Survey Reveals Rising Prices, Strong Demand

The housing industry is staging a recovery with increasing sales and stabilizing prices, according to a national survey of RE/MAX agents. Four out of five agents believe U.S. home prices won’t decline further. In fact, nearly 70% predict prices will go up, led by a strong demand for homes in the low to middle price ranges.


"To active real estate agents, this market is definitely heating up," said RE/MAX CEO Margaret Kelly. "They are witnessing a recovery across the country fueled by home buyers and sellers taking advantage of a significant market opportunity."

Agent opinions are documented in the quarterly RE/MAX Market Insights, an online survey of 1,022 residential experts. The survey builds brand visibility for RE/MAX agents, and is typically picked up by more than 300 news outlets. Collectively, RE/MAX agents sell more real estate than any other real estate network in the U.S.

Download the RE/MAX Market Insights survey infographic.

Key findings include:

• Price rebound: 68% say prices will be higher by the end of 2012.
• Today’s prices: 29% below the peak reached during the housing bubble.
• Demand for lower-priced properties: 80% of agents say it’s good or very good.
• Demand for homes in the middle-price ranges: 71% rate it as fair to good.
• Demand for high-priced homes: 58% call it poor to fair.

A snapshot of today’s homebuyers served by RE/MAX agents:

• Roughly one third are first-time buyers. Another third are homeowners looking to sell so they can move up or downsize. The remainder are mostly investors, who believe the market has hit bottom.
• One in five buyers pays cash, receiving an average discount of 15%.

The most significant challenges facing first-time homebuyers are having an acceptable credit score, posting a down payment, and facing a shortage of homes for sale. Repeat buyers have the added burden of selling their current home. They, too, are facing a scarcity of homes to purchase in the lower and middle price ranges.

Nearly half of the agents say lower priced homes in their markets are selling for slightly less than the asking price, while 17% say buyers are paying full price and 11% say buyers are paying slightly more than the asking price.

For homes in the middle-price ranges, 49% report sale prices are slightly less than the asking price, while 8% say full-price is being paid. For the high-priced homes, 43% report that sale prices are moderately less than asking prices, with another 25% saying it is slightly less.

With bank-owned homes making up a significant portion of the current inventory, agents report that 62% of their non-investor buyers have a favorable attitude toward foreclosures, while only 27% have a favorable attitude toward short sales.

"With distressed properties still making up a sizeable portion of homes on the market, this inventory is being cleared effectively by buyers, who don’t mind investing a little to fix up a property in return for an attractive bargain," Kelly added.

Among buyers’ highest priorities were quality of schools, and condition and size of the home. The lowest priorities included public transportation, walkability and energy efficiency.

Most RE/MAX agents advise their buyers to hire a professional home inspector and to attend the inspection. Getting pre-approved for a mortgage, not merely pre-qualified, also is recommended.

For All The Things That Move You

Real Estate Market Research, And Then Some

Is buying a home a good investment?  I sell real estate, so I bet you can guess my answer!  Of course it's a good investment, it's actually the best investment.  Today, two out of every three households in the U.S. live in a home they own.  And according to a recent poll, 9 out of 10 homeowners say they would buy their house again.  Their top reason for buying a home "Having a place to raise a family."  Their next reason "building equity rather than paying rent."


Home Appreciation: With the exception of the past few years, homes in Thurston County have appreciated.  The median-priced home is now back to where it was in the summer of 2005.  A home purchased in Thurston County in 2000 and sold today would net about a 4.5 percent annual return, which is respectable for a safe fixed investment.


Tax Advantages: There are tax advantages to owning that help you keep more of what you earn.  In 2008, the federal mortgage interest deduction, a powerful housing incentive unique to our country for more than 80 years, saved the average homeowner in Washington state $3,465 in taxes.


Homeownership today remains a key element of a family's wealth-building.  Maybe even more important to those who aspire to own, it provides a family long-term social enrichment, stability and quality of life - values considered priceless over the years you live in a home.


So as promised, here's the latest in numbers:


$219,700 - Median price existing home sold in WA, 4th quarter 2011.


6.0 - Month's supply of homes on market at year-end 2011.


-1.55% - Change in mortgage rate since peak of market in 2005.


$572.6 - Value of single-family building permits issued in 4th quarter (millions, excludes land).


17.3% - Proportion of underwater mortgages in WA, 3rd quarter 2011


91,080 - Existing home sales in WA, 4th quarter 2011, Seasonally Adjusted Annual Rate.


28.1% - Increase in multifamily building permits 4th quarter 2010 to 4th quarter 2011.

*all data courtesy of WA Realtor Magazine, Spring 2012

Carbon Monoxide Alarms: Important Deadline & Information

Three years ago, the WA State Legislature passed legislation requiring the Building Code Council to create rules requiring all residential buildings to be equipped with carbon monoxide alarms.

The final carbon monoxide alarm rules go into effect April 1, 2012 and here's the up-to-date information on those rules. The basics are:

• Carbon monoxide monitors must be installed in all new residential construction.
• All sellers of residential property must install carbon monoxide alarms prior to closing.
• There is NO REQUIREMENT for installation of carbon monoxide monitors in tenant-occupied housing, unless and until the property owner pulls a permit for interior remodeling.

Finally, in this legislative session Washington REALTORS® introduced SB 6472, which provides liability protection for real estate brokers should a seller fail to comply with requirements for installing carbon monoxide alarms. REALTORS® care about the safety of consumers, but should not be liable for a seller's omission. The bill has been passed by the Legislature and sent to the Governor for her signature.

The 3.8% Tax

Beginning January 1, 2013, a new 3.8 percent tax on some investment income will take effect. Since this new tax will affect some real estate transactions, it is important to clearly understand the tax and how it could impact you. It's a complicated tax, so it will have a different affect on all buyers and sellers.

Attached is an informational brochure.  On the following pages, you'll read examples of different scenarios in which this new tax - passed by Congress in 2010 with the intent of generating an estimated $210 billion to help fund President Barack Obama's health care and Medicare overhaul plans - could be relevant to you.

Understand that this tax WILL NOT be imposed on all real estate transactions, a common misconception. Rather, when the legislation becomes effective in 2013, it may impose a 3.8% tax on some (but not all) income from interest, dividends, rents (less expenses) and capital gains (less capital losses). The tax will fall only on individuals with an adjusted gross income (AGI) above $200,000 and couples filing a joint return with more than $250,000 AGI.

Download Pamphlet Here

Fixed-Rate Mortgages Remain at or Near All-Time Lows

30-year fixed-rate mortgage (FRM) averaged 3.88 percent with an average 0.8 point for the week ending March 8, 2012, down from last week when it averaged 3.90 percent. Last year at this time, the 30-year FRM averaged 4.88 percent.

15-year FRM this week averaged 3.13 percent with an average 0.8 point, down from last week when it averaged 3.17 percent. A year ago at this time, the 15-year FRM averaged 4.15 percent.

5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.81 percent this week, with an average 0.7 point, down from last week when it averaged 2.83 percent. A year ago, the 5-year ARM averaged 3.73 percent.

1-year Treasury-indexed ARM averaged 2.73 percent this week with an average 0.6 point, up from last week when it averaged 2.72 percent. At this time last year, the 1-year ARM averaged 3.21 percent.

Did you know? If your credit score is around 620, your interest rate will be approximately 1.4% more than a credit score of 720. Over the life of a $300,000 mortgage, you'll end up paying an additional $91,000!

Washington homebuyers realizing “market may have reached bottom of cycle”

KIRKLAND, Wash. (March 5, 2012) – With spring on the horizon and consumer confidence on the rise, members of Northwest Multiple Listing Service are reporting positive gains in activity. Pending sales for February increased more than 27 percent from a year ago, more sellers are listing their homes, and brokers are reporting an uptick in multiple offers.


“Buyers are beginning to realize that we may have seen the bottom of this real estate market,” remarked Frank Wilson, a member of the Northwest MLS board of directors. “Waiting to buy may only result in paying a higher interest rate, having fewer houses to choose from, or finding that sellers do not need to give up as much as they have in the past,” he added.


Brokers reported 7,623 pending sales during February, the highest volume since August when they notched 7,632 mutually accepted offers. Last month’s tally jumped 27.4 percent from twelve months ago, with 20 of the 21 counties in the MLS service area reporting double-digit gains.


“The only thing tempering this from being a hot, thriving market are the short sales and foreclosed properties which represent about one-third of the transactions,” Wilson commented.


Buyers have fewer homes to consider compared to a year ago, with inventory down 22.5 percent area-wide. At month end, there were 25,510 active listings in the Northwest MLS database; a year ago, there were 32,922 homes and condos listed for sale.