With more plentiful inventory, recently announced increases in lending limits, and moderating prices, prospective home buyers are finding more options around Western Washington, according to industry experts from Northwest Multiple Listing Service.
Buyers May Find Relief in Cooling Housing Market
The housing market is showing several signs of slowing, providing a much-needed break for potential buyers who have been waiting to jump into the market. Existing-home sales were 2.4 percent lower in the third quarter than a year ago, and the drop comes at a time when many areas are starting to see an uptick in new listings.
Home prices in many markets are no longer rising by double digits—or even single digits—annually. But with a strong economy and low unemployment, the housing dip is more of a rebalancing of the market than a sign of a downturn, housing analysts say.
Sellers are realizing there is a slowdown and are starting to cut their prices to better compete. Nearly 29 percent of listings in major markets during the month ending Oct. 14 saw price reductions, according to the real estate brokerage Redfin. “The cycle has moved from seller-advantage to at least mildly buyer-advantage in many parts of the United States,” writes Kenneth Harney, a nationally syndicated real estate columnist. “If you’re a buyer, take your time. But keep in mind: If you shop diligently, this fall could be a smart time to catch a deal—a marked-down price on the house you really want.”
Source: REALTOR® Magazine
6 Master Bathroom Trends to Watch
Grays, mixed metals, and farmhouse styles are some of the most popular trends for remodelers taking on sprucing up their master bathroom.
The 2018 U.S. Houzz Bathroom Trends Study is based on a survey of more than 1,100 homeowners who are planning or recently have completed a master bathroom renovation. Some of the trends that emerged from the report:
1. Seeing gray: Gray colors continue to dominate for walls and flooring in the bathroom. Gray cabinets are also gaining popularity, climbing from a 10 percent share in 2016 to 16 percent in 2018.
2. Taking the upgrade: More homeowners are upgrading their master bathrooms with special features when they remodel. The most popular premium features are dual showers, one-piece toilets, vessel sinks, and built-in vanities.
3. Mixing up the metals: Two in five renovating homeowners do not match metal finishes across fixtures and hardware in master bathrooms. Of the 58 percent of renovating homeowners who do match metal finishes, the most popular options are matte nickel and polished chrome (38 and 28 percent, respectively).
4. Going a little country: Farmhouse styles are jumping in popularity. While contemporary style continue to be the leading choice among renovating homeowners, the style has dropped over the past three years. Farmhouse style, on the other hand, has more than doubled in popularity, from 3 percent in 2016 to 7 percent in 2018.
5. Making it accessible: The majority of baby boomer homeowners (ages 55 or older) are addressing aging-related needs during master bathroom renovations. Nearly half of renovating baby boomers are changing the bathroom layout, and one-third are removing the bathtub. Other upgrades include installing accessibility features like seats, low curbs, grab bars, and non-slide floors in upgraded showers and bathtubs.
6. Building a master suite: The study found that homeowners are focusing on their master suite as a whole, not just the bathroom in their updates. Nearly half of master bathroom projects also were accompanied by master bedroom renovations (46 percent). Some homeowners are making their master baths even larger than their bedroom. One in ten master bathrooms is the same size or larger than the master bedroom (11 percent).
Source: REALTOR® Magazine
Americans Shift Their Perceptions of the Housing Market
For the past five quarters, the majority of Americans said their housing markets were overheating. Now, in the fourth quarter, 75 percent of Americans say their local housing market is starting to cool, according to ValueInsured’s Q4 2018 Modern Homebuyer Survey. Homeowners in California, Colorado, Texas, and Washington are most likely to say their local market is starting to cool off.
The survey “revealed some concerning evidence about the changing psychology of the housing market,” says Robert Shiller, a housing economist. “We will be watching these numbers as they unfold over the future.”
Seventy-two percent of Americans and 78 percent of “urban residents” say home prices are still too high. Urban homeowners blame “flippers and speculative investors” and “wealthy transplants from more expensive housing markets” for inflating their local home prices to unsustainable levels, according to the report.
Some home buyers may hit the pause button to see what happens in the housing market. Fifty-nine percent of interested home buyers (which includes first-time and move-up buyers) say they plan to wait for a “meaningful correction” before they buy. Fourteen percent say they plan to not buy at all until a correction occurs.
Several markets are seeing home prices slow. ValueInsured’s report notes that the fastest drops in home prices have been happening in Seattle, and North Texas has seen some of its largest sales declines in seven years.
“Buyers have switched from ‘hoop jumpers’ to bargain-hunter mode,” says Joe Melendez, CEO and founder of ValueInsured.
Source: REALTOR® Magazine
RE/MAX National Housing Report for October 2018
Inventory Ends Long Decline as Home Sales Drop for Third Month
The third consecutive month of lower year-over-year home sales in October contributed to the first year-over-year inventory increase in a decade according to the RE/MAX National Housing Report for October 2018. Meanwhile, the Median Sales Price recorded one of its lowest increases of 2018.
The RE/MAX National Housing Report for October saw sales decline 4.6% from a year ago – compared to sales drops of 11.6% in September and 1.1% in August – and was the eighth month of 2018 to record lower sales than 2017.
As a result, inventory is slowly being replenished, with the number of homes for sale in October increasing 1.0% over October 2017. October 2018 was the first month to show a year-over-year increase in inventory since October 2008 when two and a half times as many homes were for sale. The Months Supply of Inventory is now 3.5, compared to 3.3 a year ago.
“The market continues to move toward equilibrium. The modest inventory increase is a much welcome sign for buyers,” said RE/MAX CEO Adam Contos. “Although home sales were down year-over-year, it’s encouraging to see the magnitude of the decline decrease from the sharp drop we witnessed in September. The trend of easing price increases remains and that’s also a positive.”
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4 Ways to Get Your Fireplace Ready for Fall
Is there anything cozier than snuggling up beside the fireplace in fall? With the whisper of cool fall air, staying inside and watching the crackle of the fire in your favorite comfy spot is the only sensical move this season. The thought of fresh pumpkin spice everything, warm apple pies and a fuzzy blanket to curl up in is enough to get the firewood ready right now!
Before you start sipping on the cider, get your fireplace ready for fall with these four unique ideas from RE/MAX.
1. Add fire to your fireplace
Get creative! You can go as simple as a candle sitting on the mantel – to different sized candles in glass containers at different heights. The sparkle and the yummy scents will bring dimension, style and great smells to the room and help your fireplace feel like the epicenter of all things fall. Pro tip: try the Brown Sugar Chestnut Candle to get your house smelling extra nice for the season.
2. Signs are in!
You can’t go into a store today without seeing a customizable sign. Take a simple frame with slots for letters and spell out your favorite quote. Or, go a little deeper and get a chalk style board, adding your personal touch with handwriting and design. Add a family saying, your favorite verse from the song you can’t stop singing, or just a word of encouragement will lighten up the mantel and bring smiles all around.
3. Fall Flowers
Dress up your mantel with festive fall flowers. From the dollar store to a ritzy florist, you can find the orange, yellow and rustic brown hues you desire. Grab an old mason jar as a vase and start putting together the fall colored flower arrangement that is sure to grab any guest’s attention. Pro tip: string together some fake leaves and wrap them around the edge of the mantel to pull together the entire look!
4. Pumpkins, everywhere!
No fall mantel would be complete without a traditional pumpkin or 12 sitting strategically across the top. With fake fruit or real, the traditional look of a few beautiful orange pumpkins on the mantel captures the epitome of fall. Aside from pumpkins, is the idea of switching out the ordinary for a different, yet equally seasonal move. Change out the pumpkins for apples! A subtle switch can give your mantel the envy of neighbors.
If you or someone you know is in the market for a house that comes with the perfect fireplace to curl up next too, contact me. I’ll be happy to help!
Washington State NWMLS Market Snapshot for October 2018
Slower Market Means Homebuyers Have “Newfound Ability to Negotiate”
Why Home Buyers Need to Hurry
While there have been signs recently that the market may be shifting toward the favor of home buyers, prices are still on the rise in many areas around the country. The median sales price in July was $230,411, up 5.8 percent year over year.
But if buyers are hoping to wait it out, remember that mortgage rates are also increasing. The typical mortgage payment jumped 13.1 percent over that same one-year period, due to a nearly 0.6 percentage point increase in mortgage rates, according to new data from CoreLogic, a real estate research firm.
Mortgage rates are expected to keep rising, too. CoreLogic researchers predict a nearly 10 percent increase in buyers’ mortgage payments by next July, twice the rate expected for home prices. Rates are expected to increase by about 0.43 percentage points between July 2018 and July 2019. Housing forecasters predict median home sale prices to continue to rise by 1.8 percent in real terms over that same period.
Based on these projections, CoreLogic researchers predict the inflation-adjusted typical monthly mortgage payment to rise from $937 in July 2018 to $1,003 by July 2019. Furthermore, real disposable income is expected to increase by only around 2.5 percent over the next year. That means “home buyers would see a larger chunk of their incomes devoted to mortgage payments,” CoreLogic researchers note.
To calculate the typical mortgage payment, CoreLogic researchers use Freddie Mac’s average rate on a 30-year fixed-rate mortgage with a 20 percent down payment (not factoring in taxes or insurance). The typical mortgage payment standard is used to help judge affordability since it shows the monthly amount a borrower would have to qualify for to get a mortgage to purchase a median-priced U.S. home.
Nevertheless, while mortgage payments are on the rise, they’re still low by historical standards, CoreLogic researchers note. In July 2018, the typical inflation-adjusted mortgage payment still remained 26.8 percent below the all-time peak of $1,280 in July 2006. The average mortgage rate in June 2006 was 6.7 percent compared to 4.5 percent in July 2018.
Source: REALTOR® Magazine
Homeowners Putting the Brakes on Remodeling
As the housing market slows, homeowners are halting their plans to upgrade their home. The booming housing market had been making homeowners feel like investing their growing equity into sprucing up their homes. Remodeling activity climbed to a decade high of 7.7 percent this year, according to a new report from Harvard University’s Joint Center of Housing Studies. But it predicts a slowdown over the coming months as the overall housing market eases.
“Low for-sale inventories are presenting a headwind because home sales tend to spur investments in remodeling and repair both before a sale and in the years following,” says Chris Herbert, the Joint Center’s director. Herbert also points to rising interest rates that are making buying a home more challenging for many Americans. This increase in rates also has an impact on the cost of tapping into home equity lines when funding big remodeling projects.
Credit Suisse downgraded shares of home remodeler retailers’ stocks due to the slower growth in home prices and projections of a slowing remodeling business. “Home prices have been a key driver of big-ticket projects, supporting strong average ticket growth,” Credit Suisse analysts write.
Source: REALTOR® Magazine
The 5 C’s of Credit and What They Mean for a Home Loan
You’ve researched the neighborhood and spent hours scouring listings online. You know the best zip codes and school zones and are ready for the next step in the home buying process – getting pre-approval from your mortgage lender.
There is a lot that goes into determining if you qualify for a loan, but most traditional lenders will consider these five categories:
- Character
Your credit score will tell lenders about your character and your credit history. Do you pay your bills on time? Are your accounts in good standing? If your credit score is poor, you should focus on improving it before applying for a home loan.
- Capacity
This category measures your ability to pay back your loan. Your income, and your job stability, will come into play here, as well your debt-to-income (DTI) ratio. Your DTI is calculated by dividing total recurring monthly debt by gross monthly income. A ratio over 36 percent could mean you’ll pay more interest or that you will be denied a loan. If your DTI is over 36 percent, you should focus on lowering it by paying down your current debt, not taking on more debt and avoiding big purchases, such as a car, on credit before you buy a home.
- Capital
Capital refers to the money you have, or will have, to purchase your new home. Buyers with a down payment will have a better chance of obtaining a loan but a down payment is not a necessity. There are various loan programs that do not require a down payment.
- Collateral
In the case of home loans, collateral is the home itself. If you default on the mortgage, the bank will seize the home – this is why a home appraisal is almost always required before obtaining a loan.
- Conditions
Is it a buyer’s or seller’s market in your area? What is the current interest rate? These are conditions that can impact home prices in your area as well as your ability to get into a home.
Getting pre-approval for a home loan can be intimidating, but it doesn’t have to be. Contact me, and I’ll be happy to help guide you and those you know through the process!
