Hood Canal Real Estate, Mortgage, and the Economy – Seattle Millennials Top Movers

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Seattle millennials change homes here more often than anywhere else in U.S.


In a hypercompetitive rental market, the city’s young people are on the move, looking for cheaper rent, a nicer place or somewhere close to work. They are so mobile, in fact, no other place in the country moves as much.

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Moving is one of life’s more stressful events — the packing up of everything you own, the hauling, the flights of stairs — and what if it rains? One recent survey pegs it as even more stressful than a divorce.
So you might think Zach Shaner, after five moves around Seattle in seven years, would be one jittery fellow.
But Shaner and wife Sarah Herrington take it in stride. While all that moving is “pure drudgery,” he says, each new dwelling has been an upgrade. The couple’s most recent change of address was just a few weeks ago.
By now, Shaner surely knows how to load a U-Haul better than most — but the 34-year-old, who owns the local bike-rental startup Pedal Anywhere, really isn’t all that unusual among Seattle millennials.
Census data show that 36 percent of the city’s 25- to 34-year-olds — more than one in three — have changed homes within the past year. Among the 50 biggest cities in the U.S., Seattle has the highest percentage of millennial movers.


Despite all the rain, young people here sure aren’t gathering any moss.
New York may be famous as the city that never sleeps, but it doesn’t move much either. Millennials in the Big Apple are at the opposite end of the spectrum, only half as likely to have moved in the past year as their peers in Seattle. (One possible explanation: More than 1 million apartments in New York are rent stabilized or rent controlled — tenants only move out of those sought-after units feet first.)
Nationally, one-quarter of 25- to 34-year-olds have moved within the past year, according to census data. From age 35 on, as folks tend to get tied down with a spouse, a house and kids, they become much less mobile.
What’s behind all this moving in Seattle?
You might think it’s mainly being driven by all those newcomers. As everyone knows by now, Seattle is full of just-arrived young people drawn here from other places for tech jobs or some other reason.
That’s certainly part of it. But, in fact, the majority of these moves are local ones. Data show that 63 percent of millennial movers in 2015 (the most recent year available) were already living in Seattle or elsewhere in King County.
The Census Bureau doesn’t offer any interpretation of its data. But another government source, the Current Population Survey, does ask recent movers for reasons they relocated.
I thought it might offer some clues. So I looked at how 25- to 34-year-old movers in the Seattle area answered those survey questions, and compared the current data with the same age group in the previous decade.
Among all the factors cited by young movers in the Seattle area, housing issues — cheaper rent, more space, nicer apartment — saw the biggest jump, even eclipsing moving here for a new job. Housing issues were the primary reason for 29 percent of young movers from 2010 to 2016, up from 21 percent in the previous decade.


Considering how competitive the Seattle rental housing market has become, and how rents are spiking, that isn’t too surprising.
Some reasons for moving declined this decade, most notably family issues, which dropped from third to sixth place. That could be a reflection of the increasing concentration of newcomers, who have no ties to the area, and thus no reason to move for family issues.

“We’ve got 900 square feet on the main floor, a deck and a yard, yet are still one mile from Chinatown and on the most frequent bus in the city, the No. 36,” he said. “We lucked out.”Housing issues have certainly been a motivating factor behind the many moves of Zach Shaner. That includes the most recent one from Capitol Hill to Beacon Hill, where he got a lot more space — a two-bedroom house, in fact — for a very reasonable rent of $1,800.
After so many moves, Shaner concedes it would be nice to stay put for a while — but he’s not making any promises.
“Unless we have a kid, yes, I hope this is the last place until we either buy or leave town for some other opportunity,” he said.
“But if moving gets me an easier bike ride or a shorter transit ride or more space or a better value, I’ll move every time, no matter how annoying it is.”

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Hood Canal Real Estate, Mortgage, and the Economy – Average Mortgage Rates Drop

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Average mortgage rate drops to 5-month low

The average U.S. mortgage rate fell below a key threshold of 4 percent this week, its lowest level in five months.
Mortgage buyer Freddie Mac said Thursday that the average interest rate on 30-year fixed-rate home loans declined to 3.97 percent this week from 4.08 percent last week. Interest rates on mortgages began to rise after President Donald Trump won the November election. But they've started falling as the fate of tax reform and other policies has become uncertain.
The 30-year rate stood at 3.59 percent a year ago and averaged 3.65 percent in 2016, the lowest level in records dating to 1971. Lower rates make it easier for homebuyers to afford their monthly mortgage payments.
The rate on 15-year mortgages declined to 3.23 percent from 3.34 percent last week.
The recent drop also illustrates the range of factors that affect mortgage rates. The average 30-year rate has declined steadily in recent weeks — it was 4.23 percent a month ago — even as the Federal Reserve has lifted the short-term rate it controls three times in the past 15 months.
And Fed policymakers have signaled more hikes are likely to come this year as long as the economy keeps growing.
Mortgage rates, however, more closely track the yield on the 10-year Treasury note, rather than the Fed's decisions. That yield rose after the election in anticipation of faster growth and greater inflation under President Trump.
Yet as investors have downgraded their expectations for tax cuts and infrastructure spending, the yield on the 10-year has fallen. That has led mortgage rates lower as well.
Hood Canal Real Estate, Hood Canal Properties, Hood Canal Homes, Hood Canal Lots, http://www.hoodcanalliving.com, Tahuya Real Estate, Union Real Estate, Belfair Real Estate

Hood Canal Real Estate, Mortgage, and the Economy – Average Mortgage Rates Drop

Hood Canal Real Estate, Hood Canal Properties, Hood Canal Homes, Hood Canal Lots, http://www.hoodcanalliving.com, Tahuya Real Estate, Union Real Estate, Belfair Real Estate


Average mortgage rate drops to 5-month low

The average U.S. mortgage rate fell below a key threshold of 4 percent this week, its lowest level in five months.
Mortgage buyer Freddie Mac said Thursday that the average interest rate on 30-year fixed-rate home loans declined to 3.97 percent this week from 4.08 percent last week. Interest rates on mortgages began to rise after President Donald Trump won the November election. But they've started falling as the fate of tax reform and other policies has become uncertain.
The 30-year rate stood at 3.59 percent a year ago and averaged 3.65 percent in 2016, the lowest level in records dating to 1971. Lower rates make it easier for homebuyers to afford their monthly mortgage payments.
The rate on 15-year mortgages declined to 3.23 percent from 3.34 percent last week.
The recent drop also illustrates the range of factors that affect mortgage rates. The average 30-year rate has declined steadily in recent weeks — it was 4.23 percent a month ago — even as the Federal Reserve has lifted the short-term rate it controls three times in the past 15 months.
And Fed policymakers have signaled more hikes are likely to come this year as long as the economy keeps growing.
Mortgage rates, however, more closely track the yield on the 10-year Treasury note, rather than the Fed's decisions. That yield rose after the election in anticipation of faster growth and greater inflation under President Trump.
Yet as investors have downgraded their expectations for tax cuts and infrastructure spending, the yield on the 10-year has fallen. That has led mortgage rates lower as well.
Hood Canal Real Estate, Hood Canal Properties, Hood Canal Homes, Hood Canal Lots, http://www.hoodcanalliving.com, Tahuya Real Estate, Union Real Estate, Belfair Real Estate

Hood Canal Real Estate, Mortgage, and the Economy – Down Payment Could Be A Hurdle

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Down Payment the Top Hurdle Holding Back Would-Be Home Buyers

  • Saving for a down payment was a barrier to homeownership for more than two-thirds of renters surveyed in a new Zillow survey, topping other hurdles including qualifying for a mortgage and job security.
  • Still, more than half (63 percent) of renters said they are confident they will be able to afford a home someday, with 25 percent saying they plan on buying in the next three to five years.
  • The majority of respondents (66 percent) said they believe owning a home is necessary to live The American Dream, and 72 percent said they believe owning a home increases their standing in the local community.
Saving a sufficient down payment is the biggest obstacle for renters looking to transition to homeownership, regardless of their age, income, gender or geography – a hurdle likely to get worse for many before it gets better.
Two-thirds of renters nationwide (67.9 percent) cited saving for a down payment as the biggest hurdle to buying a home, according to the first Zillow Housing Aspirations Report (ZHAR),[1] a semi-annual survey of 10,000 Americans seeking insight into their views on homeownership and their housing plans.
Thanks largely to low mortgage interest rates, monthly mortgage payments are generally more affordable than monthly rent payments, making homeownership an attractive financial option for many current renters. But the sometimes hefty down payments required to buy in the first place are preventing many renters from taking advantage of the savings. And rapidly rising home values, combined with interest rates that have also begun to creep up, mean that savings window could close before many are able to take advantage of it.

Down Payments: A Widespread Concern

Difficulty in affording a down payment was universally cited as the top barrier to homeownership by renters in virtually all major demographic groups. It was the top barrier cited by respondents from all 20 major metro regions surveyed. More women (72.2 percent) than men (62.2 percent) cited down payment difficulties as a barrier, but both genders noted down payment affordability as a barrier more than any other factor.
Millennial renters (aged 18-34) were more likely than older Gen X (35-54) and Baby Boomer/Silent Generation renters (55 and older) to note down payment woes – 69.2 percent, 68.5 percent and 64.3 percent, respectively – but all three groups noted down payment challenges more than other choices. Down payment concerns were surprisingly more prevalent among those in the highest income bucket[2] than in the lowest,[3] but again, renters in low (65.9 percent of respondents), middle (70.4 percent) and high (67.3 percent) income brackets all cited down payment struggles more than other factors.
Behind down payment woes, the next-most-commonly cited barriers to homeownership among U.S. renters were qualifying for a mortgage (53.2 percent of respondents said this was a concern) and debt burdens (50 percent). Other factors cited as barriers to homeownership included job security (38.5 percent), the renter not being in a position to settle down (20.1 percent) and complaints about not enough homes being for sale (11.2 percent).
Given the many hurdles that need to be cleared before successfully buying a home even in the best market conditions, it might be somewhat surprising that down payment concerns resonated so strongly with respondents. But in the order of operations that is buying a home, it all starts with securing a down payment, which will help determine a final budget, which will lead to actually finding a home within that budget to purchase, and finally to securing a mortgage and going to closing.

A Closing Window?

Home values nationwide have been growing at a rapid pace for well over a year now – February marked the 55th consecutive month of annual U.S. home value growth and the 18th month in a row in which annual appreciation exceeded 5 percent. But while that growth is generally positive for the U.S. economy overall and for current homeowners in particular, for renters trying to save for a down payment on a home, it can often feel like trying to hit a moving target. A renter saves up enough to put a decent amount down on a home in their price range, perhaps only to find out that home has appreciated in value beyond their means.
And not only is it difficult to determine the right amount to save, renters also have the added challenge of trying to save when they’re already paying more of their income to rent in the first place. As of the end of 2016, the typical home buyer nationwide buying the median-valued home could expect to pay about 15.8 percent of their household income to a mortgage. A typical U.S. renter, unable to take advantage of low mortgage interest rates, should have expected to pay 29.2 percent of their income to their landlord each month – and close to half their income in a handful of very pricey markets. And as the share of income spent on rent rises, saving money for anything – let alone tens of thousands of dollars set aside for a down payment – becomes increasingly difficult.
Finally, even as owning a home retains its financial advantages over renting, those advantages are beginning to narrow. In 2016, typical U.S. household incomes grew 2.2 percent, a slowdown from growth of 3.3 percent in 2015. The mortgage payment on the average U.S. home, on the other hand, grew by 9.9 percent in Q4 2016, up from 6.7 percent in Q4 2015. In other words, rising mortgage interest rates and continued home value growth helped make mortgages less affordable by the end of 2016 than they’ve been in half a decade – a trend likely to get worse.
More than 100 economists and real estate experts nationwide recently surveyed by Zillow said they expect home values to rise another 4.4 percent in 2017 and 17.3 percent, cumulatively, through 2021 (on average). And Federal Reserve projections suggest a 100 basis point increase in the Federal Funds Rate (which influences mortgage rates offered by lenders) over the next year, putting conventional, 30-year, fixed mortgage rates in the 4.75-5 percent range by the end of 2017. This rate is still low by historical standards, but high enough to give some buyers sensitive to small changes in monthly payments pause. So while mortgages look set to remain more affordable than renting for the foreseeable future, the time to lock in as much savings as possible before the gap narrows is right now – as if renters already struggling to save a down payment didn’t have enough to worry about.

Millennial Confidence

Still, the first ZHAR isn’t all doom and gloom. Results suggest a great deal of confidence in the housing market, despite challenges, and an encouraging amount of faith in the importance of homeownership to achieving the American Dream.
Here are some additional highlights from the report:
  • Almost all respondents (90 percent) said they are confident they will be able to stay in their current home for as long as they want. Respondents in Atlanta and Detroit were the most confident.
  • More than half (63 percent) of renters are confident they will be able to afford a home someday, with 25 percent saying they plan on buying in the next three-to-five years.
  • Millennial renters are more confident than any other generation that they will be able to afford a home someday.
  • The majority of respondents (66 percent) said they believe owning a home is necessary to live The American Dream, and 72 percent said they believe owning a home increases their standing in the local community. Millennials believe these two statements more than any other generation.

Hood Canal Real Estate, Hood Canal Properties, Hood Canal Homes, Hood Canal Lots, http://www.hoodcanalliving.com, Tahuya Real Estate, Union Real Estate, Belfair Real Estate

Hood Canal Real Estate, Mortgage, and the Economy – Down Payment Could Be A Hurdle

Hood Canal Real Estate, Hood Canal Properties, Hood Canal Homes, Hood Canal Lots, http://www.hoodcanalliving.com, Tahuya Real Estate, Union Real Estate, Belfair Real Estate


Down Payment the Top Hurdle Holding Back Would-Be Home Buyers

  • Saving for a down payment was a barrier to homeownership for more than two-thirds of renters surveyed in a new Zillow survey, topping other hurdles including qualifying for a mortgage and job security.
  • Still, more than half (63 percent) of renters said they are confident they will be able to afford a home someday, with 25 percent saying they plan on buying in the next three to five years.
  • The majority of respondents (66 percent) said they believe owning a home is necessary to live The American Dream, and 72 percent said they believe owning a home increases their standing in the local community.
Saving a sufficient down payment is the biggest obstacle for renters looking to transition to homeownership, regardless of their age, income, gender or geography – a hurdle likely to get worse for many before it gets better.
Two-thirds of renters nationwide (67.9 percent) cited saving for a down payment as the biggest hurdle to buying a home, according to the first Zillow Housing Aspirations Report (ZHAR),[1] a semi-annual survey of 10,000 Americans seeking insight into their views on homeownership and their housing plans.
Thanks largely to low mortgage interest rates, monthly mortgage payments are generally more affordable than monthly rent payments, making homeownership an attractive financial option for many current renters. But the sometimes hefty down payments required to buy in the first place are preventing many renters from taking advantage of the savings. And rapidly rising home values, combined with interest rates that have also begun to creep up, mean that savings window could close before many are able to take advantage of it.

Down Payments: A Widespread Concern

Difficulty in affording a down payment was universally cited as the top barrier to homeownership by renters in virtually all major demographic groups. It was the top barrier cited by respondents from all 20 major metro regions surveyed. More women (72.2 percent) than men (62.2 percent) cited down payment difficulties as a barrier, but both genders noted down payment affordability as a barrier more than any other factor.
Millennial renters (aged 18-34) were more likely than older Gen X (35-54) and Baby Boomer/Silent Generation renters (55 and older) to note down payment woes – 69.2 percent, 68.5 percent and 64.3 percent, respectively – but all three groups noted down payment challenges more than other choices. Down payment concerns were surprisingly more prevalent among those in the highest income bucket[2] than in the lowest,[3] but again, renters in low (65.9 percent of respondents), middle (70.4 percent) and high (67.3 percent) income brackets all cited down payment struggles more than other factors.
Behind down payment woes, the next-most-commonly cited barriers to homeownership among U.S. renters were qualifying for a mortgage (53.2 percent of respondents said this was a concern) and debt burdens (50 percent). Other factors cited as barriers to homeownership included job security (38.5 percent), the renter not being in a position to settle down (20.1 percent) and complaints about not enough homes being for sale (11.2 percent).
Given the many hurdles that need to be cleared before successfully buying a home even in the best market conditions, it might be somewhat surprising that down payment concerns resonated so strongly with respondents. But in the order of operations that is buying a home, it all starts with securing a down payment, which will help determine a final budget, which will lead to actually finding a home within that budget to purchase, and finally to securing a mortgage and going to closing.

A Closing Window?

Home values nationwide have been growing at a rapid pace for well over a year now – February marked the 55th consecutive month of annual U.S. home value growth and the 18th month in a row in which annual appreciation exceeded 5 percent. But while that growth is generally positive for the U.S. economy overall and for current homeowners in particular, for renters trying to save for a down payment on a home, it can often feel like trying to hit a moving target. A renter saves up enough to put a decent amount down on a home in their price range, perhaps only to find out that home has appreciated in value beyond their means.
And not only is it difficult to determine the right amount to save, renters also have the added challenge of trying to save when they’re already paying more of their income to rent in the first place. As of the end of 2016, the typical home buyer nationwide buying the median-valued home could expect to pay about 15.8 percent of their household income to a mortgage. A typical U.S. renter, unable to take advantage of low mortgage interest rates, should have expected to pay 29.2 percent of their income to their landlord each month – and close to half their income in a handful of very pricey markets. And as the share of income spent on rent rises, saving money for anything – let alone tens of thousands of dollars set aside for a down payment – becomes increasingly difficult.
Finally, even as owning a home retains its financial advantages over renting, those advantages are beginning to narrow. In 2016, typical U.S. household incomes grew 2.2 percent, a slowdown from growth of 3.3 percent in 2015. The mortgage payment on the average U.S. home, on the other hand, grew by 9.9 percent in Q4 2016, up from 6.7 percent in Q4 2015. In other words, rising mortgage interest rates and continued home value growth helped make mortgages less affordable by the end of 2016 than they’ve been in half a decade – a trend likely to get worse.
More than 100 economists and real estate experts nationwide recently surveyed by Zillow said they expect home values to rise another 4.4 percent in 2017 and 17.3 percent, cumulatively, through 2021 (on average). And Federal Reserve projections suggest a 100 basis point increase in the Federal Funds Rate (which influences mortgage rates offered by lenders) over the next year, putting conventional, 30-year, fixed mortgage rates in the 4.75-5 percent range by the end of 2017. This rate is still low by historical standards, but high enough to give some buyers sensitive to small changes in monthly payments pause. So while mortgages look set to remain more affordable than renting for the foreseeable future, the time to lock in as much savings as possible before the gap narrows is right now – as if renters already struggling to save a down payment didn’t have enough to worry about.

Millennial Confidence

Still, the first ZHAR isn’t all doom and gloom. Results suggest a great deal of confidence in the housing market, despite challenges, and an encouraging amount of faith in the importance of homeownership to achieving the American Dream.
Here are some additional highlights from the report:
  • Almost all respondents (90 percent) said they are confident they will be able to stay in their current home for as long as they want. Respondents in Atlanta and Detroit were the most confident.
  • More than half (63 percent) of renters are confident they will be able to afford a home someday, with 25 percent saying they plan on buying in the next three-to-five years.
  • Millennial renters are more confident than any other generation that they will be able to afford a home someday.
  • The majority of respondents (66 percent) said they believe owning a home is necessary to live The American Dream, and 72 percent said they believe owning a home increases their standing in the local community. Millennials believe these two statements more than any other generation.

Hood Canal Real Estate, Hood Canal Properties, Hood Canal Homes, Hood Canal Lots, http://www.hoodcanalliving.com, Tahuya Real Estate, Union Real Estate, Belfair Real Estate

Hood Canal Real Estate, Mortgage, and the Economy – US Home Sales 10 Year High

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WASHINGTON — Americans purchased homes in March at the fastest pace in over a decade, a strong start to the traditional spring buying season.
Sales of existing homes climbed 4.4 percent last month to a seasonally adjusted annual rate of 5.71 million, the National Association of Realtors said Friday. This was the fastest sales rate since February 2007.
The U.S. housing market faces something of a split personality: A stable economy has intensified demand from would-be buyers, but the number of properties listed for sale has been steadily fading. The result of this trend is prices rising faster than incomes, homes staying on the market for fewer days and a limit on just how much home sales can grow. It's a situation that rewards would-be buyers who can act quickly and decisively.
"The pace of sales we saw in March is unsustainable," said Nela Richardson, chief economist at the brokerage Redfin. "Sales may be soaring, but inventory isn't."
The inventory shortage largely reflects the legacy of a housing bubble that began to burst a decade ago.
Foreclosed properties were snapped up by investors who turned the homes into income-generating rentals, depriving the market of supply. And many owners who escaped the downturn unharmed chose to refinance their mortgages at extremely low rates, possibly making them hesitant to move to a new house that could increase their monthly costs.
This mismatch between supply and demand can be seen in two simple figures tracked by the Realtors.
Sales have risen 5.9 percent over the past year, but the inventory of homes for sale has fallen 6.6 percent to 1.83 million properties. This means there are essentially more buyers chasing fewer properties.
The consequences can be seen in home values and days on the market. The median sales price in March climbed 6.8 percent over the past year to $236,400, significantly outpacing wage growth. And it took an average of 34 days to complete a sale, compared to 47 days a year ago.
In March, sales rose in the Northeast, Midwest and South but declined in the West.
It's possible that more Americans are devoting their incomes to housing as retail sales have struggled in recent months, said Jennifer Lee, a senior economist at BMO Capital Markets.
"Although spending on doo-dads may have slowed, perhaps more of their funds are being directed towards housing," Lee said.
Demand might increase further as mortgage rates began to dip in recent weeks.
Home loan costs had been climbing after President Donald Trump won the November election, under the belief that the government would engage in forms of stimulus such as tax cuts and greater deficits that could cause higher levels of inflation. But major initiatives such as tax reform have stalled in recent weeks as the administration has yet to put forward a proposal, prompting more doubts as to when and whether any stimulus might arrive.
Mortgage buyer Freddie Mac said Thursday that the average interest rate on 30-year fixed-rate home loans declined to 3.97 percent this week from 4.08 percent last week. The average is now at its lowest level in five months.
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Hood Canal Real Estate, Mortgage, and the Economy – Millennials Face Tough Market

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The struggle is real for Millennial homebuyers




It's going to be an intense house-hunting season -- especially for young buyers.

After years of many experts lamenting how Millennials weren't interested in becoming homeowners, it turns out many are actually diving in. But they're facing a lot of competition.
Millennials are the largest group of homebuyers, according to Ellie Mae, a software company that analyzes mortgage data. In January, Millennials represented around 45% of all purchase loans, up from 42% the same month in 2016.
And many expect more Millennial house hunters to jump into the market this spring buying season.
But their path to homeownership won't be easy.
"Millennials are mostly first-time buyers and they are competing against repeat buyers who have more buying leverage and experience," said Javier Vivas, manager of economic research for Realtor.com. He added that Millennials recently became the dominant group of users searching for homes on the website.
New buyers this spring will also be up against buyers who started looking last year, but still haven't bought a home.
A shortage of available homes has driven up prices -- particularly among starter homes that tend to fall within first-time buyers' budgets.
There were 3% fewer homes on the market in February compared to a year ago, according to a recent report from Zillow, and home values are up nearly 7%.
That's led to bidding wars and fierce competition, especially in the lower end of the market.
When Andy Greene and his wife Jenna began looking for their first home together near Columbus, Ohio, they found themselves in a super competitive market.
"We would get a notification that a house went on the market. You had to go see it that night ... you had to go the same day it was out," said Greene.
They thought they found their perfect home early in their search and put in an offer. But they weren't the only ones. The seller received 13 bids.
Despite going $10,000 above the asking price, the Greenes were not the winning bidders.
"It was a little defeating," said Greene. "It made us wonder if we were actually going to be able to make it work and second guessing if we could find something we could afford."
Rising home and rent prices can make it difficult for many first-time buyers and young people still establishing their careers to save for a down payment.
The Greenes, who both work full-time, saved $30,000 for a down payment, mainly by living off one income and banking the other.
They were tempted to increase their budget as they continued their search, but they stuck to their pre-determined limit. Finally, after three months of hunting, they found a house and had their bid accepted. They're scheduled to close this month.
"We didn't want to be in a house we couldn't afford," he said. "And we didn't want to have to buy a house and dump money into it."

For first-time buyers looking to become homeowners this year, experts say do your homework: determine your budget, prioritize your requirements and get pre-approved for a loan.
"Be first in line," advised Vivas. "Start your search early, figure out your budget early on."
Millennials are also facing a tighter lending environment compared to a decade ago as banks stiffen up on credit requirements.
But despite the obstacles they face, Millennial buyers do have a major advantage: low interest rates.
"If you compare their access to credit and ability to get into a home, it's far easier for Millennials than previous generations," noted Joe Tyrrell, executive vice president of Ellie Mae. "Back when Millennials' parents were buying homes, they had higher interest rates and there weren't down payment assistance programs."

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Hood Canal Real Estate, Mortgage, and the Economy – 50 Percent Spike In New Listings

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NWMLS brokers report 50 percent spike in new listings

Brisk sales prompt predictions of "frenzied spring"

KIRKLAND, Washington (April 6, 2017) - Northwest Multiple Listing Service brokers expected an uptick in the number of new listings during March, and that expectation was met with a significant gain - up more than 50 percent from February. Members added 10,321 new listings last month, but they also reported an even greater number of pending sales (10,447), leaving inventory near historic lows.
"Although we're seeing better news for buyers related to increases in new listings during the past three months, we're continuing to sell inventory at a faster rate," stated Mike Grady, president and COO of Coldwell Banker Bain. "This lack of supply continues to put an upward pressure on home prices. We're in for yet another frenzied spring," he believes.
Total active inventory across the 23 counties in the Northwest MLS service area remained below 10,000 for a second straight month. The selection of active listings rose to 9,774 for a 7.5 percent improvement on February's volume, but compared to a year ago inventory plummeted nearly 23 percent.
"It's a straight up crazy, frenzy market in King and Snohomish counties," said J. Lennox Scott, chairman and CEO of John L. Scott. About 75 percent of homes are selling within the first 30 days, according to his analysis.
The lack of supply continues to put upward pressure on home prices. The median price on last month's sales of single family homes and condos was $355,000, up 10.9 percent from the year-ago figure of $320,000.
For single family homes only (excluding condos), year-over-year prices jumped 11.5 percent, from $327,300 to $365,000. The median price for a single family home that sold in King County was $599,950, up 12.9 percent from a year ago. Adjacent counties also saw double-digit increases in selling prices for single family homes.
Pierce County prices increased 11.3 percent, from $265,000 to $295,000, while the year-over-year gain in Snohomish County was nearly 10.4 percent, rising from $385,000 to $425,000.
"There is much good news for Snohomish County," said Diedre Haines, principal managing broker-South Snohomish County at Coldwell Banker Bain. Low unemployment, plenty of available jobs, and forecasts that are optimistic for our economy are among the positives she noted, while adding words of caution. "This doesn't mean sellers can just slap a price they like on their listing and expect it to fly off the shelf. We certainly don't need or want [overpriced] inventory that just sits there, gets stale and becomes stigmatized. Agents need to be diligent with pricing and sellers need to be realistic," she emphasized, noting today's buyers are well informed and more sophisticated than in past markets.
"As the first quarter ends, the South Sound market continues to bubble along," reported Dick Beeson, principal managing broker at RE/MAX Professionals in Gig Harbor. Steep drops in inventory coupled with rising volumes of closed sales are resulting in double digit increases in prices in both Pierce County, where prices rose more than 11 percent, and Thurston County, where prices surged nearly 15.4 percent.
"It's hard to imagine what the market would be like if two things were different - more inventory giving more buyers opportunities to purchase, and if the miserable weather we've been having had been slightly better making house hunting and home selling a bit more fun," remarked Beeson.
The scenario is similar in Kitsap County, although at more moderate rates: total inventory is down about 3.4 percent from 12 months ago, and prices rose by a similar rate (up 3 percent).
"The full blooming of the spring market in Kitsap is being tempered by the tight inventory of available homes," said Frank Wilson, the branch managing broker at John L. Scott in Poulsbo. He also noted brokers in Kitsap County continue to see "strong traffic at open houses, multiple offers on new listings, and buyers becoming accustomed to (though not happy about) the use of escalation clauses, with marginal buyers being pushed closer to their affordability margins."
Area-wide, there is 1.3 months of inventory, with both King and Snohomish counties reporting less than a month's supply.
Brokers say the shortages are constricting sales. Pending sales (mutually accepted offers) are down 4.2 percent from a year ago. Brokers report 10,447 pending sales during March, down from the year-ago total of 10,900, but up from February's volume of 8,247.
"March sales activity is lower than a year ago due to the fact we are virtually sold out," explained Scott. He also said the lack of inventory is feeding the buyer frenzy for each new listing in the more affordable and mid-price ranges.
The luxury market remains strong. For the first three months of 2017, the number of homes that sold and closed at prices of $1 million or more is up 60.5 percent compared to the same period a year ago (926 such sales this year versus 577 for first quarter of 2016).
Northwest MLS chairman John Deely, principal managing broker at Coldwell Banker Bain, said bids over the listing price are commonplace. "We are seeing more multiple offers than ever on new listings, and all cash offers are dominating the winning bids." He also noted some brokers are reporting a contrast from a year ago with regard to escalation closes. "Last year they were advising a buyer to bid 10 percent above the list price, this year they're advising 20 percent over in certain Seattle neighborhoods."
Low appraisals are still occurring, according to Northwest MLS officials.
"We are seeing more low appraisals on financed offers as buyers push the sales price up to new heights for the respective neighborhoods," Deely stated, adding, "Many financed offers contain provisions where buyers will pay the difference between the appraised value and the sales price in the event of a low appraisal," he explained. He also said some buyers are waiving other protective conditions such as inspections and title and neighborhood reviews to gain an advantage over competing buyers.
Despite the hurdles, more people are getting into homes, Deely noted. Northwest MLS figures show year-to-date closed sales are up nearly 10 percent compared to first quarter 2016.
"Some, including me, are seeing signs of a developing bubble," said Haines. She said most new construction in Snohomish County is being sold before foundations are even poured. "Builders are trying to keep up with the demand, but it isn't or doesn't seem to be possible in the near future. Buyers are starting to move into panic mode and doing unadvisable things just to get their offers accepted."
Haines said problems with low appraisals have "dissipated for now," adding, "We're seeing a definite resurgence of 1031 exchange offers. Sellers are accepting contingent offers with confidence and no fear the contingent home won't sell." She also reported "Folks from the city and south of our county line are once again migrating north creating yet another logjam."
Scott expects "seller gridlock" to abate this summer for sellers who are waiting to put their home on the market. "As more inventory comes on the market it will be just as easy for them to purchase their next home as it is to sell their current one."
Wilson said the Kitsap County market is "struggling to find its new trend. We are being buffeted by the winds or rising interest rates, shortages of inventory, increasing prices and the effects of new or improved ferry service in various parts of our county. We are seeing increased interest in Port Orchard, Bremerton and Kingston by both investors and Seattle commuters."
Northwest Multiple Listing Service, owned by its member real estate firms, is the largest full-service MLS in the Northwest. Its membership of more than 2,200 member offices includes more than 26,000 real estate professionals. The organization, based in Kirkland, Wash., currently serves 23 counties in the state.

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Hood Canal Real Estate, Mortgage, and the Economy – Seattle and Tacoma Among Hottest Markets In US

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Seattle and Tacoma among most competitive real estate markets in the US, report finds
Homes are going quickly—and above asking

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Hood Canal Real Estate, Mortgage, and the Economy – Many Homes Selling Within 30 Days

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Many homes selling within first 30 days in Puget Sound housing market




Housing prices in the Puget Sound market continue to go up and inventory remains tight.
“It’s straight up a crazy, frenzy market in King and Snohomish counties,” said Lennox Scott, chairman and CEO of John L. Scott Real Estate in a media release about the Northwest Multiple Listing Services April Report released Thursday. “Over 75 percent of homes are selling within the first 30 days. With more buyers coming on the market, we’ve been waiting for new inventory to help replenish the inventory.
“We are heading in the right direction, as a substantial number of new listings came on in March compared to February in the four-county area of King, Snohomish, Pierce, and Kitsap Counties. In fact, new listings rose 30 percent or more in each of the four counties, but the typical March volume is down in King, Snohomish, and Kitsap Counties, with Pierce County being the only county with more new listings than a year ago. The lack of inventory is creating buyer frenzy for each new listing in the more affordable and mid-price ranges.”
The residential median home price in King County hit $599,950 in March, up 12.93 percent from one year earlier.
March sales activity is lower than previous March due to the fact that the market is virtually sold out, Scott said. The luxury market close to the job centers is red hot with multiple offers on many new listings as they come on the market.
Seller gridlock should abate later this summer for sellers who are waiting to put their home on the market. As more inventory hits the market it will be just as easy for them to purchase their next home as it is to sell their current home, Scott said.
Market overview:
New listings were down across the board in each of the NWMLS’s 24 counties compared to a year ago, but up in a big way from February, which means while we are having a slow start to spring, we are seeing positive improvement.
Pending sales were down in King, Snohomish, Pierce and Kitsap counties. Some of the smaller outlying counties saw an increase in pending sales. For example, Mason County was up 34.09 percent and Clallam County up 49.30 percent in residential and condo combined.
March 2017 market characteristics:
These market conditions will continue until at least into the summer of 2018.
1. For buyers, it continues to feel like they’re going up against multiple offer situations on every property. Sellers continue to get premium pricing for their homes.
2. In King County, the residential median home price in March 2017 was $599,950 vs. $560,000 in February.
3. The decrease in sales is not a buyer issue it’s an inventory issue.
4. The market momentum continues to be frenzy hot as we experience a slow start to the spring market.
5. We are experiencing an extreme shortage of listings available in the more affordable and mid-price ranges.
7. Luxury homes in the $1 to $3 million-range are selling in big numbers in areas near job centers. The shortage of luxury is unheard of. Sales of luxury homes in 2016 were up substantially over 2015.
8. Sales activity in King and Snohomish counties would be higher if there were more homes for sale.
9. Every new listing is getting frenzy action from homebuyers, setting up many multiple offer situations, especially in the more affordable and mid price ranges where 90 percent of sales activity is taking place.
10. Leading indicators that drive housing market:
• Job growth – predicted to lower from extremely strong back down to very strong starting in year 2017 (Puget Sound economic forecasters) From 3 percent to the 2 percent range.
• Interest rates – Interest rates have risen into the low 4s. At this level they are considered amazing on a historical basis (when interest rates were in the 3s, they were considered unbelievable).
  • Kent Reporter Fri Apr 7th, 2017 

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