings account, or HSA. “Contributions to your HSA are tax-deductible and, once the accounts get above a certain threshold, can be invested in mutual funds for long-term growth,” writes Judy McNary, a certified financial planner in Boulder, Colorado.

A woman talks on a landline phone.
 CREDIT

Drop the home phone.

Who uses a home phone these days anyway? Drop your home phone to lower your phone bill and stick with your cellphone.

People using spin machines in gym
 CREDIT

Rethink the gym.

Do you refuse to cancel that overpriced gym membership you never use? Consider ways to get in shape, such as running, walking or following online videos, without paying that hefty price each month.

Happy family enjoying their vacation in Paris, France
 CREDIT

Identify a financial goal.

Whether it’s funding your next vacation or paying off your student loans, pinpoint a money goal that motivates you to save and cut down on spending.

 CREDIT

Repair your finances fast.

To recap, here are some ways to fix your finances fast:

  • Review your credit card statement.
  • Look at your tax refund.
  • Bundle your insurance.
  • Phone your cable company.
  • Go digital when tracking your spending.
  • Request a free credit report.
  • Unsubscribe from marketing emails.
  • Raise your insurance deductible.
  • Find unclaimed cash.
  • Inflate your tires.

These quick tweaks will boost your budget.

Updated on July 8, 2019: This story was originally published on Oct. 4, 2016, and has been updated with new information.
Posted on July 23, 2019 at 9:53 pm
Becky and Steve Larsen | Category: Helpful Information, Statistical Information, Strategy

Should I Refinance My Home?

 

With the recent lower interest rates, many homeowners are wondering if they should refinance.

To decide if refinancing is the best option for your family, start by asking yourself these questions:

Why do you want to refinance?

There are many reasons to refinance, but here are three of the most common ones:

  1. Lower your interest rate and payment – This is the most popular reason. If you have a 5% interest rate or higher, it might be worth seeing if you can take advantage of the current lower interest rates, hovering below 4%, to reduce your monthly payment and overall cost of the loan.
  2. Shorten the term of your loan – If you have a 30-year loan, it may be advantageous to change it to a 15 or 20-year loan to pay off your mortgage sooner.
  3. Cash-out refinance – With home prices increasing, you might have enough equity to cash out and invest in something else, like your children’s education, a vacation home, or a new business.

Once you know why you might want to refinance, ask yourself the next question:

How much is it going to cost?

There are fees and closing costs involved in refinancing, and Lenders Network explains:

“If you were to refinance that loan into a new loan, total closing costs will run between 2%-4% of the loan amount.”

They also explain that there are options for no-cost refinance loans, but be on the lookout:

“A no-cost refinance loan is when the lender pays the closing costs for the borrower. However, you should be aware that the lender makes up this money from other aspects of the mortgage. Usually pay charging a slightly higher interest rate so they can make the money back.”

If you’re comfortable with the costs of refinancing, then ask yourself one more question:

Is it worth it?

To answer this one, we’ll use an example. Let’s assume you have a $200,000 home loan. A 4% refinance cost will be $10,000. If you want to lower your interest rate from 6% to 4%,  then refinancing is going to save you $244 per month. To break even ($10,000/$244), you need to continue owning your home for over 40 months.

Now that you know how the math shakes out, think about how much longer you’d like to own your current home. If you plan to stay for more than 3 years, then maybe it is advantageous for you to refinance.

If, however, your current home does not fulfill your present needs, you might want to consider using your potential refinance costs for a down payment on a new move-up home. You will still get a lower interest rate than the one you have on your current house, and with the equity you’ve already built, you can finally purchase the home of your dreams.

Bottom Line

There are many opportunities for growth in the current real estate market. To find out what’s right for your family, meet with a local real estate professional who can help you understand your options and guide you toward the best decision.

 

 

Posted on July 16, 2019 at 10:12 pm
Becky and Steve Larsen | Category: Helpful Information, Statistical Information, Strategy

2020 Real Estate Excise Tax Laws are Changing!

The majority of sellers will enjoy a slight savings once the new tax structure starts in 2020, however, sellers whose homes are worth $1.5M or more should pay close attention as the tiered system will cost them more in 2020. If you own a high-end home and have been considering downsizing, doing so inside of 2019 may be a winning strategy.

If you or someone you know is curious about the value of your home or you have considered a move, please reach out. It is our goal to help keep our clients informed and empowered to make good real estate decisions.

 

 

 

 

Posted on June 27, 2019 at 10:11 pm
Becky and Steve Larsen | Category: Helpful Information, Statistical Information

Multigenerational Homes Are on the Rise

We are seeing the trend everywhere…….Why are Multigenerational Homes on the Rise?

 

As loved ones start to get older, we start to wonder: how long will they be able to live alone?  Will they need someone there to help them with daily life? There’s a reason to ask those questions now more than ever, as the average life expectancy in the U.S. is 78 years old!  As a result, 41% of Americans in the market are searching for a home that can accommodate a multigenerational family.

The graph below shows the number of people by generation that purchased a multigenerational home because they will either be taking care of an aging parent or they just want to spend time together.Multigenerational Homes Are on the Rise | Keeping Current Matters

Of those buyers, 26% indicated they will be taking care of an aging parent, and 14% said they want to spend time with an aging parent. These numbers do not come as a surprise. According to Pew Research Center, 64 million Americans (20% of the population) lived in a multigenerational household in 2016 (Last numbers available).Multigenerational Homes Are on the Rise | Keeping Current MattersAn increasing number of studies affirm the benefits of being part of a multigenerational household. These benefits aren’t just for the grandchildren, but for the grandparents as well. According to these two resources:

The University of Oxford

“Children who are close to their grandparents have fewer emotional and behavioral problems and are better able to cope with traumatic life events, like a divorce or bullying at school”.

Boston College

“Researchers found that emotionally close ties between grandparents and adult grandchildren reduced depressive symptoms in both groups”.

This research gives helpful insight into why 41% of Americans are in the market to buy a multigenerational home.

Bottom Line

If you have a home that could accommodate a multigenerational family and are thinking about selling, now is the perfect time to put it on the market! The number of buyers looking for this type of home will only continue to increase.

 

Keeping Current Matters – Published May 2019

 

Posted on June 3, 2019 at 11:39 pm
Becky and Steve Larsen | Category: Helpful Information, Statistical Information

Generational Shift Impacts Demand for Real Estate

 

The generational shift that is happening in our country right now is having a strong influence on demand for real estate. As the Millennials gain a stronger foothold into their adulthood, Generation X settles in with family, Boomers move towards retirement and the Silent Generation find themselves making moves for health reasons, the desire to match their homes to the time in their life is creating strong demand in the real estate market.

In the month of April, the absorption rate based on pending sales was 81% in north King County and 91% in south Snohomish County. Historically low interest rates are helping to fuel this demand. In fact, rates are over half a point lower than they were six months ago.  The low rates are enabling people to make moves with less debt service to satisfy their changing needs for housing based on their age and lifestyle. Below you can see a chart from the National Association of Realtors outlining this motivation.

Recently, the National Association of Realtors did a survey of home buyers to help understand the generational influence on real estate. From July 2017 to June 2018 they gathered data which outlined the top motivators for each age group. Let’s take a look at what caused these groups to make moves.

Young Millennials (1990-1998)
This group accounted for 11% of all home buyers and were predominantly first-time home buyers. Motivated by the desire to start building wealth through owning real estate and purchasing as close to work as possible, this group enjoyed small ramblers, townhomes and condos. This group used financing to obtain their purchases and used savings or gift funds to amass their down payment. A common misconception from this group is that they need a large down payment in order to purchase. This group utilized loan programs with smaller, single-digit down payments to help get their foot in the door of becoming a home owner and building wealth.

Older Millennials (1980-1989)
This group accounted for 26% of all home buyers, the largest group! They have become more established in their careers and are getting married and having children, which is creating the need for a larger home. They tend to gravitate toward larger homes and are willing to move a bit further away from work to obtain the larger square footage. This group is moving into the suburbs and considering school districts and commute times. Some were able to move equity from their first home to the next, creating a larger down payment;  others bought for the first time to avoid high rents.

Generation X (1965-1979)
This group accounted for 24% of all home buyers, the second largest group. They are motivated to upgrade to the largest square footage of all, and take a multi-generational approach to their housing. Many with aging children and/or parents, it is not uncommon for this group to consider having room for adult children or older parents. Still in prime earning years, proximity to work is very important.  Positive equity positions have helped this group make these transitions.

Younger Boomers (1955-1964)
This group accounted for 18% of all home buyers. Job change and desire to be closer to friends and family motivated this group. Positive equity growth enabled some of this group to have sizable down payments. Another interesting fact about this group is that one in four were a single female, some of which were first-time home buyers.  In some cases divorce and death lead individuals to still take on home ownership to build wealth and avoid high rents.

Older Boomers (1946-1955)
This group accounted for 14% of all home buyers. The ability to move equity from one home to the next was a huge influence for this group, and enabled them to find that “forever home” with large down payments and in some cases with “all cash”. The house with less maintenance, more upgrades, possibly further away from job centers, but still close to family and friends.  Single level living is of high priority for this group along with turn-key finishes.

Silent Generation (1925-1945)
This group accounted for 7% of all home buyers and often centered themselves in senior living choices. Smaller homes or condos with stair free access in communities close to family and health services are a priority for this group. Through years of equity growth many of these purchases are “all cash” or only with the need for a very small mortgage.

Life changes motivate real estate decisions.  Career changes, marriage, divorce, family size, retirement, and the desire to be close to family and friends are just some of the reasons people decide to make moves. Fortunately, today’s low interest rates and the ability to transfer equity from one property to another is having a positive effect on demand for real estate. The recent balancing of the market due to more inventory has also made it a bit easier for first-time home buyers to purchase a home.

If you’re curious about the market and how your goals, current lifestyle, and financial position measure up, please contact me. We can help you analyze your ability to match your home to your life. It is our goal to help keep our clients informed and empower strong decisions.

Posted on May 29, 2019 at 9:21 pm
Becky and Steve Larsen | Category: Statistical Information, Strategy

Interest Rates

 

 

 

Posted on April 30, 2019 at 12:47 am
Becky and Steve Larsen | Category: Statistical Information

Q1 2019 Western Washington Gardner Report

The following analysis of the Western Washington real estate market is provided by Windermere Real Estate Chief Economist Matthew Gardner. We hope that this information may assist you with making better-informed real estate decisions. For further information about the housing market in your area, please don’t hesitate to contact your Windermere agent.

 

ECONOMIC OVERVIEW

Washington State employment slowed to an annual growth rate of 1.7% — a level not seen since 2012 — and continues a trend of slowing that started in the summer of 2018. I was a little surprised to see such a significant drop in employment growth, but it may be due to the state re-benchmarking their data (which they do annually). As such, I am not overly concerned about the lower-than-expected numbers but will be watching to see if this trend continues as we move through the spring months. The state unemployment rate was 4.5%, marginally below the 4.6% level a year ago.

My latest economic forecast suggests that statewide job growth in 2019 will be positive but is expected to slow. We should see an additional 84,000 new jobs, which would be a year-over-year increase of 2.2%.

 

HOME SALES

  • There were 13,292 home sales during the first quarter of 2019. Year-over-year, sales were down 12.3% and were 23.4% lower than the fourth quarter of 2018.​
  • It is quite likely that part of the slowdown can be attributed to the very poor weather in February. That said, anecdotal information from our brokers suggests that March was a very active month and I expect to see sales rise again through the spring selling season. Notably, pending home sales were only off by 3.5% from the first quarter of 2018.​
  • All counties contained in this report saw sales drop when compared to a year ago. The greatest drops were in the relatively small counties of San Juan, Clallam, Island, and Kitsap.​
  • The decline in interest rates during the first two months of the quarter nudged many home buyers off the fence. I believe this will cause a significant bump in sales activity in the second quarter numbers.

 

 

HOME PRICES

  • In combination with the factors discussed earlier, the 40% increase in listings has caused home price growth to taper to a year-over-year increase of 3.3%.
  • Home prices were higher in every county except Clallam. While the growth of prices is slowing, the strong local economy, combined with lower interest rates, will cause home prices to continue rising through 2019.
  • When compared to the same period a year ago, price growth was strongest in San Juan County, where home prices were up 36.4%. Only one other county experienced a double-digit price increase.
  • As I have said for quite some time now, there must always be a relationship between incomes and home prices, and many areas around Western Washington are testing this ceiling. That said, the region’s economy continues to perform well and incomes are rising, which, in concert with low interest rates, will allow prices to continue to rise but at a significantly slower pace.

 

 

 

DAYS ON MARKET

  • The average number of days it took to sell a home matched the same quarter of 2018.
  • Pierce County was the tightest market in Western Washington, with homes taking an average of 40 days to sell. There were seven counties that saw the length of time it took to sell a home drop compared to the same period a year ago. Market time rose in seven counties and one was unchanged.
  • Across the entire region, it took an average of 61 days to sell a home in the first quarter of 2019. This matches the level seen a year ago but is up by 10 days when compared to the fourth quarter of 2018.
  • In the last two Gardner Reports, I suggested that we should be prepared for days-on-market to increase, and that is now occurring. Given projected increases in inventory, this trend will continue, but this is typical of a regional market that is moving back toward balance.

 

 

CONCLUSIONS

This speedometer reflects the state of the region’s real estate market using housing inventory, price gains, home sales, interest rates, and larger economic factors. I am again moving the needle toward buyers as price growth moderates and listing inventory continues to rise.

I do not see any clouds on the horizon that suggest we will see a downturn in sales activity in 2019. That said, this will be the year we move closer to balance. Buyers who were sidelined by the significant increase in listings in the second half of 2018 are starting to get off the fence as mortgage rates drop. I foresee a buoyant spring market ahead.

 

As Chief Economist for Windermere Real Estate, Matthew Gardner is responsible for analyzing and interpreting economic data and its impact on the real estate market on both a local and national level. Matthew has over 30 years of professional experience both in the U.S. and U.K.

In addition to his day-to-day responsibilities, Matthew sits on the Washington State Governors Council of Economic Advisors; chairs the Board of Trustees at the Washington Center for Real Estate Research at the University of Washington; and is an Advisory Board Member at the Runstad Center for Real Estate Studies at the University of Washington where he also lectures in real estate economics.

 

Posted on April 26, 2019 at 12:10 am
Becky and Steve Larsen | Category: Quarterly Reports, Statistical Information