Tag Archives: home buyer

NWMLS Press Release (4/4/13): Prices “spiking” as home buyers compete for scarce inventory

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The Northwest Multiple Listing Service sent out their monthly press release on April 4th 2013. Below are details from the release, including a 4-County Puget Sound Region Pending Sales Table for March 2013. To read the press release in its entirety, click here.

MC900432680Brokers added 9,332 new listings to the Northwest Multiple Listing Service database during March, but pending sales topped that number to further crimp inventory and trigger competitive bidding among buyers who are flocking to open houses.

Northwest MLS figures show year-over-year prices jumped 14.9 percent for the 21 counties in its service area. The median price for last month’s closed sales of single family homes and condominiums (combined) was $258,500, rising from $225,000 for the same month a year ago. Twelve counties reported double-digit gains, led by Ferry (up 70.9 percent), San Juan (up 47.3 percent), and Island (up 36.1 percent).

Prices for single family homes increased 14.3 percent, while the median sales price for condos, which accounted for about 12 percent of sales, surged 19.6 percent. Two-thirds of last month’s condo sales were in King County; prices there leaped 28.6 percent, increasing from $175,000 to $225,000. The price of a single family home that sold in King County jumped from $330,000 to $392,000 (up 18.8 percent).

Brokers reported 5,745 closed sales last month for a 13.9 percent increase from the previous year when they tallied 5,044 completed transactions.

“The market continues to be incredibly competitive with at least one in four buyers paying cash,” noted MLS director OB Jacobi. “For those not paying cash, the average down payment is between 20 percent and 50 percent,” he added.

Jacobi, the president of Windermere Real Estate Company in Seattle also reported the vast majority of home sales right now have multiple offers, and “it’s no longer restricted to the urban markets — the outlying areas are now experiencing the same thing.”

Brokers say even distressed sellers are receiving multiple offers for their homes.

“As one of my brokers told me, when you have 12 offers on a short sale, it pushes the price of the home up to market value. This is clearly reflected in the appreciation we continue to see in prices across the board,” Jacobi stated.

Inventory is depleted area-wide, with only 18,500 active listings in the MLS system at month end. That total is down by almost 6,400 listings year-over-year for a 25.7 percent drop. Counties with the largest declines include Clark (down 46 percent), Snohomish (down 43.8 percent) and King (down 42.4 percent).

System-wide, there is less than a two-month supply of homes, with the tightest selection in Snohomish (0.93 months), King (1.03 months), Clark (1.81 months) and Pierce (1.68 months) counties. In general, analysts consider four-to-six months of supply to be normal.

Pending sales are mirroring the shifts in market conditions. Volume area-wide was up only 3.9 percent from a year ago, rising from 9,126 mutually accepted offers to 9,482.

Five counties – Ferry, Grays Harbor, Island, King, and Snohomish — reported fewer pending sales than a year ago, likely a consequence of the limited selection.

Northwest Multiple Listing Service, owned by its member real estate firms, is the largest full-service MLS in the Northwest. Its membership includes more than 21,000 real estate brokers. The organization, based in Kirkland, Wash., currently serves 21 counties in Washington state.

March 2013 Puget Sound egion Pending Sales

NWMLS Press Release (1/7/13): Local Real Estate Markets Brisk For A December, Even With Seasonal Slowing

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MC900432680

The Northwest Multiple Listing Service sent out their monthly press release on Jan. 7th 2013. Below are details from the release, including the 4-County Puget Sound Region Pending Sales Table. To read the press release in its entirely, click here.

Home buyers around western Washington made offers on 5,314 residences during December, outnumbering the 3,857 owners who listed their homes for sale. The imbalance helped push up prices and further thin already depleted inventory.

While the expected seasonal slowdown occurred last month, determined buyers were undaunted by sparse inventory and record-breaking rainy days, according to December statistics from Northwest Multiple Listing Service.

MLS members reported 5,314 pending sales of single family homes and condominiums last month for a modest year-over-year increase of 1.5 percent. That volume of mutually accepted offers fell from November’s total of 6,522, but far exceeded the number of new listings, 3,857, that members added to the MLS system during December. It also marked an unprecedented fourth straight month when pending sales outnumbered new listings.

MLS members tallied 5,267 closed sales during December, outgaining the same month a year ago by 526 transactions for an increase of about 11.1 percent. The 2012 total of 64,624 closed sales was 14.8 percent higher than the volume reported for 2011.

Brokers expect the housing market rebound to continue, while cautioning sellers to refrain from becoming too greedy and expressing hope for “controlled natural growth” to sustain the recovery. They also believe distressed properties, rising rents and re-engaged investors will have an impact on activity for the foreseeable future.

Even with distressed properties (and the lower prices they usually fetch) being part of the mix of sales, median sales prices are edging up. Last month’s buyers paid more for their home than purchasers of a year ago, and the number of properties that sold for a million dollars or more jumped nearly 56 percent, rising from 68 in December 2011 to 106 last month.

The median price area-wide was $255,000, up 13.3 percent from twelve months ago when the price was $225,000. Prices rose by double digits in ten of the 21 counties in the Northwest MLS service area. Homes and condos that sold in King County commanded the highest prices at $342,000, reflecting a gain of more than 17.5 percent.

For single family homes (excluding condos), the median selling price rose $30,000 system-wide (about 12.8 percent) climbing from $235,000 a year ago to $265,000.

In King County, the median sales price of a single family home jumped nearly 18.8 percent, from $320,000 to $380,046. Within the county, the biggest increases on single family homes that sold were reported in Skyway/Bryn Mawr area (up 89.8 percent), Central Seattle (up 50.2 percent), Vashon (up 35.6 percent), Bellevue west of I-405 (up 28.6 percent) and Burien-Normandy Park (up 26.9 percent).

Prices and the number of multiple offers may be rising in part because of shrinking inventory. At the end of December, there were only 17,718 properties for sale, which compares to 26,639 active listings for the same time a year ago (down 33.5 percent). Months of supply declined to 3.3 months, down from about 5 months of supply for the same period a year ago.

Looking ahead, many brokers expect a strong market in 2013, with some expressing concern about “frenzied bubble growth.”

Another positive indicator brokers noted is improving builder confidence. It recently rose to its highest level in more than six years, according to a National Association of Home Builders (NAHB)/Wells Fargo survey released last month. Although newly built homes account for only a small portion of the housing market, they are considered to be a leading revenue and job creator. Each home built creates an average of three jobs for a year and generates about $90,000 in tax revenue, according to NAHB research.

Northwest Multiple Listing Service, owned by its member real estate firms, is the largest full-service MLS in the Northwest. Its membership includes more than 21,000 real estate brokers. The organization, based in Kirkland, Wash., currently serves 21 counties in Washington state.

The NWMLS plans to release its annual summary report for 2012 mid-January.  Stay tuned for details.

4-county Puget Sound Region Pending Sales (Single Family Homes + Condo combined)

(totals include King, Snohomish, Pierce & Kitsap counties)

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2000 3706 4778 5903 5116 5490 5079 4928 5432 4569 4675 4126 3166
2001 4334 5056 5722 5399 5631 5568 5434 5544 4040 4387 4155 3430
2002 4293 4735 5569 5436 6131 5212 5525 6215 5394 5777 4966 4153
2003 4746 5290 6889 6837 7148 7202 7673 7135 6698 6552 4904 4454
2004 4521 6284 8073 7910 7888 8186 7583 7464 6984 6761 6228 5195
2005 5426 6833 8801 8420 8610 8896 8207 8784 7561 7157 6188 4837
2006 5275 6032 8174 7651 8411 8094 7121 7692 6216 6403 5292 4346
2007 4869 6239 7192 6974 7311 6876 6371 5580 4153 4447 3896 2975
2008 3291 4167 4520 4624 4526 4765 4580 4584 4445 3346 2841 2432
2009 3250 3407 4262 5372 5498 5963 5551 5764 5825 5702 3829 3440
2010 4381 5211 6821 7368 4058 4239 4306 4520 4350 4376 3938 3474
2011 4272 4767 6049 5732 5963 5868 5657 5944 5299 5384 4814 4197
2012 4921 6069 7386 7015 7295 6733 6489 6341 5871 6453 5188 4181

Before You Waive the Inspection Contingency, Consider the Risks

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In marketplaces where multiple offers are more common place, there may be a temptation to forgo an inspection to woo the sellers. However, it would behoove a buyer to take some time to learn the risks that can accompany forgoing the inspection contingency when purchasing a home.

The American Society of Home Inspectors (ASHI) website has an informative FAQ section which addresses commonly asked questions about inspections. Their Facebook Page contains photo examples of what ASHI inspectors find out in the field. While many are humorous looking, the reality is dealing with unexpected problems after purchasing a home is no laughing matter.

Check out this Huffington Post article about a woman who paid $1,000,000 for a home, waived the inspection contingency, and after the transaction closed discovered an enormous mouse infestation. According to the article and accompanying video, the home needs to be torn down to the studs. While this is an extreme example, it illustrates clearly why conducting an inspection prior to purchasing a home is usually in a buyer’s best interest.

If the local real estate market you want to buy in suffers from low inventory, like it is here in the greater Seattle area and Eastside, multiple offers are a reality buyers grapple with. For buyers who are finding that an unwillingness to waive the inspection contingency can be a deterrent to sellers receiving multiple offers, a pre-inspection may be a good option to consider.

What exactly is a pre-inspection? This is an inspection service available to buyers that is conducted before making an offer on a house. It’s not as long, or as detailed, as a regular inspection. During a pre-inspection, which generally lasts an hour to 90 minutes, the inspector examines all the main structural elements and systems. Roof, attic, crawl spaces, foundation, heating and cooling systems, electrical, plumbing… the large components of a home, like these, will be inspected for damage, moisture problems, breakdown and infestations.

In neighborhoods that have more buyers than available inventory, it’s become increasingly popular to invest in a pre-inspection first. While it’s not as thorough, conducting one may give a buyer more confidence to move forward without a full inspection if that waiver would make their offer stronger. “Certainly no one wants the added expense of paying for an inspection on a house where your offer may not be accepted,” Raj Hayden, of Cardinal Home Inspection, shared. However when you consider the risks of forgoing any type of inspection, Hayden said for her it’s always preferable to have as much information going in to the decision making process as is readily available, to minimizing the shock and/or regret later.

Furthermore, during a pre-inspection, while their agent is present, buyers can do the detail leg-work a home inspector usually completes during a full-length inspection. Check out doors and windows. How do they fit into their frames? Do they open and close easily? Check out the appliances that will be staying. How do they work? How noisy are they? Do closet doors ride easily on their rails? Have walls been patched? What is the condition of the cabinetry? Does the carpet in any of the rooms have spots pulling away from under the molding? These details can be easily checked by the buyer while the inspector examines the core of the home.

Now it’s your turn. What has your experience been in a multiple offer situation? Have you invested in a pre-inspection before making an offer on a home?

The Continuing Discussion of Rent vs Buy

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Trulia released a report today which takes another look at the Rent vs Buy conversation. Trulia analyzed the last 3 months of rental and home purchase data for the 100 largest US metro areas. Trulia concluded that with the current home price averages, low fixed interest rate and how much rent prices have increased in the past year, it’s cheaper to buy than rent is all 100 metros— under certain conditions. In 96 of the 100 areas examined, it’s still cheaper to buy even with the least desirable scenario Trulia used for their calculations.

There was certain criteria Trulia included in their analysis:

1) Trulia looked at both rentals and homes for sale listed on their site for June, July and August 2012. They then calculated how much the rental homes would probably sell for, and conversely they estimated how much homes for sale would rent for. The goal of calculating this data was for Trulia to be able to create a “direct apples-to-apples comparison.”

2) Trulia calculated the total cost of both renting a home and owning a home over a 7 year period, including the consideration of tying up your money in a down payment.

3) Trulia then analyzed different scenarios regarding the costs of renting versus buying. They changed up the mortgage rate, the income tax bracket for tax deductions, and time period of renting/owning the home.

In all 100 metros, it was cheaper to rent than buy under the best case scenario Trulia used in their calculations (20% down payment, 30-year fixed mortgage rate at 3.5%, buyer at 25% federal tax bracket and owning the home for at least 7 years). The report discusses how influential each of these elements were in determining the cost percentage between renting versus buying. For example, when Trulia compared the data of locking in at a 4.5% fixed mortgage, not itemizing your tax return and only staying in the home for 5 years, buying was actually more expensive than renting in 4 of the metro areas!

So, if buying a home is a much better deal for all these areas– why aren’t more people purchasing homes? The down payment is the largest hurdle for home buyers, according to the Trulia report. If buying a home is a goal of yours, speaking with a real estate broker will give you a better idea of how to deal with the down payment hurdle. The real estate broker can help answer the questions you have on how to make your dream of owning a home a reality.

You can read the full Trulia report here. The report is accompanied by an interactive infographic based on the data Trulia calculated for each of the largest US metro areas.

Interest Rates Climb For Third Consecutive Week– Compare Mortgage Payments

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The Thursday, August 16th, press release from Freddie Mac revealed the 3rd straight week of rate increases for both 15 and 30 year mortgages. The 15 year, fixed rate mortgage ended the week at 2.88%; the 30 year, fixed rate mortgage finished the week at 3.62%.

If you are contemplating a home purchase, taking advantage of today’s lower interest rates can save you quite a bit of money over the life of the loan. Also, the monthly mortgage payment is so much more affordable.

Jennifer Burton, of Windermere Mortgage Services, put together payment comparison charts to compare the monthly payments for homes between $200,000 and $900,000 at 3.5%, 4.5% and 5.5% interest rates. It’s pretty amazing to take a look at the jump in the monthly mortgage payment as the interest rate climbs! If you would like to print the payment comparison charts to look at them closer, click here for homes priced between $200,000 and $600,000; for homes priced between $600,000 and $900,000, click here.

The economy is showing signs of modest growth, which in turn has caused the interest rates for fixed-rate mortgages to rise a little. The following quote is attributed to Frank Nothaft, vice president and chief economist, Freddie Mac,

“The latest economic indicators point toward low inflation but gradually stronger economic activity which placed further upward pressure on long-term Treasury yields and, in turn, fixed mortgage rates. For example, inflation remains in check with 12-month growth in the core consumer price index falling for a second month to 2.1 percent in July. At the same time, industrial production rose 0.6 percent in July compared to a 0.1 percent increase in June and retail sales jumped 0.8 percent in July from a 0.7 percent decline in June.”

According to local economist, Matthew Gardner, the housing market in Western Washington is seeing some home price stability, however the inventory of homes available is still very low. It’s noteworthy, however, to read how the greater Seattle area has been witnessing continued job growth, and how Gardner also notes that increased consumer confidence is evident with the modest economic growth in the retail sector. If listing your home for sale has been on your mind, maybe now is the time to speak with a real estate broker, to discuss how the small inventory has effected the selling process in King County. Request from real estate broker your broker a market analysis of your home. This document will help the two of you discuss what options you have as a seller, and if it makes sense to list your home now.

Now it’s your turn. What are your thoughts about the recent increases in fixed mortgage rates? Has it changed any plans you had to buy or sell a home?

Open Houses: Sunday, June 17th, 2012

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Hello and Happy Saturday! Lots of exciting fun things to do this weekend. Seattle Flight Museum is having all Dad’s free Sunday June 17th from 10-5pm lots of fun activities going on. Or if you like horses and races try Emerald Downs, its Free Cap Day and they have free family activities in the park, pony rides, face painting and more 12-5pm.

This weekend there will be open houses to visit, as well!

Two Windermere R.E. / Mercer Island listings will be held open on Sunday, June 17th. One is brand new to the market this is the first open, its a NW beauty-extensive remodel -traditional sensibility.  The other one is a peaceful, private rambler located in Shoreline’s Innis Arden neighborhood.

Details about each open house are below, by city.

Mercer Island

$950,000 l 6215 86th Ave NE l 368876 l Cynthia Schoonmaker l Sunday, 6/17, 1-4PM

Shoreline
$493,000 l 17061 10th Ave NW l 350859 l Ina Bahner l Sunday, 6/17, 11-2PM

“The Mercer Island Open House List is ready to conveniently print from this blog post!  5 home are available to preview Saturday, June 16th, and 10 will be open Sunday, June 17th. The list prices range from $650,000 to $2,799,000. The prominent features of the homes being held open over the weekend new to the market, outdoor entertaining spaces and walk-in pantries.”

2012 Mercer Island Tour of Homes– First Tour of the Year!

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Our first 2012 Mercer Island Tour of Homes is this Sunday, February 26th, from 1-4 pm. Six homes are scheduled for this tour— three of which are brand new to the market within the last 7 days. The island tour will be the first public open house for two homes! Also, if you are a fan of one level living, this is definitely the tour for you. The rambler is the predominate building style of the homes available to preview on Sunday.

For more details about each listing please follow the links below.

  1. $300,000 | 2500 81st Avenue SE, Unit 346 | #324326 | Allen Hovsepian
  2. $565,000 | 7265 87th Avenue SE | #323105 | Kelly Weisfield
  3. $599,950 | 4005 89th Avenue SE | #318017 | Hosted by Nancy LaVallee
  4. $699,000 | 2755 73rd Avenue SE | #317192 | Hosted by Michael Lee
  5. $889,000 | 4104 94th Avenue SE | #322781 | Cynthia Schoonmaker
  6. $920,000 | 7415 80th Place SE | #322237 | Hosted by Doug McKiernan
  7. $2,199,000 | 6857 SE 33rd Street | #268980 | Bonnie Sanborn

On Sunday, February 26th, please stop by our office any time after 10 am for a cup of coffee and a tour map! We’d love to see you.

December 2011 Stats Are Out

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The most notable aspect of the December 2011 stats is the continued trend toward high pending sales volume despite the softening of sales prices. Listing inventory is down markedly compared to inventory levels for the past three years in the month of December. With interest rates below 4% buyer interest has remained very strong and multiple offers are not unheard of–albeit at much more modest prices than in years past. Having been burned once, buyers are cautious of overpaying and are negotiating for a fail-safe price.

2011-12 Summary

2011-12 Mercer Island

2011-12 Eastside

2011-12 Seattle Metro

2011-12 King County

October is Mixed Bag for the Island

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October’s stats contain the good, the bad and the ugly!

The good: inventory is down 58% from the same time last year, the Average Sale Price is higher, $/sq ft is higher, and the absorption rate is holding steady.

The bad: Pending sales are down 20% from a year ago, the gap between original list price and sale price is larger (83% as compared to 88%) and the # of months inventory on the market has grown to 10.3 months.

The ugly; Closed sales totaled out at a meager 11 as compared to 26 in October 2010.

The “Rent or Buy” Quandry

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The question, “Is it better to buy or to rent?” is on so many minds these days. And it’s understandable, with historically low interest rates and reduced home prices. Yet, there is no canned answer to this question, because there are too many angles which need to be examined to arrive at an accurate answer. The “rent vs buy” discussion is highly personal– there is no one view that “fits most” in today’s housing and employment market.

If this question is one you have been pondering, there are resources to help you arrive at an answer. A good place to start is with an interactive buy or rent calculator, like this one published in the New York Times. You can fill in your own personal information to produce a graph which examines your circumstances and analyzes what might be a better option for you.

Freddie Mac has a web page that discusses “Is Buying or Renting Right For You?” This web page offers bullet points to examine. Do you plan to stay in one place longer than 4 years, have good credit, reliable income, the ability to put down 5+% down and pay closing costs? Perhaps purchasing a home makes more sense for you. Does your career require frequent or sudden moves, you don’t want to deal with home maintenance/improvements, or your finances have experienced a setback? Maybe renting would be a better choice for now. Zillow also examines Owning Vs Renting a Home. Part of the Zillow discussion centers on tax deductions for home owners and the building of equity, both note-worthy issues to consider.

Are you just starting to explore the “rent or buy” question? Keeping track of your expenses and creating a monthly budget is always important; if you are considering a home purchase, it is imperative. Freddie Mac offers a monthly budget worksheet to help with this process. The Women’s Institute for Financial Education (WIFE) offers a Rent Vs Buy Worksheet, so you can examine personally your financial and tax consequences connected to each housing option.

It’s also a good idea to examine your local housing market. A real estate broker would be happy to speak with you. If you have examined the current monthly lease prices in your market area, and compared it to how much of a mortgage you could afford, have you also looked at what kind of home is available at your price point? Is it fairly easy to secure a rental home? A broker will be able to help you find answers to these questions. Also, a broker is a terrific resource for connecting with reputable mortgage professionals, if you would like to discuss the mortgage lending process.

To quote a title of an article written by Knight Kiplinger, A House Is Just A Home. Whether you rent or buy, the end result is you will have someplace to call home. What is important is to make the decision to rent or buy based on sound financial data, in conjunction with how the final decision fits with your current life circumstances and emotions.