Tag Archives: interest rates

Selling Your Home in the Winter

Many prospective sellers feel they should wait for spring to sell their home. They feel this way because of the seasonal downturn in the market and because homes don’t look as good without exterior flowers and plants and the general grayness of our part of the country. However, there are several good reasons to list your home during the winter. The most serious buyers will still be out there – those that need to buy because of job relocation or need different space. And inventory is at it’s lowest, giving buyers fewer choices, so your home will stand out more. Mortgage rates are increasing, so buyers may have greater buying power earlier in the year.

To sell your home in the winter, there are some key things to do. Keep your home warm and cozy – buyers need to be comfortable when they come in the house and the warmer it is, the more likely they’ll stay longer. Leave lights on and shades open to keep the home bright. Make sure the yard stays neat and the roof is clean. Stage the home and have professional photographs that show off the home at its best.

Thinking about listing your home this winter or spring. Give me a call at 206-790-0081 or email to discuss a complimentary market analysis and marketing plan for your home.

Shift in the Market?

We are seeing a shift in the market, but it’s not a cause for alarm. This shift is a balancing. We have reached the point where prices have hit the top and now they’re settling down. A recent article from CityLab.com explains it well:

“Housing prices are cooking. Across the nation, the price of homes is rising faster than the rate of inflation—in some places by a factor of three. That’s true of high-cost cities such as Seattle and San Francisco and lower-cost cities such as Charlotte and Tampa alike. And the overheated market for homes is costing the middle class the American dream.

Nationwide, the price for homes is approaching the zenith seen in 2006, just before the market fell into a foreclosure crisis and the economy sank into the Great Recession. . . 

But there are key differences between the housing peak in 2006 and the housing peak today. This surge in housing prices is not necessarily evidence for a bubble—much less any indication that a bubble is about to burst.

Late in July, the S&P CoreLogic Case–Shiller U.S. National Home Price NSA Index tracked a 6.4 percent annual gain in home prices for May 2018. This index has recorded year-over-year increases of at least 5 percent every month since August 2016—a sign of the strength of the recovery. . . . in Seattle, which saw a year-over-year price increase of 13.6 percent for May, home prices are already well above the 2006 high-water mark.

But since most workers aren’t earning 6 percent raises year after year, eventually this party has to come to an end. (Indeed, for four-fifths of privately employed workers, wages are actually falling.) Housing prices will stabilize or soften because they have nowhere else to go. The prevailing trend is unsustainable. “If something can’t go on forever, sooner or later it will end,” says David Blitzer, managing director for S&P Dow Jones Indices. With mortgage rates and prices rising, sales in both new homes and existing homes are starting to slow. ‘Either buyers have gone for the summer, because it’s too hot to look at housing, or they’re pausing to see what’s going on,’ Blitzer says. ‘If the pause continues, you’ll see sales go down.'”

And this is what we’re now seeing in Seattle. Most homes are not selling in 7 days and significantly above list price right now. I’m seeing a significant increase in price reductions and less multiple offer situations as well.

What does this mean for you? If you’re a buyer, this is all good news. It means you may be able to get into the market without a bidding war and having to look at homes significantly below your price point.

If you’re a seller, it’s not a time to panic. This shift is actually creating a healthier market. You probably will get less for your home than if you listed 6 months ago. But you probably will still have significant profits if you sell as prices are at record highs. We still have a significant shortage of housing so even with the increased inventory, demand still outweighs supply. Inventory levels are still under 2 months which means it’s a seller’s market – a balanced market would be 4-6 months, and a buyer’s market would be greater than 6 months.

As I’ve said often, there’s no crystal ball in real estate. In my predictions for 2018, I said price increases would slow down. In fact, year over year prices are still up about 11%. I also predicted interest rates would hit 5% before year-end; we have already hit this number which is reducing buying power for buyers.

If you’re thinking of buying, this is the time to get pre-approved and start your buying process. If you’re a seller, I’d be moving quickly to get your home on the market while prices are still at the peak. Please call me at 206-790-0081 or email me at Jamie@JamieFlaxman.com for a complimentary market analysis for your home.

Interest Rates are Rising

If you’re thinking of buying a property, you should move forward with your plans now. According to one lender I work with, last week she saw an increase in interest rates every day. While most of us have been predicting that rates would hit 5% by the end of year, we have already reached (and exceeded) that percentage.

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. A month ago your monthly payment would be around $2,837 with a 4.5% interest rate. At 5% that payment would be $3,006, or $169/month more. Your lender may no longer qualify you to purchase a $700,000 home but instead more likely around $675,000 to keep your payment around the $2,837/month. If we see a 7% (being conservative) increase in prices this year, your $700,000 home would sell around $750,000 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.

 

Is Now the Time to Sell Your House?

Today’s real estate market offers a fabulous opportunity to successfully sell your home for top dollar.

Why do I think now could be the right time for you to sell?

The economic climate has improved. Consumer confidence is high and unemployment is low. Combined, this has impacted all parts of the economy – including housing. The demand for homes significantly outweighs the availability of homes to purchase.

Unbelievable mortgage rates. Low rates equate to the largest possible pool of qualified buyers for your home. However, interest rates are on the rise, which will decrease affordability for many buyers.

Average sales prices have increased, and average market time has decreased. With prices rising, your opportunity to get the price you want is better than it has been in past years and your timeline to receive an offer is shortened as well.

Your needs may have changed. Have you had changes in your lifestyle (retirement, a new job, marriage, divorce, children, or parents moving in with you) or your health which have changed your housing needs? If so, now may be the time to sell.

I would welcome the opportunity to talk further with you about whether now is the right time for you to sell. Just give me a call/text at 206-790-0081 or send an email to Jamie@JamieFlaxman.com to set up a time to chat!

 

Happy New Year!

Here’s to a happy and healthy New Year!
May all your dreams and wishes be realized.

Stay Tuned in 2015 for:

  • 2014 Seattle market update (January)
  • Fabulous Seattle homes for sale
  • Monthly videos created by me
  • And much more

And to Start the Year Out Right, here are my predictions for the 2015 Real Estate Market:

Each year I review what has happened during the year, research what the experts say for next year, and share my thoughts on what will happen in the market in 2015.

Median Sold Prices – Home prices will continue to increase nationally by single digit numbers, between 5-6% whereas Washington State home prices will increase around 7%. Urban metro areas (such as Seattle) in high demand by millennials will see an increase probably in the double digits. Home prices in October 2014 were up by 6.4% year-over-year, after climbing 10.6% in 2013. There are still areas of very high demand and low inventory which will continue to push prices upward. However, many homeowners surveyed suggest they will sell their homes next year, increasing potential inventory and putting downward pressure on prices.

Inventory – It is a good thing that more homeowners are expected to sell their homes next year as I predict that more buyers will be entering the market for a home. Improved job markets and lower unemployment rates, along with stabilizing home prices and fewer bidding wars, will bring more buyers into the market. Buyers who left the market in 2014 due to disappointment over lost offers will return. Increased inventory and slower market time gives buyers the time they need to get financing and look at more homes. The bottom line is inventory will increase due to more sellers in the market, but I expect that buyers will be purchasing that inventory, so there won’t be big fluctuations either way.

Interest Rates & Mortgage Availability – The improving economy is a sure sign that interest rates will increase in 2015. The new rates will balance job growth and higher inflation rates. The Federal Reserve indicated it will increase the federal funds rate in 2015 (the federal fund rate has a significant effect on mortgage rates). I expect the 30 year fixed rate mortgage rate will reach 5% by the end of 2015. Government officials have also indicated that mortgage credit should become more available in the foreseeable future, which will allow more buyers to qualify for a mortgage and will allow some people to qualify for a lower-rate mortgage. The FHA is raising its loan limits for King, Snohomish and Pierce counties to adjust for rising median home prices; the loan limit in 2015 for a single-family home is $517,500, up 2.3% from $506,000 this year. Additionally, the FHA is bringing back loans with only a 3% downpayment.

Foreclosures – The foreclosure crisis is near its end. 2014 saw foreclosures down 30%. We will see a further decline in 2015 with a return to low levels.

These are just a few of the things I predict 2015 will bring us. For further information, please don’t hesitate to give me a call at (206) 790-0081 or emailJamie@JamieFlaxman.com. I would be happy to share what my 2015 predictions mean for your real estate holdings.