Buyers: Window of Opportunity Still Open

  

opportunity windowThe Fed recently announced they would continue their current pace of purchasing bonds until the economy was stronger. This bond purchasing program is the reason that mortgage interest rates are at historic lows. Rates began to increase over the last several months just on the anticipation that the Fed would announce that they would be reducing the level of bond purchases last month. When that didn’t happen, rates actually decreased (4.50 to 4.37).

That was great news for any buyer in the process of purchasing a home. However, this window of opportunity is expected to close in the very near future as most experts expect the Fed to taper the bond purchasers in December. Even Ben Bernanke, Chairman of the Fed, suggested that the Fed could still scale back the stimulus this year. He stated:

"If the data confirms our basic outlook, then we could move later this year.”

Where will mortgage rates head in 2014?

The Mortgage Bankers AssociationFannie MaeFreddie Mac and the National Association of Realtors have each projected that the 30 year fixed rate mortgage will have interest rates in excess of 5% by this time next year. The average of their four projections is 5.3%. The table below shows the impact this will have on the monthly principal and interest payment on a $250,000 mortgage:

Payment A buyer should take advantage of the current window of opportunity before it is too late.


Posted on September 30, 2013 at 11:08 pm
Debi Bloomquist | Posted in Economics, Homeowner News, Real Estate |

Do you really need to spend a lot on home insurance?

By Andrea Duchon | Yahoo! HomesWed, Sep 11, 2013 1:53 PM EDT

Want to make sure your home and family are adequately protected? Here are five questions to help you figure out how much insurance you actually need on your home.

When you buy a new house, it seems like there are a million moving pieces and thousands of documents that need your signature. But how closely did you pay attention when you chose your home insurance policy?

Paula Pant, founder of AffordAnything.com, a money management website, says that most people gloss over their policy and either end up paying more than they need or simply not enough.

"That's a lose-lose situation," she says. "You need the Goldilocks policy: not too much and not too little."

To make sure you're adequately covered, here are a few questions to ask to help you figure out how much home insurance you need…

How Much Will it Cost to Rebuild Your Home?

When determining how much home insurance you need, understanding the cost of rebuilding your home is crucial.

"You need enough insurance to cover the cost of rebuilding your home at current construction costs," according to the Insurance Information Institute (III). It also warns against confusing rebuilding costs with the price you initially paid for the home, as the current value and reconstruction costs could vary greatly.

Below is a list of some factors that will decide the cost of rebuilding your home, notes the III:

  • Local construction costs
  • The square footage of the structure
  • The type of exterior wall construction – frame, masonry (brick or stone) or veneer
  • The style of the house (ranch, colonial)
  • The number of bathrooms and other rooms
  • The type of roof and materials used
  • Other structures on the premises such as garages, sheds

To gauge how much insurance you'll need to reconstruct your home, the III suggests multiplying the total square footage of your home by local building costs per square foot. You can figure out "local" costs by getting rates from contractors and talking to local real estate agent and builders.

And because there's so much to consider in determining reconstruction costs, Pant suggests walking through your home and taking pictures of everything from your countertops and cabinets to your tile and hardwood floors.

"When you submit a claim to your insurance company to justify the cost of rebuilding your home," she says, "these pictures of the components of your home will be immensely helpful in getting back the value of everything inside."

How Much are the Items in Your Home Worth?

It can be hard to know how much insurance to buy if you don't know what all of your assets are worth, says Pant.

"Many people underestimate the value of their assets because they don't conceptualize them as being worth cash," she adds.

However, Pant says it's important to have a good handle of the monetary value of your possessions as it will put you in a better position to recoup your costs should disaster strike.

To do this, Pant recommends having photographic evidence of your possessions.

"Walk around your house with the video camera, even if it's just the camera on your phone, gathering video evidence of what the interior of your home looks like. Couple that with any receipts or invoices from contractors that you've saved."

The III offers similar advice, noting that homeowners should take an inventory of their personal possessions: "You need to conduct a home inventory. This is a detailed list of everything you own and information related to the cost to replace these items if they were stolen or destroyed by a disaster such as a fire."

What's Your Likelihood of Getting Sued?

Do you have a dog? Swimming pool? Trampoline?

If you said yes to any of the above, you'll want to make sure you have strong liability coverage in the event that someone is injured by your pet or while they're on your property. Being covered is good risk management – just ask Mitchell D. Weiss, an adjunct professor of finance and member of the board of the University of Hartford's Barney School of Business.

"There are three good steps to good risk management," advises Weiss. "You want to identify the risks that concern you, estimate the likelihood of their coming to pass, and determine the cost you'd incur should that thing occur."

Once you take a look at those things, Pant says it's a good idea to carry an umbrella insurance policy to protect you in case someone sues.

"These umbrella policies are generally cheap – less than $100 a year can provide coverage for up to $1 million or more dollars for lawsuits and liabilities. If someone slips on ice in your front yard and sues you, it's good to have the peace of mind that you have additional protection."

Are Earthquakes and Floods Common in Your Area?

"If you're particularly prone to hurricanes, floods, or other natural disasters, make sure you buy added insurance specifically for that. Many standard plans won't cover natural disasters that your neighborhood is most likely to experience," says Pant.

In fact, the III says that floods, earthquakes, maintenance damage (like mold, for example), and sewer backup, are a few disasters that are not covered in a standard insurance policy.

Luckily, you do have coverage options available.

"Ground water flooding is not covered by most (if not all) homeowner's insurance policies. You'll need flood insurance for that, which the government makes available," says Weiss.

He also suggests looking at wind-damage insurance limitations.

"These are used to describe an issue that's common to beachfront – or near beach – properties. Insurance companies set high deductibles for that, which leaves the homeowner to cover the difference," Weiss explains.

So, if you live in an area that's known to experience natural disasters or just bad weather in general, you'll want to add any coverage necessary to ensure you're protected.

How Much Would it Cost to Live Elsewhere if Your Home is Damaged?

You obviously don't want to think about your home being damaged to the point where it's uninhabitable, but it's an important thing to consider when you're talking insurance.

"Remember: you'll unfortunately have to live somewhere else if your home is destroyed," says Pant. For this reason, she suggests that homeowners "opt for a plan that gives you a payout, or stipend, to cover the cost of renting a home for at least six months while your current home is being fixed."

A basic, bare-bones plan usually won't cover this, but many insurance companies offer riders, or a provision of your insurance policy that is purchased separately from the basic policy, which help pay for this cost.

"Of course, adding these riders to your insurance plan also increase your premium," Pant warns. But, paying a little more a month to ensure you have place to live if disaster strikes is probably worth it.

 


Posted on September 18, 2013 at 3:49 pm
Debi Bloomquist | Posted in Economics, Homeowner News, Real Estate |

Cultural Trends: How driving trends are impacting the housing market

Posted in Buying by Edward Krigsman 

Windermere Blog

 

As we have mentioned in previous blog posts, home buyers continue to consider their daily commute when making home purchase decisions. Some Americans are limiting their driving or forgoing cars all together. In recent years, the driving trends of Millennial and Boomer generations have decreased steadily. More Americans in general are embracing alternatives to driving like mass transit, walking, bicycling, car sharing, and working from home.

Recent studies and articles in publications like the Washington Post and theNew York Times document declining automobile use. Driving measured by consumption of auto fuel tells the same story. Whether you are a home buyer, seller, or owner, these trends may impact your decisions in new and surprising ways, with the value of your home being shaped, at least in part, by this trend.

If you are in the market for a home, considering your commute, walk-score, and transportation options could be an important part of determining if a particular neighborhood is right for you. It might also be helpful to seek out the assistance of a real estate agent familiar with such issues.

Real estate companies have started adding search features to their websites to assist buyers with evaluating commuting information. For example, Windermere recently added INRIX DriveTime™ to its website which allows home buyers to search for homes based on commute times. Walkscore.com and Transitscore.com provide home buyers with a quick and easy way to assess the quality of a community based on walkability and access to mass transit. These online tools highlight those homes with shorter drive times and higher walkability, factors which could end up impacting the value of certain homes as some buyers “vote with their feet,” rather than with their car.

Real estate developers are embracing this trend too by building in locations that reduce car use; this is why you may notice an increase in new housing as you travel from suburban neighborhoods into cities like San Francisco, Portland, San Diego, or Seattle. In some of these cities, it is increasingly common to see townhomes built in more walkable neighborhoods, many without dedicated, private garages. 

City planners are encouraging such construction by changing zoning laws to foster "Transit Oriented Development," (TOD). TOD changes zoning to incentivize developers to create new housing construction close to light rail stations, with progressively lower housing density to about 1/2 mile from their stops. This solves what city planners have come to call the "last mile problem," (getting more commuters home from a transit hub). Cities with TOD initiatives include Seattle, the San Francisco Bay Area, the Salt Lake City Metro Area, and the Portland Metro area.

With experts saying that consumers are trending towards less driving, home buyers may wish to evaluate the location of their purchase by asking themselves the following questions:

  • Does this neighborhood lower the cost of living, while increasing the quantity and quality of free time, by increasing my independence from cars?
  • What is the travel time between the places those in my household frequent most, such as home, work, schools, and recreational amenities?

If you are selling your home, consider highlighting its location as one that might improve the quality of life for the next residents by showcasing drive time, walkability, and proximity to transit—to the extent that such benefits exist.

Studies continue to show that the amount of time a person spends commuting every day is a major factor when buying a home. In recent years, there has also been a significant trend towards mass transit and reducing one’s “carbon footprint” by driving less. This is important for both buyers and sellers to keep in mind, as these factors can have a significant impact on the long-term value of a home – and on the quality of life for you and those in your community.

 

 


Posted on September 11, 2013 at 9:52 pm
Debi Bloomquist | Posted in Economics, Real Estate |

Should I Wait for Interest Rates to Come Back Down?

 

by THE KCM CREW on SEPTEMBER 3, 2013 ·in FOR BUYERS

 

 

Above is a graph of the movement of the 30 year fixed mortgage rate since the beginning of 2012.

Some buyers are waiting to see if interest rates will come back down before making a decision about buying a home. Though no one can guarantee where rates will be in a few months, we don’t believe waiting is a good strategy.

Most experts believe rates may actually move higher. The Mortgage Bankers AssociationFannie MaeFreddie Mac and the National Association of Realtors are in unison projecting that rates will continue to climb.

With home prices increasing and interest rates projected to also increase, the cost of buying a house could quickly increase rather dramatically.


Posted on September 10, 2013 at 11:07 pm
Debi Bloomquist | Posted in Economics, Home Finances, Homeowner News, Real Estate |

Washington home prices up more than 12% in a year

 
by Ben Miller Contributing Editor – Puget Sound Business Journal

Home prices in Washington state have risen 12.4 percent in the past year, which mirrors the national average.

According to property information company CoreLogic Inc., single-family home prices in both Washington state and nationwide, including distressed sales, increased 12.4 percent on a year-over-year basis in July 2013 compared with July 2012.

Excluding distressed sales, single-family home prices increased 12.7 percent in Washington state.

According to CoreLogic, including distressed sales, the five states with the highest home price appreciation were: Nevada (up 27 percent), California (up 23.2 percent), Arizona (up 17 percent), Wyoming (up 16.4 percent) and Oregon (up 15 percent).


Posted on September 5, 2013 at 10:36 pm
Debi Bloomquist | Posted in Economics, Real Estate |

Moving Up? Do It Now!!

by THE KCM CREW on AUGUST 5, 2013 

PrintNew reports are revealing that the number of existing home ownerspurchasing a house is beginning to increase. Some are moving up, some are downsizing and others are making a lateral move. Another study shows that over 75% of these buyers will, in fact, be in that first category: a move-up buyer. We want to address this group of buyers in today’s blog post.

There is no way for us to predict the future but we can look at what happened over the last year. Let’s look at buyers that considered moving up last year but decided to wait instead.

Assume they had a home worth $300,000 and were looking at a home for $400,000 (putting 10% down they would get a mortgage of $360,000). By waiting, their house appreciated by 12% over the last year (national average based on the Case Shiller Pricing Index). Their home would now be worth $336,000. But, the $400,000 home would now be worth $448,000 (requiring a mortgage of $403,200).

Here is a table showing what additional monthly cost would be incurred by waiting:

Move up

If your family sees yourself in this situation, it may make sense to move now than later. Prices are definitely appreciating and interest rates are beginning to rise.


Posted on August 20, 2013 at 8:09 pm
Debi Bloomquist | Posted in Economics, Real Estate |

Selling a House? Don’t Overprice It

 

by THE KCM CREW on JULY 15, 2013 ·

in FOR SELLERSPRICING

There is no doubt that the housing market is coming back nicely. What, if anything, could slow down the current momentum? We believe it may be sellers’ over exuberance when it comes to pricing. There is little doubt that house prices have appreciated over the last twelve months in most regions of the country. However, with both the inventory of homes for sale and interest rates increasing, we have to be careful to not over judge what the market can bear.

Trulia just reported that asking priceshave jumped dramatically and the increase is accelerating:

  • Year-Over-Year prices jumped 10.7%
  • Quarter-Over-Quarter prices jumped 4.1% (16.4% annualized)
  • Month-Over-Month prices jumped 1.5% (18% annualized)

No expert is expecting home prices to shoot up 18% in the next twelve months. If anything, price appreciation may slow as rates and inventories increase. Investors will begin to slow their purchases and the first-time buyers expected to take their place will be working within a pre-set budget in many cases.

Buyers’ Purchasing Power

Let’s look at an example: A young couple is looking for a home and have predetermined that their budget will only allow them to spend $1,000 a month on a mortgage. At today’s mortgage rate of 4.5%, they could afford a $200,000 mortgage ($1,013 principal & interest). However, if rates jump to 5%, they would have to lower their mortgage amount to $190,000 in order to keep their monthly payment where they need it ($1,020). At 5.5%, the mortgage would need to be no more than $180,000 ($1,022).

The Impact on Prices

This decrease in buyers’ purchasing power will have an impact on home values going forward. We do not believe it will cause a decrease in prices. However, we do believe it will likely cause current rates of appreciation to slow.

If you are thinking about selling your home, don’t get carried away with current headlines about home price increases that have taken place over the last twelve months. Instead, call a local real estate professional. They will be best prepared to explain where prices are headed over the next six months.


Posted on August 1, 2013 at 12:01 am
Debi Bloomquist | Posted in Economics, Home Finances, Real Estate |

How to Choose the Right Home

 

Posted in Buying by Marguerite Giguere

 

As the market starts heating up and real estate becomes a popular dinner party topic again, it’s easy to get so caught up in the fever of searching and offers that we forget why we were buying a home in the first place. When you’re hearing about “inventory shortages” and “bidding wars” it’s important not to fall into the trap of settling, buying for the wrong reasons, or even overspending.

When is the “Right Time to Buy”?

I constantly see information out there telling buyers and sellers that it is the “right time” or the “wrong time” to buy or sell a home. Of course you should take things like rising interest rates or rising or falling prices into consideration, but the most important thing to ask yourself is, “Is it the right time for me?” Are you ready to stay in one place for a while? Are you feeling like your employment position is stable? How about your relationship? If you’re barely making ends meet with a job you hate and your relationship with your partner is on the rocks, it’s probably not the time to buy, no matter what interest rates are doing. Having enough money to comfortably afford your home is more important than buying when everyone else is.

What are your values?

Why do you want to buy a house, anyways? Do you imagine yourself spending your weekends working in your yard every weekend? Is your idea of fun tearing apart a bathroom and putting it back together piece by piece? Or are you more interested in a lifestyle, living close to your work and walking to the grocery store? If you love going out with your friends or traveling for long periods, buying a house with extensive landscaping or an endless list of things needing to be remodeled and upgraded is probably not a good fit. Know what kind of life you want to live in your home BEFORE you find a place, and stay true to that as you search.

Find a REALTOR who gets you.

When you’re looking for an agent to help you find a home, keep looking till you find someone you like and trust. Buying a home can be hugely stressful, and being able to have open and honest conversations with an agent who gets you will make the whole process much easier.

Everyone is happy that the real estate market is in recovery and buying a house is an amazing experience. Just make sure you know what you want your home to be FOR YOU and stay true to your own personal American Dream.

Marguerite Giguere is a buyers agent specializing in Downtown Tacoma. She blogs regularly at GetRealTacoma.com.

Posted on July 26, 2013 at 9:24 pm
Debi Bloomquist | Posted in Real Estate |

HomeWork: Buy new or buy older? Each has its pros, cons

Originally published Friday, July 19, 2013 at 8:05 PM  
The Seattle Times  
 

The rule of thumb used to be that new homes were more expensive than older homes, but no longer is that always the case.

Q: When buying a home, is it better to buy new or used?

A: For some buyers, an older home holds charm, history and character. For others, the idea of a brand-new home that has never been lived in is much more appealing.

The rule of thumb used to be that new homes were more expensive than older homes, but no longer is that always the case. One reason is that, as land costs have increased, lot sizes have shrunk. And even though material costs continue to climb, today’s construction is cheaper due to engineered woods and the use of drywall instead of plaster.

A potential buyer looking for a home in one of Seattle’s more desirable inner-city neighborhoods will find, on average, larger lot sizes and homes that cost more than entry-level homes in a new subdivision in the outlying areas.

In addition to factors such as commute times and school systems, there are some distinct advantages and disadvantages to consider as you decide whether a newer home or an older one is right for you.

Advantages of older homes

Older homes have stood for decades and sometimes for centuries, weathering many storms. The Seattle area is known for its genuine Craftsman homes built with meticulous attention to detail.

An older home is more apt to have a larger lot size, with room to potentially accommodate a garage or a backyard cottage, depending on local regulations. Zoning changes are much less likely in older established neighborhoods, which reduces the chances that you’ll ever be surprised by how your neighborhood is developed.

An older home may have enchanting design and detail features that aren’t found in a modern house, as well as mature trees and landscaping. And older neighborhoods are often well-developed and may have local coffeehouses and shops nearby.

Drawbacks of older homes

Obviously, you’re likely to have more maintenance-related issues with an older home — unless it has been recently remodeled or upgraded. When considering an older home, ask about the age of the heater, water heater and pipes, as well as the electrical system. You’ll want to know if the home might soon be in need of major repairs or upgrades.

Many older homes in established Seattle neighborhoods have less square footage. It is likely they will have a smaller garage, closets and windows.

Advantages of new homes

In most cases, your warranties ensure that you won’t face major repairs or replacements for at least 10 years. Many of today’s most-popular conveniences are standard with a new home, including built-in dishwashers and microwave ovens, and wiring for security systems and other home technology.

New homes are more energy efficient — they feature insulation in walls, ceilings and floors, as well as double- and sometimes triple-pane windows, all of which help to reduce energy costs.

When buying in a new-home development, there are often several floor-plan choices. In some cases, you have a choice of interior features like cabinets, countertops and paint colors.

Drawbacks of new homes

Most new-home developments have some kind of neighborhood association that restricts exterior appearance and other considerations. It can take years for the vegetation, including shade trees, to mature in a new development.

New houses settle — it happens everywhere, regardless of the type of soil, and can cause cracks in foundations, walls and doorframes.

Perhaps the biggest drawback is the likelihood of a longer commute, since — other than condominiums — most new housing is being built outside of metropolitan areas.

Identifying your top priorities will help determine whether a new home or an older home is the right choice for you and your family.

HomeWork is the weekly column by the Master Builders Association of King and Snohomish Counties’ Remodelers Council about home care, repair and improvements. If you have questions about home improvement, send them to homework@mbaks.com.


Posted on July 24, 2013 at 10:54 pm
Debi Bloomquist | Posted in Home Improvement, Homeowner News, Real Estate |

Home Inspection: a Reality Check from a Pro

 

Posted in Buying by Tara Sharp 

 

For many people, a home inspection is a hurdle that has to be overcome during the process of buying or selling a home. But, in fact, it can be a useful tool for buyers, sellers or anyone who plans to get the greatest possible value from their home.

Find out if the house you are selling has “issues”

When you’re selling a house, a pre-sale inspection can be particularly useful. By uncovering any potential problems your house may have, an inspection can give you an opportunity to address them before your first prospective buyer arrives.

According to Bill Richardson, president of the American Society of Home Inspectors (ASHI), “More and more, sellers are obtaining pre-sale inspections. This simple step can allow for better planning and lower expenses in making repairs, add value to the home, and help speed up the process and likelihood of an offer.”

In any market, a pre-sale inspection can give your home a competitive edge. Potential buyers are likely to find the kind of detailed information an inspection provides reassuring—and are encouraged to give your home a closer look.

Get to know a house before you buy it

A home is a major investment and, for many people, the greatest financial asset they have. With so much at stake, it makes sense to do what you can to protect your financial interest. Getting an inspection is a smart, simple way to do just that.

When you make a written offer on a home, insist that the offer provide that your contract is contingent on a home inspection conducted by a qualified inspector. You’ll have to pay for the inspection yourself, but an investment of a few hundred dollars could save you thousands of dollars and years of headaches. If you’re satisfied with the results of the inspection and are assured that the home you’re purchasing is in good shape, you can proceed with your transaction, confident that you are making a smart purchase.

When does a home inspection make sense?

In addition to routine maintenance and pre-sale inspections, there are a number of circumstances in which a home inspection could greatly benefit a homeowner. If you are not sure, here are a few simple questions to ask yourself:

· Was your home inspected when you bought it? If not, an inspection would be beneficial even if your home was a new construction at sale.

· Are you an older homeowner who plans to stay in your home? If so, it makes sense to hire a professional who can inspect difficult-to-reach areas and point out maintenance of safety issues.

· Do you have a baby on the way or small children? An inspection can alert you to any potential safety issues that could possibly affect a growing family, such as mold, lead or structural problems. If mold or lead is present, be sure to rely on technicians or labs with specialized training in dealing with these conditions.

· Are you buying a home that’s under construction? You may want to hire an inspector early on and schedule phased inspections to protect your interest and ensure that the quality of construction meets your expectations.

What doesn’t your home inspection cover?

For a variety of reasons, some homes will require specialty inspections that are not covered by a typical home inspection. A specialty inspection might include such items as your home’s sewer scope, septic system, geotechnical conditions (for homes perched on steep sloes or where there are concerns regarding soil stability) or underground oil storage tank. If you have any questions about whether or not your home needs a specialty inspection, talk to your real estate agent.

Hire a professional

If you decide to hire a home inspector, be sure they’re licensed in your state. They should be able to provide you with their license number, which you can use to verify their status with the appropriate government agency. It’s also helpful to ask for recommendations from friends and family members. Even among licensed and qualified home inspectors, there can be a difference in knowledge, performance and communication skills, so learn what you can before your hire a home inspector to ensure that you get the detailed inspection that you want.

What to ask your home inspector

Ask the right questions to make sure you are hiring the right professional for the job.

What does your inspection cover?

Insist that you get this information in writing. Then make sure that it’s in compliance with state requirements and includes the items you want inspected.

How long have you been in the business?

Ask for referrals, especially with newer inspectors.

Are you experienced in residential inspections?

Residential inspection in a unique discipline with specific challenges, so it’s important to make sure the inspector is experienced in this area.

Do you make repairs or make improvements based on inspection?

Some states and/or professional associations allow the inspector to perform repair work on problems uncovered in an inspection. If you’re considering engaging your inspector to do repairs, be sure to get referrals.

How long will the inspection take?

A typical single-family dwelling takes two to three hours.

How much will it cost?

Costs can vary depending upon a variety of things, such as the square footage, age, and foundation of the house.

What type of report will you provide and when will I get it?

Ask to see samples to make sure you understand his or her reporting style. Also make sure the timeline works for you.

Can I be there for the inspection?

This could be a valuable learning opportunity. If your inspector refuses, this should raise a red flag.

Are you a member of a professional home inspector association? What other credentials do you hold?

Ask to see their membership ID; it provides some assurance.

Do you keep your skills up to date through continuing education?

An inspector’s interest in continuing education shows a genuine commitment to performing at the highest level. It’s especially important with older homes or homes with unique elements.

If you have questions about finding a home inspector, or are looking for an agent in your area we have professionals that can help you. Contact us here.

 


Posted on July 18, 2013 at 11:18 pm
Debi Bloomquist | Posted in Real Estate, Uncategorized |