Home shoppers in Western Washington can choose from the largest supply of homes in three years and they are facing fewer bidding wars. August statistics from the Northwest Multiple Listing Service show prices appear to be moderating (up about 6.7 percent overall), but brokers say they are not bracing for a bubble, or even anticipating a quick shift to a buyers’ market. “There have been incremental increases in listing inventory the past few months,” noted Gary O’Leyar, the designated broker/owner at Berkshire Hathaway HomeServices Signature Properties, but, he added, “By no means have inventory levels reached a point that is deemed to be a balanced market.” Prices were down in August but are still up from 2017.
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 to discuss your real estate needs.
Pete and Jody contacted me early this summer about selling their family home on Phinney Ridge. I’ve known Pete and Jody for many years as we were former neighbors and they wanted to work with someone they knew.
When I say family home, I mean it. Pete’s parents had bought the house about 80 years ago, and approximately 40 years ago Pete bought it from his parents. Pete and Jody raised their family in this lovely craftsman. They had made many updates over the years, and had particularly loved designing the beautifully landscaped yard and the 2-car garage where in his free time Pete worked on his cars.
But it was time to downsize. The house had too many stairs and was too much work to maintain. The property tax bill had become too high for retirees on a fixed income and they no longer wanted to live in Seattle.
Pete and Jody went exploring where they wanted to live and found a 55+ community in Mount Vernon that met all their needs. It was quiet. It was new construction. It was all on one floor, no stairs to even get into the house. The yard allowed for Jody to continue her love of gardening but was not too large. The house they wanted was already completed, but they would need to sell their Phinney home before they could purchase in Mount Vernon. I was able to negotiate with the seller of the Mount Vernon home for a longer closing period, to give Jody and Pete time to sell their Seattle house.
I recommended some minor repairs to their Seattle home before listing and we had the house staged. Jody and Pete worked hard at packing up 40 years of life, giving many items away, and having a mega-garage sale. It was hard work, but they had the house ready almost a week before our target list date. Jody and Pete’s Phinney home came on the market on August 5, and by August 11 we had two offers.
Both homes closed last week, Phinney on Thursday and Mount Vernon on Friday. Pete and Jody will be moving into their new home over the next few weeks. It was such a joy to call Jody and Pete on Friday and tell them that they were the owners of the home in Mount Vernon. Congratulations!!! May you have many, many years of love and laughter in your new home.
Phinney home, listed for $895,000, sold for $890,000, 6 days on market
Mount Vernon home, listed and sold for $459,900, 79 days on market
The media has been saying “the market is slowing down.” So have my colleagues. I even said a few weeks ago that we’re seeing a market adjustment. But this is not what I’m seeing right now.
I had 2 open houses this weekend on my new Ravenna listing and both were packed. I expect we may see multiple offers or even take an offer early.
Buyer clients of mine went to an open house yesterday in Bothell. They said it was busy. When I spoke with the broker for that listing last night, he said he had 90 people through on Saturday and around 50 on Sunday. And that’s in Bothell.
Buyers are out there for your home. There’s no need to wait until after Labor Day. Usually the last 2 weeks of August are slow in Seattle, but not this year. Maybe because of the smoke and weather change people are coming out. Maybe because interest rates dropped a tiny bit last week. I don’t know why but the market is very active right now.
I expect we’ll see an influx of listings after Labor Day. Talk to me soon if you’re interested in buying or selling a property.
I’m excited to share my latest listing, an adorable home in a fabulous Ravenna location! Close to the University of Washington, Children’s Hospital, Green Lake, future Roosevelt transit station, bus lines, Whole Foods, Magnuson Park, Third Place Books, and restaurants galore. And according to Seattle Schools, it’s in the area for the coveted Bryant Elementary, Eckstein Middle, and Roosevelt High Schools.
This home offers a large kitchen space, one bedroom and a den, large back deck, and fabulous landscaping. The den used to be a bedroom you could potentially reconfigure it to create a second bedroom. Very private, up off the street. It also has a one-car detached garage.
It’s a great condo alternative or the opportunity to create your dream home with your updates and/or build an addition. The home had a new roof installed and the chimney was rebuilt in 2017.
1 Bedroom, 1 Bathroom
1,170 Sq. Ft.
4,590 Sq. Ft. Lot
Built in 1909
Forced Air Gas Heat
2018 Property Taxes: $4,270
To learn more:
Attend an open house Saturday, August 25, 1:00-4:00pm, Sunday, August 26, 11:00am-1:00pm, or Monday, August 27, Noon-2:00pm.
People are asking if 2018 will be another 2008 for the real estate market. I emphatically answer NO! Here is why I don’t believe we’re headed for a major turn in the market.
There are many more protections for buyers/homeowners in the mortgage market. A large part of the 2008 crash was related to mortgages being given to people who could not afford those homes. The Dodd–Frank Wall Street Reform and Consumer Protection Act which was signed into law by President Obama in 2010. The Consumer Financial Protection Bureau instituted a rule that protects consumers from irresponsible mortgage lending by requiring lenders to ensure prospective buyers have the ability to repay their mortgage.
Additionally, housing starts are significantly below the need for 1.5 million units per year (top chart below). 2007 was the last year we met that goal. On the other hand, the homeownership rate is rebounding and is at its highest rate in three years (bottom chart below). These two statistics combined tell us that demand continues to outweigh supply. Our market will remain strong as long as we have the demand.
We are, however, seeing an adjustment in the market, please see last week’s post for that update.
For more information on the market or on buying or selling a home, please give me a call at 206-790-0081 or email Jamie@JamieFlaxman.com.
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.
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.
When you’re looking to buy or sell a house, there are many features of the property that can affect value. Only an appraiser can fully put a value on items such as views or garages but here are my thoughts.
For sellers, you may think that a unique feature such as a sauna or swimming pool adds value, but that’s not always the case here in the Seattle area. If your home is in California, a pool does increase value. But most people in Seattle don’t want a pool, so having a pool might actually decrease the price you get for your home. Pools significantly increase the operating cost of the home and just aren’t used that much with our climate.
Garages, on the other hand, can add a lot of value. Trying to park in many of our neighborhoods is a challenge so off-street parking is a plus, and a garage to protect your car is a major benefit. Depending on your location and property, a garage can add around $50,000 to your home’s value. However, once you go beyond the 2-car garage, the additional value goes down – not that many people want 3, 4, or even 6 car garages (I saw one of those this weekend).
How do you quantify a view? It’s hard. In a condominium building, you could compare 2 units that are exactly the same, on the same floor, that sell at the same time, with one facing the Sound and the other not having a view. Those sales prices would give you an idea of the value of a view. But it’s rare we can make that comparison and with single family homes it’s even harder. Appraisers have formulas but there isn’t really a science to the calculations. How do trees or other homes affect the view?
Special features may add value but they may also take away value such as in the case of a pool. The best way to find out what the features of your home offer is to talk with a real estate broker or a home appraiser. Give me a call at 206-790-0081 or email Jamie@JamieFlaxman.com if you’d like to talk about your home’s features.
One of the things I love most about my job is helping first-time home buyers find their dream home. Last week Sarah and Mike closed on their dream house, a rambler in Shoreline with mid-century features in the living room and an incredible backyard.
We looked at countless condos, townhomes, and single family homes. They lost out on 3 other offers. One of the things I do when I’m out with buyers is watch their non-verbal responses to a property. When Sarah and Mike walked into this one, I saw a response I hadn’t seen previously – of joy and relaxation – and I knew we had found the home for them.
This home did not have an offer review date and had only been on the market for 3 days. Time to move quickly. We wrote an offer above list price with an inspection contingency (which was great because they had already paid for a couple pre-inspections where they didn’t get the house). The lender quickly sent me a pre-approval letter. And voila, Sarah and Mike got the house.
Congratulations to the new homeowners! May you have years and years of joy in your new home.