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Wednesday, November 25, 2015

5 Key Housing Stats From NAR’s Latest Report

Mortgage rates are still below 4 percent but the low financing rates aren’t luring more buyers this fall. All four major regions of the U.S. saw a decrease in existing-home sales in October, according to the National Association of REALTORS®’ latest housing report. Regional Snapshot Here are existing-home sales fared in October across the country: 

Existing-home sales – which are completed transactions for single-family homes, townhomes, condos, and co-ops – dropped 3.4 percent to a seasonally adjusted annual rate of 5.36 million in October. Despite the drop, sales are still nearly 4 percent above a year ago, when sales were at 5.16 million. “New and existing-home supply has struggled to improve so far this fall, leading to few choices for buyers and no easement of the ongoing affordability concerns still prevalent in some markets,” says Lawrence Yun, NAR’s chief economist. 

“Furthermore, the mixed signals of slowing economic growth and volatility in the financial markets slightly tempered demand and contributed to the decreasing pace of sales. As long as solid job creation continues, a gradual easing of credit standards even with moderately higher mortgage rates should support steady demand and sales continuing to rise above a year ago.” 

 Here’s a closer look at the numbers behind NAR’s latest housing report for October sales: 

1. Home prices: The median existing-home price for all housing types last month was $219,600, which is 5.8 percent above a year ago. Last month marks the 44th consecutive month of year-over-year price gains.

2. Housing inventory: Total housing inventory at the end of last month fell 2.3 percent to 2.14 million existing homes for-sale. Inventories are now 4.5 percent lower than a year ago. Unsold inventory is at a 4.8-month supply at the current sales pace.

3. Distressed sales: Foreclosures and short sales dropped to 6 percent in October, the lowest since NAR began tracking such data in 2008. Last year, distressed sales comprised 9 percent of the market share. In October, 5 percent of sales were foreclosures and 1 percent were short sales. Foreclosures sold for an average discount of 18 percent below market value while short sales were discounted on average 8 percent.

4. Days on the market: Properties typically stayed on the market for an average of 57 days in October, a drop from the 63 days in October 2014. One-third of homes sold in October were on the market for less than a month. Short sales were on the market the longest mount of time at a median of 90 days, while foreclosures sold in an average of 67 days and non-distressed homes took 57 days.

5. All-cash transactions: All-cash sales comprised 24 percent of transactions last month, down from 27 percent a year ago. Individual investors, who account for the bulk of cash sales, purchased 13 percent of homes last month, down from 15 percent a year ago. "All-cash and investor sales are still somewhat elevated historically despite the diminishing number of distressed properties," Yun says. 

"With supply already meager at the lower-end of the price range, competition from these buyers only adds to the list of obstacles in the path for first-time buyers trying to reach the market." 

Source: National Association of REALTORS®

Thursday, November 5, 2015

Real estate brokers expect only a modest holiday slowdown, saying strong economy, low inventory make this year “different”

With holidays approaching, real estate brokers usually expect a slowdown as buyers and sellers shift their attention elsewhere. “This year is different,” say some industry leaders.

Today we have one of the best markets we’ve ever seen for sellers. Buyers are still surging to the market and inventory is low. It’s a very good time to sell. Owners who are eager to make the next move don’t have to wait six months or until spring to act.

Newly released MLS figures for October show pending sales are up 7.8 percent from a year ago, rising from 8,643 transactions to 9,317. Nearly half the counties in its service area reported double-digit gains in the number of mutually accepted offers. For the four-county Puget Sound region encompassing King, Kitsap, Pierce and Snohomish counties, Northwest MLS members tallied 6,977 pending sales, the highest October volume in a decade.

For 19 of the 23 counties in the latest MLS report the number of pending sales surpassed the number of new listings added to inventory. System-wide there were 8,094 new listings that came on the market during October, about the same as 12 months ago when members added 8,102 listings. With those additions (the fewest monthly total since February) inventory at the end of the month stood at 18,068 listings, well below the year-ago total of 23,501 for a 23.1 percent year-over-year drop.

Closed sales rose 7 percent from a year ago, increasing from 7,257 to 7,769. Last month’s total slipped below 8,000 closings for the first time since April, with some brokers citing inadequate inventory as a factor.

Given the severe shortage of homes for sale, I’m not surprised to see that both pending and closed sales slowed down last month. If we just had more homes to sell the number of closed units would have increased even more during October.  Selling more homes at a faster rate than we are replenishing supply shows just how good the local real estate market really is.

The MLS reported 2.33 months of supply area-wide, well below the 4-to-6 months figure many in the industry say indicates a balanced market. The months of supply figure has not been above three months since February when the figure was 3.56.
Both King and Snohomish counties had less than two months of supply. The most acute shortages are in King County with only 1.29 months of supply; Snohomish has 1.91 months of supply.

Based on the gap between supply and demand, this is not sustainable and will create a market condition where buyers will overpay for a home.  Multiple offers are now being seen in outlying areas as buyers look farther out just to find a home that is a perfect fit while sacrificing distance to work and services.  Good schools remain the highest sought-after criteria.

Even with inventory shortages in some areas, strong open house traffic is expected for the coming weekend, thanks to the bye on the Seattle Seahawks schedule, suggested MLS director Frank Wilson. “A weekend without a Hawks game is good news for real estate brokers and sellers who hold open houses on Sundays, commented Wilson.

Open houses for new listings draw decent traffic, Wilson reported, adding. “New listings get picked through pretty quickly, and homes that are correctly priced are selling within days, with multiple offers.”

He also said homes that have been on the market for more than 60 days have little traffic unless they have had a price reduction. “Some sellers are tending to overprice their homes due to all the hype.”

Gain noted the Seattle area’s home price gains are outpacing the nation’s, earning the city No. 1 ranking on a recently released list of the hottest single-family housing markets in the U.S. He credits strong demand, rising prices, low interest rates and the area’s healthy economic conditions as reasons for the strength. “We will experience a hot housing market over the winter months,” who also expects 2016 to be “another fantastic year for sales activity.” Noting home sales activity is historically lower during this time of year, he believes activity this winter will be “red hot” in price ranges where inventory is low. He believes continued low interest rates and job growth will ratchet up demand as spring approaches. Despite general optimism among Northwest MLS leaders, some pullback is anticipated.

Jacobi, who last month commented on the market being on the cusp of a slowdown, faults scarce inventory. “I expect this trend (of slower pending and closed sales) will likely continue through the end of the year due to the lack of available inventory for buyers.” Jacobi also said appreciation may start to slow over the winter months, adding, “but overall the housing market continues to benefit from our thriving local economy.”

Diedre Haines, principal managing broker-South Snohomish County for Coldwell Banker Bain, said they are noticing some slowdown, but “not as much as we’ve seen historically.”

“There remains a lot of frustration with multiple offers and getting transactions to actually make it to closing,” reported Haines, a past chairman of the Northwest MLS board. She attributes failed sales to several factors including low appraisals, financing issues, and an increase in sellers and buyers not being able to come to terms on inspections.

Prices on last month’s closed sales jumped nearly 9.7 percent from a year ago. Area-wide the median price for sales of single family homes and condos that closed during October was $318,000. That compares to a price of $290,000 for the same month a year ago.

For single family homes (excluding condos), year-over-year prices increased nearly 8.4 percent, rising from $299,950 to $325,000. In King County, the median price for a single family home was $480,000, rising 7.3 percent from the year-ago figure of $447,250, but dropping from September’s median price of $490,250.
“Appreciation for most of Snohomish County has continued, but not exorbitantly,” noted Haines. Prices in that county are up more than 5.8 percent from a year ago. “Modest gains in value are in reality much better for the market than the rapid gains we’ve seen in the past. For us, this means no sign of a growing bubble.”

The MLS reported strong sales in the condo segment, with both the volume and prices rising by double digits. Area-wide, closed sales rose 13.2 percent, from 990 units to 1,121. Prices surged 16.2 percent, jumping from $228,500 a year ago to last month’s median price of $265,500.

Condo inventory is also depleted with the number of active listings down nearly 26 percent from a year ago. MLS figures show only about 1.6 months of inventory area-wide; in King County there is less than 1.2 months of supply.

Looking ahead, Gain and many of his colleagues expect the area’s housing market will continue on a “gradual upward trend” into 2016. “As rents continue to rise, it makes buying a home more affordable than renting in many cases. It also insures that the monthly payment will remain the same as rents continue to escalate,” he stated, adding “Buying a home today is simply a smart decision for most who have the ability and resources to do so.”

Wilson said low inventory in areas like Kitsap County where his office is based will pose challenges. Inventory in that county is down nearly 30 percent from a year ago, while prices climbed more than 5.7 percent. “Some buyers are feeling beat up having to put in multiple offers or offer more than they are comfortable with,” he reported. Nevertheless, “buyers realize as we move into 2016 both prices and interest rates are likely to move upward,” he noted, adding, “We are anticipating a difficult spring market. The numbers are lining up for double-digit price increases in the first half of 2016.”

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 23,000 real estate brokers. The organization, based in Kirkland, Wash., currently serves 23 counties in Washington state.

Sunday, November 1, 2015

Know Before You Owe

Know Before You Owe

Consumers will face less stress when applying for most mortgages after October 3, when our new disclosure rule takes effect. The new rule and disclosures ease the process of taking out a mortgage, help you save money, and ensure you know before you owe.
Learn more about our Know Before You Owe mortgage initiative.

Friday, October 30, 2015

Carbon Monoxide Monitors

The number of CO monitors required in any given home (new and resale), and the location of those monitors, is controlled by regulation adopted through the state building code.  WAC 51.51.315 provides: 
"... an approved carbon monoxide alarm shall be installed outside of each separate sleeping area in the immediate vicinity of the bedrooms in dwelling units and on each level of the dwelling and in accordance with the manufacturer's recommendations."

The regulations leave some discretion as to where, near sleeping areas, the CO alarm is located.  There is no requirement that it be placed high or low on a wall.  But, the regulations are absolutely clear that in a two-story home, there must be at least two alarms and more than that if there are more than two levels to the home.  If bedrooms are spread out across one level of the home, then it may be necessary to have more than one alarm on that level of the home.  The exact location of the alarm(s) on a given level of the home is left, somewhat, to the discretion of the property owner.  The requirement that at least one alarm be located on each level is mandatory.  

Monday, October 5, 2015

Housing market slowdown expected, but prices in most areas are still rising

Scarce inventory, new rules for mortgage closings and affordability concerns will likely slow home sales around Western Washington during the remaining months of 2015 and into early 2016, according to spokespersons from Northwest Multiple Listing Service.

The latest statistics from the MLS show a double-digit drop in inventory, a double-digit jump in closed sales, and a near double-digit increase in prices from a year ago, prompting one industry leader to say the trends aren’t sustainable. “We simply can’t sustain double-digit increases in sales when inventory levels continue to drop every month,” “We’re on the cusp of a housing market slowdown,” he predicts. Northwest MLS director Darin Stenvers also expects a slowdown, pointing to new rules for mortgage closings and rising interest rates as culprits.

“With the introduction of the new TRID1 banking and closing disclosure requirements we will see longer closing timeframes for the foreseeable future. This will lead to a slowdown in closings and thus may slow the market until early or mid-2016,” explained Stenvers. Layoffs and the possibility of higher interest rates result in unpredictability for both buyers and sellers, he suggested.

Despite an expected slowdown, closed sales through the first nine months of this year are running 16.6 percent ahead of the same period a year ago, with median prices up 9.2 percent.
The MLS report for September shows pending sales continue to outnumber new listings, resulting in inventory declines in most of the 23 counties in its service area. That imbalance leads to rising prices.

Northwest MLS members reported 9,574 pending sales (mutually accepted offers) in September for a 7.9 percent increase from the year-ago figure of 8,875. Compared to August, pending sales fell 9.7 percent.

Closed sales jumped 17.5 percent, with year-over-year sales rising from 7,020 finished transactions to 8,245. Twenty of the 23 counties reported double-digit gains from a year ago.
Prices showed more variation. Area-wide, the median price on last month’s closed sales of single family homes and condos was $312,000. That’s up nearly 9.5 percent from the year-ago figure of $285,000, but down slightly from August.

Compared to the system-wide gain, prices rose at more modest rates in three of the four counties in the Puget Sound region, with Pierce County being the exception. Year-over-year prices there jumped 11 percent. Prices in Kitsap County were up only 4 percent from a year ago; in King County the gain was about 4.8 percent and in Snohomish County it was about 7.5 percent.

Single family home prices across the 23 counties in the MLS report rose nearly 7.6 percent from a year ago, from $297,500 to $320,000. Single family homes in King County commanded the highest median price at $490,250, up 6.6 percent from the year-ago figure of $460,000, but down from June’s high of $500,000.

The condo market remained hot with both sales and prices up by double digits. Members reported 1,183 closed sales during September for a gain of nearly 30 percent from a year ago. Prices on last month’s sales jumped 13 percent, from $230,000 to $260,000.

“We’re coming off one of the hottest summer housing markets on record, and the second-best September on record for sales activity in the four-county area,” said one industry leader. He attributes part of the surge to an interest rates drop in May, and the anticipation of rates increasing in the near future.

Dwindling inventory continues to be a drag on activity, but some brokers believe new construction activity is encouraging. Stenvers said new housing starts could help boost inventory in many markets during the coming months.

For now, new listings are drawing “quick action” when they come on the market, adding, “We are virtually sold out of inventory.”

MLS members added 8,772 new listings during September, down slightly from the year ago total of 8,878. At month end, there were 19,724 active listings in the database, down 23.3 percent from the same time a year ago when inventory totaled 25,717 properties.

“We’re selling everything before buyers can turn around,” commented Dick Beeson, principal managing broker at RE/MAX Professionals in Tacoma and a member of the Northwest MLS board of directors. Figures showing the ratio of listings to sales, known as months of supply, tend to support his belief.

For September, the MLS reported 2.39 months of supply system-wide, about the same as the figure for August. The shortages were most acute in King County, with about 1.4 months of supply, and Snohomish County, with about 1.9 months of supply. Industry experts use a range of four-to-six months as an indicator of a balanced market.

“The frenzied market on the Seattle side is taking a toll on Kitsap home prices,” said MLS chairman Frank Wilson, the branch managing broker at John L. Scott in Poulsbo. Prices there rose 4 percent from a year ago. He reported good traffic at open houses in Kitsap County, quick acting buyers when a new listing appears, many multiple offer situations, and an increase in investor interest.

“Since new listings coming to market usually slow during the fourth quarter, we are looking at a severe shortage of inventory heading in to the spring market of 2016,” Wilson remarked. Like others on the MLS board, he said serious buyers need to be prepared to take immediate action when they find a home they like.

“In preparation, buyers need to meet with a lender, find an inspector, check with their insurance agent, and get their financial house in order so they can move aggressively,” Wilson advised.

Scott said house-hunters who procrastinate may be disappointed. “If you’re looking for a home this winter, the number of listings coming on the market each month will drop approximately 50 percent every 30 days compared to spring and summer months,” he predicts.

Brokers say opportunities still exist for buyers who have missed out on homes during multiple offer situations.
Some buyers who are weary of bidding wars are looking in areas where multiple offers are less common, said MLS director George Moorhead. Also, buyers who consider homes that have been on the market more than 120 days are negotiating much better terms without the competition of other buyers,” he reported.

Scott also recommended alternatives for frustrated buyers. “There are still opportunities to take advantage of low interest rates by taking a second look at homes that have been on the market for more than a month. If you don’t mind doing some fix up, you can negotiate the price and avoid multiple offer scenarios,” he stated.

Beeson suggested inventory shortages could be eased if expired listings are re-listed. Not every home sells once it’s listed, he noted. His analysis shows more than 2,600 listings have expired in the tri-county area so far this year. “These are sellers who need coaching on pricing,” he believes.

Even though they’ll face longer commutes, Moorhead said buyers who are feeling squeezed by the lack of inventory are extending their search areas farther than before in hopes of finding a home at an affordable price. These buyers hope to sell the home in the outlying area within five years and purchase another home closer in. “This calculated move hasn’t really been a conversation in the past. If buyers have a home to sell in order to purchase, they should consider selling, then prepare to live in temporary housing while looking for the right home to purchase,” they suggested.

Buyers without a home to sell may be better positioned to have their offer accepted, believes Chipman, a member of the Northwest MLS board of directors. “These buyers should look at both active status listings and contingent listings to expand their choices,” she explained.

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 23,000 real estate brokers. The organization, based in Kirkland, Wash., currently serves 23 counties in Washington State.

Wednesday, September 30, 2015

Commerical Real Estate, Did you Hear?

Macroeconomic conditions continued improving at a moderate pace in the second quarter of this year. Demand for commercial lease space continued advancing in the second quarter of 2015, rebounding from the soft performance of the wintry first quarter. The apartment 
Commercial Real Estate Outlook PDFsector was the only exception, as new supply exceeded demand this year, resulting in a slight increase in vacancies. While construction has been ramping up across all property types, the gap between demand and supply continued to add downward pressure on availability.

Wednesday, September 23, 2015

Selecting a Lender

Finding a mortgage lender is not a problem. Selecting someone who will help you find the best loan product for your situation even if it means sending you to another lender is paramount.

There is a huge advantage to be able to sit across the table from someone you’re doing business with and look them straight in the eye. It’s difficult to make an informed decision based on a website and a phone call.

Doing business with a full-time professional who specializes in residential loans like you’re trying to get is important. You want the loan officer to be familiar with local conditions, values and practices.
It’s to your benefit to have a loan officer who has the experience to put the unusual transaction together even if yours is not. 

Here are a few questions that will be helpful in selecting the right loan officer.
  1. What percentage of your business are FHA &; VA compared to conventional mortgages and how long have you been doing them?
  2. What percentage of your loans close on time according to the sales contracts?
  3. Will my credit score affect my interest rate?
  4. Will you help me select the best loan product for me regardless of your commission?
  5. Are there prepayment penalties on any of the loans we’re considering?
  6. Are there any restrictions on refinancing any of the loans we’re considering?
  7. When is my loan rate locked-in? Is there a charge for that?
  8. Is your loan underwriting in-house?
A real estate professional can be your best source of information and can recommend a trusted lender. If you have any questions as to what kind of answers you should expect, please give me a call.

Thursday, September 3, 2015

Opinions vary on possibility of a housing slowdown, but numbers show solid activity

Some brokers from Northwest Multiple Listing Service detected a slowdown in housing activity during August, “but nowhere near what is typical,” according to one industry veteran. Among MLS leaders who commented on the service’s latest report, expectations for the remainder of 2015 ranged from one who predicted “we’re on the cusp of a slowdown,” to others describing activity as “torrid” and saying “sales will continue at a fast pace.”

Newly released statistics show solid gains for several indicators used to track activity, including pending sales, closed sales, and median prices. For the fifth month this year, pending sales system-wide outpaced the number of new listings added to the inventory. During August, members reported 10,603 mutually accepted transactions and 9,921 new listings. That new listing total for the 23 counties in the MLS service area was the lowest level since February.

The velocity of sales activity continues at a very fast pace with pending sales eclipsing new listing inventory. This sales activity is keeping the selection of available properties at historic lows. The low listing inventory continues to impact some sub-markets, including Seattle’s where multiple offers and escalation clauses are “the rule rather than the exception.”

Like new listings, total inventory also declined. At the end of August, Northwest MLS members reported 20,749 total active listings in its database. That reflects a slight drop from July’s total selection of 21,069, but a 23.3 percent decline from the year-ago inventory when there were 27,060 homes for sale.

Supply, as measured by months of inventory, showed slight improvement in August, inching up to 2.38 months overall. That’s up from July’s figure of 2.24 months. In King and Snohomish counties, supply remained well under two months. Many industry analysts use a range of four-to-six months as an indicator of a balanced market.

MLS figures show last month’s closed sales of single family homes and condominiums had a median selling price of $315,000 area-wide for a 9.6 percent increase from a year ago. Ten counties reported double-digit gains, including King County where the median price was $450,700. That translates to a 13.2 percent increase from the year-ago figure of $398,000.

The volume of completed sales, numbering 8,718, jumped more than 12 percent from the year-ago total of 7,775 closings. Single family homes accounted for more than 85 percent of the total transactions.

Single family homes in King County sold for a median price of $499,950, just below the figure of $500,000 the MLS reported in June, believed to be an all-time high for the monthly reports. Year-over-year prices for this segment jumped 14.4 percent.

For condos, both the volume of sales and selling prices showed sizable gains from a year ago. The overall number of condo sales rose from 1,026 to 1,248 for a 21.6 percent gain. Condo prices surged 17 percent, rising from $221,000 to $258,750.

The number of buyers in the market place today leaves little doubt that third quarter sales will continue at a fast pace. Conditions are optimal for the home buying surge in the Puget Sound Region to continue, due to job growth and historically low interest rates. We can also expect the severe shortage of homes for sale close to job centers, and in the more affordable and mid-price ranges in all Puget Sound markets, to persist.

There is suggestion the fall season will create new challenges for home buyers. We expect price appreciation to remain consistent as inventory continues to decrease, noting new listing inventory historically drops about 50 percent in the winter months.

Northwest MLS brokers continue to remind sellers about the consequences of overpricing and to caution would-be buyers about the pitfalls of overextending themselves.

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 23,000 real estate brokers. The organization, based in Kirkland, Wash., currently serves 23 counties in Washington state.

Wednesday, August 12, 2015

Carbon Monoxide Alarms Must Be Installed

As a reminder, all residential properties are required to be equipped with carbon monoxide alarms. 

RCW 19.27.530 requires the seller of any owner-occupied single-family residence to equip the residence with carbon monoxide alarms. Washington State Department of Health's website lists additional information about carbon monoxide.

Monday, August 10, 2015

This Is Me

It's the tireless work they do behind the scenes on behalf of buyers and sellers that makes them unique. It's a RE/MAX agent.

Wednesday, August 5, 2015

Pent-up demand boosting Western Washington home sales and prices

Prices for last month’s completed sales rose 6.4 percent area-wide from a year ago, with considerable variation across the 23 counties served by the multiple listing service. The median price system-wide for last month’s closed sales of single family homes and condominiums (combined) was $319,250.

Among counties in the central Puget Sound region, Kitsap County registered the largest year-over-year increase at 9.2 percent, and King County registered the smallest gain at 3.3 percent. The median sales prices in the four-county area ranged from a low of $245,000 in Pierce County to a high of $439,000 in King County.

July’s single family home prices (excluding condominiums) rose 4.1 percent compared to a year ago, but dipped slightly from the previous month. The area-wide price on last month’s closed sales was $327,950, up from the year-ago figure of $315,000, but down from June’s figure of $330,000. Year-over-year prices were up in 22 of the 23 counties in the report, while seven counties reported small drops from June.

The challenge with a sellers’ market is that some sellers tend to spend too much time reading the headlines, which pressures them to overprice their homes. Noting cash transactions tend to draw news coverage, they are still in the minority when compared to conventional, FHA or VA financing. At the end of the day you still need to attract a ready and willing buyer who is offering a price that an appraiser will confirm.

We also noted prices are escalating at a faster pace in Kitsap County than in King County. MLS figures indicate the median price in Kitsap County has surged 22.4 percent since January, which compares to a 12.6 percent jump in King County.

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 23,000 real estate brokers. The organization, based in Kirkland, Wash., currently serves 23 counties in Washington state.

Monday, August 3, 2015

Sellers’ Preparation Checklist

To save time and avoid delays in the transaction process, sellers should identify and provide clear access to all electric panels, attics, and crawl space access points. Here is a list that may be helpful for you in preparing your client for an inspection.

Many of these items can be done at little or no cost and are part of a regular maintenance program for any home. When a home seller is aware of the things they can do to prepare their home for an inspection, it’s certain to help make it a smooth experience for all involved.

House Exterior

  • Remove soil or mulch from contact with siding. Six or more inches of clearance is best.
  • Clean out dirty gutters and any debris from the roof.
  • Check to make sure all water from downspouts, sump pump, condensation and basement entry drains is diverted away from the house.
  • Trim trees, roots, and bushes back from the foundation, roof, siding and chimney.
  • Paint weathered exterior wood and caulk around the trim, chimney, windows and doors.
  • Repair any failing mortar in brick or block.
  • Remove wood and/or firewood from any contact with the house.
  • Caulk all exterior wall penetrations.

Basement, Crawl Spaces and Attics

  • Check to ensure that the crawl space is dry and install a proper vapor barrier if necessary.
  • Remove paints, solvents, gas, wood and similar materials from crawl space, basement, attic and porch.
  • Update attic ventilation if none is present.
  • If windows are at or below grade, install window wells and covers.

Doors and Windows

  • Ensure that all doors and windows are in proper operating condition, including repairing or replacing any cracked windowpanes.

House Interior

  • Clean or replace heating and cooling filters, clean dirty air returns and plenum.
  • Test all smoke detectors to ensure that they are working.
  • Have the chimney, fireplace or wood stove serviced and provide the buyer with a copy of the cleaning record.
  • Replace any burned out light bulbs.
  • Have clear access to attic, crawl space, heating system, garage and other areas that will need to be inspected.
  • If the house is vacant, make sure all utilities are turned on. This includes water, electricity, furnace, A/C and the water heater.
  • Ensure ready access to all rooms and crawl spaces. Clear all furniture, boxes, clothes, toys and other personal items that may block access to the furnace, water heater and electrical panel.

Kitchen and Bathrooms

  • Ensure that all plumbing fixtures such as the toilet, tub, shower, and sinks are in proper working condition. Fix any leaks and caulk around fixtures if necessary.
  • Ensure GFCI receptacles are functional.
  • Check bath vents to see if they are properly vented and in working condition.
  • Clear out areas under sinks so they can be inspected.
Sellers’ Inspection Preparation Checklist provided by WIN Home Inspection. 

Sunday, July 5, 2015

Home sales sizzling around Western Washington, with volumes reaching 10-year high

Temperatures around Western Washington were not the only thing sizzling during June. Northwest Multiple Listing Service members reported 11,453 pending sales last month, the highest volume since August 2005 when members notched 11,546 mutually accepted offers. Last month also marked the fourth consecutive month of 11,000-plus pending transactions.

MLS members credit first-time buyers, an influx of relocating workers, and escalating rents for part of the surge.

“First time buyers are returning to the market, but cautiously and with more knowledge based on market values and trends,” said Gorge Moorhead, designated broker and owner at Bentley Properties in Bothell.

Spring House

“Educated buyers today are no longer just dipping their toes in the water. They are diving right in. It’s been challenging for everyone involved in a real estate transaction, whether buyer, seller or agent.”

Gain and many of his colleagues bemoan the lack of listings. “The only real problem we are experiencing today is the lack of inventory,” he said.
 Brokers added 11,581 new listings to inventory during June, about the same number as a year ago (11,541), but pending sales outgained the same month last year by nearly 16 percent, depleting the selection. At the end of June, the number of active listings across the 23 counties in the MLS report totaled 20,333. That compares to 25,342 for the same month a year ago for a drop of 19.8 percent.

The imbalance between listings and sales means shrinking “months of supply,” an indicator of sales velocity. Industry experts use a figure of four-to-six months of supply as one gauge of a balanced market. For the Northwest MLS market overall, only 2.2 months of inventory existed at the end of June.

Multiple offers are common throughout the Central Puget Sound region.

“We see many multiple offers on properties,” reported Dick Beeson, principal managing broker at RE/MAX Professionals in Tacoma, who described sales activity as “phenomenal.” 

For first-time buyers, the competitive bidding can be daunting, which he suggested underscores the importance of relying on experienced brokers. Anxious buyers have a sense of urgency as prices rise, he noted. “They need a great real estate broker to help guide them through multiple offer situations,” added Beeson, a member of the Northwest MLS board of directors.

Rising prices are prompting some house-hunters to broaden their search beyond primary job centers.

“More and more buyers are starting to chase the market northward as prices increase in King County, especially around Seattle,” said Diedre Haines, principal managing broker-South Snohomish County at Coldwell Banker Bain in Lynwood. “Open house activity, despite buyers’ fatigue and slight increases in interest rates, remains robust,” added Haines, a past chairman of the MLS board.

Median prices continue to trend upward, according to Northwest MLS figures.

Rising prices are prompting some worries about affordability. Broker Dick Beeson believes the growth rate in jobs and the “sheer numbers of people flowing into the state make this market appear to be sustainable for the long term,” despite some uncertainty around reaching the upper limit in pricing and the likelihood of rising interest rates.

Referring to a list compiled by Forbes magazine that rank the Seattle-Bellevue-Everett area as an “overpriced area,” MLS director Moorhead suggested it’s a matter of value. “An experienced real estate broker will be invaluable in navigating through the buying and selling process” and understanding value as inventory levels balance out and interest rates increase.

Appraisals are also concerning to some. Low appraisals are a big challenge, according to Beeson. Other MLS brokers agreed. “We are beginning to see a resurgence of low appraisals, most are small gaps between sale price and appraised value adding to frustration for both buyers and sellers,” reported Diedre Haines. “Kitsap is also beginning to see a higher incidence of low appraisals,” said MLS director Frank Wilson.

Thursday, June 4, 2015

Northwest MLS brokers say home buyers are sprinting, but sellers are stalling

Home buyers are in “full sprint” mode while sellers are stalling, according to brokers from Northwest Multiple Listing Service. As a result, MLS members are juggling severe inventory shortages and multiple offers in many Seattle neighborhoods and beyond.

MLS figures for May show double-digit drops in inventory compared to a year ago and double-digit gains in both sales and prices. Commenting on the numbers, Northwest MLS director Dick Beeson said “The crush between the lack of inventory and desperate buyers may soon generate the next TV reality show! The stressed market is exhausting everyone in its path, with no relief in sight.”

Last month’s volume of 11,425 pending sales across the 23 counties in the latest report nearly matched the number of new listings added to the database (11,862). At month end, the total number of active listings stood at 19,515, a drop of more than 18 percent from a year ago when members reported 23,917 active listings. Only two counties (Douglas and Ferry) reported year-over-year gains in inventory.

George Moorhead, another director with Northwest MLS, said multiple offers are commonplace for well-priced homes in desirable areas. “We are definitely feeling the squeeze on inventory levels with sellers holding off until they can find a home,” commented Moorhead, the designated broker and owner at Bentley Properties.

MLS figures for May show supply has dwindled to about 1.2 months in King County and 1.6 months in Snohomish County. Several neighborhoods near Seattle’s job centers have less than a month of supply.
For the MLS service area overall, there is about 2.4 months of supply – well below the 4-to-6 month figure used by many industry watchers as an indicator of a balanced market. About half the counties reported less than four months of supply.

Beeson, the principal managing broker at RE/MAX Professionals in Tacoma, noted supply in Pierce County has slipped to record lows, at just over 2 months. For sellers, there may be little solace. When they decide to sell they’ll need a replacement home “which may or may not be there,” he explained.

Pending sales jumped more than 10 percent in May compared to the same month a year ago, rising from 10,373 mutually accepted offers to 11,425. Last month’s pendings rose slightly from April’s total of 11,384.

“This is a supply-demand-distance type of market,” said Frank Wilson, branch managing broker at John L. Scott in Poulsbo. “They have run out of inventory in the Seattle market so now it’s just a matter of how far a buyer needs to drive to find a home that is available and affordable. Kitsap is seeing that demand increase with a bit of a lag as the market rolls from east to west into Kitsap and beyond,” said Wilson, another director on the Northwest MLS board.

With demand exceeding supply, prices continue to climb. MLS statistics show an area-wide year-over-year gain of more than 11 percent. The median price for last month’s 8,229 closed sales, including single family homes and condominiums, was $317,000. That compares to the year-ago median sales price of $285,000 for the 7,187 completed transactions.

In King County, the median sales price for single family homes and condos (combined) was $434,000, an increase of 9 percent from twelve months ago when brokers reported a median sales price of $398,000. Prices on single family homes (excluding condos) that sold in King County jumped to $480,942, about the same as April ($480,000), but up nearly 8.8 percent from the year ago figure of $442,250.

“Locally, home prices are continuing to rise at a steady pace, and they continue to outpace both inflation and wage gains,” observed Mike Gain, CEO/president at Berkshire Hathaway HomeServices Northwest. Pent-up demand is pushing inventory lower, he notes. Gain believes the supply challenges could be alleviated if more sellers put their home on the market. “Sellers may never see a better time to be a seller,” commented Gain, a former chairman of the Northwest MLS board.

OB Jacobi, president of Windermere Real Estate, echoed comments about the supply. “We’re still in desperate need of inventory. The irony is that there are plenty of people who want to sell, but won’t put their home on the market until they can buy something new. But they can’t buy something new until there are more homes on the market. It’s the proverbial chicken and egg situation for which I see no end in the near future.”

Demand exists across the price spectrum, fueled by renters, high wage earners and investors.

Gain noted renters are re-entering the housing market as they find they are better off buying than continuing to pay rent. “They are finding their monthly payment to be less than their rent payment for a similar home. They also like the fact their payment will remain the same. And they’re finding there are numerous low down payment assistance and no down payment mortgages available at incredibly low interest rates.”

Luxury home buyers are also active participants in the current market. A check of MLS statistics shows 887 single family homes priced at $1 million or more have sold during the first five months of the year. That compares to 696 for the same timeframe a year ago for a jump of more than 27 percent.

The segment of distressed properties is also rebounding. Moorhead cited figures showing 57 percent of REO (bank-owned) listings sold at or above 100 percent of list price.

Given the fast pace of housing activity, Northwest MLS brokers urged buyers and sellers alike to make sensible decisions and to take advantage of assistance from professionals.

Sellers should avoid the temptation to be greedy suggests Moorhead. “Our message to sellers is to be cautious with pricing or it will cost you thousands by over pricing.”

Frank Wilson advises sellers to refrain from agreeing to “select showings.” “To maximize on this market sellers should be sure their listing is exposed to all brokers in the Northwest Multiple Listing Service,” he explained.

Wilson also offered advice to buyers to avoid disappointment. “We are still seeing buyers who think getting a loan is like it was in the old days: fog a mirror and get a loan. That’s no longer the case,” he said, adding these misinformed buyers are offended when they are asked for documents and verifications all the way through closing. “Buyers need to be ready to buy on day No. 1,” he emphasized. “This means getting approved with their lender, being clear about what they want in a new home, becoming educated about the market, and being ready to write a strong offer when they find the right home.”

Mike Gain expects historically low interest rates, a growing economy, improving consumer confidence and consumer finances will continue to fuel activity and push up the numbers. “Anyone who can buy a home today at today’s prices with today’s low interest rates should do it. In my opinion, prices and monthly payments will never be lower than they are today.”

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 23,000 real estate brokers. The organization, based in Kirkland, Wash., currently serves 23 counties in Washington state.

Wednesday, June 3, 2015

CFPB Changes to Come

New federal rules promulgated by the Consumer Financial Protection Bureau (“CFPB”) are effective October 3, 2015. These rules relate to Integrated Mortgage Disclosures under the Real Estate Settlement Procedures Act (“RESPA”) (Regulation X) and the Truth In Lending Act (“TILA”) (Regulation Z).

The changes that are most relevant for real estate brokers include:

 Definition of loan “application” (12 CFR 1026(a)(2));

 The lender must provide a “Loan Estimate” to Buyer within three days of application (12 CFR 1026.19(e));

 The lender must provide a “Closing Disclosure” to Buyer at least three days before consummation (i.e. the date the Buyer is contractually obligated for the loan) (12 CFR 1026.19(f));

 The lender must provide a revised “Closing Disclosure” for last minute changes to the APR, the addition of a pre-payment penalty, or a change in the loan product at least three days before consummation (i.e. the date the Buyer is contractually obligated for the loan) (12 CFR 19(f)(2)(i)).

Wednesday, May 6, 2015

Pent-up demand triggering record pace of home sales around Western Washington

Northwest Multiple Listing Service members notched a record high level of pending sales during April, surpassing the year-ago volume by nearly 1,800 transactions. Both closed sales and prices also surged last month as the spring market kicked into high gear.

Buyer confidence and buyer ability to purchase are fueling activity, suggested Ken Anderson, the managing broker and owner of Coldwell Banker Evergreen Olympia Realty. “Long building pent-up demand is being unleashed,” he commented.

MLS members reported an 18.7 percent year-over-year increase in pending sales, with the volume of mutually accepted offers rising from 9,590 transactions to 11,384. For the four-county Puget Sound region members logged 8,671 pending sales to top the 8,000 mark for only the second time in the past 16 years.

Closed sales and prices also accelerated, according to Northwest MLS statistics. Across the 23 counties covered by the report there were 7,696 closed sales. That total represents a 24.3 percent increase from the year-ago volume of 6,190 closings. Within the four-county region, Pierce County experienced a jump of nearly 38 percent in closed sales compared to a year ago, followed by Snohomish County with a 35 percent increase, prompting one MLS director to comment, “That is super amazing.”
“We are still very clearly in the midst of a seller’s market and unless we see a significant increase in listings, it will remain that way for the foreseeable future,” remarked OB Jacobi, president of Windermere Real Estate. Jacobi and other brokers reiterated the dire need for listings.

Members added 11,495 new listings to inventory during April, but brisk sales kept supply tight and well below the level of a year ago. At the end of April, the MLS reported 18,132 listings of single family homes and condominiums in its database, a drop of more than 15 percent from the year-ago total of 21,390.

Compared to March, inventory at the end of April improved by 6.6 percent, but pending sales jumped 13.7 percent from the previous month.

“We’re in desperate need of inventory so I hope to see an increase in listings as we move further into the late spring/early summer,” stated Jacobi.

“What’s available and that looks at least ‘pretty good’ is selling,” according to MLS director Dick Beeson, principal managing broker at RE/MAX Professionals in Tacoma. Commenting on the latest MLS statistics, he said, “What we have in the Greater Puget Sound real estate market is too many buyers chasing too few homes.”

Beeson cautioned buyers against “playing games” with sellers. “The new normal for buyers is that the quest for the perfect home may have to wait,” suggested Beeson. “You should buy now, get in the mix, buy a home and build equity for a future decision,” he advised. “Don’t wait to pay more for the same home next year.”

Anderson agreed. “With pending home sales in Thurston County at record levels I am often asked if we are repeating the problems the last run-up caused,” he stated, adding, “There are two important differences in this market. There is not the overbuilding we saw before, and the buyers are truly qualified for today’s mortgages. Both facts suggest we won’t have a problem with the oversupply that contributed to the recent downturn. This time the market improvement is built on solid footings.”