housing Archives - ADDO Real Estate

Thanks to our friends at Sound Community Bank for sharing the buzz! Seattle’s housing market is already getting off to a strong start in 2015, and these factors are no doubt contributing.

In early January a sharp decline in interest rates, coupled with buzzing announcements to reductions on popular federally-insured home loans, resulted in both purchase and refinance volume at their highest in six years, according to a CNBC report.

After rates dropped in the first full week of the year, total home loan applications almost doubled in the week following. By mid-month, purchase applications were two percent higher than the same time last year, and demand for refinances was at its highest in eight months. According to a Wall Street Journal report, rates on the popular 30 year fixed home loan were at their lowest since May 2013.

Big Housing Announcements
The housing industry was already the talk of the town after President Barack Obama announced cuts to mortgage insurance premiums on new government-insured Federal Housing Administration (FHA) loans. The reductions will result in more affordable monthly housing payments and provide new opportunities for as many as 2 million borrowers over the next three years. In other mortgage insurance news, legislation was again passed which makes any payments on mortgage insurance premiums in 2014 tax deductible.

It may be too soon to tell whether the housing market will continue on its strong start to 2015, or slow down. “We have to see strong and sustained income growth before we’re going to see housing make a significant move upward,” said Doug Duncan, the Chief Economist at Fannie Mae, in a recent Wall Street Journal report. A December Fannie Mae survey also revealed that only 64 percent of consumers said it was a good time to buy a home.

The Bottom Line
Continued low rates and higher demand for popular first-timer home loans may drive up housing activity. If you have any questions regarding housing or know of friends, family or colleagues who wish to discuss buying or refinancing a home, please get in touch.

Sources: CNBC, Wall Street Journal

As always, feel free to contact us to discuss how this may affect your buying or selling plans in 2015!

We had to laugh when we saw the recent Redfin post 2013: Calling All Sellers! (Where are you?!?), as this is our sentiment exactly. According to the NWMLS the number of active listings in January was up 1% from December, but down a stunning 44.7% from January 2012, leaving us with a meager 1.4 month supply of homes (a 6 month supply is a balanced market).

We’ve been experiencing this first-hand as we work with buyers who are well-qualified and raring to go, but have nothing new to see! Yes, the market typically slows during the holiday season, and takes a while to build itself back up, but 2012 was nothing like a typical market. The theme was a continually increasing demand combined with an ever dwindling supply, which of course drove home values up all the way through December.

January’s stats compiled by local real estate appraisers Alan L Pope & Associates shows 72% of homes on the market in King County receiving an offer. That’s the highest absorption rate we’ve seen in almost a decade, the second highest being 66.4% in March 2005.

The message is seemingly clear! If you’re a homeowner thinking about selling, now is the time. Competition is slim, market times are short, and multiple offer scenarios are the norm. In other words, it’s most definitely a sellers’ market in Seattle right now. So, what’s the problem?

Well, it’s pretty simple really…

Many homeowners either need to wait, or just plain want to wait to sell their home!

Underwater Homeowners. Many who bought during the housing bubble don’t have the ‘wiggle room’ to sell yet, as they risk losing a chunk of their down payment or even walking away with negative equity.

The Waiting Game. If there is no pressure to sell (job change, growing family etc…) and the market is on a steady rise from the bottom, then many homeowners would rather wait to see if they can get a higher price for their home in a year or two.

Renting Instead. The rental market in Seattle remains strong, with no indication that rents will go down in the next few years, so some homeowners are opting to go ahead and buy now, but rent instead of sell their current home.

So, will 2013 be dubbed the year Seattleites waited to sell? Maybe, but we certainly hope not! These are all valid reasons not to sell right now, but there are also many advantages to jumping into the market, versus waiting until all your friends and neighbors do too!

For your additional reading pleasure, recent real estate headlines…

Brokers report brisk sales, but rising frustration for home buyers – NWMLS

City-by-city look at U.S. house prices – WSJ Marketwatch

Signs of a Housing Recovery Point to a Stronger Economy – NYTimes.com

The Year Everyone Was Wrong (Again) About Home Prices – WSJ