The Increasing Housing Prices

Here is more evidence the housing sector , along with other parts of the ecomony, is improving. To see the bottom of the Seattle market look in your rear view mirror. To check various areas of the Seatle market go to the "Local RE Stats" tab on this website.

7 Metros Where List Prices Soared Last Month | Realtor Magazine

Nationwide median list prices rose more than 5 percent in March compared to February, according to Realtor.com housing data of 146 markets. The median list price nationally is now $189,900.

In fact, nearly all of the 146 metro areas saw median list prices rise or hold steady month-over-month except for five metros (Columbia, Mo.; Melbourne-Titusville-Palm Bay, Fla.; Minneapolis-St. Paul, Minn.; Fort Collins-Loveland, Colo.; and Reading, Pa.).

The areas seeing some of the largest month-over-month increases in median list prices are:

1. San Francisco

Month-over-month increase: 6.10%

Median list price: $649,000

2. Washington, D.C.-Md.-Va.-W.Va.

Month-over-month increase: 5.92%

Median list price: $270,000

3. San Jose, Calif.

Month-over-month increase: 5.57%

Median list price: $495,000

4. Oakland, Calif.

Month-over-month increase: 5.04%

Median list price: $336,120

5. Seattle-Bellevue-Everett, Wash.

Month-over-month increase: 4.97%

Median list price: $314,900

6. Toledo, Ohio

Month-over-month increase: 4.90%

Median list price: $104,900

7. New Haven-Bridgeport-Stamford-Danbury-Waterbury, Conn.

Month-over-month increase: 4.29%

Median list price: $365,000

The metro areas that have seen the largest jumps in median list prices over the year include Phoenix-Mesa, Ariz. (a 23.45% increase in list prices compared to March this year to March 2011); Miami (a 22.27% increase), and Boise City, Idaho (a 19.73 percent increase), the Realtor.com data shows.

via 7 Metros Where List Prices Soared Last Month | Realtor Magazine.

Why Do You Think This Home Sold For So Much?

There is a home in the Seaview area just up the hill from the beach via Jacobsen Road SW. It sits one home in from the 4 way stop at the corner of 49^th Ave SW and SW Hudson Streets. This modular home was built in 1987. The house needed lots of remodeling and updating when it sold for $265,000 back on August 26, 2011. The buyers bought it to flip it. And flip it they did! The oversized double garage was redone and part of it was converted to living space still allowing room for 2 cars. They also built an enclosed walkway from the house to the room in the garage. The county records show 1,430 sq. ft. and the listing shows 1,910 which includes the room in the garage.

I saw the listing in the mls for $549,950. I thought to myself why it was listed so high and that all things considered, the market values, the location at a 4 way stop on an arterial, the size and style of the home this will be on the market a long time. What a surprise to see it had a sale pending within a couple days. Surely the appraisal will be lower. That is something we will never know because the home sold for $575,000 cash! That is $300/sq. ft. while the other comparable homes closed for $200/sq. ft. A bigger and new craftsman home a block away sold for $215/sq. ft.  I phoned the listing agent and had to ask about it. He said there were 4 offers.

After scratching my head I thought of why it went for so much more than other homes. I concluded the main reason was because it had a lot of sq. ft. and all on one level.  Secondarily it appeared to be a quality remodel in a good neighborhood.  Why do you think it sold for so much?

Does This Surprise You?

Many people stung by the real estate bubble bursting haven’t yet realized the market has greatly improved. Listening to the national news or even the county real estate updates is irrelevant here in the city.  The chart below graphically shows how the inventory (supply) has shrunk. This chart depicts only single family homes in West Seattle.  While the pending sales (demand) has steadily risen over the past couple years. The value of any product is determined by supply and the demand for that supply.

There are lots of buyers out now picking up some real bargains. Other buyers are waiting for the ‘bottom’ of the market and the only way to know when the bottom occurs is when it has already passed. Then you missed it. Waiting any longer to own your own home will be counterproductive because the prices haven’t taken off yet and the interest rates are in the low 4% range.

Sellers what are you waiting for?  There is a definite need good homes on the market now.  It is not unusual to see the pending sales with multiple offers and market times within a week. If you are ready to move now is the time. The market can change on a dime as we have seen. Take advantage of the timing of the market to make your move to a bigger home, to downsize, to an independent/ assisted living home, or just to “cash in your chips”.  Feel free to call, text, or email me to chat about your own personal situation.

I, and others, would really love to hear your story about an upcoming move or a recent home purchase or sale and whether it was a good experience or a negative one for you.

CNN Money: Buying a Home Won't Get Much Cheaper

"Buying a home may never get any cheaper than this. Several housing experts are predicting that this year will be the last chance for bargain hunters to cash in on the best deals of the weak housing market.", CNN Money.

Locally here in Seattle there is a shortage of inventory and multiple offers are getting to me more common. The buyers that have brokers experienced in multiple offer situations representing them they get the good deals.Those waiting for "the bottom" are probably looking ati in their rear view mirror.


Read the entire article at  CNN Money:Buying a home won't get much cheaper

Home Path Program Saves Buyers Thousands of Dollars!

Fannie Mae owned foreclosed homes have some very attractive financing. They want to sell the properties because they would rather have the cash instead of the properties and therefore have them priced very competitively.  The Home Path Program has been out for some time but not many home buyers and/or brokers know the details. Here are the basic guidelines and benefits of the Home Path Program.

ü  All borrowers must have a credit score and either be a US citizen or a Green Card holder

ü  Buyers may not have more than 4 financed properties

ü  Manufactured homes are eligible. Condos and PUD’ are acceptable subject to underwriting review

ü  Flexibility to use conventional agency and high loan limits

ü  Co-borrowers/co-signers allowed. Please note if they will not be occupying the property then the LTV drops to 90%

ü  Home Path financing will allow the buyer to purchase a Fannie Mae owned property with NO PMI up to 97% financing

ü  15 and 30 year fixed rates are available and standard Fannie Mae guidelines apply

ü  NO APPRAISAL NECESSARY

ü  Contributions are allowed as follows: 

                6% of the sale price for any LTV greater than 75%

                                9% of the sales price for any LTV less than 75%

                                6% on all second homes

                                2% on all investment properties

ü  Contributions can be applied to closing costs including prepaids

ü  Home Path offers mortgage job loss protection. This free program will pay a borrowers mortgage payment up to two years in the event of layoffs, involuntary unemployment or job loss

ü  If buyers closing costs are under the 3.5% figure, then the buyer will not have access to the remaining balance

ü  For loan to value offer 80% the credit score must be 660 or higher. For LTVs lower than 80% the minimum credit score must be 620

ü  NO COSTLY MORTGAGE INSURANCE 

If you would like to take advantage of the Home Path Program please contact me to see if you qualify.

Broker Comments Online or Not? Your Choice?

I had a discussion with a buyer regarding broker comments on the internet. These comments are made by any broker who previews the house.  The buyer thought it was good to find out what other agents thought of the property. 

On the surface the broker comments may sound like helpful and useful information.  However, the broker who wrote the comments may have a competing property listed and wants to downgrade the competition. The comments are subjective.  I recently had a listing that a broker wrote comments the kitchen needed updating.  While having an open house a buyer marveled at the kitchen and said, “This kitchen doesn’t need updating”.  When asked about his comment he said he saw it on a website.  

A broker commenting on the structural condition of the home is practicing outside of their area of expertise.  A buyer might love the home and should have a qualified inspector assess any structural issues. Sometimes they turn out to be minor and sometimes not.

Here’s one example.  I previewed a home that a broker posted on the comment that “there are significant water issues that would be very costly to remedy”. The agent went as far as saying it is a “money pit”.  Upon further investigation for my buyers, I found out the problem was a pipe in the upstairs had burst when it froze last winter. The problem was corrected by a professional plumber but the unsightly patch up work remained. Looking at the comment as a buyer one would think the house had a huge issue and would dismiss even looking at this home. The fact is the agent has tainted/damaged that property with unqualified remarks. 

If you were the seller how would you feel reading comments about your home that were unqualified and factually untrue?  As a buyer, how would you feel about missing out on a home that may be perfect for you because of unqualified remarks?

Further Proof the Real Estate Market Is Coming Back

Locally here in Seattle the real estate market is brisk. I've seen more multiple offers on good homes than I have for a long time. A broker in my office had an open house on a new listing in West Seattle. It was a good home and reasonably priced. There were 7 offers on it and sold for about 15% more that asking. While not typical it does show the lack of inventory.

 If you have been waiting to sell now is the time to take advantage of the market which can turn on a dime. I remember the market values increased by 3% per month for six months from September 1989 to April 1990. Then the market was flooded with homes and the subsequent 10% price drop.  It took 2-3 years for the values to come back and surpass the previous high market. This market will repeat history. It has been 5 years since the real estate market crashed and I predict in another 2 to 3 years the values will be back to what they were at the top of the market.  Watch for more details on my reasons behind my predictions in a subsequent post.

Last week, the National Association of Realtors (NAR) released their Pending Sales Report which showed that contracted sales were 12.8% higher than the same month last year and higher than any time since sales were impacted by the Homebuyers’ Credit back in April of 2010. The index stood at 101.4 which represents a level that is “historically healthy” (see methodology below).

via Further Proof the Real Estate Market Is Coming Back