The Seattle Times did a nice summary of what the Seattle Real Estate Market has done in the last 5 years last week. When looking at these facts remember to look at the big picture, the value of real estate is constantly changing. We saw a big spike in value in 2007 and people are still comparing their property value to that year.
I do believe things are starting to turn around and get back to normal, whatever that is!
A good real estate market makes for a good financial market. At least that’s what I think when I step back and look at the big picture. You might think differently but let’s take a look at the current real estate market and the effect it has on the economy.
There aren’t as many homes on the market which means homeowners aren’t hiring contractors to fix up the home. People aren’t moving to new homes so rentals of moving trucks or hiring professional movers are down.
A lot of people buy new furniture or accessories when they move into a new place. Because suddenly that couch that was perfect in your old home won’t fit in the new living room so now you need a new one. Without home sales this isn’t happening!
And don’t forget the little purchases that add up to a lot of money. Maybe you need new curtains, some paint, light fixtures, baby proofing if you are in that stage, people spend a lot of money making their new home well home! There’s nothing worse than being in your on house and having not feel like home.
All of this traces back to home sales. When home sales are up, these businesses are busy, when they are down, only the strong survive.
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We keep thinking the real estate market is getting better, and it is, until you start comparing the facts to past years. According to the Seattle Times buyers spent 8.9 billion dollars on houses and condos in King County last year. That’s good, that’s a lot of money, until you see that in 2005 we spent 17.1 billion. That’s right, almost 90% more money was spent 5 years ago.
The prices of homes were about the same in 2010 as they were in 2005 but the difference is fewer homes sold last year. In 2005 roughly 42,000 homes/condos were sold. 2010 saw only 21,000.
Honestly though, it is getting better. We had a HUGE real estate boom that we are comparing ourselves to instead of looking at the bigger picture. Value goes up and down, it’s all about selling high and buying low. The tricky part is the timing of it all.
More than 15 states are projected to experience housing inflation or appreciation during the year, according to Housing Predictor, which releases an annual report of its choices for best and worst housing markets.
The top five housing markets are:
1. Portland, Maine
2. Kansas City, Kan.
3. Tri-Cities, Wash.
4. Omaha, Neb.
5. Fargo, N.D.
Have you ever heard of recasting or re-amortizing? Yeah, I hadn’t either but this could be another way to lower your mortgage payments.
According to Daily Real Estate News recasting means the borrower pays off a lump sum of the loan’s principal and then resets monthly payments at the loan’s original interest rate and terms. For example:
$230,449 is left on a 30-year fixed rate loan for a $300,000 mortgage taken out at 7.93 percent in 1995. The borrower pays $20,000 toward the principal and asks the lender to re-amortize their payments over the remaining 15 years of the loan. The monthly payment then drops by $52, from $2,187 to $2,135 per month. ($100,000 toward the lump sum would save $730 a month.)
The best part is you are not asking for a new loan so no closing costs or credit checks! Sweet! Recasting is something to consider if you know you are going to be getting a large sum of money.
The value of a home is up to negotiation. Everyone knows that but how much should your offer be? Full price, 5k less than asking price, 10k less than asking price, more? You can make any reasonable offer; just make sure it’s a smart offer. You don’t want someone coming in at the same time with a better offer, one that you would have made, eventually!
This is where having an experienced real estate agent really benefits you. The agent should know the area really well and all the comparable properties for sale in the area so they can fight negotiate for you!
Here are a few things to consider when making your offer according to relocation.com:
The really big McMansions are quickly becoming the housing equivalent of “harvest gold” or “avocado green” appliances as more Americans are going for smaller residential footprints, according to a new Relocation.com consumer lifestyle survey.
Nearly half the respondents of the survey said their ideal home size would range from 1,000-1,999 square feet. Nearly three of every ten buyers (29 percent) prefer homes that are 2,000 to 2,999 square feet. Only 2 percent reported a home would have to be larger than 5,000 square feet to match their ideal residence.
Five years ago, the average home’s size was 2,400 square feet — about 400 square feet larger than what is desired today — according to the National Association of Homebuilders (NAHB). Relocation.com conducted the survey to gauge lifestyle factors that drive moving and relocation decisions in the U.S. Read more
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Can you guess which city in the entire world is going to be the favorite city for foreign real estate investments in 2011? A little hint, the number 1 and number 2 slots are in the United States.
According to the Association of Foreign Investors in Real Estate New York City and Washington DC is where foreign investors want to spend their money. Not only that, but word is these investors want to spend more money in 2011 than they did last year.
That’s good news, wish it was Seattle or at least the West Coast but hey, considering this survey was for the entire planet, I’m glad it was at least in America!
If you are facing foreclosure I’m sure your head is spinning. Maybe you don’t know where to turn for information, what the process is or where to start. Because of this stress we see a lot of people just walk away from their home, not realizing what options they may have had or how this will affect their future.
We tell all our clients to at least make an educated decision, don’t just walk away. See what options you have and then when you know your possibilities make a decision that best suits you and your family.
Fannie Mae just launched a new interactive website called KnowYourOptions.com. This is a great place to start getting information about Foreclosure and the process. If you are in this situation take a look and start learning what options you have. We are always here as a resource as well. It’s a bit overwhelming but in the end knowledge is power!
Home prices are expected to rise in 40 percent of major metropolitan areas, according to Veros Real Estate Solutions, a research firm that provides information to the mortgage industry.
The markets Veros expects to be strongest are:
1. San Diego/Carlsbad/San Marcos, Calif.
2. Kennewick/Richland/Pasco, Wash.
3. Pittsburgh
4. Fargo, N.D.
5. Washington, D.C. metro area
The five markets Veros expects to be weakest are:
1. Reno/Sparks, Nev.
2. Orlando/Kissimmee, Fla.
3. Boise City/Nampa, Idaho
4. Deltona/Daytona Beach/Ormond Beach, Fla.
5. Port St. Lucie/Fort Pierce, Fla.
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