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What’s Your Home Worth?

The Seattle Times recently published a story on home prices in the Puget Sound Region, reporting that prices have increased from two to 27 percent from a year ago, depending on where you live. Check out this interactive map to see increases for your area. Remember, these numbers are just averages. I can provide you with a more detailed analysis that will narrow it down to your neighborhood and will better reflect the unique features of your home.

New Website, Same Great Content

I haven’t written a post in a few weeks, as I’ve been in transition to a new website and blog host. The new site is up; if you’re reading this, you’re on www.jamieflaxman.com. I made the switch to a WordPress site as I feel it’s cleaner, easier to read and navigate, integrates my blog better, and it has a simpler search tool.

Some things you can now do on my website:

If there’s something you’d like to see me include on the site, let me know. Future plans  include a page of downloadable resources, such as referrals to mortgage brokers and sample purchase and sale contracts. I’d also love to have your feedback on the new site.

Sellers, Where Are You?

As spring arrives, the housing market becomes active as well. Sellers bring their homes on the market and buyers are looking to buy. While we are seeing an increase in the number of homes available, there is still a serious SHORTAGE of homes available. Case in point, a $535,000 listing in Ballard just had more than 40 offers and went into contract significantly above the list price!

Now, this is not the norm. Homes are generally selling within about 5% of list price, and most are receiving multiple offers (but nowhere near 40).
So why are you waiting to bring your home on? Do you think you’ll be able to get more money if you wait? That’s not necessarily the case. As interest rates rise, buying power decreases; that is, buyers will not be able to afford as much. As more inventory comes on the market, buyers will have more choices and you might not get as many offers or as high a price.
There is no better time to sell a home than NOW. Call or email me to discuss further.

There Still Are Affordable Homes Out There

People say it’s expensive to buy a home in Seattle. For many that is the case. But there still are affordable homes out there. Case in point, this Saturday (3/22) I’ll be holding open a rambler in Wedgwood that’s listed for $349,000.

The details – 3 bedrooms, 1 bath, 1,030 sq. ft, and a 6,658 lot. With that much land, you have a fabulous place for kids playing outside or to enlarge the home at a later time. And don’t let me forget, it’s got a 2-car garage with a lot of storage space. Currently the schools for this address are Wedgwood Elementary, Eckstein Middle, and Nathan Hale high, all high demand schools (but do recognize that school boundaries may change year to year).
Now you say, $349,000, is that really affordable. Let’s look at some numbers:
Down Payment (20%) = $69,800
4.5% 30 year loan = monthly payment of $1419 (you will need to add property taxes and homeowners insurance to that number for a monthly payment most likely less than $1,800)
Don’t have 20% down, there are other options. You’ll need to add mortgage insurance in as well. And if you have a combined household income of less than $97,000 with a credit score of at least 620, there are loan options that include down payment assistance of up to 4% of the loan (about $14,000) or there’s even a program with the City of Seattle that will provide down payment assistance up to $45,000.
On this home, offers will be looked at early next week (and I do expect that there will be multiple offers), so contact me ASAP if you’d like a private showing or more information on mortgages. Or please stop by on Saturday and let me know you learned about the open house from my blog.

Market Updates

Did the Seahawks going to the Super Bowl affect the real estate market? Many think it did. The January and February markets were slower than we’ve seen in awhile, but these months are traditionally the slowest months of the year. Nationally, you will see a significant slowdown in many markets, and there’s a very clear reason – the weather. Here in Seattle we can’t blame Mother Nature, but I believe we can blame our fabulous and incredible Seattle Seahawks. Seattle was one big celebration in late January and early February. Ironically, for me, January and February were busy months, where I helped several buyers become first time homeowners.

And while the market may have slowed down, appreciation did not. CoreLogic reports “Despite unusually cold weather, home prices in January raced upwards at a clip not seen since the height of the housing boom, CoreLogic reported. Home prices nationwide, including distressed sales, jumped 12 percent year over year in January, and were up 0.9 percent on a monthly basis, according to the CoreLogic Home Price Index (HPI).’Polar vortices and a string of snowstorms did not manage to weaken house price appreciation in January,’ said Mark Fleming, chief economist for CoreLogic, in a statement. ‘The last time January month-over-month and year-over-year price appreciation was this strong was at the height of the housing bubble in 2006.’ The rate home of price appreciation isn’t likely to cool in February, according to firm. The CoreLogic Pending HPI projects home prices to rise 0.7 percent month over month and 12.5 year over year.”

Take a look at the following chart on Seattle single family home activity. As you can see the market did slow down in January and February, but more homes closed (the dark green) in both of those months than in 2013. And as you can see from the 2nd chart, prices have remained steady.

College and Home Ownership

I, like many other parents of teenagers, am beginning to think about my son’s college education. We are beginning the process of looking at colleges, which of course also involves considering housing.

Whether your young adult will be an undergraduate or graduate student, at a public university such as the University of Washington or University of Oregon, or at a private institution such as Seattle University or Whitman College, you will need to make decisions about housing. At many colleges, there is insufficient housing for all students (for example, we toured the University of Oregon this past weekend – although they have approximately 24,000 students, they only offer about 5,000 spots for housing, which mainly goes to freshman).

Another option that you may not have considered is buying a home, condo, or townhouse for your young adult and roommates. In fact, the first property I sold when I became a real estate broker was a townhouse in the University District for a UW student and 2 of her friends. The friends paid rent, and combined with the parents not having to pay for a dorm for that student, the parents brought in enough income to cover the costs of owning the townhouse.

I’d be happy to talk with you about buying a property for your college student, including helping you understand the costs and benefits. Locally, there are many options around the UW, Seattle U., SPU, and the community colleges. Nationally, I can refer you to a Coldwell Banker broker who can help you find the right place. Just give me a call at 206-790-0081 or an email at jamieflaxman@cbbain.com.

The Appraisal

I am currently working with 2 sets of buyers who are in contract to purchase their homes. Both the homes being purchased are flips – that is, the current seller purchased the home with the intent of upgrading it and then reselling it.

If the buyer is obtaining a mortgage to purchase a home, the lender will require an appraisal of the home. The goal is to make sure the buyer is not paying too much for the house – that the buyer will not immediately go into a negative equity situation. When an appraiser does her appraisal, she will look at the home being purchased and the upgrades that home has. She will also look at nearby comparable sales, and then she will adjust based on the features of each home and come up with an appraised value. Additionally, the appraiser will look at the land value of the property and calculate how much it would cost to build a new home, and come up with a cost value appraisal.

When a flip is being purchased, there’s another challenge involved. A home may have been bought only a few months ago for a significantly lower price, with work then done in that short time period. No home “appreciates” by $100,000 or more in 3 months, yet the current sales price may be much higher than the seller bought it for. In an appraisal for a flip, the appraiser needs to be able to see what work was done – it’s critical that the seller’s real estate broker talk with the appraiser and explain what was done and show any receipts defending the work.

Home one of the 2 that are in contract just appraised slightly above the contract price, that’s great news. The appraisal hasn’t been done on the 2nd home, but I’m confident it will appraise as well. I know that the seller’s broker has all the documentation and will be able to show the appraiser the tremendous amount of work done.

Even if a sale isn’t a flip, if there’s a mortgage involved, an appraisal will be needed. If you’re a buyer, ask your real estate broker to talk with the seller’s broker about how he will approach the appraisal. You want to make sure the seller’s broker is pro-active and prepared to advocate if necessary for the sales price. (The buyer’s broker can advocate with the appraiser as well, showing the comps she found to support the price to the buyer.)

Any questions about the appraisal process, talk with your broker or give me a shout.

Congratulations Seattle Seahawks!

Congratulations to the Seattle Seahawks for playing a fabulous game on Sunday and winning the Super Bowl. You are truly a class act and a great group of people. Not only do you show the world what great players you are, you show off what a wonderful city Seattle is – from the fans (700,000+ at the parade today, WOW!) to the support of businesses (such as Alaska Airlines and Starbucks Coffee), everyone loves you.

Thank you Seahawks. Looking forward to next season.