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5 Simple Graphs Proving This Is NOT Like the Last Time

With all of the volatility in the stock market and uncertainty about the Coronavirus (COVID-19), some are concerned we may be headed for another housing crash like the one we experienced from 2006-2008. The feeling is understandable. Ali Wolf, Director of Economic Research at the real estate consulting firm Meyers Research, addressed this point in a recent interview:

“With people having PTSD from the last time, they’re still afraid of buying at the wrong time.”

There are many reasons, however, indicating this real estate market is nothing like 2008. Here are five visuals to show the dramatic differences.

1. Mortgage standards are nothing like they were back then.

During the housing bubble, it was difficult NOT to get a mortgage. Today, it is tough to qualify. The Mortgage Bankers’ Association releases a Mortgage Credit Availability Index which is “a summary measure which indicates the availability of mortgage credit at a point in time.” The higher the index, the easier it is to get a mortgage. As shown below, during the housing bubble, the index skyrocketed. Currently, the index shows how getting a mortgage is even more difficult than it was before the bubble.

2. Prices are not soaring out of control.

Below is a graph showing annual house appreciation over the past six years, compared to the six years leading up to the height of the housing bubble. Though price appreciation has been quite strong recently, it is nowhere near the rise in prices that preceded the crash.There’s a stark difference between these two periods of time. Normal appreciation is 3.6%, so while current appreciation is higher than the historic norm, it’s certainly not accelerating beyond control as it did in the early 2000s

3. We don’t have a surplus of homes on the market. We have a shortage.

The months’ supply of inventory needed to sustain a normal real estate market is approximately six months. Anything more than that is an overabundance and will causes prices to depreciate. Anything less than that is a shortage and will lead to continued appreciation. As the next graph shows, there were too many homes for sale in 2007, and that caused prices to tumble. Today, there’s a shortage of inventory which is causing an acceleration in home values.

4. Houses became too expensive to buy.

The affordability formula has three components: the price of the home, the wages earned by the purchaser, and the mortgage rate available at the time. Fourteen years ago, prices were high, wages were low, and mortgage rates were over 6%. Today, prices are still high. Wages, however, have increased and the mortgage rate is about 3.5%. That means the average family pays less of their monthly income toward their mortgage payment than they did back then. Here’s a graph showing that difference:

5. People are equity rich, not tapped out.

In the run-up to the housing bubble, homeowners were using their homes as a personal ATM machine. Many immediately withdrew their equity once it built up, and they learned their lesson in the process. Prices have risen nicely over the last few years, leading to over fifty percent of homes in the country having greater than 50% equity. But owners have not been tapping into it like the last time. Here is a table comparing the equity withdrawal over the last three years compared to 2005, 2006, and 2007. Homeowners have cashed out over $500 billion dollars less than before:During the crash, home values began to fall, and sellers found themselves in a negative equity situation (where the amount of the mortgage they owned was greater than the value of their home). Some decided to walk away from their homes, and that led to a rash of distressed property listings (foreclosures and short sales), which sold at huge discounts, thus lowering the value of other homes in the area. That can’t happen today.

Bottom Line

If you’re concerned we’re making the same mistakes that led to the housing crash, take a look at the charts and graphs above to help alleviate your fears.

See Original Post Here

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Relocating to Washington State? Discover the Best Island Living in WA... " Fox Island is a wonderful community - not just because of its beauty and rural feel, but because it is a safe place to live and raise a family. Fox Island has the lowest crime rate of any community its size, or larger, in Pierce County... "

Learn More About Fox Island! 

http://ficra.org/about-fox-island.htm

Jennie Wetter Designated Broker & Owner - Infinity Real Estate

253.225.5602 jennie@infinityrewa.com jenniewetter.com

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National Housing Market Forecast for 2019

Of course no one truly has a crystal ball... but here are what some of the experts have to say about the national market forecast...

The 2018 housing market was defined by low inventory, rising home prices and increasing interest rates, keeping some prospective home buyers on the sidelines.

In November 2018, the average existing-home price was $257,700, which marked 81 straight months of year-over-year gains in home prices, according to the National Association of Realtors. While housing inventory saw a small uptick that month, homes still didn’t last long on the market. The NAR reported the average property typically stayed on the market for 42 days, and 43 percent of homes were on the market for less than a month.

Will these current conditions continue to constrict the market, or will more opportunities emerge for interested buyers? Here’s what the housing market could look like in 2019:

Interest rates may continue to rise

The Federal Reserve closed 2018 by raising the benchmark federal funds rate by 25 basis points, up from 2.25 percent to 2.5 percent. The benchmark federal funds rate is the interest rate at which banks lend money to each other.

Mortgage rates have gradually increased after starting below four percent when 2018 began. The current average for a 30-year fixed-rate mortgage is 4.45 percent, according to Freddie Mac.

Two more rate hikes are currently expected for 2019 and mortgage rates could rise higher as a result. Some predictions indicate rates could rise to 5.8 percent by the end of 2019.

While rising interest rates might seem discouraging on the surface, rate increases could reduce affordability concerns.

“While I don’t think the rate announcement materially changes the underlying issues we’ve seen this year–such as lack of inventory and home price appreciation outpacing wages–I do think the rally we’ve seen in the interest rate markets helps with the affordability problem we’ve experienced this year,” said Jeremy Collett, Executive Director Capital Markets at Guaranteed Rate.

Supply might remain tight in 2019 and demand could drop

Housing inventory could increase slightly in 2019, but supply will likely remain limited in most markets. Increased interest rates also could deter prospective homebuyers, leading to a drop off in demand.

A potential decrease in demand combined with a slight uptick in inventory could result in fewer bidding wars and could prompt motivated sellers to slightly drop their asking price.

However, it’s important to note that a significant amount of inventory growth has occurred in higher-priced markets, which means there might not be an influx of starter homes available for first-time buyers.

Home price appreciation could taper off - but it doesn’t go away all together!

If inventory levels continue to increase at a sustainable rate, then price growth could ultimately slow down. One projection from Ruben Gonzalez, chief economist at Keller Williams, suggests appreciation could taper to 3 percent next year.    

This is good news for buyers who have been battling rising home prices and interest rates. While 2019 might not be a true “buyer’s market,” the conditions could certainly give buyers a bit more leverage than in years past.

Stay tuned for local market info!!

SOURCES:

https://www.forbes.com/sites/alyyale/2018/12/06/2019-real-estate-forecast-what-home-buyers-sellers-and-investors-can-expect/#149089cf70d9

https://www.marketwatch.com/story/why-2019-wont-lead-to-a-home-buyers-market-2018-11-28

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What Makes A House A Home For You? 

Whether you are a first-time homebuyer or a move-up buyer who wants to start a new chapter in your life, now is a great time to reflect on the intangible factors that make a house a home.

We frequently talk about why it makes sense to buy a home financially, but more often than not the emotional reasons are the more powerful or compelling ones.

No matter what shape or size your living space is, the concept and feeling of a home can mean different things to different people. Whether it’s a certain scent or a favorite chair, the emotional reasons why we choose to buy our own homes are typically more important to us than the financial ones.

1. Owning your home offers stability to start and raise a family

From the best neighborhoods to the best school districts, even those without children at the time of purchase may have this in the back of their minds as a major reason for choosing the location of the home that they purchase.

2. There’s no place like home

Owning your own home offers you not only safety and security, but also a comfortable place that allows you to relax after a long day!

3. You have more space for you and your family

Whether your family is expanding, an older family member is moving in, or you need to have a large backyard for your pets, you can take all this into consideration when buying your dream home!

4. You have control over renovations, updates, and style

Looking to actually try one of those complicated wall treatments that you saw on Pinterest? Tired of paying an additional pet deposit for your apartment building? Or maybe you want to finally adopt that puppy or kitten you’ve seen online 100 times? Who’s to say that you can’t do all of these things in your own home?

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Legendary Racing Driver turned Award Winning Wine Maker has a Gig Harbor connection!

If you’ve met me, you probably know I am crazy passionate about Car Racing - specifically - Formula 1, but also Endurance Racing and IndyCar Racing - and have been so almost all of my life.  Most of us sports fan rarely get a chance to meet our legends in any sport, even for a quick autograph.  So, to be able to say that I am one of the lucky ones… privileged to have opportunities to be “on the inside” is an understatement!  I often say, “just pinch me” because this starry eyed fan has met and chatted with some of the greatest!

The first time I met legendary racer, Scott Pruett, he was sharing his wines with us at a small dinner pizza party in Pebble Beach, CA.  His passion for his relatively new craft of winemaking radiated from his every word.  It was so much fun and inspiring to hear him talk about the parallels between his two careers, which would seem to most of us to be radically different.  To Scott, there are obvious parallels.

Fast forward to a couple of years later… I spent time talking with Scott and his lovely wife, Judy, again pouring their wines for all of us at a dinner party in Pebble Beach - this time the intimate low key pizza party was still low key, but now had several hundred attendees :)  It was obvious they were exactly where they wanted to be… sharing their fantastic wines and their story.  I asked Scott about his plans now that he had retired.  “Are you going to go big?  Seems the next logical step?”  His answer initially surprised me, but after I pondered it for a moment, it made perfect sense.  “No, not at all, actually.  It might seem the logical step to expand, however, think about it from a racing driver standpoint.  Perfection is attained in almost micro adjustments - lap after lap you evaluate and make tiny changes the next time around - there is always room to improve no matter how perfect the last lap.  I’ve decided to apply that philosophy to my wine making.  I want to continue to refine what Judy and I are creating - making tiny adjustments to our small batch wines - always improving - as close to perfect as we can get.  

Of course I was moved (again, if you know me - makes perfect sense!)  And of course I wanted to buy a case of their great wine!  Come to find out (as I was giving Judy my address), an integral part of their operation lives and works for them right here in Gig Harbor!!  It’s such a small world :)

You don’t have to be a racing junkie like to me to be able to appreciate the  awesome story I’ve attached below… how one of the most decorated (yet kind & genuine) racing drivers in history has produced one of the best Syrah’s in the world in just a few short years in to the winemaking business!  Enjoy the article… and the wine!

How This Legendary Racing Driver Became One of the Best Winemakers in the World in Just a Few Short Years

Scott Pruett wrapped up a five-decade career as one of the most celebrated drivers in sports car history. And he also produces award-winning wines at his family-owned vineyard.

By Jeff Haden

Contributing editor, Inc.

@jeff_haden

Scott Pruett.

CREDIT: Courtesy IMSA

Scott Pruett is the racer’s racer – and one of the most versatile drivers in motorsport history.

He’s a 5-time IMSA WeatherTech SportsCar Series overall champion. He won IROC races. He won IndyCar races. He raced in NASCAR.

And along the way he’s turned a wine business he (literally) started in his garage into Pruett Vineyard, a world-class winery that produces, among other award winning wines, what Wine Spectator declared the highest-rated Syrah in the country.

There’s an old joke that goes, “How do you make a small fortune? Start with a large fortune – and start a winery.” So why (and more importantly, how) did a race car driver launch a winery that within a few short years consistently score 90-plus wine ratings?

To find out, I talked with Scott and his wife Judy – two of the nicest people you could ever hope to meet – at the Rolex 24, his final race before retiring from driving.

Racing at the highest levels is all-consuming… so why get into winemaking?

I grew up on a ranch. I love working. I love being outside. I love working in the dirt.

As far as making wine… I wanted to give it a try, and I knew a few things. I didn’t want to just hire a winemaker and step back out of the way. I didn’t want to just put my name on a label. I didn’t want to buy my fruit.

I wanted to do the work.

You didn’t want to be like a corporate seagull: Fly in, eat all the food, and poop on everything as you fly away?

(Laughs.) Well, no.

During my IndyCar career we had purchased a property in the Sierra foothills with an incredible view of the American River. The Sierra foothills are a very old wine-growing region because of the gold rush: The miners would plant vines, harvest the fruit, ferment the grapes… it gave them something alcoholic to drink.

Being just over an hour from Napa, we knew a lot of very successful people in the business. Thomas Rivers Brown has multiple Wine Spectator and Parker hundred-point Napa Cabernets. Randy Lewis was a racer and is now a successful a winery owner. Bill Harland is there.

Through them we met Tom Prentice and Peter Michael. We needed experts to do climate and soil studies because the last thing I wanted to do was just put vines in my backyard and say, “Isn’t that pretty.” (Laughs.)

But you had no idea whether your property was actually good for growing grapes – much less high quality grapes.

No one had really done much in our area. There were a number of wineries around… but not necessarily making premium wines.

So we took a couple of years to do soil studies and climate studies: Looking at soils at different times of the year, looking at moisture levels, at holding capacities, etc.

Keep in mind we were doing all this in and around racing, but I could manage it fairly easily because we could just set up tests… it wasn’t complicated from a time management point of view.

And when we completed our analysis Tom said, “I will quit my job if you can’t produce something exciting here.”

So I said, “Let’s go.”

Of course deciding to start, and actually working through the process, are two different things.

The next challenge was choosing our root stock. That was a process in itself. Then, our soil type is 80 percent fractured rock and red clay soil. You couldn’t stick a shovel anywhere without hitting a rock. That also created challenges.

Fast forward and we were two years into analysis, more years into preparing the soil and putting plants in and cultivating them… it’s a long runway, and you’re spending money all the time.

But that’s where your inclination towards bootstrapping comes in.

There is a fairly sizable amount of capital involved, but if you’re willing to do the work yourself you can save a lot of money. Tearing down trees, doing all the dirt work, being creative…  It was a lot of hard work.

But it was also a lot of fun. I like working outside and digging up dirt. It was right up my alley. Although it did mean I got so filthy I had to take my clothes off outside before I came in the house. (Laughs.)

So we got the plants in the ground and I got some help from guys who really knew what they were doing. Again, that came through my contacts in Napa. And I hired a consultant and bought some grapes from my neighbor just so I could start the learning process of actually making wine.

Saying there’s a lot to making wine is a huge understatement, and I started with no real experience.

So how do you resist the temptation to just turn it over to someone knowledgeable?

Again, that’s not why I got into it.

On the growing side, I felt more comfortable. Getting the plants in the ground, managing them.. and soon you have a little bit of fruit. The goal was to play with the fruit – with no intention of ever selling it – and just gain some knowledge.

And I did get some help with that process. But the goal was for me to learn from the help I got, not just turn things over to someone.

What did you learn early on?

For starters, we set up all the cross arms based on growing principles from Napa.

But we don’t get those really cool, foggy Napa mornings. So it wasn’t uncommon to have a lot of heat in the fruit because they were in direct sunlight. So I had to go back in and change cross-arms to expand them out and let branches cascade over the shoots so it resulted in a dimpled instead of intense light on the fruit.

I didn’t know what I didn’t know, but I was willing to do the work to correct for things I didn’t know.

How did all that work fit into the time you needed to spend racing?

Fortunately, harvesting happens towards the end of the racing season. But it’s still tough.

And the fact that I’m a racer made it challenging from a mental aspect. Skipping forward a little bit, our first significant crop was in 2010. We harvested, got some help with the pressing, did all the fermentation… and then it’s still another two years before you can release the wine.

For me, as a race car driver used to things happening in fractions of a second, two more years was almost more than I could deal with. That was probably the hardest part – dealing with that really, really long runway.  

And with no guarantee of a return.

Exactly. You could be five years in and be left wondering how long you can use your vintage for cooking. (Laughs.)

In 2011 we were hit with a really long growing season. A lot of rain, we’re really having to move and adapt… it was good we had a small vineyard. Between myself and a couple of guys who helped, we came through it.

So our 2010 was still in barrels, 2011 was a challenging growing season… and my racing was going really well. So I’m out there winning races and I come home the next day and am out there in the wind and rain and dirt.

But that’s what you do.

So time passes and you finally release a vintage. What was the response?

We continually test and try different protocols, different floors, different toasts… the more information we have, the better we learn what brings out the best in our wines. But again, there’s no guarantee that you’re doing anything right.

So we submitted to Wine Spectator and right out of the box we got three 93-point wines.

What was that like?

We did a happy dance. (Laughs.) Plus it was really cool because we name our estate wines after our kids. So that made it fun, too.

And we kept learning. I realized that using less new oak really showed our fruit better. The expression of the wines kept getting better. The flavors and the textures and the mid-palate and the affinity… they’re striking and wonderful.

Did you ever imagine you’d be sitting here with all those terms rolling off your tongue so nicely?

(Laughs.) Oh, heck no. But that’s the great part about doing something new. You learn a lot… and you can also surprise yourself by what you learn to love.

What I also never imagined is that we’d have one of the two highest-rated Syrahs, with 96 points, in the world. Or that we’d have a 95-point wine.

And all of a sudden our sales boomed. We sell our wines ourselves, and the phones and website just lit up.

Which only works if you have something people want; otherwise you need a distributor to push sales.

Exactly. Otherwise you need some sort of distribution model to get your wine out there and get it sold. But when you have people coming to you, you get to stay in control of your marketing and sales… which is very cool.

It also helps that we did something unexpected: Here I was, a guy who shouldn’t be making great wine, doing it in an unknown wine-growing region.

That also helped put us on the map.

I’m fascinated by people who are serial achievers – who accomplish more than one thing at a very high level. Did working on your winery benefit your racing?

I wouldn’t say it made me better at racing, but it was a wonderful getaway. As a vineyard owner you’re walking through your vineyard at sunrise, at 5:30 in the morning, the sun is coming up, it’s peaceful and quiet… it’s pretty cool to know you built all that.

Plus being involved in making wine makes us part of that very centuries-long chain of people who have made wine. That’s a humbling and wonderful thing.

Honestly: All I wanted was to be able to sit across from my friends and have them try my wine and not bust my chops over the taste. (Laughs.) Everything else is gravy.

Judy: Lots of people chase one thing and try to be really, really good at it – much less two things. So I do sometimes think, “How did this happen?”

Scott says he’s totally shocked by the success of the wine. I’m not shocked. He commits all the time and energy necessary to succeed. If it needs to be done, he’ll do it, and he won’t complain. He’s the first guy there in the morning and one of the last to leave. He’ll give up sleeping and eating and anything he has to in order to make it perfect.

So it doesn’t surprise me at all that the wine is so good.

Is the ability to work hard and persevere something you had to develop?

That’s the way my dad was. That’s all I know. And I like working: This harvest was a lot of 14, 15 hour days.

My dad always said, and we say to our kids, “Do your best. Invest yourself in what you want to do. Do your best, then push it a little farther.” That’s how you accomplish hard things.

So you have 50 acres… are you running out of room to expand?

We had this courtyard in front of our house, a big grassy area… and I was constantly fixing irrigation lines and sprinklers. I finally said to Judy, “I’m sick of taking care of this grass and mowing it. Plus it’s using a lot of water. We’re going to rip it out.”

I might be able to pick up another acre, but that’s about it. That’s all there is.

Judy: And now there isn’t much room left to park cars. (Laughs.)

Will that be enough? And if it’s not, when you do you run out of personal capacity to be as involved as you are?

That’s a complicated question.

One, the winery is doing well. It’s paying for itself, putting some money in the bank, letting us buy new equipment… and it’s paying back past debt. And we’re making highly-rated wines. Those are all very, very good things.

That also put you in a small fraction of wineries.

Yes. We started out like Lucy and Ethel, bootstrapping, with minimal equipment… there was a lot of physical labor. But we’ve been able to buy equipment to help make the work easier. And we’re a lot more efficient.

So it’s paid off the installation of the initial vineyard, it’s paid back all this debt and put some money in the bank, there are two vintages sitting in the wine barrels right now and all those costs have already been absorbed… that’s a really good situation to be in.

And we don’t need to work with distributors. Nothing against distributors, it’s just nice to be able to set our own prices, to not absorb the cost of a middle-man, not have to raise our prices to support that… because when you do, the consumer ends up paying that cost.

So we won’t ever get rich from this, but it provides a good living and we get to produce great wines.

And we have a loyal following with our wine club members. One might can call and say, “My father-in-law’s birthday is next week, can you autograph a bottle?” We do, we add a special card… we like providing that kind of service.

It’s a business, but there is a personal aspect to it, too, and we never want to lose that.

So with all that said: We want to stay small because we like the personal relationship we have with our customers. We like our old-school approach.

Wine is ultimately a product… but it can be more than that.

There’s something special about sharing a bottle with your spouse, a business associate, your friends… when you pull out a special bottle and share it, that’s a really cool thing.

People put away bottles for special occasions: Graduations, birth of a grandchild, wedding anniversaries… there’s a community aspect that comes with wine.

And our vineyard is also our home. It’s like living in Tuscany.

Making wine started as just an idea, but it’s become a lot more than we ever imagined. That’s what happens when you pour yourself into something.

When you’re willing to work hard, you really do get out what you put in.

[jenniewetter]

How To Simply Increase Your Family Wealth By Paying For Housing

Everyone should realize that unless you are living somewhere rent-free, you are paying a mortgage – either yours or your landlord’s. Buying your own home provides you with a form of ‘forced savings’ that allows you to use your monthly housing costs to increase your family’s wealth.

Every month that you pay your mortgage, you are paying off a portion of the debt that you took on to purchase your home. Therefore, you own a little bit more of your home every month in the form of home equity. As your home’s value increases you also gain home equity.

Every quarter, Pulsenomics surveys a nationwide panel of over 100 economists, real estate experts, and investment and market strategists and asks them to project how residential home prices will appreciate over the next five years for their Home Price Expectation Survey (HPES).

The latest data from their Q4 2018 Survey revealed that home prices are expected to round out the year 5.8% higher than they were in January. For the next 5 years, home values will appreciate by an average of nearly 3% a year.

This is still great news for homeowners!

For example, let’s assume a young couple purchases and closes on a $250,000 home in January. Simply through their home appreciating in value, those homeowners can build their home equity by nearly $40,000 over the next five years.

Let’s look at the potential equity gained over the same period of time at some higher price points:

In many cases, home equity is a large portion of a family’s overall net worth.

Bottom Line...

If your plan for 2019 includes entering the housing market to purchase a home, whether it’s your first or your fifth, meet with a local real estate professional who can help you understand where prices are headed in your area.

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It’s a common misconception that you shouldn’t try to buy or sell a home during the fall and winter months.

 This is generally considered the “offseason” in real estate. Many sellers mistakenly believe that the cold weather will keep buyers away and that no one is looking over the holidays. Unfortunately, many real estate professionals perpetuate this myth by advising their clients to “wait until the spring” to list their home.

 The truth is, homes are bought and sold year round. And while the market is typically quieter during the fall and winter, savvy buyers and sellers know how to use this slow down to their advantage. In fact, depending on your circumstances, now may be the ideal time for you to purchase or list a home.

 If you’re in the market to buy or sell, there’s no need to wait for the spring. Read on to discover the top five reasons that it can pay to buy or sell a home during the offseason!

  1. LESS COMPETITION

 What’s the number one reason to buy or sell a home during the offseason? Less competition!

 This can be particularly beneficial if you’re a seller. Come spring, a huge wave of new listings will hit the market. But if you list now, you will have fewer comparable homes with which to compete.

 In the spring and summer months, it can be difficult for your property to stand out in a crowded market. You may end up with a surplus of homes for sale in your neighborhood. Indeed, it’s not uncommon to see multiple listings on a single street during the peak selling season.

 Inventory in the fall and winter months, however, can be significantly lower. That means your home will not only receive more attention from buyers, but you may also gain the upper hand in your negotiations. In fact, research found that homes listed in the winter are nine percent more likely to sell, and sellers net more above asking price in the winter than any other time of year.1

 Buyers also have a lot to love about the real estate offseason. While some buyers need to move during the winter, many bargain hunters search this time of year in hopes of scoring a great deal.

 Smart buyers will continue to scan the market during the fall and winter for hidden gems that pop up during the offseason. There are always highly motivated sellers who need to sell quickly. And with less competition to bid against you, you’re in a better position to negotiate a great price. If you’ve been looking for a good deal on a home or investment property, now may be the best time to look!

 So while a “slow market” may scare off some buyers and sellers, it can actually be the perfect time of year for you to list or purchase a home. While the rest of the market is hibernating until spring, take advantage of this opportunity to get a jump start on your competition!

  2. EVERYONE’S MORE MOTIVATED

 During the spring and summer, you’re likely to encounter “lookie-loo” buyers who are just testing the waters and unrealistic sellers who are holding out for a better offer. But the serious buyers and sellers stay active during the cold weather and holiday season, often because they need to move quickly. In fact, research shows that homes listed in the winter sell faster than any other time of year.1

 January and February are peak job hiring months, which brings a surge of buyers who need to relocate quickly to start a new job.2 And of course life changes like retirement, marriage, divorce, and new babies come year round. While families often find it more convenient to move during the summer when school is out, the reality is that many don’t have the option to wait. According to the National Association of Realtors, 55 percent of all buyers purchased their home at the time they did because “it was just the right time,” not because of seasonal factors.3

 If you prefer to deal with serious, highly-motivated buyers and sellers who want to act fast and don’t want to waste your time, then the offseason may be the perfect real estate season for you.

  3. GREATER PERSONAL ATTENTION

 Another key benefit to buying and selling in the offseason is the increased personal attention you’ll receive.

 While we strive to provide unparalleled client service throughout the year, we simply have more time available for each individual client during slower periods. Similarly, we find the other real estate professionals in our network—including title agents, inspectors, appraisers, insurance agents, and loan officers—are able to respond faster and provide more time and attention during the offseason than they are during the busy spring and summer months. The result is a quicker and more streamlined closing process for all involved.

  4. COST SAVINGS

 Clients who move during the offseason often report significant cost savings. Moving costs may be discounted by 15 percent or more during the winter months, and moving companies can typically offer more flexibility in their scheduling.4

 Home renovations and repairs can also be less expensive in the offseason.5 Whether you’re fixing up your property prior to listing it or remodeling your new home before moving in, contractors and service providers who are hungry for business are often willing to work for a discount this time of year. If you wait until the spring and summer, you may be forced to pay a premium.

 Home stagers and decorators are also more likely to negotiate their fees during the winter. And you can often score great deals on new furniture and decor during the holiday sales.

 Whether you’re buying or selling, count cost savings as another compelling reason to consider an offseason move.

  5. EASIER TO MAINTAIN CURB APPEAL

 Finally, listing your home during the fall and winter offers one key—but often overlooked—advantage: less lawn maintenance!

 Good curb appeal is crucial when selling your home. According to a recent report by the National Association of Realtors, 44 percent of home buyers drove by a property after viewing it online but did NOT go inside for a walkthrough.6 That means if your curb appeal is lacking, buyers may never make it through the door.

 If you list your home during the peak of the selling season, we will generally advise you to implement a frequent schedule of mowing, edging, watering, weeding, and trimming shrubs and hedges. You’ll probably want to plant flowers, as well, to brighten your exterior. After all, a lush landscape is a key element in attracting spring and summer buyers.

 If you list in the offseason, however, your lawn maintenance list is significantly reduced. While we do recommend that our sellers keep their exterior clean, tidy, and free of leaves, snow, and ice, you will probably spend much less time on outdoor maintenance during the winter than you would if you listed your home in the summer.

  ARE YOU READY TO MAKE YOUR MOVE?

 Now that you know all the great reasons to buy or sell a home in the offseason, it’s time to decide whether you’re ready to make your move.

 Every client’s circumstances are unique. Whether you need to move quickly or you simply want to take advantages of all benefits this season has to offer, it’s a great time to enter the market.

 Give us a call today to schedule a FREE consultation … and you could be ringing in the New Year in your new home!

  Sources:

1.      Redfin – https://www.redfin.com/blog/2013/12/why-winter-is-the-hottest-time-to-sell-your-home.html#.VjKYm2SrTKI

2.      Top Resume – https://www.topresume.com/career-advice/the-best-times-of-the-year-to-job-search

3.      National Association of Realtors – https://www.nar.realtor/research-and-statistics/research-reports/highlights-from-the-profile-of-home-buyers-and-sellers

4.      Angie’s List – https://www.angieslist.com/articles/why-winter-can-be-best-time-move.htm

5.      Build Direct – https://www.builddirect.com/blog/the-best-times-of-the-year-to-get-deals-on-home-remodels/

6.      National Association of Realtors – https://www.nar.realtor/sites/default/files/reports/2017/2017-home-buyer-and-seller-generational-trends-03-07-2017.pdf

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3 Signs 2019 is going to be a Hot Market

3 signs 2019 is going to be a Hot Market

Existing home sales, housing units authorized (but not yet started) and real disposable personal income will be key indicatorsBY

ANDREW DUGUAY

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We all know last year was a seller’s market in residential real estate. Supply has been low and housing starts are down 1.4 percent year-over-year, which has lead to increasing home prices and a reduction in the total number of homes sold.

The upshot is that total revenue has remained flat: Fewer sales were made, but the sales that were made came at higher price points.

Real estate professionals everywhere are wondering what’s in store for the year ahead — read on to find out why 2019 will be a growth year for our industry.

What is the housing market doing now?

New residential home sales dropped 8.9 percent in October, falling to a new two-year low, according to a new residential sales report released Wednesday by the U.S. Census Bureau and the U.S. Department of Housing and Urban Development (HUD).

Scars from the housing market crash a decade ago haven’t fully healed, and already some question whether high prices and low sales are the forerunners of another deflating bubble. But our research and indicators show that the soft activity in 2018 has more to do with rising costs from record-high lumber prices and rising interest rates, forestalling the entrance of would-be buyers in the market.

Stricter lending rules are limiting the pool of new buyers at these higher price points. Supply is also severely constrained by the lack of available contractors to build more homes as job openings across the U.S. soar toward record highs, and unemployment remains at a 20-year low.

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Some experts also believe that the various natural disasters to hit Texas and California in the last year could also lead to lower sales as people figure out whether to rebuild or move away.

Handling growth ahead

The key to turnaround will be ongoing wage growth, which will drive demand for new homes at all price points. Affordability will hinge not on dropping home prices but rather in the rise of wages.

With wages rising in 2019, there should be industry-wide, year-over-year growth in home sales, which is a welcoming sign and should relieve any anxiety about a real estate industry bubble.

The key question is how real estate professionals can prepare for growth in activity. This begins by accurately forecasting the market in 2019. It will be important to watch the following three indicators in the next six months: existing home sales, housing units authorized but not yet started and real disposable personal income.

1. Existing home sales

Existing home sales climbed 1.4 percent in October from September. Despite the monthly gain, existing home sales were still down 5.1 percent year-over-year, according to the latest data from the National Association of Realtors (NAR).

“After six consecutive months of decline, buyers are finally stepping back into the housing market,” NAR Chief Economist Lawrence Yun said. “Gains in the Northeast, South and West — a reversal from last month’s steep decline or plateau in all regions — helped overall sales activity rise for the first time since March 2018.”

This is the weakest indicator for the industry right now. Fewer people are buying homes in 2018, but we’re confident this indicator will be different a year from now so long as the consumer is healthy and wages continue to grow.

2. Housing units authorized but not yet started

This is a very positive indicator right now. As I mentioned earlier, the limited inventory in the U.S. has led to inflated price points. There are nearly 170,000 residential units ready to be built, which is the highest level reached in a decade. Once these homes hit the market, there will be a needed growth of inventory, which should spur sales.

3. Real disposable personal income

This is not a typical indicator for the real estate industry, but with housing affordability playing such a pivotal role in this current climate, real disposable personal income has jostled into the forefront of leading indicators for the real estate industry. Seeing a rise in wages would serve as a boost to new home sales and new home construction.

Final thoughts

The key for the industry will not only be about whether the housing supply grows but also about whether the consumer is in a place to actually afford a new home.

Industry professionals must focus on whether or not the consumer is employed and if their wages are growing, which would render homes affordable even in the face of other counteracting factors, such as rising interest rates and high lumber costs.

Andrew Duguay is a New Hampshire-based senior economist and data scientist for Prevedere in Columbus, Ohio. Connect with him on LinkedIn or follow him on Twitter.

Article image credited to Daniel Abadia on Unsplash

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Is Your House Prepared for Our Lovely Pacific NW Winter? Six Ways to Find Out

What a GLORIOUS spring and summer we were blessed with this year! 

As wonderful as they were, those treasured bright days and long evenings have gone into hibernation. Now the holidays are just around the corner, along with our “lovely” Pacific Northwest winter.

In case you haven’t heard—it rains here once in a while!

The signature of our winters is WATER and water can wreak havoc on your house. So, before you get too wrapped up in holiday cheer, take some time to ensure your house is ready to weather the winter.

I talked with my Infinity Team Contractor, Kevin Warner, of Yellow Ribbon Homes, about how to keep water outside where it belongs. Kevin, who specializes in repairing residential water damage, recommends inspecting your property in the rain, or right afterward when the water is flowing.

“Water follows the path of least resistance, so you want to make sure nothing interrupts its flow away from the house,” says Kevin, whose rainy day inspection list includes these questions:

1.  Where are your downspouts located and is water flowing freely from them?

Leaves and evergreen needles are frequent water damage culprits. They can plug gutters or gutter guards, bypassing downspouts and forcing water onto the roof or trim where it can enter the house.

Downspouts should move water away from the foundation. At a minimum, plastic splashguards are required at the end of downspouts. Ideally, drainage pipes should carry water 10 feet from the structure.

2. Is the roof free of debris?

Leaves and needles can pile against vent pipes and chimneys creating dams that force water under shingles.

3. Are the weep holes in vinyl windows clogged?

The small vents just below the tracks on vinyl windows can get clogged with dirt and wick water inside near windowsills. They can be easily unclogged with a small screwdriver or nail file.

4. Are siding, foundation vents, exterior stairs, and decks free from dirt and leaves? 

Dirt and leaves in contact with exterior surfaces for long periods of time can trap moisture and cause rot.

Even after deciduous leaves have fallen, evergreens drop needles and branches with each storm, which means that cleaning off roofs, stairs, and decks of homes, garages, outbuildings, and sheds is an ongoing winter activity.

[Make sure to perform these tasks only when surfaces are free from ice and conditions are safe.]

5. Where does your runoff go?

Runoff should lead away from your home and other buildings (including neighboring homes) on the way to the road or culverts. If runoff appears to be veering off course, check for obstructions: mud, rocks, leaves, and clear the problem with a rake or shovel.

If runoff leads toward your home or outbuildings instead of away, try to divert its course and check with a professional about proper grading and drainage options.

6. Are there signs of water intrusion inside?

Mold in the attic, stains on the ceiling, and mushy wallboard all indicate the presence of water.

Kevin says most water damage is caused by the common culprits mentioned above, as well as improperly installed flashing, though it can take some detective work to locate the source.

“The bad news is that water can enter the house a long way from where it shows up, and small leaks into areas with insulation, like attics, can go on for years before they’re discovered,” says Kevin, who uses moisture meters and infrared cameras to pinpoint the cause in troublesome cases.

“The good news,” he says, “is that once we know the cause of the problem, we can repair the damage and prevent it from happening again.”

Next time it rains, head outside for a little weatherproofing and you’ll preserve the value of your home for years to come.

And remember, my team and I can help you with EVERYTHING you need for successful home buying, selling, and ownership—including help with rainy day evaluations and repairs.

Call me anytime: 253-225-5602.

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Many people believe that selling their house during “the spring buyers’ market” is the best thing to do. Their reasoning is that there will be more buyers than there are during the winter months and, therefore, their house will sell quicker and for a higher price.

Historically, this made sense. However, today’s real estate market is not following the rules of the past.

The National Association of Realtors (NAR) measures buyer “foot traffic” each month. It receives data on the number of properties shown to a prospective purchaser by a Realtor® (based on the number of lockboxes used). The data reveals the number of buyers out actively looking for a home, not just window shopping on the internet. NAR explains:

“Foot traffic has a strong correlation with future contracts and home sales, so it can be viewed as a peek ahead at sales trends two to three months into the future.”

According to the latest Foot Traffic Report, buyer traffic is greater now than it was during this year’s spring market and there are more buyers out now than at any other time in the last five years (March of 2012).

The chart shows that buyer activity over the last three months (blue bars) was greater than it was during this past spring market (green bars).

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Hidden Benefits of Off-Season Home Buying

Historically in real estate, spring and summer were the best months to buy a house, with many sellers waiting until then to list their houses. Buyers used the long days to drive from one neighborhood to another on the house hunt, and families needed to settle into their new homes before school got underway.

But in today’s market, all that has changed.

The low inventory of homes for sale in the Puget Sound region, coupled with Internet marketing has motivated sellers to list year-round, knowing that buyers can virtually tour homes and neighborhoods via software and apps. Those apps also connect buyers to social networks and neighborhood groups in advance of a move, aiding families in the transition to new schools and communities any time of year.

This is a great time of year to be a buyer.

You may experience less competition from other house hunters, giving you a bit more time to decide on the right house, and possible negotiating advantages with the seller.

Once you find the right house, you may also find that the timeline for home inspections, appraisals, and mortgages has eased after the higher volume of summer escrows has closed. And with fewer people relocating, it’ll be easier to rent a moving van or hire a company on the day that’s best for you, not them.

One hidden benefit of buying a home this time of year in the Pacific Northwest is the opportunity to experience the house and neighborhood in the dark and wet before you buy it, something that’s nearly impossible in summer.

Viewing a property both after seasonal rains have begun and after sunset can reveal aspects that buyers in the long dry months wouldn’t find out about until after their purchase—a driveway filled with muddy potholes, standing water on the porch, evergreens that block the low winter sun, or a streetlight shining directly in the master bedroom window, for example.

For some buyers these items might need to be mitigated, for others they might be deal breakers. But either way, the conditions won’t be surprises. If you love a house in the waning days of Northwest winter, chances are, you’ll love it even more in our beautiful summers.

The long nights of the season might even inspire you to unpack quickly, so you can enjoy cozy winter evenings listening to the rain patter on the roof of your dream house.

If you’re interested in buying or selling a home, call me at 253-225-5602.

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Give me a call and let’s chat about what your home is worth in our current market.. 253-225-5602

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