If the real estate market is your barometer, there are several key indicators to investigate:
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.
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.
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.
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.
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.
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?
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:
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:
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.
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.
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.
REAL ESTATE news
Sales of existing homes slipped 0.7 percent in July, fourth straight monthly decline
Lower priced homes are experiencing fewer price reductions than upper end properties
Home value growth slowing in several hot markets
MORTGAGE & FINANCE news
Young homebuyers funding home down payment from their retirement account
Massive student debt makes homeownership almost impossible
Guide to understanding your home’s value
Declutter your kitchen and double your storage space
Questions to ask before buying a condo
Buyers see hope on the horizon in cooling Seattle market
Seattle-area drops to the #12 market for home price growth
Home price acceleration slows, but it’s still a challenge if you’re a buyer
Seattle #2 on list of best cities for ice cream lovers
Performing arts and affordable housing come together in planned Rainier Valley development
The SR-99 tunnel gets its stripes (and some running stick figures)
Port of Everett breaks ground on huge and historic modernization project
Where do Washington State’s billionaires live?
WEEKLY DOSE OF awesomeness
What do the smart home systems of the wealthy have that Alexa doesn’t?
(hint: Morgan Freeman)
December is known for being on the cold side and a sign of a slowing Real Estate market as everyone starts to enjoy the holidays. Not this year however! December was smoking hot. A new record of 16 days inventory pushed buyers to snatch up everything they could and quickly.
-2% December 2017 vs. December 2016
781 available homes currently on market -347 vs. last month.
-4% December 2017 vs. December 2016
1255 units -336 vs. last month
+12%!!! December 2017 vs. 2016
1516 units +101 than last month
Days on Market
Snohomish County Active to pending 34 days vs. 39 a year ago. Up 4 days from last month (normal with the holidays).
Median home price in Snohomish County 448,000 +12% last year. Up $4,000 from last month.
Area price % based on last Quarter
All percentages are up and also include new construction
Bothell + 20%, Edmonds/Lynnwood +15%. Everett/Mukilteo +10%
Snohomish/Monroe+ 17%. Lake Stevens/Granite Falls + 15%. Marysville +13%
King County Median home prices are $611,000 + 15% over last year and up $27k from last month.
Woodinville area Median price is $678!!
Of the more than 3,100 counties across the U.S., none saw a bigger net increase than Pierce and Snohomish in movers from other counties. Is this a reflection of people being priced out of King County?
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!!
Crowdfunding your down payment: a new way to buy a home?
3 steps to figure out how much mortgage you can afford
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
Jen Murrweiss- www.snohomishcountyhomesinc.com
The kids are going back to school and cool crisp nights are coming soon. Are you ready for fall? Here is your September newsletter with an eye on the market, local happenings and some items to prepare your home for the cooler months ahead.
I am privileged to announce that I have officially joined the Homes for Heroes organization in their mission to help heroes across the country save thousands of dollars in the process of buying or selling their home.
What is Home for Heroes?
Homes for Heroes is an organization that was formed after the tragic events of 9/11 as a way to say “Thank You” to the heroes of our nation. The Homes for Heroes organization is composed of a network of real estate professionals who are prepared to give real savings to those who serve their communities when they buy, sell, or refinance a home. This program is our way to say, “Thank you!”
Who qualifies as a hero?
Our core group of local heroes includes but is not limited to: Military personnel, Police Officers, Firefighters, First Responders, Educators, and Health Care Workers. If you think you might qualify, please contact me and tell me about what you do for your community. When you are buying, selling or refinancing a home, let us say thank you for all that you do!
How much will I save?
The total amount you save will depend on the final selling or buying price of your home. Homes for Heroes Affiliate Realtors agree to rebate equal to 25% of the gross commission they receive on your transaction. Discounted lender fees are also offered on purchases and refinances with a Homes for Heroes lender. The savings can be thousands of dollars!
Are there a lot of extra applications, forms, and paperwork?
No! Homes for Heroes promises no extra forms, no red tape, no fine print, no hidden fees, and no catch!
Homes for Heroes offers me the chance to help our local community heroes achieve their dreams of home ownership. If you are interested in taking advantage of this opportunity, please contact me for more info or you can register now at www.snohomishcountyheroes.com to get started.
Snohomish County Statistics as of November 2016
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.
+17% November 2016 vs. November 2015
1111 available homes currently on market -800 vs. last month.
Up 1% November 2016 vs. November 2015
1528 units -88 vs. last month
+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%.
King County Median home prices are $523,000 + 16% over last year and up $6k from last month.
Woodinville area Median price is $550!!