Seattle ninth-best U.S. market for home sellers: Report

Seattle is the ninth-best market in the country for homeowners selling their home, according to a new report.

This is great news if you are thinking if selling your home anytime soon, and another reason to jump in if you’re buying!

According to Zillow Inc. reports that only home sellers in eight other U.S. cities have more leverage than Seattle home sellers. Zillow describes a seller’s market as one where homes are on the market for a shorter time, price cuts occur less frequently and homes are sold at prices very close to (or greater than) their last listing price.

In markets like Seattle, “sellers … are squarely in the driver’s seat with their homes selling within days of listing, often after bidding wars that increase the sale price above the asking price,” said Stan Humphries, Zillow chief economist, in a statement.

If you’d like to know what’s going on in your neighborhood, on your block for similar homes just like yours, call me for a no-obligation consultation.

How can one man lift a big rock?

How can one man lift a big rock?  Why does Donald Trump win so often in high-stakes negotiations?  How can you buy five income producing properties with very little of your own money?

You’ve heard me talk about it often.  It’s leverage.  Let’s take a quick look at why the concept of leverage is so crucial to growing wealthy. Leverage is the ability to use a small amount of your own money to control an asset of far greater value. For example, when you put down 20% on the purchase of a single family residential home, you are essentially using the bank’s money to extend your own buying power.

Assume that you have $100,000 cash to invest. You could find a $100,000 house and purchase it outright. A better idea would be to find five single family residential properties each costing $100,000. Rather than plow all your resources into one property, put down 20% on all five, let the bank loan you the rest, and suddenly you have a portfolio of five income producing properties.

If you’ve done your homework and chosen appropriate deals that provide positive cash flow immediately, you’re sitting in the proverbial catbird seat. Later, you’ll refinance all five loans in seven to twelve years and use the resulting proceeds to buy as many properties as you have the down payments to afford. You should NEVER pay off your loans, but rather frequently refinance into more and larger real estate deals.

Here’s the reality of this type of investing. You use other people’s money (OPM) to buy assets that you will eventually own. Along the way, you also use OPM to cover the monthly expense of your investment, which is the mortgage payment. How do you do this?

By renting the place out! Assuming the deal is right, which it should be when you do your homework, a tenant’s monthly rent payment should cover the mortgage, all associated expenses, and still leave you with a little cash in your pocket. This is called positive cash flow.

Here’s the bottom line. There is no other asset which allows you to rent it out! Don’t try this in the precious metals market or on Wall Street. They’ll laugh you out of the place.

Let’s grab a cup of coffee and discuss the how investing can help you with your wealth goals!  Call me anytime at 425-330-0663.

Housing market “healing itself,” numbers are “astoundingly good”

Pending sales may not appear to be much higher than 2011 (up 13.7 percent in January), but the numbers are very good, considering such factors as harsh weather and the tax credits that boosted sales at this time a year ago.

The latest figures from Northwest Multiple Listing Service show pending sales in January outgained the same month a year ago by 739 transactions. Brokers reported 6,132 mutually accepted offers in January to start the year with a 13.7 increase over the January 2011 figure of 5,393 pending sales.

Given that we lost a week with some of the worst weather in 16 years, the numbers are astoundingly good.  This is the first January in four that we can make a reasonable year-over-year comparison.  The numbers are no longer skewed by the artificial stimulus of various tax credits and incentives that date to 2009.  The improvement in the numbers show that the market is healing itself and standing on its own.

Declining inventory, extremely low interest rates, and positive job growth are contributing to rising optimism among industry professionals, but Northwest MLS directors say distressed properties continue to be a drag on the market’s recovery.

Inventory is down almost 20 percent from a year ago. Brokers added 6,666 new listings to inventory during January, with single family homes making up about 85 percent of those additions. At month end, MLS members reported 26,226 total active listings; a year ago, there were 32,647 active listings.

Despite the smaller selection, the price choices overall are wide ranging, from a low of $13,000 for a manufactured home in Sultan to an asking price of $26.8 million for a waterfront home on Mercer Island.

Snohomish County reported the sharpest drop in inventory, with the selection at about two-thirds of the year-ago levels (a decline of 32.6 percent). Several of the 29 MLS map areas within King County also reported declines of 30 percent or more in the total number of active listings.

The ongoing reduction of available inventory is still impacting the market.

The lower number of new listings coming on the market is due to a combination of factors, said J. Lennox Scott, CEO and chairman of John L. Scott Real Estate.  Among them are underwater sellers (who owe more on their homes than the current value), sellers with equity holding off for higher prices, and the lack of new construction/condominiums. The low number of new listings combined with the increase in sales activity is creating the shortage of homes for sale in specific areas and price ranges,” Scott reported.

Northwest MLS reported 3,469 closed sales last month, up nearly 8.2 percent from a year ago when members reported 3,207 completed transactions.

“A sellers’ market has returned in the areas close to the job centers of Seattle and Bellevue, up to the one million dollar price point,” Scott noted, adding, “We are also seeing the same situation in the more affordable price ranges in the surrounding market areas, caused by a shortage of inventory and healthy-to-strong sales activity.”

Echoing that sentiment was Northwest MLS director Frank Wilson, who said, “Inventory in many price points and locations is dropping and what buyers are finding are overpriced or under staged homes.” Wilson, the branch managing broker at John L. Scott Real Estate in Poulsbo, also foresees upward pressure on prices as choices become narrower.

For now, however, prices are showing mixed signs –stabilizing in some areas while declining or increasing in other areas.

The median price for last month’s closed sales of single family homes and condominiums (combined) was $214,990, down about 11.7 percent from a year ago when the median selling price was $243,500. The price changes ranged from year-over-year increases reported in five counties (Ferry, Grant, Kittitas, Mason, and Pacific) to declines of up to 40 percent (in Clallam and Grays Harbor counties).

“Price increases are muted by short sales and foreclosures that are causing low appraisal values,” observed Scott.

MLS directors Jacobi and Wilson agreed.

“We are simultaneously seeing the continued rise in pending and closed sales,” Jacobi stated. “Usually pent up demand and rising sales means that prices will be going up. But, unfortunately, that isn’t the case thanks to the high level of distressed properties that continue to drag down the entire market,” he explained.

“What is tempering our real estate recovery in Kitsap and much of Puget Sound are the short sales and REO properties that are on the market and the way the banks are dealing with their sales process,” said Wilson, while pointing to several encouraging signs.

All the pieces are in place for a more normal market in much of Kitsap, Wilson said. “With pending sales up 17 percent in Kitsap, buyers are taking advantage of the values this market is offering and the extremely low interest rates. If this trend continues we should begin seeing price appreciation as we progress into the year,” he remarked.

Improving numbers show the artificial stimulus of the tax credits was not the key to the recovering market, suggested Anderson. “Instead, today’s affordability has buyers in all price segments returning – and feeling more confident about the future.”

Northwest MLS director Darin Stenvers believes “the perfect storm is brewing.” He said the pent-up need for homes in good condition is creating shorter market times and sales close to the original asking price. “It is a great time for sellers who have been waiting,” said Stenvers, the office managing broker at John L. Scott Real Estate in Bellingham.

“The market is almost done with the needed correction,” Stenvers stated, adding, “Distressed homes and REOs are not going away fast but have slowed and should soon level off.” He also foresees a loosening of overly restrictive lending guidelines.

Reflecting on a real estate career that dates to 1990, Wilson said, “I remember at the height of the market people would say ‘I wish I would have bought some waterfront back in 2001…or I wish I would have picked up a couple of rentals a few years ago’.”  For these people, “the clock has been rolled back and you now have an opportunity to purchase real estate near the bottom of the market,” he suggested.

Northwest Multiple Listing Service, owned by its member real estate firms, is the largest full-service MLS in the Northwest. Its membership includes more than 22,000 real estate brokers. The organization, based in Kirkland, Wash., currently serves 21 counties in Washington state.

Is The Seattle Housing Market Improving?

OK everyone is asking “is the real estate market better yet?” I say what area, what street, heck what time is it.  The point is it’s changing folks.  Mostly improving.  There is still a room to grow but we are seeing more people jump into the market.

The National  Association of Home Builders has an “Improving Markets Index” in an effort to track cities with improving markets. The good news is that the index grew last  month, with 40 cities being added to the 41 already on the list.

To make the list, a city has to show recovery as measured by three criteria:  housing price appreciation, job growth, and single-family housing permits.

By those measures, large metro areas such as Dallas and Philadelphia are  recovering, as are smaller cities including Denver, Honolulu, Indianapolis, and  Nashville.

We are seeing some real improvements in the Seattle market as well.  In some areas, multiple offers are in play.  If you’d like more information about your neighborhood, call us today.

Beautiful Country Rambler on 2.29 Acres With Huge Shop!

Large beautiful one story home on 2.29 acres with private setting. This home has been meticulously maintained with all the extras you were hoping for. Large open kitchen with slab granite counter tops looks out to huge family room.  We’ve loaded lots of photos for you to enjoy here.

Sparkling hardwood floors throughout, skylights, master bath with slab granite, jetted tub & walk-in closet. Large outdoor patio dining area & a shop to die for! This spotless shop is heated with lots of benches, large doors & lots of extra parking. Don’t miss out on this rare opportunity!

You should go check it out.  Directions : From I-5 take exit 210 (236th St.) and head east, left on 27th Ave NE (Tronson Rd), left on 258th, house on left side corner lot and is set back from road.

 

Insure The Value Of Your Home? Is This a Sign Of Things To Come?

Insure The Value Of Your Home? Is This a Sign Of Things To Come?

Hmmm . . . Are we begining to wise up?  Are we starting to think outside the box?  Take a look at what this company is doing in Ohio.  Could we see this elsewhere?

Property values have been hit big time in virtually everywhere in the United States.  Seattle real estate has not been spared.  But this is true especially in northeast Ohio. Thousands have moved out of the region, Cuyahoga County foreclosures continue at more than 900 per month and a growing number of vacant homes degradate dozens of neighborhoods.

Consumer confidence is key in getting people to buy homes in large numbers, and some say new financing options are one way to do it.

Equity Lock Solutions , a company based both in Ohio and Denver, has announced a new product called “Home Price Protection.”

The product allows a homeowner to “lock-in” a home value, based on the home price index, established by the  Federal Housing Finance Agency.

A homeowner that signs up for the service can make monthly payments and protect their homes value for up to 15 years.

An example, a homeowner who’s house is worth $200,000, who signs up for Home Price Protection, who then wants to sell three years later. However, the house is now worth just $180,000, according to “home price index.” After the sale of the house, the owner with Home Price Protection would be issued a $20,000 check to make up for the loss in value.

Homeowners buying the protection must pay a one-time contract fee of about 2 percent of their homes value, this fee can be spread out over 60 months, making the average payment about $75 per month for coverage on a $200,000 home.

“You want to protect the family home, you want to make sure the value will be there when you need to move for that next job,” said Equity Lock Solutions President Ted Rusinoff.

Rusinoff pointed to Syracuse New York, a city that has offered a similar product for 10 years. Rusinoff reports home values in Syracuse have only dropped 2 to 3 percent, partly because of the consumer confidence fostered by home price protection products.

“That product lets all homeowners feel comfortable that the value of their home will be there,” Rusinoff said. “Homeowners then start upgrading their houses, and it allowed neighborhood values to maintain and grow.”

Ohio’s Department of Insurance is also examining other products that also essentially insure home values.

Insurance companies are looking to get state approval for products that will allow homeowners to buy insurance against drops in the real estate market.

We are going to watch this trend closely and keep you informed.  Just another way we are watching out for you!

Finance Multiple Properties!

Hey all my investor friends, do you know most lenders will not do any new loan for any borrower that owns multiple financed properties?  However, I know lenders that will finance all the way up to Ten Financed Properties with a Conventional Loan.   Not all lenders will do this.  In fact, most won’t touch it.

They have great terms including no point loans. Please call me or email me if you have any questions regarding Investor Loan products.  My team is closing most of our FHA loans now in less than 20 days and we are still offering same day approvals including evening and weekends.    Call me anytime for details!

Tea Leaves and Mortgage Rates

Most of you know I read a ton of reports, White Papers, talk to people “who know”, and if all else fails, read tea leaves.  Here’s my guess – mortgage rates should remain low in 2012, especially in the first half of the year.

We may spend the entire year below 5%.

Rates may even fall to new lows early this year, particularly if the issues in Europe come to a head.

Rates have been sitting at record lows. I saw a 30-year fixed-rate of 3.91% recently. I think that ties the record for the lowest rates that have ever been in the history or at least since the dinosaurs left the scene. Compare that to the highest average that was 18.63% set in 1981, according to Freddie Mac.

In general, the financial unrest in Europe, combined with the Fed’s promise to keep short-term rates on hold at least through 2013, will keep mortgage rates from rising significantly.

Many of my clients have been conditioned to expect low rates. Last year, the 30-year fixed-rate mortgage had its lowest annual average on record at 4.66%, according to Bankrate.

According to Freddie Mac, the 30-year mortgage averaged 4.5% in 2011; the lowest weekly rates on record were posted toward the end of the year.

But whereas rates fell in the second half of 2011, they are expected to rise at least somewhat during the second half of 2012, said Frank Nothaft, chief economist of Freddie Mac.

An improving economy is what we all want but it could also cause rates to rise. Rates on a conforming 30-year fixed-rate mortgage are expected to average 4.2% in the first quarter of 2012, and should average 4.8% by the fourth quarter, according to Freddie Mac’s forecast.

Meanwhile, HSH Associates, a publisher of consumer loan information, predicts conforming, 30-year fixed-rate mortgages will remain between 3.85% and 4.85% throughout 2012.

Stay tuned in here for ongoing information about rates and such.  I’d appreciate your comments.

Seattle On Top Ten list – Best Run Cities

Seattle On Top Ten list – Best Run Cities

The financial press’ favorite pastime, compiling lists, has produced yet another Top Ten product, 24/7 Wallstreet’s Best and Worst Run Cities.

Seattle makes the list at number seven on the list of Best Run Cities. Do you agree?

In compiling those lists, 24/7 Wall Street considered violent crime rates, poverty, the citizenry’s education achievement and the city’s credit rating.

The rating cities Seattle’s poverty rate (14th lowest), its high educational achievement (7th), its Aaa credit rating and its 43rd ranking on violent crime.

The city’s achievement was particularly noteworthy because all of the other cities on the Best Run list were much smaller with several such as Plano, Tex. (10th), Scottsdale, Ariz. (8th) and Irvine, Calif (2nd) being well-to-do suburbs without the typical urban crime and  poverty issue that come with being a larger central city like Seattle.

Tops on the list was Virginia Beach, Va.  On the Worst Run list, Miami was number one followed by Detroit and Newark, N.J.

Repair Water Stains on Walls and Ceilings

Water stains on ceilings and walls are ugly, but they’re also instant red flags to potential home buyers. Don’t risk losing a sale due to unsightly stains that can cause undo concern about water lines and the integrity of your home.

Properly repair, prepare and paint over stains for a fresh appeal. If you have purchased an investment property or a fixer-upper home of your own, these very basic steps will add value and aesthetics with very little work.

Identify and Repair the Source

Every water stain has an origin. Identify the source of leaky water and stop it before attempting to make any repairs to the surface. Common sources are leaky roofs, leaking water pipes, and sometimes condensation or leaks from evaporative coolers. Other sources will be fairly (and woefully obvious) such is the case when a water pipe bursts or your home is subjected to a flood.

Assess the Damage

Carefully assess the extent of damage water has caused to the surfaces and structure of your home. This will largely depend on:

1. the amount of water causing the damage
2. the amount of time the water remained on the stained surface
3. the type of surface subjected to excess water

Replace wallboard that has lost integrity due to prolonged or excessive exposure to water. Take a small blade and scrape away a portion of wallboard to see how deep the damage is. Large areas may require you to remove and replace wallboard. If damage had occurred behind the wallboard, create a source of ventilation to allow air to move through the wet area and dry it. Even if your walls or ceilings are dry, leaving wet materials it is an invitation for mold and bacteria to grow in the dark, damp area.

If you’re concerned about electrical damage, hire a professional electrician to test the integrity of your electrical system where water damage occurred.

Allow all stained areas to completely dry before attempting to repair or paint them.

Repair

Small damaged areas can easily be repaired with wall plaster and a putty knife. The method of repair will, again, depend on the extent of the water damage.

Prepare

Proper preparation is absolutely necessary if you want to cover water stains and keep them covered. Although you can paint over a water stain, it’s more likely than not the stain will eventually seep through.

Sand the surface lightly with 100- to 150-grit sandpaper. Clean the area to be painted thoroughly. Remove any debris with a dry cloth or large brush and thoroughly vacuum the surrounding area. Wipe the area you want to repair again with a dry cloth.

Paint over the stain with a pigmented white oil or latex-based primer. This is key to stopping the stain from showing through the paint. Allow it to dry according to the paint manufacturer’s instructions.

Sand the area lightly before applying paint.