Refuge Properties North Idaho

Category: Real Estate Market

  • What’s new for 2021?

    December 17, 2020

    The question is, “what isn’t new?”

    On a personal note, while not completely new for 2021, new enough is that, in October, my family loaded up the Griswold Family Truckster (in this case, a new AWD Honda Pilot that can weather the snowy conditions of our new home) and moved to Coeur d’Alene, Idaho! This meant restarting my real estate career in a city and state where, when we arrived, we could count the number of people we knew on one hand. A challenge, yes, but I do love a challenge! And since we’ve arrived, I’ve become active in the community and already made many new friends thanks to the friendly nature that a smaller town brings.

    The good news for me; the real estate market in North Idaho is as hot as the one we left in Seattle. The good news for the family; we somehow managed to find the one home on the market that had been sitting long enough (in this case, more than a week), that the seller was willing to take the rare below-asking-price offer, getting us the rare “good deal” in a market where most buyers are having to make offers well above asking. I could go into the reasons why this home sat for so long (two months) while others were “flying off the shelf faster than toilet paper in March” and why, if the seller had done a few small things, it probably would have, but I’ll save that for another article about why a realtor is worth the investment.

    On a real estate market note, again, while not completely new for 2021, the trend that started this past summer is likely to continue. While none of us has a “crystal ball”, nearly all economists, even the typical skeptics, are anticipating continued growth in the market nationwide. What’s fueling this? Three main things:

    • Consumer optimism brought on by the COVID vaccine and overall better than expected economic recovery.
    • “Historically low” interest rates. (The “historically low” interests rates continue to become more and more “historic” with each passing quarter; seriously, the 4% of a few years ago was amazing, the 2.375% interest rate we have (with a 15-year mortgage) is just ridiculous!).
    • Our old friend “supply and demand.” Buyers, many of whom are now able to work from home, can live anywhere in the country in many cases. They are leaving urban areas, with their high costs of living, stressful commutes, and, in some cases, increasing crime rates, for the suburbs or even rural or semi-rural areas like our new home, North Idaho, with promises of a lower cost of living, including a lower tax burden in many cases; shorter or no commutes; and housing markets, which, while they’re still “hot, hot, hot!”, offer more bang for the buck with more space both inside and out.

    This is definitely a “seller’s market”, which does pose a challenge for buyers and those rare “good deals” are just that, rare, but if you’re at all contemplating a move, there really isn’t a better time.

    As I mentioned, economists don’t see an end to this market anytime soon because, unlike the “bubble” of 2008, which was fueled by sub-prime mortgages and a construction boom gone wild, now banks have tightened up their lending requirements significantly and inventory is “historically low” (in many areas, we haven’t seen inventory this low in 50 years). What’s more, Fed Chairman Jerome Powell recently made an announcement that he doesn’t anticipate raising rates for at least a couple of years. All of this means that, even if you do get into a bidding war and end up paying a little more than the house is probably worth, you’ll see a return on that investment fairly quickly. Plus, you’ll be living where you want to live.

    Eventually, of course, the bill for all this stimulus spending and national debt will come due and we will see inflation. And as is the case in markets over time, this one will return to “normal” before turning into a “buyers” market and probably even a short-term decrease in prices. But for now, this is the time to buy because, “historically” (yes, I know I’m using that word a lot), there really isn’t any better hedge against inflation and vehicle for wealth building than real estate. Like they say, “they aren’t building any more of it.” (Well, to be fair, they are, as anyone who takes a drive around the town of Post Falls just west of me can see, but they certainly aren’t building it fast enough in areas like North Idaho and many other suburbs and exurbs around the country.)

    So, if you think it might be time for a change of scenery, maybe even a change of residence to a state with a lower cost of living and a slower pace of life, give me a call and I’d be happy to tell you more about what’s new in 2021. It might just be your new home!

  • There is not here. Then is not now.

    January 30, 2020

    When I opened up my web browser this morning to check the latest real estate news, the headline blaring back at me stated, “PENDING HOME SALES SKID 4.9% in DECEMBER.” If I didn’t know the market and I didn’t go beyond the headline, I’d probably think this was bad news. My thoughts might turn to “Oh, no, people aren’t buying homes! We must be heading toward that “bubble” so many people are talking about!” (As a matter of fact, I’ve had a few people recently ask me about “the bubble.”) And while the headline is technically correct, it’s always important to know the reason behind things.

    First, there is not here. 4.9% is the national number and with a nation as diverse as ours, there is certainly going to be a wide range. Next, then is not now. Just looking at the difference between December and November home sales doesn’t tell me much. In fact, if you just take a look at King County, pending home sales (transactions that are under contract but haven’t yet closed) between November and December dropped by a whopping 24%! Closed sales, on the other hand, dropped by less than 1%. We can also surmise that, in general, home sales do slow somewhat in December since people are more focused on Christmas parties and travel than buying a house, which means it usually makes more sense to look at year over year trends, which, in King County, stand at 3.02% for closed sales and 7.23% for pendings. (Just to reiterate how different numbers can tell wildly different stories, listings year over year are down 38.75%!)  

    What’s more, while statistics for January are not out yet, anecdotal evidence has shown that we started the year off with a bang, with several agents reporting a return to multiple offer situations, many of them above asking in some cases, on listings that had sat on the market for months. Yes, people are ready to buy in 2020 and with interest rates under 4% and no sign that they’ll increase this year, people will continue to be ready to buy.

    So what does this all mean? If you’re a seller, there’s not need to wait for the start of the traditional selling season in March/April. If you want to sell, let’s do it!

    If you’re a buyer, well, the news is not as good, especially in our region. Amazon and other businesses continue to add jobs at breakneck speeds, especially on the Eastside as fears of a head tax in Seattle loom large. (Amazon has leased 3.6 million SF of office space in Bellevue and is on track to hit more than 5 million SF by 2024 for the estimated 25,000 new workers they will hire.) Furthermore, builders are unable to come close to demand with only 4000-4500 building permits projected this year compared to an estimated 8000 new families moving in to the region. All of this is naturally having an effect on how long people are staying in their homes, up more than 100%, from an average of five years to almost 11. All that said, people still have to move which means new houses are constantly coming on the market. It may mean you have to look farther south than you’d hope, but with rents rising as well, it also makes sense for people to buy.

    My managing broker actually said something profound last week that sums it all up. Unless you’re an investor, buying or selling a house should be a lifestyle decision, not a market decision. If you’re happy where you’re at, stay in your home. If you want to move, move. The market is always shifting, and as long as you see yourself staying in your new home for three years or more, it almost always makes sense to buy.

    If you’d like to sit down over a cup of coffee and dive in to your own personal situation to see if it makes sense to buy or sell at this time, give me a call. I’d love to help!

  • Are we headed for a bubble? Why homeownership is still a good idea.

    January 31, 2018

    Speaking of the bad news that frequently leads our newsfeeds, it seems that quite a few folks are prognosticating another housing bubble in our area. And it’s easy to understand why. We’ve been having rapid growth for several years now in both the housing and financial markets yet, the dark days of 2008 are still fresh in our memories. Too many people were caught “underwater” on their homes 10 years ago. Sadly, some still haven’t recovered from the hit they may have taken from a short sale or a foreclosure. None of us want that to happen again.

    Why is the market crazy?

    While no one, not even Punxsutawney Phil, that grand prognosticator of prognosticators, can know for certain what lies ahead, there are many reasons not to fear an impending “winter storm” in the local housing market.

    • Increased Population – The people just keep moving here! Whether its Amazon, our beautiful scenery, or a love of too much rain, the Seattle area was the fastest growing big city in America last year, adding more than 1,000 people per week. And, despite the fact that Amazon is looking to open a second headquarters somewhere else, they’re still hiring here along with several other companies in our area. And these are good paying jobs. This fact, along with a lack of inventory (December had a record low 1.12 months of inventory; a balanced market being 4-6 months) means housing prices continue to skyrocket (11% year over year; nearly twice the national average).
    • Low Inventory – Part of the reason for the low inventory does cause one to pause. People aren’t selling their homes because then they’ll be thrust into the wrong side of a seller’s market themselves. But this is not a major concern. Despite the record low inventory in December, closed sales remained virtually unchanged.
    • Lack of New Construction – The other part of this low inventory puzzle is new homes. When the market tanked in 2008, not only did many people lose their homes, many companies went out of business, including builders. If you’ve talked to a builder, architect, or anyone else in the building trades recently, you’ll know that business is beyond booming.

    The Good News

    Tighter Mortgage Restrictions

    While there are many other factors which lead me to believe that the real estate market will continue to boom for at least the next 2-3 years, I’ll touch on one more: mortgages. Back in 2008, anyone who could fog a mirror could get a mortgage. Thankfully, one of the silver linings of the mortgage crisis was that lending criteria were significantly tightened. While restrictions have been eased some since new laws were passed, the days of the Wild West Mortgage are behind us (at least for now; people have short memories so check with me in 30 years and my answer will probably be different).

    Homeownership Leads to Increased Net Worth

    So, what does this mean for those of you looking to buy a house but a little concerned you might end up taking a bath a year or two from now? Well, like. I said, no one can predict the future. If, God forbid, we were to have a catastrophic event like 9/11 or war with North Korea, all bets are off. But none of us know what tomorrow holds so I say seize the day! In the end, every decision we make is about risk management. You’re taking a risk when you drive to work every day but it’s worth the reward. Housing is the same way. If you’re currently paying somebody else’s mortgage you are paying quite a bit for “risk mitigation” (and, since rents continue to rise as well, is that such a good plan?). Once you write that monthly rent check, you’ll never see that money again. But owning a home? You’re building equity every month even when prices are stagnant. It’s a forced piggy bank. According to the Federal Reserve’s Survey of Consumer Finances released last September and covering the years 2013-2016, the median net worth of homeowners increased by 15 percent while that of renters fell by 5 percent. In actual dollars this equates to $231,400 for homeowners and $5,200 for renters. That’s 44.5 times greater!

    Should You Buy?

    In short, if you have plans to move out of the area in the next two years and don’t feel like becoming a landlord (a topic for another day), it may be best to continue renting. After all, the cost of selling a home is around 10% so, even in this hot market, you’re not going to gain that back for at least a year. But if you’re planning on sticking around for longer than that, let inflation work for you instead of against you. Not only will you be gaining equity, study after study shows that homeownership has a positive effect on mental and physical health and creates a stronger bond in our communities which leads to better friendships, less crime, and a better society at large. It’s why my mission is to help change the world by creating an ownership society one home at a time!

  • When should you sell your home?

    January 5, 2018

    The short answer, especially in this hot market, is anytime you want. Over the last year in the greater Seattle market, regardless of month, homes have generally sold in under a month. In fact, it was the rule, more than the exception for a wisely priced home in King County to sell in a week regardless of when it was put on the market. Even during the dreary winter months, when most people would rather be snuggled up by a fire than out looking for their next place to live, homes sold in record time.

    But even though this has been the case and will likely continue to be for some time, there are generally times that are better to sell a house. Again, if you were a buyer, would you rather be driving around during the balmy days of summer or the cold and wet of January?

    According to a study by ATTOM Data Solutions, which was recently completed and covered 14.7 million nationwide home sales during the years 2011 to 2017, May was the best month, to sell. Locally, the best month was June, with sellers enjoying a 4.1% premium over the average.

    This just makes sense. During the sunnier months, there are more people out searching for homes. More people means more offers and more offers means a greater price.

    So, if you’ve been thinking of selling your home, now is the perfect time to start preparing. Even in this hot market, your home needs to be made ready for sale. This means doing an accurate valuation of what it is worth, making any minor repairs that will be beneficial, cleaning up the yard, and cleaning and staging the home to give potential buyers that extra WOW-factor that will make them instantly fall in love and pull out their checkbooks.

    If you’d like a free analysis of what your home could potentially sell for and what should be done to it to achieve that price, please don’t hesitate to give me a call.