Low inventory in residential sales and residential rentals is making it a sellers market…..big time! Recently there were 30 offers on a home on Queen Anne and 20 offers on a home in Wedgwood. These are not low priced homes either! We are even finding agents asking owners with larger homes (3500+square feet) if they are interested in renting out their home for a year or two to recently hired Husky Football coaches etc who are having a tough time finding rentals in the city. There is some serious money to be made now in this frenzied climate. If you have ever wanted to live/work abroad…..now is your "perfect storm" opportunity!
-Interest rates will rise. Some predict 5.375% by the end of the year and others are saying it could be closer to 6%. As the ecomony improves the FED will have no problem increasing them.
–Home prices will continue to recover. We are up 15-20% over the peak of the market in some inner city neighborhoods.
–The Luxury Home market will continue to surge. There was an increase of sales of homes over $1m last year. In the west it was up 25.4%, midwest 36.4%, south 30.1% and the northeast 45.3%
-Multi-generational housing will continue to be a need.
–The First Time Buyer will be back! With the economy improving, we believe they will finally be moving out of their parents’ homes and, when they compare renting versus buying, many will choose homeownership.
–The Move Up Buyer will FINALLY free up some inventory! Over the last several years many homeowners were trapped in their home by negative equity. This prevented them from moving up to the home of their dreams. With home values rising and home equity increasing, this pent-up demand will finally be released and move-up properties will be in high demand.
–Foreigners will continue to fuel our real estate market with their desire to park money here in the U.S. Typically they are all cash and they have a strong desire to invest in real estate here before the prices go up much further.
Buying a home is a better financial decision than renting for Seattle area homebuyers intending to stay in their home for at least three years and 6 months, according to a first quarter analysis from online real estate marketplace Zillow. Zillow's breakeven horizon incorporates all possible costs associated with buying and renting, including upfront payments, closing costs, anticipated monthly rent and mortgage payments, insurance, taxes, utilities and maintenance costs. It then factors in historic and anticipated home value appreciation rates, rental prices and rental appreciation rates to help calculate the point, in years, at which buying becomes less expensive than renting. The breakeven for Seattle as a whole is 3.6 years. But at the neighborhood level, the breakeven horizon ranges from a low of 2.3 years to a high of 4.9 years. Those with the shortest breakeven horizon were Miami (2 years), Detroit (2 years) and Phoenix (2.1 years).
Most experts agree that at the moment we are in a housing bubble. To give you some King County stats….in April of 2008 we had 16,400 listings, 2400 sales, making it a 15% absorption rate. In March of 2013 we had 3860 listings, 3740 sales, with a 97% absorption rate. The question on every buyer and sellers mind as well as realtors is will the bubble burst or slowly deflate. We need the shadow inventory to appear and interest rates to raise abit before we get to a balanced market of about 35% absorption. Our listing volume has declined 425% while the sales volume has increased by 56%.
If you are thinking of selling DO IT NOW!!!!
Whether it's the perpetual yard sale, two feet tall grass, Christmas lights still hanging in July, dead trees, backyard roosters or cars parked everywhere – the condition of neighboring houses can make life awful and affect property values by 5 to 10%. Studies by economists measuring the impact on a home's value after a registered sex offender moves nearby have shown a decrease in value of around 4%. The appraisal industry calls this neighbor “external obsolescence” which means this is a factor that is beyond your control…but it still affects your property.
The biggest form of external obsolescence has been with homes that have been foreclosed on. Many of these homes have gotten so run down and the weeds are so high. Many Cities are enforcing the real estate agents that take these listings from the banks to take care of the grass (or lack thereof) and make the curb appeal much better or there will be fines.
So, yes, your neighbor’s house and neighboring homes do affect the value of your home. Try to get things cleared up before putting your home on the market if you can. Some sellers have paid for neighbors lawn clean up or paint job. In the end tho, living in the city, all jammed in together is not for everyone and a number of things are beyond our control!
-More Buyers than Sellers. Inventory of available homes will remain low this year creating a sellers market!
-Generations X and Y become strong homeowners. Young adults (ages 18-35) continue to see homeownership as value. 43% already own a home. 72% want to own a home. 93% currently renting plan to buy.
-Move up Sellers will return. Negative equity has prevented many sellers from moving up to the house of their dreams. However, with prices recovering, more and more sellers will realize that now may be their opportunity…..especially with the continuing low interest rates.
-High rental prices will continue. Low inventory of available homes for sale, stricter lending requirements (more down etc.) and a strong economy are fueling higher rental prices.
With home prices in the city back to 2007 levels, inventory 43% lower than last year and interest rates at record lows we are back to a sellers market!
The buyers are scrambling to get into this market! A home in city that is priced right and taken care of is getting multiple offers and going over asking price. LOVE letters (as we call them) are back where buyers are writing letters to persuade the sellers to take their offer on their home. While the prices are not escalating to the levels we saw in 2007 which at times were 20-30% over asking they are still escalating close to 10-15% above asking with no contingencies.
If you are seeing a home sitting out there it is because it is priced too high….flat out! The market always determines the price and it is no time for sellers to get greedy. Key into what buyers are saying about your property and adjust accordingly and you should have a sold strip on your for sale sign in no time!
If you are considering selling in the near future do so before the spring rush where there are more homes out there to compete with!
We are so lucky to live in THRIVING Seattle!