Should I Buy a House in 2018?

Young Woman Eating On Couch Thinking About Buying HouseBuying a home is a big part of the American dream and one of the most important decisions, and major investments, anyone can make. Many on-the-fence heroes are wondering: “Should I buy a house in 2018, wait until next year, or simply continue renting?”

Look at House Market Key Indicators

If the real estate market is your barometer, there are several key indicators to investigate:

Inventory Levels

Supply and demand plays a role. When there are not many homes for sale (low inventory), this often means home prices are higher, and the market becomes more competitive for buyers. This is the case in 2018. However, inventory levels have been steadily increasing June-August this year, and actually surpassed August 2017 levels. If inventory levels continue to increase, that’s a good sign for buyers for the remainder of 2018.

Monthly Total Existing Home Inventory

Home Pricing History

Inventory of homes for sale will affect pricing. More homes for sale will typically drive down prices, where as low inventory of homes for sale typically means there is higher buyer demand, and it will usually push prices up. This is the case in 2018 where most markets are experiencing low inventory and higher prices. The existing home price increase in August 2018 marks the 78th consecutive month of year-over-year price gains according to the National Association of Realtors. Some early estimates for 2019 show that home prices will continue to increase around 3% in most markets. Great if you’re selling a house, but challenging if you’re buying. It makes buying in 2018 look even better.

Monthly Median Existing Home Price

Number of Days Home is On the Market

House prices typically drop the longer a home stays on the market. When this happens, it’s a good sign the market is cooling off or correcting. This year, in most markets, homes have sold relatively fast. This means potential buyers need to have their ducks in a row so they can act fast on the home they want.

Market Seasonality

According to Realtor.com, it’s the perfect time to buy a house because fall and winter tend to be better for home buyers, and this year is no exception. Housing inventory is on the rise, and that may mean lower prices and more bargaining power for buyers. That, combined with sellers who are anxious to get the sale done before the holidays, makes fall and winter a great time to buy.

Interest Rates

The interest rate is a big topic of conversation this year, and probably one you’ve kept top of mind when asking, “Should I buy a house in 2018?” The Federal Reserve has raised interest rates a couple of times this year. Two or three more rate hikes are being predicted, which may mean a more expensive mortgage for you. In September, the rate for a 30-year, fixed-rate mortgage jumped to 4.88 percent, which is the highest level for the 30-year mortgage since 2011, according to Bankrate. But, you need to understand this is still well below the average over the past 45 years outlined below with FreddieMac data since 1972.

Annual Average Mortgage Rate 30 Year Fixed Mortgage Over Past 45 Years

Trying to time your home-buying decision to take advantage of low interest rates or a buyer’s real estate market are smart home-buying strategies, but the real question is: Is it the right time for you, personally, to buy a house or maybe it would be better to rent?

Renting vs Buying a House

Some of you may not be a current home owner and are probably asking yourself, “Should I buy a house in 2018 or rent?” In order to figure out whether it would be better to rent or buy a house, consider these factors in addition to the current interest rate and real estate market:

How is Your Credit?

The interest rate can be as low as it’s ever going to go, but if your credit score is shaky, you’re not going to be able to take advantage of that. People with lower credit scores pay higher interest rates, and the amount can add hundreds to your monthly mortgage payment. Improving your score, no matter what the market is doing currently, is the smarter way to go.

If you haven’t checked your credit lately, you might want to take a look at it. Last year, credit reporting companies announced they were changing the way they handle negative information, resulting in many people seeing a spike of up to 40 points on their credit score. This overhaul was caused by the Consumer Financial Protection Bureau, which found problems with the reporting of collections and tax liens and as a result, that data has been removed from millions of credit reports.

However, particularly for home buyers, a tax lien or civil judgement can still interfere with your ability to get a loan. LexisNexis Risk Solutions found that people who have a tax lien or judgement are five and a half times more likely to go into pre-foreclosure or foreclosure, so mortgage lenders may well pull a LexisNexis report to find out, even if it no longer appears on your credit report.

FICO scores (credit scores) range from 300 to 850. If yours is 700 or above, you’ll qualify for a better interest rate on a loan, so that’s the score you’re shooting for.

If your score is less than 650, here are some ways to improve it:

    • Pay down your credit card bills to show only 10 percent of your limit. If your card’s limit is $1000, your balance should be no more than $100. Doing this will increase your score almost immediately.
    • Make all of your payments on time. One late payment can drop your score up to 100 points, but on-time payments will raise it.
    • Check your credit report for errors. If negative information exists and you don’t recognize the account or the charge, dispute it.
    • Never close a credit account. Even if you don’t use it, keep it open. Closing an account can negatively impact your score.
    • If you have an account in default, request a “pay for deletion.” It’s an agreement made with your creditors that you’ll pay a debt in full or an agreed-upon amount in exchange for them deleting the negative information on your credit report. Simply paying off your debt will not raise your score unless the creditor deletes it from your record.

How is Your Income?

Most financial experts agree that your housing costs should be no more than 30 percent of your income. Can you find an affordable home based on what you’re earning now? Also look at your debt-to-income ratio. If you’ve got a high amount of debt and a relatively low income, it will be more difficult to get a home loan. Pay down your debt before applying.

However, there has never been a better time to increase your income by finding a new job. Unemployment is at an 18-year low, which means it’s a job seeker’s market out there. Take a look at the average salary range for your position in your area to gauge how your employer stacks up.

Do You Have Enough for a Down Payment?

Experts recommend putting down 20 percent or more. Why? There are a few reasons. If you put less than 20 percent down, you’ll have to pay private mortgage insurance, which, on a $300,000 loan, will cost you an extra $250 each month. Another reason to make a larger down payment is to protect yourself in the event that you have to move shortly after you purchase the home, if you get a new job in another city or if your spouse is transferred, for example. With a small or nonexistent down payment, you might find yourself underwater, owing more than you can sell the home for, if real estate prices have fluctuated.

Do You Have Enough for Closing Costs?

In addition to the down payment, you’ll need money for closing costs. According to Motley Fool, you can expect to pay around 2 to 5 percent of the value of the property. So on that same loan of $300,000, you’ll pay in the neighborhood of $6,000 for closing.

And, if you’re still asking yourself, “Should I buy a house in 2018,” don’t forget to consider having enough cash on hand to cover your mortgage if you or your spouse loses a job, and have enough in savings for repairs if something goes wrong or breaks.

Bottom line, do your homework. Review these items and get to know your personal situation so you are prepared to discuss everything with a real estate and mortgage professional when your ready, whether it’s in 2018 or not.

Interested in doing a deeper dive? Here are some additional resources:
8 Advantages to Buying a House
First Time Home Buyer Tips
Wondering How to Get a Mortgage and Stop Paying Rent?
Financial Considerations When Buying a Home
Rent or Buy: The Great Debate

Ready to speak with a specialist, committed to heroes like you? Sign up and speak with one of our real estate or mortgage specialists in your area to learn more about how they can help you through the home-buying process and maximize your hero savings. Our heroes save, on average, more than $2,400 if they use our local specialists to purchase their home. There’s no obligation, and we guarantee the most hero savings among all national programs.

 

BLuke Feldbrugge

Weekly Real Estate Awesomeness

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REAL ESTATE news

Latest report from the NWMLS

Why it’s now an empty nesters housing market

When buyers cannot afford Seattle most head north into Snohomish County therefore we keep a close eye on the housing market all over and these stories paint a clear picture of why so many are moving this way. 

Seattle’s scorching housing market positions it as a city on the rise.

What’s it like to buy and sell in Seattle’s crazy market 

Prices soar leading some to give up

Boarded up house in Ballard lists for $595K!!

MORTGAGE & FINANCE news

Crowdfunding your down payment: a new way to buy a home? 

3 steps to figure out how much mortgage you can afford 

HOME trends

Modern backyard cabin is an urban oasis

5 most popular landscape design trends for fall 2017

City of Seattle begins work on a proposal to encourage development of backyard cottages

Make it a great week.

Jen Murrweiss- www.snohomishcountyhomesinc.com

 

 

 

 

 

 

Home Buyer Frustration Continues

Taxes

Home Buyer Frustration Continues

Latest News Release

KIRKLAND, Washington (Jan. 5, 2017) – Like many other months of 2016, December was frustrating for buyers across Washington state as they encountered depleted inventory and rising prices. Post-election hikes in interest rates – with more on the horizon — added to would-be homeowners’ worries.

Northwest Multiple Listing Service statistics for December show year-over-year drops in new listings, but gains in pending sales, closed sales and prices. Pending sales (mutually accepted offers) in the four-county Puget Sound region reached their highest level since 2005.

“The data just keep telling the same story – low inventory and increasing prices,” remarked Mike Grady, president and COO of Coldwell Banker Bain. “As one of our brokers put it, ‘Sellers received an awesome Christmas gift in December, but buyers, only a lump of coal.'”

Brokers added 4,217 new listings to the inventory during December to bring the supply up to 10,571 listings. The volume of new listings surpassed the year-ago figure of 4,041, but supply still fell, dropping to only 1.4 months for the Northwest MLS market area covering 23 counties. Both King and Snohomish counties reported less than a month of inventory.

Robert Wasser, owner/broker at Prospera Real Estate in Seattle, said his analysis of the MLS data indicates the supply of single family homes for sale in King County just hit a post-recession low. “The only other time supply fell below one month was around this same time a year ago,” noted Wasser, a member of the Northwest MLS board of directors.

At month end, MLS figures show inventory (10,571 listings) was nearly 15.6 percent below year-ago levels (12,522 listings), with about 90 percent of the selection being single family homes.

Seventeen of the 23 counties in the MLS report had double-digit drops in active listings at the end of last month compared to December 2015.

Northwest MLS members reported 6,401 pending sales during December, up from 5,970 for the same month a year ago for a year-over-year gain of 7.2 percent.

“The housing market remains frenzy hot on a seasonal basis,” exclaimed J. Lennox Scott. Noting sales activity was substantially higher than the number of new listings, he said such conditions “continue to foster a competitive market where homebuyers are just waiting for the next new listing to come on the market.”

Commenting on strong sales in the Central Puget Sound region, Scott noted King County recorded the biggest year-over-year jump in pending sales of single family homes, surging nearly 11.3 percent, well ahead of Kitsap (up 4.5 percent), Pierce (up 4 percent) and Snohomish (up 3.2 percent).

“Buyers pursued homes aggressively all through November and December with little to no slowdown amid fears of rising interest rates and worsening inventory levels,” said MLS director George Moorhead. “Inventory levels have dropped to their lowest level, which makes buyer frenzy even more intense as prices approach double-digit appreciation,” he added. Moorhead, the designated broker at Bentley Properties, calculates buyers have lost $37,000 in buying power due to interest rate increases. He likens the situation to having two cars, “one going forward, and one going in reverse. The gap is widening too fast for some buyers.”

Closed sales also finished on a strong note with brokers reporting 7,575 completed transactions during December. That’s up more than 6.8 percent from a year ago when members notched 7,091 closed sales.

Prices area-wide also continued trending upward, rising nearly 9.2 percent from a year ago. The overall median price for single family homes and condominiums that sold during December was $343,950; a year ago it was $315,000.

King County prices jumped 12.2 percent, from $450,000 in December 2015 to $505,000 for last month’s sales. For single family homes (excluding condominiums) the median price for December’s sales was $550,000, unchanged from October and November. Prices peaked this year in King County in June, reaching $573,522.

Condo sales slowed compared to a year ago, due at least in part to a sharp drop in inventory (down more than 19 percent). Pending sales were essentially flat (up 0.73 percent). Closed sales for December slipped nearly 6 percent, while prices on last month’s completed sales of condos rose 9.8 percent. The median price on last month’s closed sales of condos was $280,000. Condo prices in King County jumped more than 12 percent, from $279,975 a year ago to last month’s sales price of $314,000.

“Looking ahead to 2017, the Seattle market will continue to perform well, even with the expected interest rate increase,” stated OB Jacobi, president of Windermere Real Estate. The regional economy is in full stride, he noted, adding, “This will continue to create increased demand for housing across the board. Price growth should start to cool a little as inventory levels rise modestly, but overall, 2017 should be another banner year for the housing market.”

Consumers should expect prices to continue edging upward, suggested Moorhead. “NAR indicates we are 70,000 units short of meeting the housing needs in the Puget Sound area. Builders are just flat out running out of urban land to work with,” he said. Moorhead believes rising costs for construction labor are the driving force for price increases. Builder confidence continues to grow, reaching its highest levels since 2005, he noted, but added, “Naturally, some trepidation is heard as some feel this level of growth in the market is completely unsustainable.”

Grady believes the pattern of low inventory and increasing prices will continue. “We believe it is a predictor for what to expect throughout 2017,” he commented. “There’s simply not enough new construction to fill the needs of new employees being hired both locally and new to the state. The key is employment,” Grady continued, saying “There’s no reason to think that a new administration will cause employment to slow down; rather, it’s more likely we’ll see it increase in the Puget Sound region so we’re off to another strong start in 2017,” he stated.

Scott, the chairman and CEO of John L. Scott, expects a higher number of new listings will start to show up in mid-February – “just in time for the spring housing market rush.”

Northwest Multiple Listing Service, owned by its member real estate firms, is the largest full-service MLS in the Northwest. Its membership of nearly 2,100 member offices includes more than 25,000 real estate professionals. The organization, based in Kirkland, Wash., currently serves 23 counties in the state.

 

November Real Estate Market.. HOT, HOT!

 

Snohomish County Statistics as of November 2016

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November is known for being on the cold side and normally signs of a slowing Real Estate market as everyone starts to buckle in for the winter and holidays. Not this year however! November was smoking hot with only 1.4 month of inventory and buyers were snatching up everything they could. I saw multiple offers skyrocketing and bidding wars with some homes being bid up 100K. The picture to the left is a Bothell home that had 32 offers and was bid up 95k! Crazy!!

Here are your local inventory stats.

 

Active Inventory

 +17% November 2016 vs. November 2015

1111 available homes currently on market -800 vs. last month.

Pending Transactions

Up 1% November 2016 vs. November 2015

1528 units -88 vs. last month

Sold Transactions

+27%!!! November 2016 vs. 2015

1452 units -182 than last month

Days on Market

Snohomish County Active to pending 33 days vs. 47 a year ago up 7 days from last month.

Median home price in Snohomish County 399,000 +14% last year.  Up $7,000 from last month.

Area price % based on last Quarter

All percentages are up and also include new construction

Bothell + 16%, Edmonds/Lynnwood +17%. Everett/Mukilteo +12%

Snohomish/Monroe+ 11%. Lake Stevens/Granite Falls + 17%.

Marysville +14%

King County Median home prices are $523,000 + 16% over last year and up $6k from last month.

Woodinville area Median price is $550!!

Great news for those who had a bankruptcy

 Short and Sweet Real Estate News

 

The economy was very tough a few years back and I have met many that went through some very hard times but now have made their way back are financially stable, secure and ready to move on and plant roots again. It was so hard to have to tell these potential home buyers that unfortunately they were not able to purchase a home and had to wait. 

But there is now some great news!!  

You are no longer held to the 7 year foreclosure wait requirement!

There is of course still waiting requirements but they are more lenient.

  • 4- Years from Chapter 7 and Chapter 11 Bankruptcy Discharge
  • 2 years from Chapter 13 Bankruptcy Discharge or 4 years from Chapter 13 Bankruptcy Dismissal

 VA Short sales- Now 1 year from completion was 2 years

Fannie Mae Short Sales– 4 Years from completion date

FHA– 3 Years from completion

USDA– 3 Years from completion date

As always check with your lender as these are only guidelines and different banks, brokers and mortgage companies will have some of their own programs.

I hope this helps and brings some families closer to their dream of owning a home again.

http://www.snohomishcountyhomesinc.com

 

 

 

Short and Sweet Real Estate news

2045d-homesold

INFO THAT HITS US WHERE WE LIVE… We all want to be the best and help make the housing market the best it can be. Housing took a big step ahead in July as Housing Starts blasted ahead 15.7% to an annual rate just over one million units. Starts are now up 21.7% over a year ago, with strong gains in the past year for both single family starts, up 10.1%, and multi-family, up 44.7%. New Building Permits zoomed up a nice 8.1% in July, also to a just over one million annual rate. Versus a year ago, single-family permits are up almost 4%, multi-family up just over 14%.

Monthly Housing Starts can be volatile, so let’s look at the 12-month moving average. It’s at its highest level since October 2008. Also nice to see, the total number of homes under construction (but not finished) is up 2.9% in July and up 22.8% from a year ago. No wonder the National Association of Home Builders confidence index is up two points in August, to its best read since January. More good news came with Existing Home Sales up 2.4% in July to a solid 5.15 million unit annual rate. Best of all, inventories have been growing for 7 months now and are 5.8% higher than a year ago.

30-year mortgage rate falls to 4.1%, a 2014 low!!!!

DID YOU KNOW?… The oldest surviving houses are in Turkey, in a Neolithic settlement built around 7500 B.C. People entered these mud-brick homes through a hole in the ceiling that also provided ventilation for the fires within.

BUSINESS TIP OF THE WEEK… It’s not about what you get, it’s about what you give. Focus on giving your clients more and the rewards will follow.

OPEN HOUSE TODAY IN BOTHELL 3-5!

 

Rambler1
OPEN HOUSE TODAY IN BOTHELL 3-5! Come and see me today and let the kids have some cookies and juice while you tour this great newly listed home. Do you know Ramblers always hold their value? They are sought out and they just don’t build them anymore! This Fannie Mae Value Priced Home! Lovely rambler located in an established neighborhood. Welcoming entry opens to great room concept living area which features custom tile flooring, vaulted ceilings and skylights and gas fireplace. You’ll love the natural light and warmth of this room! Home has a island kitchen with enough space for cooking for a crowd. This Home qualifies for HomePath Mortgage Financing and HomePath Renov.Financing. Purchase with as little as 5% down! This one is a MUST see. 1820 224th St SW, Bothell 98021

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Sneak Preview New Listings

Sneak Peak! Do you know there are some great bank owned homes from Fannie Mae coming soon? Here is one in Bothell that will hit the market in a few weeks. 1994 Rambler with nice tile floors, island kitchen, gas fireplace, 3 bdrm/ 2 bath/ 1632 sq ft. List price will be under $340K. Want more info? Hurry and ask BEFORE it hits the market.

Bothell Coming soon

 

This one is going on tomorrow! Turn Key FHA approved town home ready for new owner! Located in a small gated community surrounded by new homes & natural growth protected area. This Private & spacious home sits in back of the complex backing up to green belt. W/ Large living space of 1128sq. ft. & a 525 sq. ft garage w/additional storage you have room for everything. Features lots of large windows, hardwoods in kitchen & bath, gas stove, gas fireplace, gas heat & all appliances. Min. to Everett Boeing, Muk. Schools & Shopping. $165K

 

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