As we move forward in the 2007 real estate market it is helpful to see how the 2006 year end played out. If you click on the link you will be able to read my full report.
http://debrasinick.com/docs/Stats%20for%20Dec%202006.pdf
After looking at this information, watching how this year has begun (see my post for January 2007 stats), and the increase in home values, I want to focus on how you can maximize your home purchase. For those just starting out, it has been more difficult with each passing year to purchase real estate on the Eastside. Here is some advice as to how to do it and make the most money you can as a home owner.
My advice to the first time home buyer: get into the real estate market as soon as you can. Buy a condominium. Condominiums have appreciated better than single family homes with about a 24% increase in value during 2006. (see my State of the Market post)
Think about the emotional and financial benefits of owning your own place. You can make it your own, you can write off the interest on your mortgage and real estate taxes, and you can build equity. Rarely does anyone start out buying the home of their dreams. Most people start out buying a wonderful place to live in, but hopefully a place that will be a good investment.
Remember, you may “get a good deal” when you buy, but you also need to look for a great property to sell later. Maybe the home you purchase at a great discount today is not the best investment for the future.
How can you make the best buying decision so you will have a great home to sell?The key to that good investment is to remember today you are a buyer, tomorrow you will be a seller.
So here are the key questions to examine when making the best investment for future return:
Know thy neighborhood!
Location, location, location is still the key.Know the neighborhood pros and cons.
How far are you from employment centers, public transportation, highways?
What is the reputation of the school system and specific schools? Would the value of your home or condo be stronger if you purchased a similar home in a different school district?
What are the area amenities? Are you close to shopping, parks, etc?
Historically, what is the appreciation in the area?What is the current absorption rate of the homes?
Are there positive/negative present issues or future issues that impact the neighborhood and will affect your future resale value?
Know thy home or condo!
Check out the builder. Know the builder’s reputation.Has the builder been involved in any lawsuits?What is the builder's reputation for quality? (You should try to find this out even with a home that is not new)
If you are buying a condo, is it brand new construction or an apartment conversion?
What do the home owner’s dues actually cover?
Is insurance covered in the dues and what do you then need for insurance?
Do you know what a resale certificate is?
Is the floor plan a good one for your needs and for future resale?
Are there any important structural issues that seem apparent?
Should you reconsider purchasing this home or bring it to the attention of a building inspector if you decide to buy it?
Is the home in need of updates? What would be the best updates to make in the future?
Is the home located on a good street?
Is the yard a good one?
Are there noise issues?
Is there an active home owner’s association? Are there rules which will prohibit you from doing what you might want to do?
Is the home priced right for the current market?
What is the direct competition?
How many homes are selling this month?
What is the recent sales history?
These questions and more should be answered when buying a home or condo. Remember, a home buyer will a home seller be in the future. If you can answer these questions and believe you are making a good investment, then go for it! Happy hunting!
Feel free to comment if you have any further questions you think are important to ask before you make that home purchase.
Tuesday, February 27, 2007
Advice to buyers for the 2007 market
Wednesday, February 14, 2007
One of life's biggest dilemmas
I am here to help you solve one of life's biggest dilemmas. Imagine it's Friday night, you are tired, you've worked hard, and it's been a long week. You face the challenge of the week: Where to go for dinner? This is a question my husband and I often ask each other. Sometimes after a long week you want to go for dinner without thinking much about it. Ever feel that way? For those of us who struggle with the eternal dilemma of where to go for dinner, there is a website for all of us.
Have a little fun and take the decision out of the decision making process.
All you have to do is plug in your zip code and see what the wheel of food picks for you.
Enjoy!
Let me know if you use this site and if it worked for you!
www.coverpop.com/wheeloffood/
Saturday, February 10, 2007
State of the Market- a review of 2006 and a look at 2007
This information comes from the statistics charts for the full year, please take a look at
http://debrasinick.com/docs/2006_Year_to_Date.pdf
The 2006 real estate market was a real roller coaster ride. Overall, prices were up for the year. Inventory climbed each month, peaked in October, and dropped off at the end of the year. With the increase in inventory, the fall proved to be the toughest time to sell a home.
As I mentioned in a statistics report in June, I could see the number of homes for sale increasing dramatically. We started the year with only 2031 homes for sale. By September, inventory peaked with 3218 homes. December saw a drop in inventory to 2165 homes. This was1100 homes less than September, but only 100 more homes than we started with in January of 2006.
The best month to sell in 2006?
March, when 61% of all the homes listed sold!
The month with the greatest number of sales in 2006?
May with 1367 homes sold.
The month with the largest number of homes for sale in 2006?
September with 3218 homes for sale.
The toughest month to sell in 2006?
November when only 20% of the homes sold.
How did the year end? On the eastside prices increased an average of 19%. The increases varied, Mercer Island took the price, oops the prize, in 2006 with 36.9% appreciation. Downtown Redmond, Education Hill and Union Hill were next with a 26.9% increase in pricing and West Bellevue followed closely with 24.1% The Redmond/Bellevue area around Microsoft showed a price increase of 9.4% while Kirkland prices were up 15.3%.
Overall, 10% less homes sold in 2006 than in 2005. A few areas showed an increase in sales, but this was the exception rather than the rule. Seventeen percent more homes sold in West Bellevue and 16% on the plateau.
My crystal ball for 2007: We should see a strong market this year. The rate of appreciation will be less than 2006 and definitely less than 2005. I believe the increase for the Eastside will continue, but at a slower pace. There will be exceptions to this rule, such as the neighborhoods of West Bellevue and Mercer Island. Strong increases in pricing will still be seen there. The best time to sell your home in 2007? If you can do it, put your home on the market by April. The stronger absorption rates and the greatest number of sales happen in the spring.
Watch our employment rates. This will give you a good clue as to where we are heading in the real estate market. The more jobs created, the more houses will sell and the more likely will be an increase in prices. Pay attention to the absorption rate each month and this will also give you a clue as to market performance.
Enjoy 2007!
How do our home prices compare to the rest of the country?
It is interesting to see the cost of home ownership in most of the other major metropolitan areas of the country. The National Association of Realtors has compiled a list of the cost for homes in the major metropolitan areas of the country. The chart shows the median sales price for each of the areas from 2003 through the third quarter of 2006. In addition, you will be able to see the percentage of appreciation for the three quarters of 2006 in each area. Double digit appreciation was on the rare side for most of the country. However, in the Seattle area, the overall appreciation for the first three quarters of 2006 was 14%. We actually experienced great appreciation for last year when compared to other parts of the country. The area with the greatest appreciation for the first three quarters of 2006 was (drumroll, please) Salem, Oregon with an appreciation rate of 24.7%. Following closely behind was Elmira, NY. Homes appreciated at the rate of 21% (Elmira? I want to know what is going on there!) It is also interesting to see the many areas that declined in appreciation last year. Many of the stronghold areas of appreciation in the country, San Diego, Los Angeles,etc, experienced negative appreciation or single digit appreciation.
The range of appreciation in the Seattle area varies according to the specific city and neighborhood. But, stayed tuned, more on that will be coming in a later posting for our Eastside neighborhoods...
http://www.realtor.org/Research.nsf/files/MSAPRICESF.pdf/
One Person's 2007 Crystal Ball
I just read an article in today's Inman News Service from Doug Duncan, the chief economist at The Mortgage Bankers Association. Doug Duncan believes interest rates will go up slightly by the third quarter of this year. He is also projecting a national slow down of home sales. Because of this, he expects the number of mortgages to decline. In addition, he sees the overall unemployment rate increasing from 4.5% to 4.9% However, he sees the gross domestic product on a slight increase each year.
It will be interesting to see if his predictions hold true. Our Eastside neighborhoods tend to outperform the national trends. The key indicator to watch will be job growth. According to John Tucillo, who is the chief economist for the National Association of Realtors, job growth is the key ingredient for a positive real estate market. We are fortunate to be in an area of positive job growth.
By the way, Inman News is a great source for real estate information. The service culls real estate articles from everywhere. This service gives me a good handle on what is happening with real estate nationwide.
Home Safety Checklist
Attention all of you with parents! Now that I have your attention:
In my travels I am encountering more and more people who are helping elderly parents cope with lifestyle changes. I, too, have gone through the same situation with my parents over the last few years and I found it very difficult, frustrating, scary, you name it. The family roles were reversed with me taking on the job of the parent to manage my own parents' safety and comfort. It was hard to know where to begin. There are many resources out there, but they are often difficult to find. When I have spoken with many of you, I haveoften come away with the feeling that everyone is having to reinvent the wheel. Each of us is doing the same research and looking for the same help. For those of you who may need a place to start, here it is:
http://rebuildingtogether.org/downloads/home_safety_checklist.pdf
The list is a great one for analyzing safety and accessibility issues in a home.
The general website, http://http://rebuildingtogether.org is filled with great information.
Should you remodel?
I am often asked what updates to a home make the most sense and reap the greatest financial reward when you go to sell your home. As most people know, updated kitchens and baths really excite most home buyers. The National Association of Realtors annual cost vs. value report analyzes the value of remodels in different areas of the country. What sells in Peoria may not sell in Seattle!
If you want more specific information about a home update or remodel, please feel free to call on me. Since I have been out looking at many new and remodeled homes in the area, I know what people like. You may not be selling your home at this time, however, making the right choices when remodeling can reap you additional money when you decide to sell your home in the future. Making the wrong choices can be very expensive.
http://www.realtor.org/rmomag.NSF/pages/2006CostvsValue?OpenDocument
Tis the tax season
Now that the holidays are behind us and the new year has begun, our thoughts turn to taxes. (Well at least by April 14th, they do!) I have provided links to two articles which will help you examine how and what home expenses, remodeling costs, property taxes, etc. are deductible. Good luck!
http://www.bankrate.com/brm/news/pf/YIRguide06-07/nov06_taxes_tax_breaks_homeowner_a4.asp?caret=36
http://www.bankrate.com/brm/news/mortgages/20040220a1.asp
November 2006 statistics
Click on the title to view a PDF containing these statistics.
To view yearly statistics or previous months, click here.
An intro to my monthly statistics charts
I have designed Eastside real estate statistics charts for you to see the performance of the market on a monthly/yearly basis.
Here is how it works:
I will receive, as an example, the data for January by the middle of the month of February. I will then post this most recent information with an explanation of how I see the data and the market. You will be able to see whether prices and inventory are going up or down in your area. Looking at the supply of houses, the demand, and the number of sales will then help you to see the relative strength of the real estate market each month.
These charts will compare the amount of homes available for sale and the number of homes sold for the same month in each of the last three years. For example, the January sales activity for each of the last three years will be compared against each other. It is truly eye opening to see the changes in the market over the time.
If you have further questions or would like information regarding market performance, leave me a comment or email me.
The statistics for each month will be posted as an individual entry (i.e. November, 2006 statistics).
Baby Boomers and Real Estate
The National Association of Realtors just completed a survey of 2000 baby boomers (you know those people born between 1946 and 1964). The survey was most interested in future predictions for boomers as they age and think about retirement. Many boomers will not retire in the same manner or at the same age as their parents. Many will want to work longer and downsize at a later time than their parents' generation. Some people want to launch new careers and work part time. Where will you be in the next 20-30 years?
realtor.org baby boomer study
