Home Values Rise Dramatically in 2012!

Home Values Rise Dramatically in 2012!

2012 was an interesting year in the real estate market.  The year began with a shortage of homes for sale that continued to become more severe as the year progressed.

 Homes for Sale Chart

At the same time, more buyers and investors entered the market attempting to purchase homes.  With severely low inventory and increasing demand, we consistently saw multiple offers on reasonably priced homes.  February of 2012 marked the end of a five year side in home values.  By the end of the year, home values in Snohomish County realized a 12.3% increase.  If I take January’s losses out of the equation, we actually saw our home values rise by more than 20% since February!  I have to go clear back to 1990 (21.7%) to find a year with that kind of appreciation.

 Home Prices in Snohomish County

 So, what can we look forward to in 2013?

Because home values in Snohomish County plummeted by 40.6% from the peak of the market in 2007, the inventory of homes for sale is going to remain relatively low for a few reasons.  First, the drop in value left many homeowners completely upside down in their homes.  With little or no equity, a large percentage of homeowners are simply stuck in their homes and can’t sell yet.  Despite 2012’s gains, it could realistically be another few years before they have enough equity to sell.  The second reason is now that prices are rising, many homeowners that can sell are simply going to decide to stay put and recapture some of the value they have lost since 2007.  Finally, low inventory and high demand sets the stage for more multiple offers.  If you want to sell your house and buy a different one, it won’t be impossible, but it will be tougher to convince many sellers to accept a contingent offer over an offer from another buyer that doesn’t have to sell first. 

Buyers Beware:  Low inventory means prices could skyrocket in 2013.  You will be competing against other buyers, so you will have to be thoroughly pre-approved by your lender.  Sellers are going to scrutinize your approvals like never before.  You will need to know exactly what you are looking for and make a decision quickly.  And finally, make your offer at or above list price if the seller has other potential buyers.  We are in a severe seller’s market and they have more control now.

Sellers you are in the driver’s seat.  Avoid overpricing your home.  The market has plenty of  over-priced listings that buyers are ignoring.  Price your home at market and you’ll probably get more than one offer and more money as they bid the price up.  The easiest time to sell is when there aren’t many competing homes on the market.     

If you are considering selling your home and want to know its current market value,

give us a call today!

425-742-1515

Douglas Lovitt is the Managing Broker

CENTURY 21 North Homes Realty, Inc.

1133 164th St SW Suite 102

Lynnwood, WA 98087

“Statistics not compiled or published by the Northwest Multiple Listing Service.”

Home Values Going Up!

Real Estate Values Going Up!

The collapse of the sub-prime market and the financial crisis that swept throughout the banking industry in early 2007 sent real estate and our home values into a tailspin.  Over the last five years we have seen our home values drop 40% from the peak of the market in March of 2007.

 Take a closer look at the chart.  Prices hit bottom in January of this year.  Since then prices have been rising – 16% since January!  This is great news for homeowners!  If you haven’t heard about this in the news, you will.

More great news for our home values is found in the active listing chart below. The glaring fact is that homeowners have not been putting their homes on the market this year.  This has created a shortage of available homes for buyers to purchase.  And, I expect to see the shortage get even worse over the next few months.  Why?  Typically we see the number of homes for sale decrease by 22% between September and the end of the year because of the holidays. 

 

 Buyer demand is very strong.  In fact, below $300,000 we are having a hard time finding quality homes for buyers to purchase!  Homes that are clean and well maintained are selling fast.  Even those properties that are in need of repairs are selling fairly quickly when they are priced correctly.

It’s no secret that for the past few years we have been in a “Buyer’s Market.”  What exactly determines whether it is a buyer’s or seller’s market?  Supply vs. Demand.  The absorption rate measures the total amount of homes for sale (supply) divided by the total number of closed sales from the previous month (demand).  The result is how long the current supply will last given the current level of demand.  Six months of supply is considered to be a balanced market.  More than six months of supply is considered excessive inventory and a buyer’s market.  While less than six months of supply is a shortage and a seller’s market.  The next chart very clearly shows that buyers are no longer in control of today’s market! 

We have plenty of well qualified buyers who want to buy a home before the end of the year.  We need homes to sell!

 If you have been thinking about selling your home, call us today!

We’d be more than happy to confidentially discuss your situation and help you determine what your options are in today’s market.

If you have been thinking of moving into a larger home, now is the perfect time.  The prices on larger homes are just starting to increase.  Take advantage of this window of opportunity by getting a good buy on your next home and selling your existing home quickly at a fair price!

425-742-1515

Douglas Lovitt is the Managing Broker at
CENTURY 21 North Homes Realty, Inc.
1133 164th St SW Suite 102
Lynnwood, WA 98087

Home Buyers Need to Brace for Fewer Homes for Sale and Higher Prices

Home Buyers Need To Brace For Fewer Homes For Sale and Higher Prices.

If you are looking to buy a home in Snohomish County it’s going to be even tougher to find the home you want.  And if you do find it… there are going to be other buyers to compete with when you make your offer.

Why?

First, every year beginning in September the amount of homes on the market typically begins to shrink.  In fact over the last five years from September through December inventory levels have dropped an average of 22%.  As of today there are only 1,978 homes for sale in Snohomish County.  If seasonality holds true, we should expect to see that number fall to only 1,543 homes for sale.  To put that number in perspective, for the same time period over the last five years we have averaged 4,408 active residential listings for sale.  

Inventory usually tightens the last 4 months of the year for several reasons.  Many would be sellers make the decision not to sell because they could not find anything they wanted to buy before school begins.  So, they decide to stay put.  Others sellers decide to take their homes off the market as the holidays approach.  Others make the decision not to move during the wet and possibly freezing winter weather.  Finally, many sellers decide to wait until spring.  They believe their home will look better and there will be more potential buyers.

Second, the recent decision by the Washington State Supreme Court over the validity of foreclosures initiated by MERS (Mortgage Electronic Registration Service) will bring many of the pending foreclosures to a grinding halt.  This will definitely reduce the number of homes for sale over the next four months.

Third, buyer demand is showing no signs of slowing down.  In fact, given the number of sales that are closing each month, the existing number of homes for sale will be completely gone before Thanksgiving!  Wow did I just really say Thanksgiving was on the near horizon?  Sorry about that.  But it is true.  Our existing inventory will only last 2.2 months.  I personally have been in real estate for 20+ years and have never seen inventory levels this low.  And, it’s going to go lower.

My advice…

If you are planning to buy a home in the near future, try to do it now.  Get your financing in order before you start looking.  A pre-approved buyer is much more attractive to a seller when they are reviewing offers.  Getting pre-approved might just be that edge you need to beat out other buyers. 

If you’re thinking about selling, consider taking advantage of the low inventory over the next four months.  Don’t wait until spring when everyone else puts their home on the market.  Low inventory means your home will sell faster and for more money.

If you want some help, give us a call…

425-742-1515

Douglas Lovitt is the Managing Broker at
CENTURY 21 North Homes Realty, Inc.
1133 164th St SW Suite 102
Lynnwood, WA 98087

From many false predictions to Signs of a Turning in Housing?

Announcements of a housing recovery have become a false prediction rite of summer, but after several years of false hopes, evidence is accumulating that the optimists may finally be right.

The housing market is starting to recover. Prices are rising. Sales are increasing. Home builders are clearing lots and raising frames.

The pace of recovery will probably be slow, and the prices of some homes will continue to decline.

Millions of people remain underwater, owing more on their homes than the homes are worth, and unable to sell.

At CENTURY 21 North Homes, “Our sense is that the market is recovering, and we’re extremely confident that it’s not going to get worse,”

FHA 203k Rehab Loans Are a Great Way to Go!

If you are considering buying a home, the FHA 203k rehab loans are a great way to go.  Because of the shortage of homes on the market, homes in good condition sell very quickly and receive multiple offers.  These multiple offer situations usually push the purchase price up, making the deal much less attractive, and pricing many buyers out of the picture.  If you have been through this you know exactly what I am talking about and know how frustrating it can be. 

So what can you do?

Many of the bank owned and HUD properties on the market are in need of repairs and have been priced much lower than most private sellers - the banks and HUD want these properties sold now!  Some of these properties are selling for unbelievable prices.  The problem that stops most buyers from getting one of these great deals is having the money to do the repairs.  If you use an FHA 203k rehab loan to purchase the property, you’ll not only be able to get a great deal, but you’ll also have the money to do the repairs and upgrades you want after the transaction closes!  FHA 203k rehab loans can be used to purchase the home, make health, safety and energy conservation improvements, make repairs such as roofs, decks, lighting, painting, carpeting, new appliances and much more!

Give us a call… we’ll teach you how you can take advantage of this program and get a great home for less.

425-742-1515

Douglas Lovitt is the Managing Broker at
CENTURY 21 North Homes Realty, Inc.
1133 164th St SW Suite 102
Lynnwood, WA 98087

7 Simple Tips To Getting Your Offer Accepted

With the inventory of homes for sale still extremely low, many buyers are becoming frustrated over losing the home they want to another buyer.  I hope these 7 simple tips to getting your offer accepted help you get the home you want.  It’s not uncommon right now for a well priced home to come on the market, receive multiple offers, and sell within the first few days.  So what can you do to make sure you are the one that gets the home?

1.  Know exactly what you are looking for!  Buyers that take the approach that “they will know it when they see it” are wasting their time in this market.  In fact, your real estate broker probably doesn’t think you are very serious about buying a home. Meet with your broker and define what you need and want in a home – those are not the same issues.  Have your broker educate you thoroughly about the home buying process.  And finally, put together a solid game plan for your search and follow it.

2. Get pre-approved for a loan.  Don’t just call a lender and see what you qualify for.  Actually make your loan application and get the lender everything he/she needs so they will give you a loan commitment letter.  This letter will be very important when the home you like receives more than just your offer.

3.  When you find the home you want, make your offer NOW!  The longer you wait, the greater the chance another buyer will find the home and make an offer too!  If you have to think about it for any significant time, you either didn’t do tip # 1 above, or it simply isn’t the right home.

4.  Have your broker call and talk to the listing broker before writing your offer.  Knowing what the seller’s needs and concerns are will help structure your offer to make it more appealing to the seller.  By the way… although your offer price is important, isn’t always their biggest concern.

5.  Write a clean offer that considers the seller’s needs.  If you have the down payment and money for closing costs, you might consider not asking the seller to pay your closing costs.  For the last several years this was pretty standard, but we are not in a buyer’s market anymore.  When sellers compare offers they will look for the highest net proceeds, then negotiate further with that buyer over the minor issues.  Make sure you are the one the seller wants to negotiate with!

6.  Consider writing a letter to the seller and have it submitted with your offer.  Concentrate your letter on why you love their home, how much you appreciate the care and attention the seller has given to the home, and what owning it would mean to your family.  Of course, if the house is a dump, you can skip the care part.

7.  Consider doing a pre-offer inspection on the home.  Your inspection is a major concern for most sellers.  Doing your inspection first can be a little risky because you’ll be paying an inspector to check out the home before knowing if the seller will even accept your offer.  But, an offer that does not require an inspection is a major plus to most sellers.  I would never advise completely waiving your inspection unless you are absolutely comfortable with the condition of the home and/or your abilities to correct issues that were not apparent prior to closing.

Obviously there are many more issues that need to be considered along your journey to home ownership, but these 7 tips are the ones that make a huge difference in whether a seller decides to accept your offer or one from someone else. 

Good Luck!  

If you want help with finding and buying your next home,

Give us a call today!

425-742-1515

Douglas Lovitt is the Managing Broker at
CENTURY 21 North Homes Realty, Inc.
1133 164th St SW Suite 102
Lynnwood, WA 98087

Savvy Investors Should Take Advantage Of A Window Of Opportunity

Savvy investors should take advantage of a window of opportunity created by the Robo-signing Settlement.  For months now investors have been hearing rumors about and waiting for a tidal wave of “REO Shadow Inventory” to hit the local real estate market.  Unfortunately, at recent local real estate conference, representatives from Bank of America, Wells Fargo and J. P . Morgan Chase all dispelled these rumors.  They outright said they don’t have a big back log of foreclosed properties they will be dumping on the market.  In fact, they said just the opposite.  According to the new requirements placed on them by the recent Robo-signing Settlement, it will take them significantly more time to work their way through the foreclosure process.  If this is true, investors will see even fewer opportunities within the REO market.

Investors have also been given a lower priority within HUD’s bidding process and Fannie Mae’s First Look program. Both programs favor owner occupants over investors.  This has allowed some of the best investment properties to be gobbled up before investors get a chance at these bargains.

One of the areas that buyers have been avoiding like the plague is short-sales.  Why?  Most buyers that want to occupy a home simply don’t want to wait around for months to find out if their offer will be approved by the underlying lien holder.  They want to know now if they are going to be able to purchase the home so they can make plans to move.  Investors however don’t have the same urgency and should be preparing to enter this market aggressively between now and the end of the third quarter this year.

Since the Robo-signing Settlement, one thing is very clear.  The attitudes of the large banks and loan servicers are rapidly changing when it comes to short-sales.  Since the settlement, both are now more financially motivated to accept and approve a short-sale.  Now… combine this with the fact that the Mortgage Forgiveness Debt Relief Act  is currently scheduled to come to a halt at the end of this year, and you have a rare situation where both the seller and the lender will be very motivated to get a deal done!

If you want to learn more about how you can take advantage of this opportunity,

Give us a call today!

425-742-1515

Douglas Lovitt is the Managing Broker at
CENTURY 21 North Homes Realty, Inc.
1133 164th St SW Suite 102
Lynnwood, WA 98087

March pending home sale rise-Recovery??

Pending home sales increased in March and are well above a year ago, another signal the housing market is recovering, according to the National Association of REALTORS®.

The Pending Home Sales Index, a forward-looking indicator based on contract signings, rose 4.1 percent to 101.4 in March from an upwardly revised 97.4 in February and is 12.8 percent above March 2011 when it was 89.9. The data reflects contracts but not closings.

The index is now at the highest level since April 2010 when it reached 111.3. …
Quoted from the NAR Chief Economist, Lawrence Yun.

Listing Inventory Continues To Tighten In Snohomish County

Despite the lack of local media attention, listing inventory continues to tighten in Snohomish County.  Potential home buyers are finding it more and more difficult to find and purchase quality homes.  When a buyer does find a well maintained home at a reasonable price, they quite often also find themselves having to compete with other buyers in a multiple offer situation.  This is good news for anyone attempting to sell a home. 

The average number of homes for sale in Snohomish County over the past 5 years has hovered around 4,500 homes.  Today, that inventory is down to just 2,115 homes and still continues to fall.  That’s less than half the normal amount of homes buyers usually have to choose from!  The reason is simple.  There are more buyers looking to buy right now than there are sellers attempting to sell.  Since May of last year buyer demand has slowly outpaced the supply of homes coming on the market. 

Out of the 2,115 existing residential listings on the market, approximately 66% (1,406) are normal non-distressed sellers.  The remaining homes for sale are either short sales (23% – 488 homes), bank owned properties (8% – 171 homes) or bankruptcy sales (2% – 50 homes). 

If you have been thinking about selling your home or liquidating an investment property, the next couple of months may be your best window of opportunity.  We expect to see an increase in the number of bank owned properties coming on the market beginning in June and July.  Many of the larger banks are currently working their way through a backlog of pending foreclosures.  Expect to see these properties to hit the market at very attractive prices.  They want to get them off their books as quickly as possible. 

If you want to sell…

Give us a call today! 

425-742-1515

Douglas Lovitt is the Managing Broker at
CENTURY 21 North Homes Realty, Inc.
1133 164th St SW Suite 102
Lynnwood, WA 98087  

“Statistics not compiled or published by the Northwest Multiple Listing Service.”

Number of homes for sale in Snohomish County continues to fall

The number of homes for sale in Snohomish County continues to fall at a surprising rate.   As of today, the number of active listings has fallen to 2,185.  This is down nearly 9% just since the end of February.  To put this shortage into perspective, over the last five years the average number of homes for sale is usually around 4,500!

The buzz in my office meeting this morning (and for the past 3 weeks) was all about multiple offers.  Buyers are searching for good homes and the shortage of inventory is creating bidding wars!  Right now it is not unusual for the seller of a well priced quality home to receive 9 or more offers!  In fact, we just had one that received 28!  In most of these situations buyer are paying more than list price to get the home they want.

Further evidence of the dramatic shift back into a seller’s market is clear when you look at the average time it takes to sell a home.  In February, pending sales were averaging 91 days on the market before they sold.  Today, less than a month later, the market time has dropped to 76 days!  Those 15 days represent a huge swing and a very telling sign of how heated the market is becoming.

This is very welcome news for existing homeowners that have been riding out the market hoping to reclaim some the value they have lost over the past five years.  And… it is great news if you are wanting to sell a home right now.