There are a number of things that can trigger the decision to remodel or move to a new home. Perhaps you have outgrown your current space, you might be tired of struggling with ancient plumbing or wiring systems, or maybe your home just feels out of date. The question is: Should you stay or should you go? Choosing whether to remodel or move involves looking at a number of factors. Here are some things to consider when making your decision.
Five reasons to move:
1. Your current location just isn’t working.
Unruly neighbors, a miserable commute, or a less-than-desirable school district—these are factors you cannot change. If your current location is detracting from your overall quality of life, it’s time to consider moving. If you’re just ready for a change, that’s a good reason, too. Some people are simply tired of their old homes and want to move on.
2. Your home is already one of the nicest in the neighborhood.
Regardless of the improvements you might make, location largely limits the amount of money you can get for your home when you sell. A general rule of thumb for remodeling is to make sure that you don’t over-improve your home for the neighborhood. If your property is already the most valuable house on the block, additional upgrades usually won’t pay off in return on investment at selling time.
3. There is a good chance you will move soon anyway.
If your likelihood of moving in the next two years is high, remodeling probably isn’t your best choice. There’s no reason to go through the hassle and expense of remodeling and not be able to enjoy it. It may be better to move now to get the house you want.
4. You need to make too many improvements to meet your needs.
This is particularly an issue with growing families. What was cozy for a young couple may be totally inadequate when you add small children. Increasing the space to make your home workable may cost more than moving to another house. In addition, lot size, building codes, and neighborhood covenants may restrict what you can do. Once you’ve outlined the remodeling upgrades that you’d like, a real estate agent can help you determine what kind of home you could buy for the same investment.
5. You don’t like remodeling.
Remodeling is disruptive. It may be the inconvenience of loosing the use of a bathroom for a week, or it can mean moving out altogether for a couple of months. Remodeling also requires making a lot of decisions. You have to be able to visualize new walls and floor plans, decide how large you want windows to be, and where to situate doors. Then there is choosing from hundreds of flooring, countertop, and fixture options. Some people love this. If you’re not one of them, it is probably easier to buy a house that has the features you want already in place.
Five reasons to remodel:
1. You love your neighborhood.
You can walk to the park, you have lots of close friends nearby, and the guy at the espresso stand knows you by name. There are features of a neighborhood, whether it’s tree-lined streets or annual community celebrations, that you just can’t re-create somewhere else. If you love where you live, that’s a good reason to stay.
2. You like your current home’s floor plan.
The general layout of your home either works for you or it doesn’t. If you enjoy the configuration and overall feeling of your current home, there’s a good chance it can be turned into a dream home. The combination of special features you really value, such as morning sun or a special view, may be hard to replicate in a new home.
3. You’ve got a great yard.
Yards in older neighborhoods often have features you cannot find in newer developments, including large lots, mature trees, and established landscaping. Even if you find a new home with a large lot, it takes considerable time and expense to create a fully landscaped yard.
4. You can get exactly the home you want.
Remodeling allows you to create a home tailored exactly to your lifestyle. You have control over the look and feel of everything, from the color of the walls to the finish on the cabinets. Consider also that most people who buy a new home spend up to 30 percent of the value of their new house fixing it up the way they want.
5. It may make better financial sense.
In some cases, remodeling might be cheaper than selling. A contractor can give you an estimate of what it would cost to make the improvements you’re considering. A real estate agent can give you prices of comparable homes with those same features. But remember that while remodeling projects add to the value of your home, most don’t fully recover their costs when you sell.
Remodel or move checklist:
Here are some questions to ask when deciding whether to move or remodel.
1. How much money can you afford to spend?
2. How long do you plan to live in your current home?
3. How do you feel about your current location?
4. Do you like the general floor plan of your current house?
5. Will the remodeling you’re considering offer a good return on investment?
6. Can you get more house for the money in another location that you like?
7. Are you willing to live in your house during a remodeling project?
8. If not, do you have the resources to live elsewhere while you’re remodeling?
If you have questions about whether remodeling or selling is a wise investment, or are looking for an agent in your area, we have professionals that can help you. Contact us today!
Originally published March 6, 2019 at 4:22 pm Seattletimes.com
For months, there’s been one question in Seattle-area real estate: How low can prices go? We may have found our answer.
King County home prices had dropped $116,000 since last spring, falling to a two-year low in January.
But in February, home prices bounced back as the median sale rose by $45,000 from the month prior, according to new data released Wednesday. It was the first time in eight months that prices actually went up, on a month-over-month basis.
And it was no small increase, either: In dollar terms, it’s the biggest one-month jump since records have been kept.
One month of data does not necessarily guarantee a new trend. But there’s evidence the market could be picking up speed as buyers start slowly coming out of the woodwork: Sales increased 1 percent on a year-over-year basis, a small amount but nevertheless the first increase since April 2018, back when Seattle was still the hottest market in the country. Brokers and buyers are reporting more traffic in open houses and the slow return of bidding wars.
And while prices usually grow in February coming out of the winter doldrums, this year’s bump was triple the average increase from the previous five years. It’s an ominous sign for buyers, given that prices almost always rise the most in spring, which is just around the corner.
King County’s median single-family house sold for $655,000 in February, up 7.4 percent from a month prior but still comfortably below record highs reached last spring, according to the Northwest Multiple Listing Service.
“Everything has picked back up,” said Grant Burton, a Seattle-based Redfin agent. He’s working on two buyer offers right now, and has four pending sales — all featuring bidding wars, which had all-but disappeared in the second half of last year.
“When we noticed the cool-down last spring, buyers were fatigued, they were burnt out on the crazy market and not having enough time to do their due diligence,” Burton said. But then things went in the opposite direction — homes sitting unsold longer, prices being negotiated down — for long enough that buyers have started to feel comfortable enough to come back.
“It helps that there’s more inventory, and having more time (to decide on a house) has been a little bit easier for buyers to digest. And I think maybe people were trying to take advantage of not as many buyers to compete with,” he said.
Still not red hot
The market isn’t back to red-hot by any means. On a year-over-year basis, prices rose a bit less than 1 percent. And the number of homes sitting unsold still doubled in that span. Brokers say instead of bidding wars with 10 buyers driving up prices way above the list price — which was common for years — now there might be two or three bidders on sought-after homes, willing to go slightly above list price.
House Sales by Sub-market
Paul Lundin and his wife are closing on a $1.5 million Ballard home now after losing three previous bidding wars. They wound up having to go $80,000 over list price and waive all their contingencies — such as the clause that allows buyers to back out of a home purchase if an inspection turns up new problems — to beat out other bidders.
“We ended up overpaying or at least paying more than we wanted to,” Lundin said. “I certainly would have liked to land something in December (before the market picked up), but it just is what it is.”
Lundin said it’s clear the competition among buyers has increased compared to when they started looking around last fall.
“It was going pretty fast, very contentious,” he said. “If you go to open houses on a weekend, there are people streaming out all day.”
A closer look at the numbers
In Seattle, the median home price hit $730,000, up from $711,000 the previous month but still down from a year ago.
The biggest gains came in Southeast King County, where prices grew from $450,000 to $473,000 in the last month – led by gains of $100,000 in Renton.
But the turnaround hasn’t started on the Eastside. There, prices fell to $900,000 — down from a month ago and a year prior.
Also helping nudge buyers back into the market: mortgage interest rates, which had grown last fall, have fallen back down in the last few months.
Despite a shift in single-family home values, condo prices continue to fall — down 8.4 percent from a year ago across King County, the biggest decline in seven years. The median condo across the county sold for $380,000, down from a record high of $466,000 last spring. The number of condos sitting unsold more than tripled in the past year while sales continued to decline.
The cool-down also continues in Snohomish County, where the cost of the median single-family house fell 2.1 percent from a year prior — the county’s first annual drop since 2012. The median Snohomish house sold for $475,000, down from last spring’s peak of $511,000.
Pierce and Kitsap counties, which have been mostly immune from the recent slowdown as buyers seek out cheaper alternatives, continue to see prices grow.
In Pierce, the median house sold for $355,000 — up 9.2 percent in the past year, and matching the record highs reached last spring. In Kitsap, prices grew 3.7 percent, to $341,000.
Source, Seattle Times Newspaper March 6th, 2019
From Tacoma to Spokane, the housing market is hottest where homes are the cheapest,
and downright cool in expensive areas like Seattle and Bellevue. (Source Seattle Times Newspaper February 26th, 2019).
As the Seattle-area real estate market has slowed over the past year, it’s clear things have gotten better for buyers of the region’s priciest homes. But people looking for anything resembling affordable housing haven’t had the same luck.
The monthly Case-Shiller home price index, released Tuesday, showed prices fell another 0.6 percent on a month-over-month basis in the Seattle metro area in December, although for the first time in five months it did not lead the country in declines. San Francisco did so with a 1.4 percent drop.
On a year-over-year basis, prices in Greater Seattle grew 5.1 percent, the smallest since prices were bottoming out in 2012, and similar to the national average.
But those numbers for the full metro area – which spans Tacoma to Everett – mask significant differences in the market depending on whether you’re looking at a Bellevue estate or a Puyallup starter home.
The report divides the metro area evenly into three price ranges: roughly those homes under $390,000, those over $620,000 and ones in between.
The most expensive homes, which are generally found in Seattle, the Eastside and upscale homes in farther-out communities, have seen their prices increase 3 percent in the past year, or roughly the same as inflation.
But prices grew 9 percent in that span for the cheapest group of homes, mainly in Pierce County, northern Snohomish County and some smaller homes in more close-in areas.
As for the middle price group — which includes plenty of homes in South King County and southern Snohomish County — home values grew 5 percent.
Demand has grown fastest for cheaper houses because they have become so rare in the region, which is now one of the most expensive places in the country to buy a home.
Six years ago, the cost of a median house in Seattle was roughly equivalent to today’s cost of the typical house in Tacoma. Those priced out of more expensive parts of the region have increasingly moved further north and south, driving up prices in the outer parts of the region.
The current median price of a single-family house is $610,000 in King County, $455,000 in Snohomish County and $330,000 in Pierce County. Compared to a year ago, prices are down slightly in King County, flat in Snohomish County and up in Pierce County.
The number of homes sitting unsold has roughly doubled in the past year in expensive areas like Seattle and the Eastside and has grown only slightly in the lowest cost parts of the region. The priciest parts of the metro area have had the highest share of price cuts and the biggest drop in overall home sales.
Homes are now even selling quicker in Spokane than in Seattle, for the first time in six years. That’s at least partially, again, because of people being priced out of the Emerald City; the biggest group of out-of-town home shoppers looking in Spokane are from Seattle. That median home price in Spokane? $205,000.
The federal government on Tuesday released its quarterly home price report, which includes 245 metro areas, not just big ones. Spokane had the fourth-biggest price gain in the country, with prices growing 13 percent in the past year. Yakima was sixth, Olympia-Lacey was 15th and Kennewick-Richland was 19th, all with prices growing more than 10 percent a year. Bremerton was 24th and Bellingham 30th.
Source, Seattle Times Newspaper February 26th, 2019
Every month, Windermere Stanwood-Camano publishes a snapshot of the local real estate market. Our Brokers use this data to help determine listing prices, realistic offers, and tailored advice for their clients. We also like to make this information public, to help you with your real estate journey. Here are Marla Heagle’s key takeaways from January 2019.
Continued Evidence of a Balanced Real Estate
Market in Our Local Area
As we dive into 2019 in Stanwood and Camano Island, we are continuing to see signs of a balanced real estate market. These three points were taken from Matthew Gardner’s economic forecast last month, and are ringing true in our local market:
1. Single Family home prices will rise in 2019, but the rate of growth is trending lower.
|Area||2019 Price Forecast|
In January 2019 compared to January 2018, we have seen year over year price growth of .5% on Camano island and 2% in Stanwood. As the year continues, that number is likely to increase.
2. Regional economic growth will still drive housing demand.
3. The big story for 2019 will be the ongoing move towards a balanced market.
We have seen this move towards a balanced market in our January numbers for Stanwood and Camano Island. As we reported last month, Camano Island had 2.6 months supply of inventory (MSI) at year end and at the end of January it rose to 3.4 months. Stanwood had 3.7 MSI at year end and is now 5.1. A true balanced market.
To read in-depth statistics from January 2019, click on the links below.
To read in-depth statistics from December 2018, click on the links below.
Homebuyers Resuming Search Amid Improving Inventory, Attractive Terms
KIRKLAND, Washington (February 2019) – Homebuyers around Washington state are making their way back to the market, hoping to take advantage of improving inventory, attractive interest rates, and more approachable sellers, according to officials with Northwest Multiple Listing Service.
Northwest MLS statistics for January show year-over-year improvement in the volume of new listings and total inventory, along with moderating selling prices. Although fewer pending sales (mutually accepted offers) were reported than a year ago (down about 3.3 percent), January was the smallest year-over-year decline since May 2018 when the drop was about 2.7 percent.
Commenting on the MLS statistics summarizing last month’s activity, broker Gary O’Leyar said January’s post-holiday real estate activity doesn’t normally pick up until later in the month, but this year the uptick began early. “January started as a bit of a surprise. Open house activity was very robust, and we saw multiple offers in numerous instances again,” reported O’Leyar, the owner of Berkshire Hathaway HomeServices Signature Properties in Seattle.
Brokers tallied 7,564 pending sales during January, a decline from a year-ago when they recorded 7,820 transactions.
Seven counties had increases in pending sales of single family homes and condos compared with 12 months ago, including King (up nearly 7.5 percent) and Snohomish (up 3.8 percent).
James Young, director of the Washington Center for Real Estate Research at the University of Washington, commented on pending sales. The mixed results, including “healthy growth” in King and Snohomish counties, “corresponds well to upward movement in mortgage applications late in December, a leading indicator for the month to follow,” he noted, adding, “One should expect to see increased sales activity in the coming months throughout the region if mortgage applications continue to stabilize or increase.”
J. Lennox Scott, chairman and CEO of John L. Scott Real Estate, said buyers “came out of the woodwork” after the holidays, eager to take advantage of better housing conditions. “Areas close to the job centers are seeing improved affordability from spring 2018,” he said, attributing it to lower interest rates, strong job growth, and adjusted pricing.
Scott said buyers are also attracted by expanded inventory resulting from the addition of new listings and a higher number of unsold inventory, although he noted “inventory levels are still considered a shortage.”
Prospective buyers who sat out the second half of 2018 or were pushed to the sidelines during last year’s heated market are finding better buying conditions, agreed Robb Wasser, branch manager at Windermere Real Estate/East. “Interest rates are near a nine month low and buyers have a stronger platform for negotiating, which have helped drive a 9 percent increase in pending sales of single family homes in King County,” Wasser stated.
MLS members added 7,090 new listings of single family homes and condos during January, up from the year-ago figure of 6,805 and nearly doubling December’s total of 3,631. At month end there were 11,687 active listings in the database, up more than 45 percent from the year-ago total of 8,037. Listing inventory more than doubled in both King and Snohomish counties.
Sixteen counties, including all four in the Puget Sound region, reported more inventory than a year ago. Even with sizable gains, supply is still tight at 2.4 months system-wide. (In general, four to six months typically indicates a balanced market.)
“The rise in inventory is largely due to investors who are selling because they believe the market has peaked and they want to unload their properties before interest rates rise too far,” said OB Jacobi, president of Windermere Real Estate.
“New listing inventory in King County is bringing more homebuyers to the market. We are enjoying increased open house traffic, including during the Super Bowl weekend,” remarked Dean Rebhuhn, owner of Village Homes and Properties in Woodinville. He also commented on the early arrival of the spring market, crediting jobs and immigration as factors. “Properly priced homes are selling!” he exclaimed.
Mike Grady, president and COO of Coldwell Banker Bain, expects activity to pick up heading into spring, as is customary. “I have absolutely no concerns about 2019 being a strong year, with prices rising 4-to-6 percent and units up 10-to-12 percent. There is no reason for sellers not to move on with their lives and list their homes,” he remarked.
Northwest MLS figures show an area-wide price gain of just over 5 percent on January’s 4,865 closed sales of single family homes and condos. Only six of the 23 counties in the report had year-over-year price drops. Among them was King County where prices slipped about one percentage point, from $571,250 to $565,000.
Prices on single family homes (excluding condos) rose 5.4 percent from the same month a year ago. In the four-county Puget Sound region, prices increased in Kitsap, Pierce and Snohomish counties, but decreased about 2.9 percent in King County, dropping from $628,388 to $610,000. Prices for single family homes in Kitsap County, where there is only about 1.7 months of supply, surged nearly 14.7 percent when compared to a year ago.
“The minor decline in King County home prices in January doesn’t mean the housing market is tanking; it’s primarily because of the significant increase in the number of homes for sale,” suggested Jacobi. “We may see prices take minor dips periodically in the coming year, but for the most part they are expected to continue rising, just at a far more modest rate than in recent years,” he added.
“Median prices on closed sales continue to remain stable in January with continued strong upward growth in outlying counties,” stated Young. “Pierce, Kitsap, and Thurston counties outpaced King and Snohomish counties in price growth, consistent with the past few months. This trend indicates that many first-time buyers and middle-income families are continuing to look to the outer regions of the area for value. Strong price growth in Lewis and Whatcom counties also support this general trend of outward migration along the I-5 corridor,” he added.
Mike Larson, president/designated broker at ALLEN Realtors in Lakewood (Pierce County) concurred, describing the slowdown in activity during the second half of 2018 as a “much-needed correction.” Sellers in King and Snohomish counties “got caught up in the craziness so many buyers turned to Pierce County for their affordability solution,” something he expects will continue this year.
Condo prices rose slightly, about 1.6 percent, as inventory more than doubled from a year ago. The median price for the 645 condos that closed last month area-wide was $325,000. In King County, where more than half the sales occurred, the median price was $383,500, up slightly from the year-ago figure of $380,000.
Several brokers expressed optimism for a busy spring.
“Buyers are signaling a more aggressive spring market with an uptick in search activity and high application rates with mortgage companies,” said George Moorhead, designated broker at Bentley Properties. He also noted would-be owners are commenting on having more options to consider and “are feeling the real estate market is less volatile.” He also reported sellers are similarly encouraged by having more options, “and not having to race around with the fear of making a housing mistake.”
“We’ve clearly been in a transitioning market, but given the ongoing demand for real estate in the Greater Seattle area, we may have adjusted to a ‘new market reality’ wherein inventory is up and prices have re-aligned, but there is still strong demand for housing. I would expect to see a robust regional real estate market going forward into spring,” stated O’Leyar.
The director of the Washington Center for Real Estate Research was more guarded in his expectations. “Increasing inventory and moderate price growth in urban counties (and growth in outer regions of the Puget Sound) point to several problems relating to how potential homebuyers see things moving forward,” said James Young. He referenced figures from the National Association of Homebuilders National Trends Report indicating a shrinking pool of buyers.
“The picture for first-time buyer affordability in the longer term for the region is not bright for potential homeowners unless changes in the housing supply framework throughout the area are addressed soon.”
Larson also expressed concerns around affordability, “particularly for entry-level buyers as well as move-down buyers who also want to sell. The middle rungs on the housing ladder are slowly disappearing,” he remarked. Options like condos could help fill that void, he suggested, but believes they won’t be built “until the state legislature reforms the condo liability laws.”
Affordability is a “crucial issue” for 72 percent of millennial renters, according to a survey by Apartment List.
Northwest Multiple Listing Service, owned by its member real estate firms, is the largest full-service MLS in the Northwest. Its membership of around 2,200 member offices includes more than 29,000 real estate professionals. The organization, based in Kirkland, Wash., currently serves 23 counties in the state.
Source, Northwest Multiple Listing Service
If you are a homeowner, you probably know all-too-well how costly home repairs can be. And, thanks to Murphy’s Law, appliance break-downs seem to happen at the worst possible time—like when you are selling your home. For this reason, it is in the best interest of all home sellers to consider purchasing a home warranty.
A home warranty offers many advantages to the home seller, the least of which is a peace of mind that your major home appliances are covered in the event of a break down. Most home warranties cover both parts and labor of your home’s most vital systems and major appliances. This protects the home seller from potentially large, unexpected repair bills and also allows the buyer to purchase the home with more confidence. Additionally, a home warranty is usually for the term of at least one year, so any unforeseen repairs/replacements are also covered well after the home has been sold. A home warranty also provides a competitive edge over those homes without warranties because it communicates confidence to buyers. This can add up to a faster selling period, resulting in a more convenient process for all involved.
A home is probably the single largest investment you’ll ever make, so the last thing you want as a home seller or buyer, are unexpected home repairs/replacements. Major appliance replacement can cost you several thousand dollars, and during the process of a home sale/purchase, your budget doesn’t often allow for costly expenses. A home warranty is designed to protect you from these types of expenditures. Furthermore, it is convenient for home sellers because a home warranty offers after-sale liability. While an inspection may find many faults that are covered by a home warranty, it cannot account for latent problems that are beyond an inspection’s scope, or problems that occur down the road. In most cases, a home warranty will cover these expenses, alleviating potential financial burdens for the seller once they have sold the home.
When considering a home warranty, it’s important to ask the right questions. Warranties vary from one company to the next and there are also many different types of coverages available. Your Realtor should be able to help you with this process. First and foremost, you should identify which components of the home will be covered by the warranty. It’s also important to attain annual costs and the charge for service calls. You will want to ask what the total dollar limit is on the warranty and what the limits are for the individual items that are covered. Many home sellers purchase home warranties, which are then passed along to the homebuyer when they move into the home. As a homebuyer, you may want to look into whether or not the coverage can be renewed once the warranty has expired.
According to American Home Shield, one of the largest home warranty companies in the nation, the average home warranty customer uses their warranty plan 2.3 times. Furthermore, the number of home warranties is increasing with every year because homeowners are becoming more informed of their benefits. Eventually home warranties will become commonplace, as buyers and sellers realize the advantages they offer. Ultimately, what it comes down to is that a home warranty is a very simple, cost-effective way to purchase a peace of mind for both homebuyers and sellers alike.
Every month, Windermere Stanwood-Camano publishes a snapshot of the local real estate market. Our Brokers use this data to help determine listing prices, realistic offers, and tailored advice for their clients. We also like to make this information public, to help you with your real estate journey. Here are Marla Heagle’s key takeaways from December 2018.
Are Camano Island and Stanwood
Heading for a Balanced Housing Market?
How do we determine if we are in a seller’s, buyer’s, or balanced housing market? It comes down to something called Months Supply of Inventory (MSI). MSI quantifies how many months it would take the market in its current condition to absorb all the active listings. So, we’re easily able to see if the market is favoring buyers or sellers. Generally, a balanced market will have somewhere between four and six months of supply. If supply is less than four months, sellers have gained asking power. If it’s above six months, buyers have gained negotiating power.
MSI is calculated by dividing the current month’s inventory figure by a rolling 12-month calculation of pending sales.
Here’s a glimpse at our local MSI.
At the end of December 2018:
- Camano Island had 2.6 MSI, which is a seller’s market.
- Stanwood had 3.7 MSI, which is a seller’s market heading towards a balanced market.
Let’s look at the difference 10 years ago, at the end of December 2008:
- Camano Island had 29.1 MSI, which was a buyer’s market.
- Stanwood had 10.9 MSI, which was also a buyer’s market.
If new homes stop entering the market today, MSI equals how many months would it take to sell all the homes currently available for sale. It would take 2.6 months on Camano Island today but would have taken 29.1 months 10 years ago. Times have changed.
The chart below shows the Stanwood/Camano Island combined MSI over the past 10 years.
Steve Harney, Founder of Keeping Current Matters, said this in a recent blog post:
“Returning to a normal market is a good thing. However, after the zaniness of the last eleven years, it might feel strange. If you are going 85 miles per hour on a road with a 60 MPH speed limit and you see a police car ahead, you’re going to slow down quickly. But, after going 85 MPH, 60 MPH will feel like you’re crawling. It is the normal speed limit, yet, it will feel strange.
That’s what is about to happen in real estate. The housing market is not falling apart. We are just returning to a more normal market which, in the long run, will be much healthier for you whether you are a buyer or a seller.”
To read in-depth statistics from last month, click on the links below.
As we step forward into 2019, eco-friendly “green homes” are more popular than ever. Upgrading your home’s sustainability improves quality of life for those residing in it, but it is also a savvy long-term investment. As green homes become more popular, properties boasting sustainable features have become increasingly desirable targets for homebuyers. Whether designing a new home from scratch or preparing your current home for sale, accentuating a house with environmentally-friendly features can pay big dividends for everyone.
While the added value depends on the location of the home, its age, and whether it’s certified or not, three separate studies all found that newly constructed, Energy Star, or LEED-certified homes typically sell for about nine percent more than comparable, non-certified new homes. Plus, one of those studies discovered that existing homes retrofitted with green technologies, and certified as such, can command a whopping 30-percent sales-price boost.
There are dozens of eco-friendly features that can provide extra value for you as a seller. To name a few:
Cool roofs keep the houses they’re covering as much as 50 to 60 degrees cooler by reflecting the heat of the sun away from the interior, allowing the occupants to stay cooler and save on air-conditioning costs. The most common form is metal roofing. Other options include roof membranes and reflective asphalt shingles.
Fuel cells may soon offer an all-new source of electricity that would allow you to completely disconnect your home from all other sources of electricity. About the size of a dishwasher, a fuel cell connects to your home’s natural gas line and electrochemically converts methane to electricity. One unit would pack more than enough energy to power your whole home.
For many years, fuel cells have been far too expensive or unreliable. But as technology has improved, so too has reliability. Companies like Home Power Solutions and Redbox Power Systems have increased the reliability of these fuel sources while reducing their size. Much like we’ve seen computers and cell phones shrink in size while improving reliability and power, fuel cells continue to be refined.
A wind turbine (essentially a propeller spinning atop an 80- to 100-foot pole) collects kinetic energy from the wind and converts it to electricity for your home. And according to the Department of Energy, a small version can slash your electrical bill by 50 to 90 percent.
But before you get too excited, you need to know that the zoning laws in most urban areas don’t allow wind turbines. They’re too tall. The best prospects for this technology are homes located on at least an acre of land, well outside the city limits.
Another way to keep the interior of your house cooler—and save on air-conditioning costs—is to replace your traditional roof with a layer of vegetation (typically hardy groundcovers). This is more expensive than a cool roof and requires regular maintenance, but young, environmentally conscious homeowners are very attracted to the concept.
Combining a heat pump with a standard furnace to create what’s known as a “hybrid heating system” can save you somewhere between 15 and 35 percent on your heating and cooling bills.
Unlike a gas or oil furnace, a heat pump doesn’t use any fuel. Instead, the coils inside the unit absorb whatever heat exists naturally in the outside air, and distributes it via the same ductwork used by your furnace. When the outside air temperature gets too cold for the heat pump to work, the system switches over to your traditional furnace.
Geothermal heating units are like heat pumps, except instead of absorbing heat from the outside air, they absorb the heat in the soil next to your house via coils buried in the ground. The coils can be buried horizontally or, if you don’t have a wide enough yard, they can be buried vertically. While the installation price of a geothermal system can be several times that of a hybrid, air-sourced system, the cost savings on your energy bills can cover the installation costs in five to 10 years.
Solar panels capture light energy from the sun and convert it directly into electricity. Similarly to wind turbines, your geographical location may determine the feasibility of these installments. Even on cloudy days, however, solar panels typically produce 10-25% of their maximum energy output. For decades, you may have seen these panels sitting on sunny rooftops all across America. But it’s only recently that this energy-saving option has become truly affordable.
In 2010, installing a solar system on a typical mid-sized house would have set the homeowner back $30,000. But as of December 2018, the average cost after tax credits for solar panel installation was just $13,188! Plus, some companies are now offering to rent solar panels to homeowners (the company retains ownership of the panels and sells the homeowner access to the power at roughly 10 to 15 percent less than they would pay their local utility).
Solar water heaters
Rooftop solar panels can also be used to heat your home’s water. The Environmental Protection Agency estimates that the average homeowner who makes this switch should see their water bills shrink by 50 to 80 percent.
Many of the innovative solutions summarized above come with big price tags attached. However, federal, state and local rebates/tax credits can often slash those expenses by as much as 50 percent. So before ruling any of these ideas out, take some time to see which incentives you may qualify for at dsireusa.org and the “tax incentives” pages at Energy.Gov
Regardless of which option you choose, these technologies will help to conserve valuable resources and reduce your monthly utility expenses. Just as importantly, they will also add resale value that you can leverage whenever you decide it’s time to sell and move on to a new home.
What a year it has been for both the U.S. economy and the national housing market. After several years of above-average economic and home price growth, 2018 marked the start of a slowdown in the residential real estate market. As the year comes to a close, it’s time for me to dust off my crystal ball to see what we can expect in 2019.
The U.S. Economy
Despite the turbulence that the ongoing trade wars with China are causing, I still expect the U.S. economy to have one more year of relatively solid growth before we likely enter a recession in 2020. Yes, it’s the dreaded “R” word, but before you panic, there are some things to bear in mind.
Firstly, any cyclical downturn will not be driven by housing. Although it is almost impossible to predict exactly what will be the “straw that breaks the camel’s back”, I believe it will likely be caused by one of the following three things: an ongoing trade war, the Federal Reserve raising interest rates too quickly, or excessive corporate debt levels. That said, we still have another year of solid growth ahead of us, so I think it’s more important to focus on 2019 for now.
The U.S. Housing Market
Existing Home Sales
This paper is being written well before the year-end numbers come out, but I expect 2018 home sales will be about 3.5% lower than the prior year. Sales started to slow last spring as we breached affordability limits and more homes came on the market. In 2019, I anticipate that home sales will rebound modestly and rise by 1.9% to a little over 5.4 million units.
Existing Home Prices
We will likely end 2018 with a median home price of about $260,000 – up 5.4% from 2017. In 2019 I expect prices to continue rising, but at a slower rate as we move toward a more balanced housing market. I’m forecasting the median home price to increase by 4.4% as rising mortgage rates continue to act as a headwind to home price growth.
New Home Sales
In a somewhat similar manner to existing home sales, new home sales started to slow in the spring of 2018, but the overall trend has been positive since 2011. I expect that to continue in 2019 with sales increasing by 6.9% to 695,000 units – the highest level seen since 2007.
That being said, the level of new construction remains well below the long-term average. Builders continue to struggle with land, labor, and material costs, and this is an issue that is not likely to be solved in 2019. Furthermore, these constraints are forcing developers to primarily build higher-priced homes, which does little to meet the substantial demand by first-time buyers.
In last year’s forecast, I suggested that 5% interest rates would be a 2019 story, not a 2018 story. This prediction has proven accurate with the average 30-year conforming rates measured at 4.87% in November, and highly unlikely to breach the 5% barrier before the end of the year.
In 2019, I expect interest rates to continue trending higher, but we may see periods of modest contraction or levelling. We will likely end the year with the 30-year fixed rate at around 5.7%, which means that 6% interest rates are more apt to be a 2020 story.
I also believe that non-conforming (or jumbo) rates will remain remarkably competitive. Banks appear to be comfortable with the risk and ultimately, the return, that this product offers, so expect jumbo loan yields to track conforming loans quite closely.
There are still voices out there that seem to suggest the housing market is headed for calamity and that another housing bubble is forming, or in some cases, is already deflating. In all the data that I review, I just don’t see this happening. Credit quality for new mortgage holders remains very high and the median down payment (as a percentage of home price) is at its highest level since 2004.
That is not to say that there aren’t several markets around the country that are overpriced, but just because a market is overvalued, does not mean that a bubble is in place. It simply means that forward price growth in these markets will be lower to allow income levels to rise sufficiently.
Finally, if there is a big story for 2019, I believe it will be the ongoing resurgence of first-time buyers. While these buyers face challenges regarding student debt and the ability to save for a down payment, they are definitely on the comeback and likely to purchase more homes next year than any other buyer demographic.
If you enjoyed this article and would like to hear more about the market forecast join us and Matthew Gardner Jan. 25 at 6 PM at the Camano Center on Camano Island. Space is limited, reserve your seat here!
Windermere Stanwood-Camano Real Estate Brokers are deeply connected to the issues that face local home-buyers and sellers. In this series of blogs, The Broker’s Perspective, Windermere Stanwood-Camano Brokers provide insight into current Real Estate market trends and topics.
This week we take a look at a recent press release from Northwest Multiple Listing Service. Michael Ofstad, a broker from our Terry’s Corner office, gives us his thoughts on this topic.
Slower Market Means Homebuyers Have “Newfound Ability to Negotiate”
Washington (November 6, 2018) – Seven months of steadily rising housing inventory reversed course in October when Northwest Multiple Listing Service brokers added the fewest new listings since February, according to a new report. MLS members believe the onset of wintry weather and transition to the holiday season are factors, but suggested the slower pace also signals improving conditions for house-hunters.
“After months of inventory growth that more than quadrupled the number of homes buyers have to choose from, things got back on a seasonal track with new listings and total supply falling in October,” said Robert Wasser, a director with Northwest MLS, when comparing those metrics with September.
“Buyers are catching on to their newfound ability to negotiate. For the first time since 2012, closed sales system-wide rose from September to October,” noted Wasser, a branch manager with Windermere Real Estate in Bellevue.
Northwest MLS members added 8,865 new listings to inventory last month in the 23 counties it encompasses, down from September’s volume of 10,458, but up 4.7 percent from the year-ago total of 8,466 new listings. Compared to September, last month’s number of total active listings shrunk nearly 6.7 percent, but year-over-year inventory rose 33.2 percent, from 13,680 to 18,223 offerings.
Brokers generally welcomed the bump-up in inventory.
Windermere Broker, Michael Ofstad, give his perspective
Do you see buyers having more options and negotiating power in our local Stanwood-Camano market?
Yes. In the Stanwood-Camano market, there are certainly more options, from two different forces at work. There are fewer buyers during this time of year. People suspend their search in consideration of the holidays, and also the thought of moving in the wet, cold winter and halfway through the school year. And secondly, there is an uptick in inventory, and therefore more choices available. This leaves room for traditional negotiations, instead of a lack of inventory holding all the power. In our local market, it’s a great time to buy.
What can buyers and sellers really expect when entering the local real estate market today?
In this local real estate market, buyers and sellers can expect an active, robust and competitive market that is leaning towards being more balanced – although it is still a healthy seller’s market. We have seen some price reductions in our area, although not as drastic as other areas, which is simply a market correction happening before our very eyes. There is a bigger market correction going on across the country, and we are fortunate to be in an area where these trends are on the mild side, for both buyers who don’t want to lose equity and people who desire a long-term stable investment market. The best result of this mild correction, in my opinions, is a large reduction in stress among buyers, sellers, and the industry as a whole.
NWMLS gives us some great statistics in this article, but we still see home prices up in varying degrees in each area when compared to 2017 home prices. Can buyers look forward to affordable inventory anytime soon?
The beauty of this area’s market is that over the long term, as more people discover opportunity and a beautiful place to live, here in the Northwest, this whole area is a good investment now. The term affordable is usually associated with the concept of a reduction in value, where I think the focus might be the appreciation factor, gaining wealth in the long term.