Hood Canal Real Estate – Now is a great time to invest in a rental property. www.hoodcanalliving.com

Hood Canal Real Estate, Mortgage, and the Economy.  www.hoodcanalliving.com


Now is a great time to invest in a rental

Low home prices and low interest rates make this a great time to become an investor. These 5 tips will help you get started.

Invest in a rental property (© Greg Vote/Getty Images)




What's more, the real-estate market is starting to recover: U.S. houses lost $489 billion in value during the first 11 months of 2009, but that was significantly lower than the $3.6 trillion lost during 2008, according to real-estate website Zillow.com.If you're thinking about investing in a rental property, experts say low home prices combined with low interest rates make this the best time in years to become a real-estate investor.
"We haven't seen home prices this low in so many years, coupled with the rates being so low," says Jill Sjolin, an agent with Windermere Real Estate in Woodinville, Wash., who specializes in investment properties. "When the money is cheap to borrow and the houses are cheap to buy, it's absolutely the best time to invest."
While the timing may be right, these five tips can help first-time investors take advantage of what might be the opportunity of a lifetime.
Know your options. Since not all investment properties are the same, it's important to determine what type of property fits your strategy, says Harrison Merrill, chief executive officer of Merrill Trust Group, a real-estate investment company based in Atlanta. Do you want to become a landlord, or would you rather restore and resell properties? Are you interested in apartment buildings and other commercial real estate, or in buying land that can be developed? First-time real-estate investors may want to start with residential housing, since commercial real estate and land development still face challenging market conditions, Merrill says.
Partner with experience. First-time investors should find a real-estate agent experienced in investment property deals who can help you locate promising properties. "Look for relational brokers who expect to do business with you again and therefore are going to be much more careful with what they recommend," Merrill says. A second option is to collaborate with a more experienced real-estate investor and close a deal together. In this economy, an experienced real-estate investor may be willing to work with you in exchange for the capital you can provide, giving you the opportunity to glean investment knowledge and experience firsthand, Merrill says.
Even if you don't collaborate with other real-estate investors, talk to them about pitfalls they've experienced. "Go down to the general district court in your area and listen to some landlord/tenant cases so you can get a sense of what kind of challenges landlords face," says Jeffrey Taylor, author of "The Landlord's Kit."
Look for the right location. If you buy a property with hopes of renting it out, location is key. Homes in high-rent or highly populated areas are ideal; stay away from rural areas where there are fewer people and a small pool of potential renters, Sjolin suggests. Also, look for homes with multiple bedrooms and bathrooms in neighborhoods that have a low crime rate. "Renters gravitate to a safe neighborhood, and if they have kids, they will want a good school district," Sjolin says. Also think about potential selling points for your property. If it's near public transportation, shopping malls or other amenities, it will attract renters, as well as potential buyers if you decide to sell later. The more you have to offer, the more likely you are to please potential renters, Sjolin says.
Have capital lined up. Speak to potential lenders or even a financial planner about whether you have enough assets to handle the ups and downs that could come with investing. Even if you plan to rent out the property, count on paying the mortgage whenever there's a vacancy. "If you can have about six months of mortgage payments saved up, it's there if you need it, and you can use that money for repairs," Sjolin says. Even if you're planning to fix up a home and sell it, you may end up holding onto it for several months in the current market, Sjolin adds.
Build a supporting cast. Don't wait until a rental property needs repairs to find someone to handle them. "Line up maintenance individuals who can take care of the different challenges that occur so you can simply call the person when a particular issue comes up," Taylor says. Other sources you may want to have relationships with are an attorney to consult with on tenant issues, a property management firm to handle the day-to-day rental affairs and an accountant to help you understand the tax ramifications of investing. The more support you have, the better you will be able to handle the problems that come your way.
Whatever you do, understand that buying investment property is an entirely different experience than buying your primary residence. "When you go to buy your own home, you usually have emotions in it," Sjolin says. "When you go to buy an investment property, you need to put all that aside and ask, 'What makes sense?'"
This article has been brought to you by: By Tamara E. Holmes of Bankrate.com

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Hood Canal Real Estate – The Graying of America. www.hoodcanalliving.com

Hood Canal Real Estate, Mortgage and the Economy.  www.hoodcanalliving.com
The graying of America has hit home — in its kitchen cabinets, bathroom counters and bedroom walls.
The white-on-white look has had a lock on home interiors in recent years but is becoming passe, tastemakers have decreed.
In its place, various shades of gray are gaining ground, or so some authorities contend. Others are pushing a different kind of neutral, more beige or brown, while still others are going for pastels or something even brighter.
Choosing the colors we live with is more than a question to ponder while standing in front of a rack of paint chips. It's big business.
White's fading domination has left color experts wrestling over the next hot hue — a subject that fuels an entire industry of color prediction and consultation.
"You would never buy meat that is the wrong color," said interior designer and color stylist Mark Woodman, immediate past president of the Color Marketing Group, an influential color-forecasting organization based in Alexandria, Va. "Up to 85% of the consumer decision is based on color."Builders, designers and manufacturers need to know where home color preferences are headed so they can plan products that won't hit the market for months. And unlike a fast-fashion sweater that gets discarded after a season or two, these home-based shades tend to hang around for a very long time.
To come up with 60 hues for a worldwide palette last year, select members of the nonprofit trade organization discussed 3,000 colors, he said. "It's an endless internal research project by forecasters who are fascinated by color and want to make good business decisions."
Color specialists weigh factors beyond beauty such as the state of the economy, the psychology of the times and the tenor of youthful rebellion.


"There is a lot of effort, time and money spent on creating new colors," said David Bromstad, who hosts HGTV's "Color Splash."
The interior designer is a creative consultant for DuPont's Corian and Zodiaq brands, helping select colors for kitchen and bathroom countertops that buyers live with for years.
"I am all about using trending colors in your space, but I would keep the cabinets and countertops classic," Bromstad said. "Having a neutral color palette with pops of color throughout, using pillows or throws, is a safer way to go."
Debra Mednick, home industry analyst for market research company NPD Group, said color prognosticators for residential products "have to go pretty conservative to have a wide appeal."
After all, no one wants to relive the avocado refrigerator horrors of an earlier era.


The wild cards in the color equation are the millennials, Mednick said. The notion "it's not your mother's" appeals to this group, which may opt for choices outside the mainstream.
"Color is tricky," she said, "because you have to find the right one."
In kitchen appliances, for example, white has been a bestseller, but it is often associated with lower-end quality and discounted prices. Metallics that cost more have more cachet.
Gray got the vote as the most popular color choice in kitchens and bathrooms this year, according to a trends report from the National Kitchen & Bath Assn.
A recent bulletin to members from the Color Marketing Group highlighted a warm gray "caressed by chocolate" that the organization dubbed "Maybe."
In the parlance of pigment, "'Maybe' is not a wishy-washy neutral. It takes its strength from a world that is pondering its next steps," the group's Color Alert noted, showing the tone in use as a car finish and a stool seat, among other things.


When home building and design industry representatives gathered in Las Vegas a few months ago, gray tones were prominent in cabinetry and counter displays throughout the 650,000 square feet of exhibit space. Appliances also got the gray treatment, but surfaces went beyond stainless to include metallic shades such as dark platinum.
The 1,700 exhibits at Design & Construction Week 2014 also showed colors that pulled brown or beige, such as the wood stains in the Pumice line offered by cabinetmaker Dynasty by Omega.
"The colors combine gray and beige," said Maria Stapperfenne, president-elect of NKBA, a trade group. "I like to call it greige."
Based on historical trends, the manager at Tewksbury Kitchens & Baths in Whitehouse Station, N.J., has a theory on why this subdued palette is in vogue.
"Gray is popular when we feel secure, things are moving fast and we feel good about our futures," Stapperfenne said. "People are looking ahead."
Sherwin-Williams has gone so far as to call gray "the new black" in its color campaign — plus a lot of other names.
Its 2014 paint shades include Agreeable Gray, Earl Grey, Peppercorn, Gauntlet Gray and classic French Gray. Its color of the year, Exclusive Plum, looks like violet with at least two grandparents from the gray family.
But not all color connoisseurs are buying into gray.
The most popular kitchen colors displayed on Houzz, a Palo Alto-based website that helps homeowners share ideas and connect with design professionals, are white, beige and neutral.
In bathrooms, according to a Houzz Bathroom Trends Study, white cabinets are in the forefront.
The New American Home, outfitted in nearby Henderson, Nev., in conjunction with the show, was decorated in beiges and browns in line with the "new neutrals" being touted this year.
The design industry experts at Pantone, which calls itself "the world-renowned authority on color," went out on a stalk naming the pinkish purple Radiant Orchid its 2014 color of the year. While that may apply to clothing and lipstick, reds and aquas were more common accent colors on the floor of the Las Vegas Convention Center.
Another color authority breaking out of the gray box is Benjamin Moore & Co.
"At the end of last year, we saw furnishings and beddings tipping toward pastels," said creative director Ellen O'Neill. So the paint company created a palette of 23 new colors for this year in collaboration with bathroom fixture maker Kohler.
Among the new hues are Peach Parfait, Fruit Shake, Lavender Mist, Caribbean Teal and Iced Mauve.
It's a subtle shift.
"People are insecure about being accused of having bad taste," O'Neill said. "But they wanted color back."
That sentiment may explain the name of the sky-blue shade that Benjamin Moore selected as its color of the year: Breath of Fresh Air.
Hood Canal Real Estate, Mortgage and the Economy.  www.hoodcanalliving.com

Hood Canal Real Estate, Mortgage, and the Economy – www.hoodcanalliving.com

Hood Canal Real Estate, Mortgage, and the Economy - www.hoodcanalliving.com

Interest Rates Holding Near 1 Year Low Point: Interest rates are in a holding pattern near their lowest point since they spiked up last June. If you remember, that is the time when the Federal Reserve made the formal announcement of the ending of Quantitative Easing. QE’s purchasing of mortgage backed bonds drove interest rates down to the low 3’s but jumped up as high as 4.75% shortly after the announcement. Many predicted even higher rates but the current trend suggests rates could move even lower. The lack of real working wage job growth, concerns over stock market correction, inflation under control and a lack in supply of mortgage securities all point to stable rates or maybe even moves lower. Strong economic growth and inflation increases would quickly change that prognosis.

Industry News
This just in! Key news hit the wires almost every day last week, with important reports spread throughout the week. Plus, home loan rates reached some of their best levels this year. Here are the highlights you need to know about.
Over in the housing sector, April Housing Starts jumped 13.2 percent from March to an annual rate of 1.07 million units. This was above expectations and the highest level since November. The unexpected surge was led by multi-family dwellings or apartments, while single-family construction barely budged. Building Permits, a sign of future construction, rose by 8 percent to 1.08 million units, with apartment buildings leading the surge here as well. The takeaway is that builders are betting on the future expansion of renters.   However, it's also important to note that the price appreciation rate for homes has slowed and is expected to slow even further. Case Shiller confirmed that home prices rose 11.3 percent in 2013, but they see less than a 6 percent increase for 2014. With home loan rates near some of their best levels of the year, this is a key point to note for potential buyers and refinancers.

In other news, weekly Initial Jobless Claims fell to their lowest level since May 2007, while Retail Sales for April came in below expectations. While the spring thaw has seemed to help the labor market, it wasn't a boon for retailers last month. And after months of tame reports, inflation is starting to heat up at both the consumer and wholesale levels. Remember, inflation is the arch enemy of Bonds, as inflation reduces the value of fixed investments like Bonds. This includes Mortgage Bonds, the type of Bond on which home loan rates are based. While inflation numbers are still within the Fed's comfort zone, you can bet the Fed will be watching for a trend higher.

The bottom line is that home loan rates remain attractive compared to historical levels, and now remains a great time to consider a home purchase or refinance. Let me know if I can answer any questions at all for you or your clients.
 Real Estate Miscellaneous Stats
 
New FHFA Chief Rebuffs Shrinking Role for Fannie and Freddy.   Newly installed Chairman of the FHFA, Mel Watt, pushes back against moves to dissolve Fannie and Freddy or to lessen their role in the US Housing market. It has been the mistaken belief of many that Fannie and Freddy were the main cause of the financial melt down of 2007. I believe this opinion is held by those who do not understand the history and details of what was occurring in the mortgage industry. They were certainly participants but much of their falter was due to lack of oversight by those responsible to make sure they did not abuse their government guarantees, THE US CONGRESS. Instead of an intelligent analysis of the real problems, politicians choose to divert attention by manufacturing a villain and propose that they save us with some wonderful action. So both Democrats and Republicans found their villains that they could target and thus be our heroes. One misguided proposal has been to dissolve Fannie and Freddy. Mr. Watt sees no reason to lessen the role of the GSE’s. With proper oversight there is nothing in Fannie and Freddy’s 80 year history that suggests they cannot continue to be an important part one of the biggest sectors of our economy. It does not hurt that they have repaid their bailout funds and are now a source of revenue for the government. Increased government fees built in to their pricing has made it easier for private mortgage products to compete. Mr. Watt is dramatically changing the language of the former chairman with statements this last week. "I don't think it's FHFA's role to contract the footprint of Fannie and Freddie," Mr. Watt said during a discussion at the Brookings Institution in Washington. Winding down the companies without clear proof that private investors are willing to step back in "would be irresponsible."     Finally a voice of reason is speaking to realty. 

New Home Sales Rebound in April:  After slumping the previous two months, most markets are seeing a comeback in sales as the spring season starts. Sales are still lower than the same time last year. New home sales have remained at about half of what is expected for a healthy market, according to experts. Sales were about 433k. We are seeing the affects of the destruction of the builder sector as well as their traditional sources of funding. This is also seen as a major part of the lack of recovery in the overall economy. The lack of demand is discouraging speculative building. Sales by region showed interesting trends. Sales were up dramatically in the mid-west, us slightly in the south, flat in the west and fell in the Northeast. A major change is sales above $750k showed the strongest growth while sales below $250k were down from last year. This has been suggested as an indicator of affordability. Data in our area does not suggest this to be the case but supply may be the more likely culprit. Home builder confidence remains survey show low confidence levels nationwide.

April Existing Home Sales Up 1.3%:  We would like to see stronger numbers here as this represents a 6.8% reduction from the same time last year. Interesting to note that most of the sales increases were condo’s with single family homes only being up .5%. Existing sales numbers suggest entry level and mid priced homes are slowing while the higher end market is growing the most. Lack of supply continues to be the main reason sighted for lower sales and discouraging demand. Sales in the west were much stronger than other regions.

Most Affordable Areas Still Seeing Strong Appreciation: Most markets in the US are seeing slower appreciation rates in 2014 versus the robust averages in 2013. That is true for King and Snohomish Counties but not for some areas. The main metropolitan areas are becoming unaffordable for median income earning households. This is creating the typical move out. Those markets hit most hard are now seeing strong rebounds in housing values while others wane. King county average appreciation rates of 15% in 2013 have slowed to 11% so far this year but, some areas are at 20%. Shoreline, Maple Valley, Federal Way and Burien are some of these rapidly appreciating markets. Not all suburbs had strong growth. Kent, Renton/Benson Hill, Skyway and Enumclaw slowed below 5% appreciation. King County, overall, seems to have strong momentum. 17 out of 30 areas had stronger appreciation rates than the same period last year. Snohomish County measurables were weaker but that is blamed on lack of inventory and sales. The lower priced markets are appreciating at an average rate of 18% but are still below market peaks of years ago. Kent and Burien are still 30% below their peak levels. Not all high end areas are slowing. Redmond, Kirkland and Newcastle are still appreciating at 13-18% per year. A number of these markets have surpassed their housing boom peak prices. These include Central Seattle, Eastlake, Queen Anne and Redmond. Many are poised to surpass their peak values such as Green Lake and Ballard. Zillow chief economist, Stan Humphries, points out that appreciation rates can be skewed by the mix of low or high prices homes in current period sales. Still he says appreciation rates are low double digits in King County. He points out that affordability is not yet at boom levels but that is largely due to low interest rates. At the end of last year 38% of Seattle homes were affordable for median income earning households. It was 75% in Federal Way. The more central zip codes were even less affordable in the main metro job centers; just 3% in Seattle’s 98117 and 18% in Bellevue’s 98005. In order for area affordability to reach the peaks in 2006 interest rates would have to rise to 8%. This appears to be a long way off currently.

 Loan Program Of The Month. New Non-QM Program:RPM will soon be rolling out a loan program that does not follow limitations set by recent legislation. This is welcome news to self employeed borrowers or those with non-traditional income. High end buyers will benefit from less demand on documentation. Details to be released soon.

Hood Canal Real Estate, Mortgage, and the Economy - www.hoodcanalliving.com

Hood Canal Real Estate – US Home Construction Up – www.hoodcanalliving.com

Hood Canal Real Estate, Mortgage and the Economy - hoodcanalliving.com
WASHINGTON (AP) — U.S home construction surged in April to its highest pace in six months. But almost all that increase came from the volatile apartment sector, a sign that Americans are still struggling financially to buy single-family homes.
The Commerce Department says builders started work on 1.07 million homes at a seasonally adjusted annual rate in April, up 13.2 percent from 947,000 in March. The gains were driven by a 42.9 percent jump in the construction of apartments and condominiums. The rate of building single-family homes rose just 0.8 percent.
Most of the gains in multi-family housing were concentrated in the Northeast and Midwest, regions that are bouncing back from the harsh winter.
Applications for building permits, a gauge of future activity, rose 8 percent to an annual rate of 1.08 million.
Hood Canal Real Estate, Mortgage and the Economy - hoodcanalliving.com

Hood Canal Real Estate – Showers Are In, Bath’s are Out!

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The shower gets more use than the bathtub in many households. That’s why some homeowners are ripping out their tubs completely, creating bigger showers instead.
Extra shower space allows for multiple shower heads, a built-in seat and designs without shower doors, said John Petrie, president of the National Kitchen and Bath Association, in an email interview about current kitchen and bath trends. They can be designed without a threshold — which look more contemporary and are easier for people to use as they get older.
“People really like the bigger showers. They like that there’s elbow room,” said Susie Johnson, a real-estate agent with Coldwell Banker Gundaker in St. Louis. Meanwhile, comments she hears from prospective buyers about whirlpool tubs when walking through a property are often along the lines of: “That’s a nice tub but I don’t take baths,” she said.

LED bulbs: what to know before you buy

Energy-efficient LED light bulbs have gotten brighter and warmer since the early days of this technology. The best bulbs, although pricey, make colors pop in a way that incandescents can’t.
Now, keep in mind that a home should still have at least one bathtub, Johnson added. Having a tub will be important at resale for some buyers, particularly those with small children. For high-end homes, buyers expect a shower and a separate bathtub, especially in the master bath, she said.
One other possible consideration before ripping out a bathtub is how it will be viewed by multiple-listing services when you’re selling the home. Realtor.com, for example, defines a “full bathroom” as having a toilet, a sink and a bathtub. A room with a toilet, sink and shower is a “three-quarter bathroom.” A room with only a toilet and sink is defined as a “half bathroom” or “powder room.”
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Waterfront Property for Sale – 13380 North Shore Road – Hood Canal Waterfront Real Estate.

Hood Canal Living, Hood Canal Real Estate, Mortgage and Economy 5/17/14

www.hoodcanalliving.com

Just in time for Memorial Day weekend, your waterfront retreat awaits!


Wow!!! Wonderful Beach Home across from Alderbrook Resort with 100' dock and 30' float! 2 BR, 1 Bath daylight basement home with additional guest room above detached garage, and additional building site further up the lot, with outstanding views. Boat house has power winch and is ready for your watercraft. Detached garage has plenty of room for all your associated water toys. Huge deck, and covered sitting area look over the Canal. 50' of waterfront, with 100' tidelands, included in the sale.

Click here to preview:

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Waterfront Property for Sale – 13380 North Shore Road – Hood Canal Waterfront Real Estate.

Hood Canal Living, Hood Canal Real Estate, Mortgage and Economy 5/17/14

Just in time for Memorial Day weekend, your waterfront retreat awaits!


Wow!!! Wonderful Beach Home across from Alderbrook Resort with 100' dock and 30' float! 2 BR, 1 Bath daylight basement home with additional guest room above detached garage, and additional building site further up the lot, with outstanding views. Boat house has power winch and is ready for your watercraft. Detached garage has plenty of room for all your associated water toys. Huge deck, and covered sitting area look over the Canal. 50' of waterfront, with 100' tidelands, included in the sale.

Click here to preview:

Hood Canal Real Estate – Influenced by Seattle’s Prices

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Home prices climbing fastest in region’s most affordable spots

Despite a slowdown in sales over the past 12 months, home prices in King and Snohomish counties have risen — but by dramatically different amounts in different areas.

Seattle Times business reporter


Click for details on sales activity
READER COMMENTS
HIDE / SHOW COMMENTS
@Mule Train because for people who already own a home, rising home prices / values means their existing investments...  MORE
@manicdrummer Supply and demand, rising costs and taxes, taking a risk ( we tend to downplay the risk taking)  MORE
It sure would be a refreshing change for the seattle times to inform us as to the housing trends in counties beyond...  MORE
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National reports this week suggested the housing market was showing signs of weakness — but it all depends on where you live.
In the first quarter, the average price of single-family homes sold in King and Snohomish counties increased between 2 and 27 percent from a year ago, depending on the area, according to data from the Northwest Multiple Listing Service (MLS).
While average 12-month price appreciation in King County slowed to 11 percent at the end of March — from almost 15 percent a year ago — some lower-priced areas have seen average prices jump more than 20 percent annually.
They include affordable suburbs like Shoreline, Federal Way, Maple Valley and Burien.
For many neighborhoods devastated five years ago by an epidemic of foreclosures, the rebound in prices is long overdue. But for first-time homebuyers, the rapid run-up in prices, combined with rising interest rates, could be putting homeownership further out of reach.
“Most of King County, and particularly the city of Seattle, is not affordable for the median income earner,” said Stan Humphries, Zillow’s chief economist.
Despite a sharp slowdown in sales, during the first quarter all but one area in King County saw average prices appreciate on an annual basis.
The areas that experienced the most growth in average selling price were in Richmond Beach/Shoreline, Dash Point/Federal Way, Sodo/Beacon Hill, Des Moines/Redondo and Black Diamond/Maple Valley, according to the MLS data.
Homes sold in Enumclaw, Renton-Benson Hill, Skyway and Kent had the least annual gain — less than 5 percent. Vashon Island’s average price dropped 5 percent over the year, but there weren’t enough sales for that figure to be meaningful.
The average price of condominiums sold in the Belltown/Downtown Seattle area was $653,627 in the first quarter, down from $694,266 in the same three-month period a year earlier. But in Central Seattle, the other major condo submarket, the average price in the first quarter was up 14 percent over the year before to $356,957.
King County’s housing market appeared to gain momentum, despite a slowdown in sales: 17 out of 30 areas saw stronger annual price gains than in the same three-month period a year ago.
But in Snohomish County, where sales slowed even more than in King County, price gains accelerated in only two out of six areas — which local real-estate brokers blamed on a plunge in the number of listings.
“Prices are up and inventory is down,” said Bob Maple, managing broker of the John L. Scott office in Everett. “There’s just not enough homes for our buyers.”
The lower tier of the housing market in King, Snohomish and Pierce counties outpaced the middle and upper tiers in annual appreciation in February, as it has since March 2013, according to data from S&P/Dow Jones Indices published earlier this week.
The lower tier gained 18 percent annually, compared with 14 percent for the middle tier and 11 percent for the upper tier.
“First-time homebuyers are out there in force trying to get something,” said Abby Santos, a managing broker at a Windermere office in Federal Way. “I just listed one in Pacific for $250,000. We had an above-full-price offer the same day, and multiple offers stacking up.”
The double-digit price growth is still occurring in more affluent areas, too: For example, average prices of homes sold in Redmond, Newcastle and Kirkland during the first quarter were up between 13 and 18 percent over the year.
Below the bubble
Lower-priced areas, while seeing the strongest upsurge in prices, have a long way to go to reach their previous peaks during the housing bubble. The median price of homes sold in the first quarter in Kent, Burien and Enumclaw was still about 30 percent below its peak during the bubble years; Skyway’s median price is still almost 40 percent below its peak.
A few of the higher-priced areas have broken through: At the end of last year, Central Seattle — which includes Capitol Hill and Eastlake — was the first area in King County to surpass its peak during the housing bubble.
Three more higher-priced areas appeared to be on track to equal or surpass their previous peaks if they sustain this first-quarter’s price levels:
In Queen Anne/Magnolia, the median price was $700,000, well above the median price of $675,000 in 2007.
In the Redmond/Carnation area, the median price was $634,990, surpassing the last peak median price of $616,000 peak in 2008.
And in Seattle’s Ballard/Green Lake/Greenwood area, the median price was $499,000, just shy of the median $500,000 price set in 2007.
“What I’m seeing is confidence increasing in our upper-end buyers and also the fact they may be getting their homes sold,” Santos said.
Assessing the figures
Some real-estate experts caution that the annual gain in home prices based on sales may be a poor gauge of the true appreciation rate because the mix of houses selling in each period could vary significantly: For example, if there are more low-priced homes sold during one year and more high-priced homes sold the following year, the gain in median price will be inflated.
The Zillow Home Value Index, which attempts to correct for this bias, still found that median home values in the Seattle metro area were up 10.3 percent annually in March. Zillow says monthly appreciation has slowed steadily since last July to just 0.3 percent in March.
The price gains are eating away at the affordability of homes.
At the end of last year, only 38 percent of homes in the Seattle metro area were affordable for a home shopper earning the median household income of $67,944, assuming a 20 percent down payment and a 30-year fixed-rate mortgage, Zillow estimates.
About 75 percent of homes in Federal Way’s 98023 ZIP code were considered affordable.
By contrast, fewer homes are affordable in the region’s big job centers — Seattle, Bellevue and Redmond. In Seattle’s 98117 ZIP code, for example, just 3 percent of homes were affordable; in Bellevue’s 98005 ZIP code, 18 percent of homes were.
At year’s end, homebuyers in the Seattle area were spending about 21 percent of their income on the mortgage.
“Unfortunately that’s illusory because it’s the mortgage rate, not the underlying home price,” that is making homes still relatively affordable by historical standards, Humphries said. “It can be taken away rather quickly.”
Homes locally were far less affordable in mid-2006 during the bubble, when the mortgage payment for a median-value home was more than 35 percent of median income.
To reach those levels again, interest rates would have to zoom past 8 percent, Humphries said.
If you can afford to buy a home, it could be a smart move.
Based on first-quarter data, Zillow estimates homebuyers can break even in two years on a home purchase in King County; that is, they’ll pay more as a renter than a homeowner if they plan to live in the home for longer than two years. In Seattle, it’s 2.5 years.
This article courtesy of: Sanjay Bhatt: 206-464-3103 or sbhatt@seattletimes.com. On Twitter @sbhatt

Hood Canal Real Estate, Mortgage and Economy


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