Seattle area housing market remains strong through April
Housing activity has remained strong despite what some would have thought was a sure death to the areas high flying housing market. While Covid19 has caused a disruption to life and work, buyers and sellers are active and coming to agreeable terms to complete a purchase and sales. Most parts of real estate are moving through the pipeline without major issue. Lenders are funding loans, inspections and appraisals are taking place, and all parties to a real estate transaction can do their job. With a few new tactics to stay healthy and less in person interaction, buyers and sellers are getting to the closing table on time. Serious and prepared buyers are taking advantage and patient sellers are being rewarded.
Are we in a repeat of 2008? – Indications say No!
The 2008 financial and housing crisis was just that, a housing crisis. It was caused by home mortgages provided without proper oversight or qualifications, homeowners over leveraging every bit of home value possible, lots of available housing to speculate on, and mortgage investments packaged to investors as “low risk” when they were anything but.
Today’s higher standards for borrowers with larger down payments, solid credit scores, qualified employment, and loan products with more scrutiny is helping prevent a repeat of 2008. There is also a housing shortage that cannot keep up with demand, especially in the greater Seattle area. The high costs of land, construction materials, labor, and regulation costs limits what builders can and are willing to build. With little new supply to meet demand, and strong financials and increased home equity, current value and desire for houses remains high.
Home Sales – Still going, just a slower pace
Buyers and sellers who planned to sell or purchase a home in the 1st quarter of the year stayed the course as the call to “shelter in place” began. Some just beginning the process took a step back to re-asses, catch their breath and decide what to do next, and are slowly re-emerging now that the news is not dire. With the days on market dropping by over 1/3, and mortgage applications for new home purchases trending upwards after bottoming out in the first weeks of April, indications are that housing is still in demand and buyers are finding homes they like.
Home Prices – Holding Steady(ish)
Pricing continues to stay and remain positive throughout the city. Historically March to April show a price growth as activity picks up steam, but currently prices appear to be rather stable with no visible over correction in either direction. First quarter (January – March) of the year started out strong with eager buyers and low inventory, increasing overall values. Current listing prices appear to be focused on attracting buyers interest and sellers are able to stick to their listed prices and some receive multiple offers. Values are riding the wave of Q1 home appreciation.
Inventory – More Opportunities
There are 50% less listings than last year, but understandably so. The absorption rate is decreasing, meaning there are more homes on the market than are being purchased as buyers wait for the home that fits their need. Roughly 6 months of inventory is considered a “balanced” market. Seattle has 2.1 months available, up from 1.8 months in March. Anything less than 6 months is considered a “sellers-market” as it has been for some time.
West Seattle Bridge – A loss for our region and community
As a West Seattle resident, and a real estate agent conducting over 80% of my business in the area, there is no denying the strain a lack of transportation in and out of the area is going to cause. This is a serious and unfortunate turn of events and I sympathize with those this will seriously affect. But people love West Seattle for what it offers, not what it does not.
West Seattle has access to beaches, waterfront, parks and a small town vibe like nothing else in the city. Being off the beaten path, with little need to leave “The Island” is one reason West Seattlites enjoy their neighborhood so much. The loss of the bridge might lower interest from some home buyers for a short period of time, but it creates opportunity for those that want to live here and understand the value.
A small number of homeowners who experience a serious burden getting to work, moving kids around the city for school or events, or a busy life outside of West Seattle are considering a move out of the area. But home buyers and residents that work further south (Tukwila, Renton, Kent, etc.) or work from home (expect to see more of this), use public transportation to and from downtown, and families looking to upsize or retirees looking to downsize, will continue to seek out West Seattle and the options available.
The long term repair or replacement options are still being studied, and everyone is waiting to see what is done next to ease the burden felt by residents and businesses.
If you are thinking of buying or selling in the next 12 months, and you have question or want insight to how to prepared for the market ahead, call me today at 425-766-4202.
We will focus on your goals, outline how I work with sellers the greatest ROI in the shortest amount of time on market, and how buyers can save time and money to win in a competitive market. If you think we are a fit, we can discuss your next strategic steps forward. Call me today at 425-766-4202 or via email at firstname.lastname@example.org.
Provided annually, this report compares the 5 regions of the Metro Seattle area, highlighting both the year-to-year and quarterly change on important info including; median price, days on market, available inventory and the change in selling price to the original listed price. The information is designed to highlight trends of our local real estate market and what buyers and sellers may be able to expect going forward.
If you would like to receive this report in PDF format, delivered directly to your email inbox when released, please contact me directly at email@example.com, with the appropriate subject line. There is no cost and no obligation to receive this information.
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After succumbing to the “Great Recession” ten years ago, the stock market has made a comeback. So, does that mean you should forget about buying a new house and invest in stocks instead? The answer to that question, say experts, depends on your investing savvy, your financial discipline, your age, and your current financial situation.
The first question you need to ask yourself is, “Am I disciplined enough to invest in stocks?” According to two professors who recently studied 30 years of personal-finance performance, you need to be someone with exceptional financial discipline if you want to earn real money in the stock market. Or, you could simply buy a house.
When you buy real estate, the down payment and monthly mortgage payments force you to set aside a significant amount of your earnings on a regular basis. It’s automatic. But if you can’t summon the same discipline to invest that same amount of money in the stock market on an equally regular basis, then stocks are probably going to be a losing proposition, according to the professors’ study.
“We find that if people don’t invest all the money, actually about 90% of the time, you’re better off buying real estate,” says Professor Eli Beracha, co-author of the study.
Other issues that make stock investing risky
Investing guru James Altucher wrote a column in The Wall St. Journal titled, “8 Reasons You Stink at Trading Stocks.” In it, he argues that most non-professionals don’t have the investing savvy required to be successful in the stock market. Here are a few telling excerpts:
- “Nine out of 10 people think they are above-average drivers. Nine out of 10 people think they are above-average investors. Both are mathematically impossible.”
- “Most people sell at the bottom and buy at the top—the opposite of what you want to do as an investor—because they let emotions get in the way of patience and strategy.”
- “It’s really hard to own stocks. It’s not just picking a stock and watching it go up 1,000%. It’s buying it and sometimes watching it go down 80% before it ends up rising 20% above your purchase price. It’s waiting. It’s patience. Psychology is at least 80% of the game. And knowing when to sell? Even harder.”
When you’re young, many financial advisors encourage investing in things like individual stocks. With a long career ahead, you have time to wait for any bad investments to turn around before you may really need the money. But once you’re a little older, with a family, and starting to focus on your financial future, that’s when advisers recommend you buy things like real estate—a conservative investment with a long history of stable, predictable earnings.
The type of loan you choose also makes a difference
If you want to both own a home and invest in stocks, consider a 30-year home loan, which will significantly reduce your monthly payments and leave you with extra money for playing the market. (Just remember the tradeoff: You’ll end up paying thousands of dollars more in interest over the life of the loan.)
If you don’t have a burning desire to play the stock market, choose a 15-year home loan. You’ll pay less interest over the life of the loan, you’ll build equity faster, and, obviously, you’ll be mortgage-free 15 years sooner.
The tax advantages of owning real estate
As a homeowner, you’re entitled to a bevy of tax benefits you don’t get as a stock investor. You can deduct your mortgage interest and property taxes from your annual tax return. Plus, depending on your circumstances, you could also get a deduction or credit for any home-office expenses, moving expenses, capital gains, any “points” used to lower your interest rate, and more.
One caveat: investing in real estate takes time
No matter what some of those reality TV programs show, buying a home should not be viewed as a get-rich-quick scheme. But if you think you’re ready to put down roots for as long as seven years, chances are very good that any home you purchase will appreciate significantly during that time (even if the economy runs into some bumps along the way).
The non-financial benefits
Of course, not all of the benefits of owning a home are financial. For most Americans, their home is a source of tremendous pride, comfort, security and freedom. Most of us also use our homes to showcase our personality, through paint colors, furnishings, landscaping, yard signs, holiday decorations and so much more.
Yes, the stock market is on an upswing currently (depending on the week), but if you want an investment with a long-term track record of consistent returns—plus tax breaks and a variety of personal perks—you may want to buy a home instead.
If you have questions about the buying or selling process, contact Aaron Calvo at 425-766-4202 or email at firstname.lastname@example.org.
Selling Your Home: The Impact of Staging
How can you make your home more attractive to potential buyers? The answer is with some “home staging”. According to the Wall Street Journal, implementing some basic interior design techniques can not only speed up the sale of your home but also increase your final selling price.
It all comes down to highlighting your home’s strengths, downplaying its weaknesses, and making it more appealing to the largest pool of prospective buyers. Staging an empty house is also important to help buyers visualize how the spaces would be used, and to give the home warmth and character.
Cohesiveness Is Key
Make the inside match the outside. For example, if the exterior architectural style of your house is Victorian or Craftsman Bungalow, the interior should be primarily outfitted with furniture styles from essentially the same era. Prospective buyers who like the exterior style of your home are going to expect something similar when they step inside. If the two styles don’t agree or at least complement each other, there is likely going to be an immediate disconnect for the buyer. Contact your agent to help determine the architectural style of your home and what makes it unique.
There is always room for flexibility. Not all your furnishings need to match, and even the primary furnishings do not need to be an exact match to the architectural style of your home. To create cohesion, you simply need to reflect the overall look-and-feel of the exterior.
The Role of Personal Expression
Every home is a personal expression of its owner. But when you become a seller, you’ll want to deemphasize much of the décor that makes a place uniquely yours and instead look for ways to make it appeal to your target market. Keep in mind, your target market is made up of the group of people most likely to be interested in a home like yours—which is something your agent can help you determine.
Your Goal: Neutralize and Brighten
Since personal style differs from person to person, a good strategy to sell your home is to “neutralize” the design of your interior. A truly neutral interior design allows people touring the house to easily imagine their own belongings in the space—and to envision how some simple changes would make it uniquely their own.
In short, you want to downplay your own personal expression, while making it easy for others to mentally project their own sense of style on the space. Ideas include:
- Paint over any bold wall colors with something more neutral, like a light beige, a warm gray, or a soft brown. The old advice used to be, “paint everything white,” but often that creates too sterile of an environment, while dark colors can make a room look small, even a bit dirty. Muted tones and soft colors work best.
- Consider removing wallpaper if it’s a bold or busy design.
- Replace heavy, dark curtains with neutral-colored shear versions; this will soften the hard edges around windows while letting in lots of natural light.
- Turn on lamps, and if necessary, install lighting fixtures to brighten any dark spaces—especially the entry area.
- Make sure everything is extremely clean. You may even want to hire professionals to give your home a thorough deep clean. Remember, the kitchen and bathrooms are by far the two most important rooms in a house when selling, so ongoing maintenance is important.
The Importance of De-Cluttering
Above all, make sure every room—including closets and the garage—is clutter-free. Family photos, personal memorabilia, and collectibles should be boxed up. Closets, shelves, and other storage areas should be mostly empty. Work benches should be free of tools and projects. Clear the kitchen counters, store non-necessary cookware, and remove all those magnets from the refrigerator door.
The same goes for furniture. If removing a chair, a lamp, a table, or other furnishings will make a particular space look larger or more inviting, then by all means do it.
You don’t want your home to appear cold, un-loved, or unlived-in, but you do want to remove distractions and provide prospective buyers with a blank canvas of sorts. Plus, de-cluttering your home now will make it that much easier to pack when it comes time to move.
Where to Start
Contact your agent Aaron Calvo at www.aaroncalvo.com for advice on how to most effectively stage your home or for a recommendation on a professional stager. While the simple interior design techniques outlined above may seem more like common sense than marketing magic, you’d be surprised at how many homeowners routinely overlook them. And the results are clear: staging your house to make it more appealing to your target buyer is often all it takes to speed the sale and boost the price.
WASHINGTON (Reuters) – U.S. home resales fell more than expected in April, weighed down by a chronic shortage of houses on the market that is keeping house prices elevated and sidelining prospective buyers.
The National Association of Realtors said on Wednesday existing home sales declined 2.3 percent to a seasonally adjusted annual rate of 5.57 million units last month.
Despite the decline, April’s sales pace was the fourth highest over the past 12 months. March’s sales pace was revised down to 5.70 million units, which was still the highest level since February 2007, from the previously reported 5.71 million units.
“Lack of supply moving through the seasonal ramp-up in sales in the spring selling season slowed sales rather than demand,” said Ted Wieseman, an economist at Morgan Stanley in New York.
Economists had forecast sales falling 1.1 percent to a 5.65 million-unit rate. Sales were up 1.6 percent from April 2016, also underscoring the housing market’s underlying strength.
While the number of homes on the market rose 7.2 percent to 1.93 million units from March, supply was down 9.0 percent from a year ago. Housing inventory has dropped for 23 straight months on a year-on-year basis.
As a result, the median house price increased 6.0 percent from a year ago to $244,800 in April, the highest level since June 2016. That was the 62nd straight month of year-on-year price gains.
With recent data showing a drop in home building and a plunge in new home sales in April, weak home resales suggest residential investment will probably make a small contribution to gross domestic product in the second quarter.
Residential investment added half a percentage point to the economy’s 0.7 percent annualized growth pace in the first quarter.
U.S. financial markets were little moved by the report as investors awaited minutes of the Federal Reserve’s May policy meeting later on Wednesday.
Houses typically stayed on the market for 29 days last month, the shortest period since the NAR started tracking the series in May 2011. That was down from 34 days in March and 39 days a year ago.
Demand for housing is being driven by a tight labor market, marked by a 4.4 percent unemployment rate, which is boosting employment opportunities for young Americans.
The housing market also remains supported by historically low mortgage rates, with the 30-year fixed mortgage rate hovering just above 4.0 percent. But rising building material costs as well as shortages of lots and labor have left builders struggling to fill the inventory gap.
The NAR estimates housing starts and completions should be in a range of 1.5 million to 1.6 million units to eliminate the persistent shortage. Housing starts are running at about a rate of 1.2 million units and completions around a pace of 1 million units.
A separate report from the Mortgage Bankers Association on Wednesday showed applications for loans to purchase homes fell 1.0 percent last week.
Last month, sales fell in the Northeast, West and South regions, but rose in the Midwest.
At April’s sales pace, it would take 4.2 months to clear the stock of houses on the market, up from 3.8 months inMarch. A six-month supply is viewed as a healthy balance between supply and demand.
First-time buyers accounted for 34 percent of transactions last month, still well below the 40 percent share that economists and realtors say is needed for a robust housing market, but up from 32 percent a year ago.