Market NewsMatthew Gardner Report December 21, 2019

Matthew Gardner’s 2020 Mortgage Rate Forecast

Each year Windermere’s Chief Economist, Matthew Gardner, forecasts into the next. Here’s what he expects for Mortgage Rates in 2020.

 

Market News December 12, 2019

Your Queen Anne Market Report for December 2019

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!

HomeownerSelling November 20, 2019

4 Reasons to Get Excited About Selling Your House in Fall or Winter

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

Market News November 13, 2019

Queen Anne Market Report for November 2019

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.

View Full Report Here.

Market NewsMatthew Gardner Report October 25, 2019

Q3 Market Report for Seattle

Guest Blog October 3, 2019

A Beautiful Pitch

It was a beautiful week really. I found myself in a beautiful office in a beautiful city on a beautiful day. I was sitting in front of a beautiful new client. It was a beautiful thing. My purpose that beautiful day was to make my “pitch”. We started with the glad handing. Then we moved to the client-based needs assessment. I espoused my resume, assessed potential outside threats, and finally monetized my message to close. It was all going along swimmingly, but I had one more little trick to pull out of my hat.

The Special
As we were wrapping it up, I started to show her something that I had just finished working on. It’s brand new, still a little buggy, an no one else had seen it yet. But I thought what the hell. As I revealed my new invention, her surprise became her interest and that became her approval. It really was what sealed the deal. In my pregame prep I saw myself walking out of that pitch having made the impression that I was the new messiah of my topic (or at a minimum, just stronger than my cologne). But in the end what really worked was much simpler and egoless than all of that: I have something that she can only get from me. That’s why it’s special. And she has something I need from her: access to a whole new market and the marketing muscle that goes with it.

The Schmalue Proposition
Most pitchers pitch the same way. They talk about “value”. Adding value, creating value, and of course, the value they create. There’s really nothing wrong with Value Schmalue approach. In fact, it really does play in Peoria. But there is one problem with the value-based focus: if you confront a pitcher and ask them to actually explain what all of this “value” stuff is they’re talking about they rarely (never) can. And that can be a problem for a pitcher. Especially with a smart client.

There’s a higher calling here; one that’s greater than the cliché of “value”. It’s the notion of “mutual satisfaction”. The idea that both you and the customer are better off together than not. The agreement that you both bring something of benefit to each other. It’s really no different than any other kind of relationship: when two people can come together in a transaction and find mutual satisfaction, magic occurs. You know what I’m talking about, you may just not see it quite this way. Mutual satisfaction is a point of view, an aspiration, and even an intention that each of us should embrace in all of our human interactions, but especially when pitching.

The Prep
Most pitchers prep the same way: write it down, practice in the mirror, talk to the dog. There’s nothing wrong with these practice methods, but what you’re pitching matters too. You have to have an idea of something you can provide that someone else can’t and how that fits your customer’s needs. This is strategy stuff and it’s a big deal. You may be the best pitcher ever – the kind that can sell ice to Eskimos. But you’ll pitch more effectively if you’re pitching a way to stay warm in the arctic without wearing a piece of stinky animal fur and drinking whale oil martinis. It’s kind of crazy how few salespeople really take the time to learn these things, and yet this is the world customers live in every day. Knowing what options exist for customer and knowing where you fit in the mix of choices should be the center of your pitch.

The Simple
I know this seems like such a simple thing. Even trite. But simple is beautiful and simple can make you rich. Perhaps this is a good time for you to stop and think. Think about what you do. Think about what you sell. Think about who you really are. Think about what makes you unique, special and different. Think about what makes people want to buy from you. Is it your looks perhaps? You charming personality? Or maybe the way you bake that one kind of cookie that no one else can. Marketers call this a “unique Selling Proposition (USP). Whatever it is, you should know this about yourself. Because you just never know when you’ll be in a beautiful town in front of a beautiful client staring at a beautiful opportunity. All you know for sure is that you don’t want to screw it up.

Author | Joe Still

BuyingMarket News September 12, 2019

Your Queen Anne Market Report for September

You probably have felt it in the air over the last 90 days-home prices are coming down. Ah the good old days when a home would come onto the market and be sold in less than a week with multiple offers. Not happening now. Our Windermere economist is indicating that, on average, home prices are down 7-10% over this time last year.

No need to panic, because mortgage rates are low and will probably fall a little more over the next month, so that keeps buyers in the market. There is no one reason for this transition in prices. Perhaps prices just got too high for buyers to qualify or feel comfortable with their monthly mortgage payment? Perhaps the bulk of buyers have already purchased and are not being replaced at the same crazy rate that they were over the preceding seven years? Perhaps there are so many new rental apartments now with managers offering major incentives to prospective tenants that that has lessened demand, not to mention that as rents become much less than mortgage payments, folks may decide to stay in their apartments. Perhaps they are locked into a one year lease with ten more months to go? And we cannot forget the unusually higher volume of homes that came on the market in late April and  continued through June which contributed to the price decline.

Despite the above, I am still very bullish on the future of Queen Anne popularity and pricing. If we follow the usual annual cycle, I expect this market to continue at basically this value level until next Spring when we will be off to the races again from March-June(or longer)!

Don’t forget: WS Excise taxes are going up starting January 2020 and really impact homes closing for $1.5M or more. Please see the attachment for details.

There were very few homes that sold over their list prices in August, but there was one standout: 1407 Bigelow was listed at $1.495M and sold for $1.7M.

And that’s the way Steve sees it…Click here to view report, and Click here to view the current Excise Tax rates.

Make it another great month!

 

 

Buying August 21, 2019

An Overview of Housing Decisions Seniors Face When Downsizing

Guest Blog By: Jim Vogel

The reasons for choosing to leave your current home may vary, but whatever they are, it means you now have to decide what you should do with the house you’re living in. Let’s discuss some of the things you should look at before making the move.

Where Are You Going?

You know you need to downsize, but you also have to establish where you’ll be living once you move. According to HelpGuide, seniors have the options of independent living facilities, assisted living facilities, nursing homes or aging in place. Independent living facilities are meant for seniors who are still capable of managing their day-to-day activities on their own, while assisted living facilities are able to provide help with certain things like laundry and cooking. Nursing homes are for seniors who have a certain amount of independence but need the 24-hour supervision of medical personnel. Seniors who would like to continue living in their own house choose the age in place option. Since you’ve already decided that your current home isn’t right for you, then you’ll need to find a smaller home that suits your age in place needs. You will also need to determine whether you’ll be buying or renting the new home. The decision to buy or rent must be made based on your affordability and your budget.

What Should You Do With Your Home?

You can either sell your home, turn it into a rental property or transfer ownership of it to a relative. All of these options have different processes and documentation involved with them so it’s important that you know what you’re getting into with each one.

This article from Senior Advisor gets into the pros and cons of selling or renting your home, especially if your aim is to use the funds to help with the cost of living in a senior-focused facility. While a rental property will generate much-needed income, you will also have a lot of responsibilities as a landlord. Selling the property requires short-term work, but the funds received are set and may run out depending on your recurring expenses. Transferring the ownership of your property to a relative comes with its own regulations, and it’s important to be aware of these to ensure the transfer is handled properly. Unlike the first two options, transferral will mean you’ll no longer be able to use the property for income generation.

Who Do You Need to Consult?

Whether you decide to rent, sell or transfer ownership, you’ll need to consult a lawyer to draw up the relevant paperwork. Real estate agents are essential for selling or renting your home as well as helping you find a new one. This article by the U.S. News offers suggestions on finding the best real estate agents for you as well as what services you can expect them to offer.

A real estate agent will also be able to help you find homes that will suit your age-in-place needs and fit your budget. Before engaging an agent, make sure the cost of the house you’d like is in line with what you can afford and that you have the necessary funds for a down payment. This is most important if you will be using the proceeds from selling your home to fund your new one. If you’ve decided to rent your home and will be unable to carry out activities such as property maintenance and emergency repairs, then it would be in your best interest to get in touch with a property manager. Bear in mind, however, that property managers charge a fee in order to manage rental properties for landlords.

Leaving your home can be an emotional experience, but it’s important to make decisions based on facts and data. It’s in your best interest to make sure you have all the information and have covered all the bases for whichever option you choose. 

Photo courtesy of Pixabay

BuyingMarket News August 13, 2019

Your Queen Anne Market Report for August 2019

The only positive aspect of the current trade war that I can determine is that it is scaring investors into the bond market and consequently lowering yields and mortgage rates. The other “secure” investment, gold, has risen significantly and now has a market price of around $1500/ounce, up from $1250/ounce prior to about 90 days ago. Lower interest rates are always good for buyers and sellers of course. I expect mortgage rates to be at this level through the rest of the year.

Despite the low rates, home prices in King County have fallen 7% in the last year primarily due to rising inventory which has increased an average of 12%. This has also increased market times. Market times for QA homes have risen from 28 days to 39 days for the past 45 day period. Remember when our market time was about 6 days(or less)? Fortunately, homes on Queen Anne have continued their upward trend, although certainly more slowly than the preceding 6 years. I did a sampling of homes that sold in 2018 from 1/1/18-7/1/18 and we had 135 sales of single-family homes.

For the same period this year, that figure was 169, a 25% increase. Currently we have 38 homes for sale on the Hill as of today and 16 pending sales in the last 45 days which signals a 42% pendings/actives ratio(see attachment). That still indicates a seller’s market. Wages in Washington have risen 5.5% which if rates stay low, will help buyers purchase higher priced homes.

The home that sold for the most over list in the last 45 days was 2435 1st North, listed for $998,000 and selling for $1,050,000. Multiple offers are down in properties over $1.2M and when they occur, do not significantly raise purchase prices like they used to.

And that’s the way Steve sees it…Click here to view report.

Have a great month!

 

 

Homebuyer July 11, 2019

Are You Better Off Paying Your Mortgage Earlier or Investing Your Money?

Photo Credit: Rawpixel via Unsplash

Few topics cause more division among economists than the age-old debate of whether you’re better off paying off your mortgage earlier, or investing that money instead. And there’s a good reason why that debate continues; both sides make compelling arguments.

For many people, their mortgage is the largest expense they will ever incur in their lives. So if given the chance, it only makes logical sense you would want to pay it off as quickly as possible. On the other hand, a mortgage is also the cheapest money you will ever borrow, and it’s generally considered good debt. Any extra money you obtain could be definitely be put to good use elsewhere.

The reality is, however, a little less cut and clear. For some homeowners, paying off their mortgage earlier is the right answer. While for others, it would be far more advantageous to invest their money.

Advantages of paying off your mortgage earlier

  • You’ll pay less interest: Each time you make a mortgage payment, a portion is dedicated towards interest, and another towards principal (we’ll ignore other costs for now). Interest is calculated monthly by taking your remaining balance, the length of your amortization period, and the interest rate agreed upon with your lending institution.

If you have a $300,000 mortgage, at a 4% fixed rate over 30 years, your monthly payment would be around $1,432.25. By the time you finish paying off your mortgage, you would have paid a total of $515,609, of which $215,609 were interest.

If you wanted to lower the total amount you pay on interest, you don’t need to make a large lump sum to make a difference. If you were to increase your monthly mortgage payment to $1,632.25 (a $200 a month increase), you would be saving $50,298 in interest, and you’ll pay off your mortgage 6 years and 3 months earlier.

Though this is an oversimplified example, it shows how even a small increase in monthly payments makes a big difference in the long run.

  • Every additional dollar towards your principal has a guaranteed return on investment: Every additional payment you make towards your mortgage has a direct effect in lowering the amount you pay in interest. In fact, each additional payment is, in fact, an investment. And unlike stocks, bonds, and other investment vehicles, you are guaranteed to have a return on your investment.
  • Enforced discipline: It takes real commitment to invest your money wisely each month instead of spending it elsewhere.

Your monthly mortgage payments are a form of enforced discipline since you know you can’t afford to miss them. It’s far easier to set a higher monthly payment towards your mortgage and stick to it than making regular investments on your own.

Besides, once your home is completely paid off, you can dedicate a larger portion of your income towards investments, your children or grandchildren’s education, or simply cut down on your working hours.

Advantages of investing your money

  • A greater return on your investment: The biggest reason why you should invest your money instead comes down to a simple, green truth: there’s more money to be made in investments.

Suppose that instead of dedicating an additional $200 towards your monthly mortgage payment, you decide to invest it in a conservative index fund which tracks S&P 500’s index. You start your investment today with $200 and add an additional $200 each month for the next 30 years. By the end of the term, if the index fund had a modest yield of 5% per year, you will have earned $91,739 in interest, and the total value of your investment would be $163,939.

If you think that 5% per year is a little too optimistic, all we have to do is see the S&P 500 performance between December 2002 and December 2012, which averaged an annual yield of 7.10%.

  • A greater level of diversification: Real estate has historically been one of the safest vehicles of investment available, but it’s still subject to market forces and changes in government policies. The forces that affect the stock and bonds markets are not always the same that affect real estate, because the former are subject to their issuer’s economic performance, while property values could change due to local events.

By putting your extra money towards investments, you are diversifying your investment portfolio and spreading out your risk. If you are relying exclusively on the value of your home, you are in essence putting all your eggs in one basket.

  • Greater liquidity: Homes are a great investment, but it takes time to sell a home even in the best of circumstances. So if you need emergency funds now, it’s a lot easier to sell stocks and bonds than a home.