Are you a numbers person? I am when they show a 6.4% increase in average sales prices of residential homes. Check out the numbers below. Bainbridge Island is feeling the love with these rising prices.
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real estate trends
Most Americans have now arrived at the conclusion that it is a good time to buy a home. That’s the top line analysis from one of the country’s major mortgage creators, but there’s a secondary finding about credit scores that could also have a sizeable impact on real estate activity. Some would-be area homeowners would benefit from learning the information—which is about misinformation.
The second annual “Wells Fargo Homeownership Survey” is a national survey of 2,016 respondents, and the source upon which last week’s Franklin Codel analysis is based. The excellent news for current and soon-to-be home sellers is that a whopping 72% of respondents think now is a good time to buy a home. Most Americans also agree that “owning a home remains a vital part” of the American dream— and continues to be a key element in the strength of the nation.
Running counter to that upbeat survey result is the finding that despite the efforts of lenders (and the government) to make credit more available to potential mortgage applicants, two misconceptions are widespread enough that they are “holding many potential buyers back.”
- The misconception that every buyer must have at least 20% for a down payment; and
- A belief that credit scores alone determine whether an applicant will land a home loan
Under the heading The legend of the 20% down payment, Wells Fargo’s Codel points out that 36% of the general population (and larger proportions of minority groups) qualify for loans with lower down payment options— some of them as low as 3%.
But equally illuminating is what Codel has to say about the importance of credit scores. He is the head of mortgage production at Wells Fargo, so home seekers can be expected to pay attention to what he has to say, which is that credit scores are not as all-important as most people think. Because creditworthiness is not determined based on a single factor, homebuyers should do some investigating of their options “before excluding themselves based on credit scores alone.” And when it comes to the actual scores themselves, it’s not true that a ‘good credit score’ has to be above 780. There are multiple models and investor guidelines—and under some of them, more than 660 “is generally considered good.”
If it’s true that homebuyers agree that now is the time to make a foray into the market, it’s refreshing (and rare) to hear a top mortgage lending insider provide that kind of encouragement. His conclusion is that the cited misconceptions can be overcome with a “better understanding of how credit works”—and that a good lender will use a borrower’s “entire financial picture, not just credit score” to decide whether to issue a mortgage.
The takeaway is for prospective buyers to do some investigating to find out what their home owning prospects actually are: they might be pleasantly surprised. A good place to start: giving me a call!
Residential sales in Seattle—in fact, all real estate dealings anywhere—remain the most local of commercial transactions. If your house is in San Francisco, a price spike in suburban Newark is probably of little interest, unless you plan on moving anytime soon. Even so, the new projection for overall U.S. residential sales had to perk up area homeowners’ interest.
The “best home sales market in eight years” was the forecast—along with “mortgage originations that will likely rise” and “larger gains in newly built home sales.” Puget Sound residential sales may make up but a tiny fraction of the data contained in CoreLogic’s analyses and data announcements, but any local homeowners looking for a strong spring market couldn’t help but be buoyed by last week’s prognostications.
The basis for the surprisingly robust residential sales prediction was supported by a number of other data sources which have gradually confirmed solidification of the overall economic picture. With many economists agreeing that the U.S. economy “is poised to grow by close to 3%” this year, a heightened level of housing demand is bound to result. If that mark is achieved, it would be for only the second year in a decade. Gains in employment (in the 3-to-3½ million person range) are also expected.
The improving economic projection for 2015 was ascribed to three forces. The halving of energy prices which began last summer was deemed “unlikely to jump back up this year.” Anyone who’s been enjoying the freefall in prices at the pumps will appreciate the immediate impact that has on family wallets.
The second positive force is psychological, and very real. The rise “in consumer and business manager confidence” in the recovery has been widely noted: the Conference Board (“up 4.9 points”); U.F.’s Confidence Index (“the highest reading in 10 years”); Small Business Optimism Index (“3rd highest reading since 2007”).
CoreLogic’s third factor was one that hasn’t been much talked about until now: governmental. Apparently, tax receipts have been stronger than expected, freeing state and local governments to spend more. That’s an unexpected economic stimulus—and of a kind that should be more welcome than some of the previous “let’s just create more money” variety.
CoreLogic puts residential sales growth in the area of 5%. Will our Puget Sound numbers match those projections? One reason to think so is the local mortgage rate phenomenon. Rates remain tantalizingly low—but apt to begin creeping upward. That’s the kind of spur to home buyers that is apt to work as effectively as merchants’ “limited time sale” technique: tick! tick! tick!
If you have been delaying wading into the local residential sales arena until the time is right, 2015 certainly looks like that time has arrived. I’m standing by to help you take advantage of the many opportunities this spring market is offering. Why not give me a call?
Mortgage rates may rise or fall this spring (lately they seem to be falling!)—but that needn’t prevent you from saving even more money when it’s time to structure your own Bainbridge Island mortgage. The underpublicized fact is that mortgage rates are only one of the factors that affect how much you wind up paying. No matter what happens to mortgage rates in 2014, here are some keys to making mortgage decisions that result in significant savings:
Tailor the term
Evaluate your budget and see whether it is possible to increase the amount of your monthly payment. By increasing monthly repayments, you reduce the term of your Bainbridge Island mortgage. Over the course of the loan, this can save tens of thousands of dollars.
Refinance for five years instead of two
The interest you pay on a refi loan isn’t the only cost. The origination and other fees can easily end up costing four figures. It’s a numbers game: simply calculate the anticipated savings from refinancing, then subtract the amount of the fees. The difference tells you your net savings…and demonstrates why one of the easiest ways to grow those savings is to refinance less frequently.
Change to biweekly
Changing to biweekly payments instead of monthly payment can save you more than small change. The reason is on the calendar: there are 52 weeks in a year, but only 12 months. If you make 26 1/2 payments every year, that equates to 13 monthly payments. It’s a stealthy way to make an additional month’s payment every year without really noticing it. When choosing a loan, opt for one where the bank allows you to choose biweekly payments (as long as they don’t want to charge an additional fee). Also request that the extra payments be deducted from the principle.
Improve your credit score
On this count, every mortgage guru sounds like a broken record. Although the average quoted mortgage rate may rise or fall, that’s not necessarily the rate that you pay. Your FICO score is the primary determinant of your mortgage rate. The difference between a good FICO score and a bad one can be significant, so get a copy of your credit card record and challenge any damaging inaccuracies. Lenders want to see a long history of paying on time with a mixed use of credit.
Mortgage rates on Bainbridge Island will almost certainly increase in the future because they’re still well under historical averages. But there are plenty of steps you can take to cut thousands of dollars from your ultimate Bainbridge Island mortgage costs. And if you are ready to buy a house on Bainbridge Island this spring, contact me today—I’m ready to show you what’s coming up at your price point!
This year, it looks as if the busy spring real estate season extends beyond the residential arena. Latest reports show commercial property sales on the rise throughout the nation—and in volumes that make it one of the main contributors to the overall economic upturn.
The most reliable data comes from the National Association of Realtors®, whose latest quarterly survey shows year-over-year sales increasing a full 11% (with prices rising 4%). It’s an encouraging backdrop for businesspeople and individual investors who are gauging the opportunities in today’s Bainbridge Island commercial property market. Despite the vagaries of the tax and political climate (it is an election year, after all), with rental rates increasing and leasing activity up across the nation, the market does invite a closer look by anyone considering a fresh entry into Bainbridge Island’s commercial property arena.
While working with a buyer’s agent to find and purchase a Bainbridge Island commercial property isn’t an absolute essential, it certainly can be more efficient to have professional assistance and guidance throughout the process. When you choose a Realtor who has specifically commercial experience on Bainbridge Island, you make the same kind of choice as when you seek expert help in any other area of your business or personal endeavors—an expert’s insight can be priceless!
Whether you are buying or selling a commercial property, it’s also important to avoid fixating on short-term impacts. Today’s cash flow may be your leading financial factor, but balancing with the long-term impacts is a juggling act worth mastering. Buying or selling a commercial property has long term impacts that spread out well beyond this year’s bottom line. Don’t hesitate to discuss your current business model with your accountant or tax professional. They are sure to have concrete ideas about potential impacts that will be quite real five and ten years from now. The right commercial property on Bainbridge Island will be one that is able to accommodate your needs both now and into the future.
With the right agent and clear-cut financial goals, your search for a Bainbridge Island commercial property can result in the best financial move you make this year—or for many years to come. If you’re weighing the value of purchasing a commercial property or placing your own for sale, call me to open the discussion about the opportunities in today’s market.
Keeping your Bainbridge Island kitchen looking up-to-date doesn’t have to be difficult or expensive. Contemporary home design in our neck of the woods is all about knowing what the latest trends are and which to choose when regular maintenance calls for a change in appliances or décor.
This year, eco-friendly appliances are definitely ‘in’—as are the pops of bright color meant to create a vivid and welcoming kitchen. And as convenience features continue to evolve, those are increasingly prominent factors influencing design choices. Especially if you are planning to sell Bainbridge Island home in the near future, there are a few home design directions that are most likely to impress prospective buyers who’ve been exploring the latest kitchen trends:
Going green is a pronounced trend, not just in home design. Using renewable, Earth-friendly materials can be a way to update a kitchen while minimizing environmental impact. A sample idea would be a sustainable bamboo parquet butcher block to grace the kitchen counter or table. They come in beautiful, rich wood tones, and when large enough to cover a substantial counter area, can warm the feel of the entire room.
Another (almost diametrically opposed) current direction is to deck the kitchen out with a few of the latest high-tech gadgets. Even if you resist an ultra-modern look, a few chic techie touches can add a dash of luxury to your home. One example: Siemens makes a multimedia ventilation hood that has a 17-inch LCD screen with options for listening to music or watching TV. It’s a creative way to make cooking more entertaining—and one that would certainly help make Bainbridge Island local listing stand out!
Bright colors have not always been popular in kitchens, but lately, appliance manufacturers have been less shy about offering exuberant finishes. You can find dishwashers, blenders, toasters, microwaves and refrigerators in bright blues, pinks, yellows, greens and oranges. It can be an inexpensive way to add a splash of color to your kitchen…although if you are planning on selling soon, in many instances I’d recommend caution: perhaps confining the color pops to bright accent pillows or colorful floral arrangements.
Copper is also an increasingly popular trend in kitchen design this year. Its natural antibacterial properties make it a practical home design element, and that cool, rustic hue looks great in warm, gold-toned kitchens. Copper sinks and faucets are both practical and stylish (although keeping them bright and shiny can be another story!).
If you are thinking of selling soon, consider incorporating one or two current Bainbridge Island home design ideas if your kitchen could use a decor infusion. Looking for more ideas? Contact me today to discuss what is making today’s homes S-E-L-L!
The children have grown; home feels…a little empty…
Many people assume that an empty nest means it’s downsizing time—time for a smaller house or condo. In truth, for many a homeowner in Bainbridge Island, downsizing is just one of a number of appealing directions.
It may sound obvious, but it’s your interests and plans that should guide your next step. After a lifetime of deferring to other people’s priorities, many of us are ill-prepared to think creatively about what it is we want. When we do, downsizing might not necessarily be the springboard to life’s next great adventure.
For instance: consider Upsizing. Moving a smaller family into a larger home may sound backwards, but if you have special interests or hobbies that call for a lot of space, now may be the chance to add the workshop, rehearsal space, or studio you’ve always longed for. A larger home can also provide space for guests when the family (and it might be a growing one!) comes to visit.
Have you always wanted to live near water, or be able to step out on the front porch any time of the day to drink in a panoramic view of the mountains?
Or maybe the reverse, and you’d like to sample life in the city—urban living, with its museums, shows and restaurants on every corner. Alternatively, perhaps it’s time to look into one of the increasingly-popular planned communities; one built around a golf course, or one emphasizing social activities, clubs and outings that cater to older adults
The serious point: dream a little! If not now, when? With the children out the door, this could finally be a chance to indulge yourself. Raising a family means putting other people’s needs first. Now it’s your turn. A luxury home or condo could have the amenities you’ve always wanted—a swimming pool or home spa, designer furniture or classic architecture. Your empty nest may give you the chance to own the kind of home you’ve only daydreamed about.
Among the down-to-earth details you’ll want to consider before acting—
• Whether you’re truly ready to leave your Bainbridge Island home and community behind
• The real estate market and comparative housing values in Bainbridge Island and in alternative venues
• Health issue implications now and (as much as predictable) into the future
Finally, give yourself time…enough time to be sure that the home ownership path you choose is one that’s most likely to prove rewarding. And remember, too, that I (or a qualified Realtor® wherever you land) is your invaluable resource. Do give me a call whenever you want to investigate your choices.
It’s time for this Bainbridge Island real estate observer to tackle the New Year’s roundup of the Year in Real Estate (along with the traditional disclaimer that, since the actual statistics won’t be tallied until 2014, this has to be a lot more sizzle than steak!) But this is one time in the year when we Bainbridge Island residents get to take pause to relax, perhaps put a bottle of bubbly in the fridge for later on, and take a sweeping view of the general direction of things across the land.
If you’ve been reading here throughout the year, you already know that 2013 Bainbridge Island real estate activity might easily justify chilling a superior vintage champagne: it’s been a pretty darn good year! A smattering of last week’s press reports confirms it:
- From the East Coast to Oahu (where there was a “1 in 3 chance” that if you sold a house, it was for more than the asking price), reports were of steadily rising prices.
- The Business Insider reported that the Big Apple “managed to shatter several real estate records in 2013.” One of the records was a tidy listing for a modest little 62,000 sq. ft. private coop residence. Sure, $130 million may sound a little steep to us here on Bainbridge Island, but that might be because so few of our digs have 82-foot swimming pools or tennis courts…at least not indoors, inside our five-story apartment atop a skyscraper.
- More down to earth might be NAR’s assessment that “Housing prices rose faster than expected” — with a lot of credit given to the fact that “affordability remained high.”
- Another factor: “More first-time buyers” were entering the market due to “rising rents and pent-up demand.”
- Following suit, the Dallas News was touting a local home market that “came roaring back in 2013;” one that had “builders rushing to keep up with demand for new houses.”
- The Realtor® web awarded credit for the strong real estate year to “Low mortgage rates, all-cash buyers, and tight inventories” that sustained the housing market recovery. Our Bainbridge Island real estate saw much of the same.
- There was one notably bleak spot: “ACT real estate hit hard by election” the Times reported. “Uncertainty” about election politics had created “subdued performance during the year” and some “negative house price growth.” The best news: this was the Canberra Times – and the country was Australia!
So let’s wish those Down Under a quick turnaround; then, after a relaxing day watching the Rose Parade and a bowl game or two, let’s get ready to charge into an equally dynamic 2014.
Happy New Year, everyone!