Windermere Chief Economist, Matthew Gardner, answers the most pressing question on everyone’s minds: Will there be a recession in 2020? Here’s what he expects to see.
I hope you all had a wonderful Holiday season and were able to take a break from work for a few days to relax and re-group! Now, let’s jump right in and look at a summary of the homes sold on Queen Anne for 2019. This data comes from the NWMLS and does not include condominiums or multi-family dwellings and contains only single family homes on the Hill that sold in 2019.
In looking at the data above, the first thing you will notice is that statistically there was no average appreciation during 2019 from 2018. I am flabbergasted at that number because I know many homes did appreciate last year. I know my raw data from the NWMLS is correct and complete. One factor in this lower average appreciation number is there were 65 homes that sold for less than $1M which is 28% of the total annual sales; a number larger than most previous years. This larger percentage has worked to counteract any increase in the average sold price of all homes sold. It is related to the significant number of price reductions homes have had this year before going into escrow. Another indicator is to look at the median sold prices between the two years. The median, as you probably know, is the price that an equal number of homes on the Hill sold for above and below that $1.265M median. This number does indicate a small gain of about 1% in price over last year. Please see attachment for all of the 234 homes that sold on the Hill last year with the details of each. (The computations have been made by the MLS computer so no chance of mathematical error on my part if you happen to be wondering that!)
At present, we have only 5 active homes listed for sale on the Hill. This number will be increasing over the next three months as we approach spring and prices begin to rise once again with increasing demand. BTW, the grand prize for the home that sold for most over list price in 2019 goes to 2120 2nd Avenue West, a fixer on a large lot in a wonderful location listed at $1M and sold for $1.250M. Last year, 45 homes sold for more than list price although many of them sold for just slightly more. With a strong local and national economy, I am confident we will see more appreciation in prices this year. Also, the state excise tax on the sale of a home has actually gone down for homes at $1.5M or less. Over $1.5M it has doubled. “A man’s money is never safe when the legislature is in session”-Mark Twain.
And that’s the way Steve sees it… Don’t forget to have a little fun every day.
You’ve worked hard your whole life, so now it’s time to relax in style. Like many retirees, you’ve had a vacation property in the back of your mind for a while, but you aren’t entirely sure how to go about making that dream a reality. It’s not easy, as the average cost of owning a second home is $700 a month — and that doesn’t even include the mortgage. But if you’re ready to commit to owning a second home in Seattle, here’s some advice to make sure you end up with a sound investment, not a money pit.
Settle the Financing
Before getting started, it’s important to know how much house you can actually afford. Now is a great time to take a close look at your financial situation. Afterward, you can get down to business. If you can pay cash up front, that’s great, but if not, consider borrowing against your primary residence, in which case it must be worth more than you owe the bank. There are other ways to finance, but they may mean more risk than you’re willing to take.
And don’t forget those other expenses. There’s routine maintenance, such as heating, air conditioning, and plumbing, and if your home needs professional work done, you’ll also need to tack on the cost of hiring a contractor. There are some jobs you can do on your own, but keep in mind that if you start a project you’re ultimately not qualified to do and need a pro to complete it, you’ll end up spending more than if you’d hired a specialist in the first place. You could offset these costs by renting out the home when you’re not there, but keep in mind the costs of utilities and property management services if you take this route.
Find the Right Area
Once your budget is set, it’s time to take a look at your schedule. You want to make sure you’re at your vacation home often enough to justify the money you’re spending. You may get the most out of the house if it’s within striking distance of your primary residence or accessible to other family members as a place to gather for reunions.
Seattle, of course, is a wonderful spot for a second home, and there a number of different neighborhoods to choose from, depending on what you want. Ballard, for example, is considered one of the city’s “hippest neighborhoods,” according to Turnkey. Although the area began its life as a fishing village, it’s now the home of coffee shops, cafes, and a number of renowned restaurants. Queen Anne, meanwhile, is more historic and picturesque, and it offers a number of Victorian homes that might catch the eye of those looking for a property with character. Regardless of what you’re after, Seattle has a little something for everyone.
Rent It First
You’ve found the right area… maybe. You may want to consider renting for a while before buying so you can be sure. For starters, how was the travel? If it seemed a bit too long (and you’re not a fan of cramped airline seats), then that’s a sign you’re too far from home. And the weather? It may have been unusually warm when you came here on vacation for the first time, but now you get to see what it’s really like. Does it have all the amenities you want to be close to, like shopping, bars, and restaurants?
Cut Insurance Costs
Insurance is one of those hidden costs for second homes, but there are ways to keep your premiums low. First, shop around for the best coverage option, and don’t just go with your mortgage provider. There are also adjustments you can make to the property to reduce payments. These include actions like installing burglar alarms (which start as low as $29 per month, but can save you hundreds in insurance premiums over the year), as well as fireproofing and removing tall trees near your home.
Plan for Maintenance
This may not be necessary if you’ll be making frequent visits throughout the year. If not, then you’ll need to look into other options for upkeep, according to HouseLogic.com. You could hire a property manager, who will normally find suitable staff to open and close your property while handling guests and payments if you’re renting it out during your absence. Hiring a caretaker, on the other hand, will save you money. You’ll need to check references, though, as they’ll be going in and out of your place to check on the utilities and inspect for damage.
Hopefully, at the end of all this pondering and planning, you’ll have found a place in Seattle to call your home away from home. Just make sure to plan and prepare wisely so you can really make the most of every moment you spend at your vacation abode.
Image via Pixabay
Each year Windermere’s Chief Economist, Matthew Gardner, forecasts into the next. Here’s what he expects for Mortgage Rates in 2020.
First off, I hope you all had a wonderful Thanksgiving with friends and family!
Now let’s leap into what has happened on the Hill since my last report:
Sales during the Holidays and into January usually slow, but this year, at least in November, sales in King County are up 7% over this time last year according to the NWMLS. This is surprising news and confirms what my colleagues and I have been observing in our local market. In Ballard, Wallingford, Fremont, Crown Hill and most of the other near north end neighborhoods with average prices under $1Million, the competition among buyers is fierce. A very nice Craftsman bungalow in Wallingford that I looked at for a buyer last month had 8 offers on it listed at $985,000! Another home in Magnolia priced at $1.05M has had 8 pre-inspections before they are looking at offers. Much of what is causing this is traditional low inventory this time of year and amazingly low interest rates both which I expect to continue into the spring market. In looking at the data, it seems that homes listed over $1.2M are not experiencing this sales rapidity but are selling with an average on market of around 54 days. Currently, we have 16 active listings for sale on the Hill and the average sold price has been consistently right around $1.2M for a 2500 square foot home. Average price/square foot for the last 30 days has risen slightly to $525.00 November 2019 QA Pendings and solds for more details. Also, below is the 2020 real estate projection from Windermere’s economist Matthew Gardener. I encourage you to view his 4 minute video.
Finally, the home on the Hill that sold for most over list price was 3017 10thAvenue West, listed for $875,000 and sold for $913,700. Certainly not the overage we were used to seeing in the recent fast markets, but it was a major fixer in a Queen Anne Park and had been in very rough shape for years, so I am sure the neighbors are thrilled!
And that’s the way Steve sees it…
Have a magical Holiday season!
By Suzie Wilson
Looking to list your home this fall or winter? If you’re feeling anxious about doing so, you should know that these can be the perfect seasons to sell your home and can even help it sell for more profit. You just need a few fall and winter home selling tips to maximize your listing.
Winter Plants and Holiday Decor Can Boost Curb Appeal
Just because it’s fall or winter doesn’t mean your yard has to look drab. In fact, you can easily add a winter garden to your property, in order to spruce things up and attract potential buyers. Some beautiful shrubs that can withstand the colder seasons include witch hazel, Japanese pieris, and holly. If you have flower beds, you can always add these cold weather plants, or you can use containers to add pops of color to your front porch. While adding some winter plants will draw potential buyers to your listing, you may also want to add some touches to help visitors feel at home. Fall and winter offer plenty of opportunities to deck out your outdoor spaces with holiday decor. Just keep decorations simple and sleek, so your home will appeal to more potential buyers.
Special Touches Can Help Make Staging Homes Easier
Staging your home’s interior can be fairly simple in the fall and winter months as well. You’ll want to start by clearing out any excess clutter to make the inside of your home look as spacious as possible. Next, take a look at any leftover pieces of furniture or decor. Update any older items with modern touches that will help shoppers feel cozy. Those modern changes can be as simple as adding a throw rug to set spaces apart or repainting your walls in more neutral colors to create the illusion of space. Lighting is key during the darker months as well, so use a mixture of lamps and fixtures to create the perfect ambiance in each room.
Fall and Winter Open Houses Can Be Fairly Simple to Pull Off
Just like the inside of your home, preparing for open houses typically involves the same basic steps throughout the year. Since open houses are meant to attract a lot of people to your property, though, you will need to work with your realtor to create a marketing plan and to time your open house just right for prospective buyers. In fall and winter, you may need to add some extra steps to keep those visitors comfortable and safe as they explore their potential new home. If your area gets a lot of snow, be sure to shovel driveways and any other walkways. It’s also a good idea to keep all areas well-lit and warm to give your listing that cozy feeling buyers crave in a property. Good smells can add to that coziness and attract offers on your property.
Homes Listed in Fall and Winter Can Give Sellers Some Advantages
Most people would tell you that spring and summer are the best times to list a home, but that all depends on what your goals are as a seller. Selling in the winter can actually have some perks for savvy sellers, so as long as you are willing to put in the extra work to help your listing stand out, it may be best to list it during the off-season. For one, when you list your home after the peak selling season, you will be competing with far fewer properties. Fewer properties can help attract higher offers on your home, but you are also more likely to get those offers from serious buyers. So when you look at all of these benefits, this may be the best season to list your home!
Selling a home in the fall or winter shouldn’t stress you out. This can be the perfect time to sell a home, and you may even net some higher offers. There are so many cozy and warm touches you can add to help attract those fall and winter home buyers. So if you need to list your home in the off-season, don’t despair and use the tips above to help your listing sell faster!
Photo Credit: Unsplash
Are you being besieged by offers to purchase your home? I must get 4-6 postcards and letters a month to do just that. It makes me wonder if a national seminar rolled through the NW teaching people how-to low-ball owners on the value of their homes and then try to re-sell them for a profit. Speaking of that, I was on the Zillow site yesterday looking at a Zestimate of a home and noticed that Zillow is now buying homes and re-selling them! Though not in Washington yet, they are in 26 US markets. As a test, I called them on a rental home I have in Palm Springs to get an offer to purchase. That is in progress and I will let you know how that turns out in my next newsletter. I suspect their model is to purchase homes below market, add a fee due from the seller and then attempt to re-sell them in a very short time frame. One of the appeals, of course, is that there are no realtor commissions and no bank loans. The huge downside in all of this for the owner is that the home is not presented to the market at large and therefore, the owner runs the risk of selling it for less, or far less, than its real market value. I think we all agree that “Zestimates” are not exactly reliable estimates of your home’s value so why should rely on Zillow to give you a reasonable offer? I have always maintained that an experienced real estate agent is well worth the commissions paid in getting you the highest, feasible price on your home through the extensive exposure the agent can garner. Time after time, I have seen that even after commissions are paid, the seller still has a higher net than selling without testing the market place.
As far as the Queen Anne market goes now, 80% of the homes listed since my last report have gone into escrow or have closed. That is very respectable number. 36% of those sold homes had to reduce their original list price to get into escrow, so list prices generally have been declining. BTW, the home that sold for most over list price was 506 Galer, listed for $989,000 and sold for $1,030,000, not much of a difference and reflects the fact that on the Hill, prices are not being run up over list like they once were. Of course, one reason for that is that most of the homes on the Hill are listed for over $1M. Homes priced for less in other neighborhoods are still seeing more activity. Please see the attachment for the data for the last 30 days on the Hill.
Finally, for the last 20 years, I have spent the winter months from November until March in Palm Springs where I have a home. I have had a California real estate license for over 12 years, but have not affiliated with a brokerage until now. I am happy to tell you that I will be selling homes there this winter and if you, or someone you know, would like to purchase a home there and get out of the grey, wet winter weather, please let me know. Prices are much lower than Seattle BTW. Same phone number and email address as always. In March, I will return to Seattle to once again be listing and selling homes on the Hill. I am always available during the winter months to assist you and have a realtor partner in Seattle, so don’t hesitate to call. And that’s the way Steve sees it.
In a normal housing market, whether you’re buying or selling a home, you need an experienced guide to help you navigate the process. You need someone you can turn to who will tell you how to price your home correctly right from the start. You need someone who can help you determine what to offer on your dream home without paying too much or offending the seller with a low-ball offer.
We are, however, in anything but a “normal market” right now. The media is full of stories about an impending recession, a trade war with China, and constant political upheaval. Each of these potential situations could dramatically impact the real estate market. To successfully navigate the landscape today, you need more than an experienced guide. You need a ‘Real Estate Sherpa.’
A Sherpa is a “member of a Himalayan people living on the borders of Nepal and Tibet, renowned for their skill in mountaineering.” Sherpas are skilled in leading their parties through the extreme altitudes of the peaks and passes in the region – some of the most treacherous trails in the world. They take pride in their hardiness, expertise, and experience at very high altitudes.
They are much more than just guides.
This is much more than a normal real estate market.
The average guide just won’t do. You need a ‘Sherpa.’ You need an expert who understands what is happening in the market and why it is happening. You need someone who can simply and effectively explain it to you and your family. You need an expert who will guarantee you make the right decision, even in these challenging times.
Dave Ramsey, the financial guru, advises:
“When getting help with money, whether it’s insurance, real estate or investments, you should always look for someone with the heart of a teacher, not the heart of a salesman.”
Hiring an agent who has a finger on the pulse of the market will make your buying or selling experience an educated one.
When people talk about homeownership and the American Dream, much of the conversation revolves around the financial benefits of owning a home. However, two recent studies show that the non-financial benefits might be even more valuable.
In a recent survey, Bank of America asked homeowners: “Does owning a home make you happier than renting?” 93% of the respondents answered yes, while only 7% said no. The survey also revealed:
- More than 80% said they wouldn’t go back to renting
- 88% agreed that buying a home is the “best decision they have ever made”
- 79% believed owning a home has changed them for the better
Those surveyed talked about the “emotional equity” that is built through homeownership. The study says more than half of current homeowners define a home as a place to make memories, compared to 42% who view a home as a financial investment. Besides building wealth, the survey also showed that homeownership enhances quality of life:
- 67% of current homeowners believed their relationships with family and loved ones have changed for the better since they bought a home
- 78% are satisfied with the quality of their social life
- 82% of homeowners said they were satisfied with the amount of time they spend on their hobbies and passions since purchasing a home
- 75% of homeowners pursued new hobbies after buying a home
Homeowners seem to be very happy.
Renters Tell a Different Story…
According to the latest Zillow Housing Aspirations Report, 45% of renters regret renting rather than buying — more than five times the share of homeowners (8%) who regret buying instead of renting. Here are the four major reasons people regret renting, according to the report:
- 52% regret not being able to build equity
- 52% regret not being able to customize or improve their rentals
- 50% regret that the rent is so high
- 49% regret that they lack private outdoor space
These two studies prove that renting is just not the same as owning.
There are both financial and non-financial benefits to homeownership. As good as the “financial equity” is, it doesn’t compare to the “emotional equity” gained through owning your own home.