Category Archives: home ownership

How Much Is My Home Worth

While we may have seen some lower prices in 2018, the following chart shows that we have had significant appreciation in the housing market in Seattle, King County, and Snohomish County since 2006. In King County prices have appreciated approximately 70%, Seattle 80%, and Snohomish County 51%. If you’d like to know appreciation rates for your community or would like a market analysis of your home, please reach out to me at 206-790-0081 or Jamie@JamieFlaxman.com.

The Danger of Waiting

Affordability is one of the major factors driving our real estate market. We saw an increase in interest rates in 2018 from around 4.15% in January to a high of nearly 5% in November and with the year ending around 4.55%. We expect that interest rates could reach 5.75% in 2019. What does this mean if you are considering buying a home (or selling and buying a new home)?

As interest rates increase, your buying power decreases. Let’s say your lender has qualified you for a home purchase of $700,000 with 20% down. Today your monthly payment would be around $2,837 with a 4.5% interest rate. If rates rise as expected in 2019, the payment later this year at 5.5% would be $3,180, or $343/month more. Your lender may no longer qualify you to purchase a $700,000 home but instead more likely around $625,000 to keep your payment around the $2,837/month. If we see a 5% (being conservative) increase in prices this year, your $700,000 home would sell around $735,000 by year end. By waiting, you are likely to decrease the amount you can pay for a home.

If you’re considering buying a property this year, the time to move is now. Give me a call at (206) 790-0081 or email Jamie@JamieFlaxman.com so we can talk about your plans and needs. (The chart above shows you various principal and interest payments at different interest rates. However, you should talk with a lender to verify the accuracy of these numbers. I have several wonderful lenders who would be happy to speak with you.)

Down Payments – How Much Do You Really Need?

Gone are the days when anyone could buy a home with just a promise and signature. No documentation loans allowed virtually anyone to buy a house with no money down with just a simple credit check. After the mortgage meltdown, this all changed. Lenders tightened guidelines and down payments were back.

But how much do you actually need? Must you always find 20% down? The answer might surprise you; there are many ways to buy a home with less than 20% down payment.

  • 0% Down – There are still two loan programs which allow one to buy a home for no-down payment; the VA loan and the USDA loan. The VA loan requires the borrower to be a qualified service person or veteran and the USDA loan is for certain areas under the Department of Agriculture.
  • 5% Down – Conventional loans with loan limits can allow one to buy a home with as little as 5% down. These loans do have PMI (Private mortgage insurance) which can be eliminated when the loan amount falls below the 20% threshold.
  • 3 ½ % Down – FHA offers first time home buyers a good home loan for only 3.5% downpayment. Again these loans have loan limits and PMI but offer a faster entry into the housing market. Buying a home doesn’t always mean 20% loan. If you’re considering buying a new home, talk to your lender about your options.

If you’re thinking of buying, give me a call at (206) 790-0081 or email Jamie@JamieFlaxman.com. Let’s talk about your needs. I can also refer you to excellent local mortgage lenders.

King County Homeowners

If you own a property in King County, check out this website: http://localscape.property/#kingcountyassessor/.

It’s new from King County and you can find out so much information. Choose My Property, put in your address and then click on the blue button that says “View Proposed Taxes.” This will tell you how much any current tax levy on the ballot will affect you. Right now it’s showing info for August’s primary for Prop 1 – AFIS Property Tax Levy. For the several addresses I checked, the taxes will actually decrease from this one passing.

Let me know what you think of the site.

2017 in Review

The story of the Seattle real estate market in 2017 continued similar to the past few years. Low inventory drove our market, with the number of new listings down from 2016 and prices up significantly. While the median sales price for a single family home citywide increased 13.7% to $705,000, in many neighborhoods that increase was even higher. For the 23 counties in the MLS area overall, inventory shrunk 19% from the end of 2016 to the end of 2017. That’s the smallest selection for any month in the past decade.

December is traditionally a slower month, but that wasn’t the case this year. While the inventory was low, the number of buyers seemed to be high, with multiple offers the norm (I heard a story of 28 offers on a Queen Anne listing as well as multiple offers even during the week between Christmas and New Year’s) and packed open houses (100+ visitors at times). At year end, there were only 256 single family homes and 95 condos for sale in Seattle, a decrease of approximately 30% from 2016.

Until we see an increase in inventory, we can expect the market to be strong. We need property owners to list their homes at higher rates as well as an increase in new construction. See my predictions on the next page for more details.

Please give me a call/text at (206) 790-0081 or email Jamie@JamieFlaxman.com if you have any questions or would like further information on the market or your specific area.

 

Is Summer Over Already?

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This is so true in Seattle. Labor Day is the unofficial end of summer and the official end is only two weeks ago. This summer raced by – both personally and in the real estate market. The market sizzled till mid-August when it slowed down, most likely due the fact that the weather was nice and Seattle-ites hit the road for vacation.

The end of summer triggers change.

Kids go back to (or start) school. I happen to know a lot of families with kids starting college this year. This morning I took a look at what it costs for a student to live in a dorm at the University of Washington. Excluding a meal plan, a dorm room can run you from $6,000 to nearly $12,000 for the academic year. For four years of college, that could run you up to $48,000. And if your student is going to live off-campus, rents are sky-high with many one bedroom apartments running at $1,500+/month and two bedrooms $2,000+/month.

Instead of paying the dorm fee or the rent for an off-campus apartment, have you thought about buying a condo, townhome, or single family home for your student? You’ll be investing in your child’s future as well as your own. The home will likely appreciate over time, meaning you may make money when you go to sell. If your child has roommates who pay some rent, you’ll have income to offset some of your ownership costs.

For more information on purchasing a home for your college-age student, see a post I wrote in 2014 or give me a call/text/email so we can talk.

Stay tuned – my next post will be about the August market and expectations for the fall market.

Have You Taken All Your Tax Benefits?

With tax day quickly approaching (April 15), here are some reminder on tax benefits you might be eligible for as a homeowner. (Please verify with your tax adviser if you are eligible for these benefits.) Thanks to www.houselogic.com for providing this information.

  • One of the most beneficial deductions homeowners can take advantage of is the mortgage interest deduction, which you claim on Schedule A. You must itemize your deductions (instead of taking the standard deduction) and for most homeowners itemizing outweighs the ease of the standard deduction. To get the mortgage interest deduction, your mortgage must be secured by your home — and your home can be a house, trailer, or boat, as long as you can sleep in it, cook in it, and it has a toilet.
  • You can deduct the cost of private mortgage insurance (PMI) as mortgage interest on Schedule A if you itemize your return. This only applies to loans taken out in 2007 or later and your 2014 taxes may be the last year you can claim the deduction unless Congress renews it for 2015.tatat
  • Prepaid interest (or points) you paid when you took out your mortgage is generally 100% deductible in the year you paid it along with other mortgage interest. If you refinance your mortgage and use that money for home improvements, any points you pay are also deductible in the same year. But if you refinance to get a better rate or shorten the length of your mortgage, or to use the money for something other than home improvements, such as college tuition, you’ll need to deduct the points over the life of your mortgage.
  • You can deduct on Schedule A the real estate property taxes you pay. If you have a mortgage with an escrow account, the amount of real estate property taxes you paid shows up on your annual escrow statement. If you bought a house last year, check your HUD-1 settlement statement to see if you paid any property taxes when you closed the purchase of your house. Those taxes are deductible on Schedule A, too.
  • If you made your home more energy efficient in 2014, you might qualify for the residential energy tax credit. Tax credits are especially valuable because they let you offset what you owe the IRS dollar for dollar for up to 10% of the amount you spent on certain home energy-efficiency upgrades.

Read more: http://www.houselogic.com/home-advice/tax-deductions/home-tax-deductions/#ixzz3VWBO8zis