In The News • February 17, 2021

Where Is Our For Sale Home Inventory?

by Paul Isenburg

Some of us likely remember the Johnny Carson show and his banter with his audience of “how crazy is it….” Well, it’s pretty crazy out there.

Likely many of you also saw the skit on Saturday Night Live a couple of weeks ago spoofing Zillow searches for homes as today’s dating or other unusual website surfing. It’s true, since the Covid crisis, home searching and buying seems to have become “the” national pastime. Many want to get away from or get out of their homes, even if only dreaming, while others truly want to find their new home. While the skit was very funny, finding and buying a home in today’s market is very challenging.

Strong demand for a change in our house style, size, location and features coupled with record low interest rates are creating unprecedented circumstances. The freedom and need to work from home, teach and learn from home, get some separation and privacy–safety and distance are all adding to the demand part of the picture.

At the same time we have unprecedented refinances taking place as interest rates have been in the mid 2% range which is allowing many to refinance their home loans and save $100’s to $1,000’s of dollars on their house payment. Great news for these home owners but it also means these home owners aren’t likely selling their homes for several more years–like 5, 7 or 10+ years to come. This is creating a significant shortage of homes for sale. While this is bad across the country, it’s staggering in our region. One silver lining to this point is these home owners aren’t likely to be competing buyers any time soon either.

So how bad is it?

In all of King County we only have 887 homes on the market for sale as of 2/17/2021; adding condos to the figure adds 796 more choices for a combined total of 1683 homes for sale. Typically this figure would be in the 3-4,000 range for an average month. The current inventory represents only .00185% of all homes in our region being for sale. That’s 1/4 to 1/3 of last years record low levels. Snohomish County is even worse with a combined houses and condos total of only 251 total homes for sale. That’s .0008% of all households in Snohomish County and 10-15% of normal inventory levels. The Eastside area has only 354 combined homes for sale and South Snohomish County only 124 total homes for sale. This is all homes, no bedroom, bathroom, price range or features as filters, just a house or condominium being for sale! Crazy! By the way, the national inventory level is only at 1.2% but that’s still well above our local figures.

Active agents like myself are hopeful for some increase in homes for sale but from these low levels, any increase will be welcome but not likely enough to change the real dynamic of what it’s like to be a home buyer in the present market. I know many people think or thought we would be seeing a collapse in home prices, some form of bubble bursting. We all remember the economic collapse from 2008-2010 and no one wants that repeated. Now let’s look at what an economic recovery will mean for our region, the country and the world as a whole. As more businesses reopen, new jobs will be created and filled; more people with more incomes will start to feel better and hopefully spending continues. Will this mean a decline in demand for homes? A rise in homes for sale? Not likely. It’s most likely to mean some increase in demand and hopefully some trading of homes–people moving out of and into a new home but a one to one exchange of households.

The results of this shortage of homes to sell is resulting in rapid home appreciation. We’re seeing home values rise 10%+ in the last couple of months in much of the area and 30%+ in much of the region over the last year. So what stops this price appreciation? Nothing in our current or near-term economic forecasts. While it’s easy to ask: “How many people can afford a $1M+ home?” the answer is more than you think. With our record low interest rates a $1M home with a 20% down payment equates to about a $3,266 principal and interest payment. With taxes and insurance this moves up to $4,182. Compare this to recent times when a $500K home with 10% down and a 5% interest rate meant a payment of $3,031. The gap isn’t that big between these two. When you also consider that an average 3 bedroom home rents for around $3,000 and the price tag on a $1M home doesn’t seem so out of line.

When you consider that the owner of a home they bought for $500K, 5 or less years ago can now sell that home for $800K+ and the equity they then have to put down on the $1M home makes that home even more affordable. The point being with so much equity in our current homes and wage levels for those less affected by Covid where they are, a huge percentage of our population can now afford a $1M+ home. Homes priced from $1M to $1.5M have become the most sought after homes in our region, as they are considered the most affordable and desirable homes for a large percent of local buyers.

The perspective of the most informed buyers in our marketplace is not one that focuses on the price of the home but on the monthly payment of the home. They don’t worry about the home’s price because it’s most likely they will never be paying it “off” but instead they consider if they can afford the payments. With current wages and stable employment this perspective and focus is why so many people see today’s market as an opportunity that can’t be passed on in hopes or fears of some dramatic crash in home values. Given our current inventory levels, any bubble burst or calamity likely only creates a very short term relief on price appreciation.

What can we do with this information?
It depends on what is going on in your life; what changes are occurring or anticipated in the next few years. If buying a home is your focus, then teaming up with a well-informed agent and diligent attention to the market is necessary to capture this opportunity. With all the refinances that have taken place it’s likely inventory won’t change that dramatically in your favor. If making a move from your present home to a new one is your focus, the current value of your home combined with record low interest rates means the bridge between your present home and your next home is likely closer now than in the future as your present equity is at a high and it’s likely that economic recovery will put some upward pressure on interest rates, making that new home’s payment higher, regardless of how that compares to your present payment.

If you are thinking “when is the best time to ‘cash out’ take my money and run”—well, typically only the rearview mirror can tell us this but here’s a few points to consider. First, just as we don’t have “a” real estate market, we have many micro markets, there are also many micro peaks. Your home’s size, features, condition and location will adjust where your peak may be. We still have 20-30,000 more new jobs scheduled to come to our region over the next couple of years. This is besides any rebound of jobs in travel, hospitality and dining. That likely means more new people to our area. Yes, many can work remotely but most will stay in our region. A quick side note to this point—King county’s population shifts have gone mostly to other central Puget Sound regional counties–Pierce, Snohomish, Kitsap counties; some to Clark county near Portland but most of the population shifts are still in our local market. So with increasing jobs, increasing populations and a tight inventory, what happens to your home’s value? Likely the peak continues to form. The point being, if you’re ready to “cash it out”, make that call and change when you’re ready is most likely the best advice. Historically we see the most appreciation in our market in the earlier months of a year but as we all learned last year, tomorrow is always uncertain so finding that peak may be more difficult to do than enjoying the timing that fits your life’s goals.

So, how crazy is it out there?
You’d be crazy to not seek guidance from an active, informed agent to help you capitalize on the opportunities and navigate these challenges. Give me a call. I’m happy to help you.

Photo by Edi Libedinsky on Unsplash

In The News • January 8, 2021

Is 2021 Already Over?

by Paul Isenburg

Welcome to 2021?
I’ve been trying to figure out how to respond to the events in Washington DC and Olympia this week and it’s hard to encapsulate into a cute message or quick slogan. So, I understand if you don’t want to take a few minutes to consider this message.

First, I was blessed to enjoy another birthday this week, as was my wife. We are grateful to be enjoying good health and relative prosperity. While most of you haven’t celebrated a birthday this week, we all anticipated and celebrated a New Year with high hopes that 2021 would bring us significant positive changes from the challenges of 2020.

This week’s unrest shattered our hopes for only positive events in 2021. But it really shouldn’t. Every day, week, month and year presents us with challenges, struggles, victories and opportunities. Yes, we’d all like to have not had this week’s shameful events occur but what it mostly illustrates is our lack of control over events in the world at large. For some, this frustration seems devastating and bubbles over to more vitriol and quick shouts of anger. This, however, doesn’t provide any of us more control or positive changes or steps forward in our lives.

I’m not a big believer in New Year’s resolutions, but I do make prayers and commitments to a word or two to help focus and guide my actions for the New Year. This year, my words are presence and focus. These can help me recognize opportunities and solutions to what I want, need and can control. Opportunities and actions I can take that I can control to help others and myself to move ahead in life.

Wednesday’s events presented many nauseating feelings and initial anger but with no place or options to effect change. Screaming at the TV, computer screen or text boxes doesn’t really help me, you or the situation. Calm, presence and focus helps me to recognize that I needed to state this message with hopes that it can help you and others to recognize there is a huge consensus of dismay and disgust to these events. We’re not as divided as the media and the quick-tempered flood of remarks presents.

We effect change by controlling ourselves, making conscious decisions of what we want, who we talk with and support, who we elect to offices and policies we want to see enacted. There are lots of quips we’ve heard for “being the change”, “start with the man in the mirror”, etc. that should remind us that change does begin with each of us. We also need to recognize and call out when all forms of extreme idiocy are present and not just ones we don’t agree with. Relativism in life is a difficult and risky scale to balance. Burning down and breaking into innocent businesses is no more acceptable than Wednesday’s events. Hiding behind banners and within groups of people voicing real concerns, only to sneak out and be an anarchist or general vandalism shouldn’t provide you shelter, anymore than carrying our Flag in your fits of outrage does. Wrong is wrong.

I hope we will not let Wednesday’s events dampen our optimism for this year. We’ve been isolated too much in 2020 and we need to broaden our perspectives and step out of our bunkers from which hate speech and too narrow of focus has encased or buried us. Recognize that all of us want to be heard but voices of hate don’t generate bridges or audiences that truly listen or hear you. Calm focus and being present with others will show us bridges and help us find new joys in 2021.

Returning to “normal” never really happens. Change is constant and inevitable, and with these changes, our normal changes. Decency, however, can return; patience can prevail and perspective that half-truths and intentional deceit, no matter by whom, are tools of division. We all have a burden to seek a fuller and better understanding of other’s perspectives so that solutions and normalcy can return and prevail.

I hope you’ll join me in not giving up on 2021—many challenges are and will continue to present themselves but we are stronger than we know. We’re not as isolated as you might think. Gain control of yourself, change your focus and be present—willing to listen, accept—or at lease widen your perspective and exchange calm ideas and hopes with others.

Most of us have so many blessings we take for granted. 2020 pointed out many that most of us overlooked. Instead of recognizing the real opportunities presented, it was too easy to poke fun at our misery. I too fell into this mentality. But for many, they gained time and opportunity none of us imagined could present itself, for us to really be with and enjoy our close friends and family; our child’s first days or loved ones last days.

Focus on your blessings—what you focus on expands, not the media hype of derision and division; certainly not the political speeches of blame. There’s plenty of blame to go around, no matter the people or parties involved. Sadly, this blaming is attempted leadership by and through the rearview mirror; not focusing on the options in front of us. The change we seek is in front of us and looking backward rarely leads to a path of positive change to guide us.

Regardless of your resolutions or perspective, I hope we all enjoy a 2021 with blessings beyond our imaginations and the courage to face your challenges with focus and a broader perspective. It’s been said that wisdom comes with age; not sure I can believe that, but age usually means the opportunity to have made many more mistakes. Hopefully seeing this week’s mistakes will help us all find a better path forward. Best wishes to us all in 2021.

Photo by Sebastian Pociecha on Unsplash

In The News • October 27, 2020

Q3 2020 Gardner Report for Western Washington

by Paul Isenburg

I am fortunate to work for Windermere Real Estate and one of the benefits I derive is access to a local economist, Matthew Gardner, who monitors various economic details and trends for insights and perspectives on our real estate market. Here’s his latest analysis of the Western Washington market place. It seems we have recovered many of the job losses since Covid struck our region, but not sure the new jobs are for the same people and certainly not for the same jobs that were lost since March. Still, the employment picture is improving and the real estate market continues to thrive–being one of the strongest economic engines in our area and across much of the country. Most expectations are for home sales and values to continue strong into 2021 with low levels of homes for sale, low interest rates and high buyer demand. A trend for 2020 has been for buyers to either look for second homes or to move out to less urban and business-centric areas. Market times in many of these suburban to rural areas are dropping while home prices are rising sharply. We’ll se if this trend continues as we hopefully gain more control over the Corona virus impacts to our country and region.

Take a look at the report:

In The News • October 22, 2020

Finding Balance in Tumultuous Times

by Paul Isenburg

For most of us the end of March seems like an eternity ago and yet by the end of March, the first of March seemed like an eternity before that. 2020 has presented all of us with challenges we couldn’t have imagined and most of us would like to forget. Sadly life doesn’t allow us to disengage to the level many of us think we’d like and prefer to. The change in the calendar won’t likely change these feelings either. 2020 has created a need for all of us to find balance. Sure work-life balance would be nice–it’s been the topic of books, blogs, broadcasts and classes ad nauseum but it seems what most of need more of right now is just life balance.

Newscasts and headlines yank us over here, then send us over there. Political campaigns push us from hysteria to the depths of depression. Economic challenges, kids, schools, protests, riots….the lists go on and our frustrations and anxieties grow higher. Where can we find balance? Where is the finish line? When do we get to go back to normal? If you think the elections will change all of this, I think you’re going to be disappointed. 2020 has created the need and the challenge for all of us commit to finding our own balance, our own silence, refuge and mental sanctuary. Our own new normal.

While many are trying to find this by buying a bigger or different home (good news for me), most of us will find our challenges will still be with us in our new homes too. What we likely need more of is the strength and energy to tune out the noise, at least for a little while; take time to focus on what we want–what we focus on expands, so focus on you and your real wants–and commit to finding those moments of silence,( or screams), in our sanctuaries, so we can turn back around or get back up and face the challenges of our real lives.

Moaning, complaining, protesting for the sake of protesting isn’t going to reduce our problems or help us solve our daily challenges. Stepping back, taking some real breaths and focusing on what you can do today to eliminate or begin a path to reduce or eliminate even one challenge is worth the effort. Having been an independent contractor for most of my working life, I face challenges and frustrations every day; they’re real, scary and can be overwhelming. I haven’t and won’t conquer all of them–none of us will; but I’ve learned to take steps forward, seek progress and do something today to help reduce my anxieties. Even seemingly little steps will help you feel better about yourself, your abilities and your strength. Take those steps.

I offer this moment of reprieve and respite from the chaos in hopes that all of us can find some calm, some balance and some strength to help us face our individual challenges. The community, national or world problems will still be there. You’re not running away from them or being selfish to think of and take care of yourself first, your family next and then spread your strengths and talents outward. You need balance, grounding and focus to have strength and with all of the challenges we face, Lord knows we all need strength to prevail in these crazy days. Good luck to you in finding your balance points and keeping your focus on you first. At least we have Halloween to help us feel good about wearing a mask.

Photo by G T on Unsplash

In The News • September 23, 2020

Market Update Amid Uncertain Times

by Paul Isenburg

Pardon my absence, the market has been running extremely hot for the past several months and I thought I’d offer some insights on the activity levels and sentiments. Contrary to many predictions early in the year, the market took a 4-6 week breath in mid-March but has taken off in a full stroke sprint since then. Almost all price ranges, property types and locations have had amazingly strong activity. Prices have been on a steady climb, up 4-8% since March, more in some pockets of the market and multiple offers have been more common than not. We’ve seen 40+% of the homes selling above asking prices; most in 6 days or less time and prices averaging 4% over asking prices in the broader market.

Interesting side note, initial pricing is still keenly critical. If a home should be priced at $675K, it needs to be priced there. Even if it may get bid up to $720 or more, pricing at $685-690 likely means the seller ultimately sells for less, in longer time and with more concessions. This does vary a bit by specific location but overall, the market is still amazingly price sensitive, even in our so-called Seller’s market with rising prices. This price sensitivity is even more critical in condominiums which are lagging the market pace but still strong overall. Downtown Seattle condos have some unique headwinds for sure.

A second point worth noting is that our weekly sales volumes have been 12-50% higher per week than 2019 levels since the end of May. Combine this with the fact that our inventory of available homes for sale is down 40-55%, it shows we have a true, organic and sustainable demand for homes to buy. We have lots of people looking for a home to buy and not enough supply to fill the demand.

So where is all this demand coming from? Mostly from local buyers, secure in their jobs and incomes and motivated by record low interest rates. The decline in interest rates is counter-balancing the rise in prices so people can pay a higher price and still lower their monthly payments. Affordability is rising.

Many first-time buyers are trying to jump into the market. Other current homeowners are making lifestyle adjustments to their home desires and moving up, down, in or out of cities and suburbs. The reasons are varied but the result is the same; they’re looking for a change, now.

Record low interest rates are projected to be with us into 2023 or beyond but if 2020 has taught us anything, it is that tomorrow’s paths aren’t certain. Buyers of all ages and demographics and for a variety of reasons are seeking to secure a home for tomorrow, today, by buying a home now.

I expect this desire for certainty and to capture a lower cost of housing will continue for the balance of this year and into 2021. We have a lot of life uncertainties going on, so being secure in your home is a foundational piece of personal security and comfort that likely continues to drive our local market. Business expansion and movement around the Sound is and will continue to bring more people and more demand into our region. With all of the headlines of uncertainty, this demand seems to be one good fortune we can continue to count on.

Photo courtesy of Paule Knete-Unsplash

In The News • April 15, 2020

Forbearance Impact on Lending and Home Values

by Paul Isenburg

As part of the Corona Virus response from the Federal Government, the Feds have provided an option for homeowners to not make their mortgage payments, with no need to prove a hardship or inability to pay.This is called Forbearance.

There are many moving parts to the mortgage industry, most of which homeowners aren’t aware. I can’t cover all of the behind the scenes details in one post or video, but I wanted to send out this video and basic outline of the potential harm this option can cause.

The bottom line is, if you can make your mortgage payments, please do so. If too many of us don’t, our future lending world and options to borrow for a home loan will get diminished and our home values will decline. Buyers won’t have the ability to meet new lender requirements. Fewer buyers, in any segment of the housing market, impacts all of the housing market–in a negative way.

Let’s limit the impact of the Corona Virus to our health and general economy, not spread it into our housing market. I have lenders able to help you or someone you care about to get financing but we don’t want to lose our options by people unnecessarily avoiding their mortgage payments. I hope you enjoy the video; Live from the Tiki Lounge.

In The News • April 10, 2020

Which Way Is Up For Real Estate?

by Paul Isenburg

This trek of isolating in our homes marches on. Hopefully some of our sunny days have helped to break the monotony and stress of isolation and lifted your spirits as we stay home to stay safe.

The real estate market was put on the essential business/services list just a few days after we were told we weren’t an essential business. That said, social distancing and personal safety, along with restrictions on movers, photographers, contractors, inspectors and home stagers all slowed the market activity level dramatically. We’ve since seen a release of these various jobs to open back up, but we’ve still seen a market slow down. Despite the recent publication of March sales and pricing data, all showing a continued strong market, we did see a pullback in new pending sales, homes sold but not yet closed. I expect we’ll see lower figures for closings and pending sales as we get into May and see the April figures.

Real estate has never seen such a giant swing in momentum in such a short period of time as we’ve experienced in the last 4 months. We had a sluggish early fall, with increasing market times and slower than normal sales but a steep decline in homes for sale that went on into March. December saw a big jump in sales activity and a corresponding jump in home prices. The lack of inventory and high demand made for quite a frenzy of multiple offers and new price highs. January and February continued very strong, even into early March which showed 55-58% of homes selling above their asking prices and average market times of 15 days or less for much of our region.

Then Covid 19 came to roost in our area and across the country and the World. We saw stock markets plunge and housing freeze. Quite a change in a 3-4 month period. The stock market plunge created panic in the Federal Reserve Bank, and they started buying Mortgage Backed Securities which created more troubles in the mortgage market and nearly collapsed the Secondary Mortgage market. This pushed interest rates up from the 3.375% range to over 5% and many lenders pulled out of the market altogether.

Calm is restoring in the mortgage market due to The Fed changing their behavior and time passing to allow lenders to get their books and balance sheets back in synch. We’re also seeing some rebound in the stock market as we see improving optimism related to the Covid 19 virus. So, what about the real estate market? With so many job losses and business closures, where will home prices go in the coming months? I wish I knew.

Economists and predictions vary widely, mostly due to any lack of true certainty over the Virus influence and impact. Most of us are hoping to be released from our homes by early May and then see some jobs and earning power restored. Unemployment is understandably high, but hopes are that we can see this decline over the next few months when the economy is open. Unemployment won’t drop back to its 3-4% range, but hopefully back below 10% yet this year. Hope is all any of us have right now.

The recent sales data do show a broad range of home values selling and generally across the whole Puget Sound region, so I’m optimistic that we’ll see a generally strong rebound in home sales. Not likely the frenzy of this late winter and early spring, but still a lively market. We’ve had 1,999 closed sales in the last 20 days in King and Snohomish Counties. We’ve also had 1,347 Pending sales and 364 Pending inspection sales in the last 20 days. That’s a bit over 1700 sales in 20 days of limited mobility; fairly active against a backdrop of 4,164 homes for sale in these 2 counties.

Real Estate, shelter, is an essential human need, along with food and safety/security. It offers us both shelter and hopefully some improved sense of safety and security. This means there is always “a” market. Every market has some holes within it; specific property types, locations or price points that are not as active as others. That will be the case in this recovery too. What I’m focusing on is the strength of many of our larger employers, their employee counts, spending patterns and the overall physical health of our region. This will help us have a more balanced market and housing opportunities for all.

Our social distancing seems to be paying off, even if taking longer that we wanted. I hope we can see a steady improvement in our physical recovery, no delayed or unexpected spikes in incidence or severity rates, so that businesses can re-open, re-hire and start finding our balance again. We will need more of us to participate in the physical and economic recovery to keep housing stable and a driving force in our economy.

No one knows with any certainty when or what the ultimate recovery pattern will be but I think most of us will be happy if we can see home values maintain close to their peak values attained this winter and our continued recovery in the stock market and our business climate. I have no fear of the market stalling out; we just have too much demand. We may well see a very lively initial bounce as families try to find their new homes this summer, so they’re settled in for the coming school year. My hope is that we have seen more of a deferral in market activity than a loss in market interest, ability or demand.

Some potential home sellers won’t be coming on the market due to their personal economic circumstances but anyone wanting or needing to sell should still find an ample supply of buyers looking for their new home in your neighborhood, hopefully inside your front door. Let me know if you’d like to talk about your particular market, concerns and circumstances. I’m always glad to talk with you.

Stay safe, home and healthy. Hopefully we’ll all be celebrating our release on Cinco de Mayo!

Photo by Jakob Owens on Unsplash

In The News • March 9, 2020

Covid-19 and Real Estate?

by Paul Isenburg

There’s no doubt, there’s a lot of fear in our local marketplace. Today we saw our stock indexes drop by 7% and even the good news of great jobs reports from last week, major drops in the costs of oil and record low interest rates can’t seem to win the headlines against Covid-19. So what’s ahead for our market? I wish my bald head was a better crystal ball for knowing the answer but here’s some facts that you may want to know.

We’ve been dealing with this virus for over a month now and we just had an amazingly strong February real estate market. Prices were up, sales were up–even in the face of drastically lower supply of homes which meant quicker sales and multiple offers for Buyers to compete against and Sellers to rejoice in. On the Eastside, 51% of homes sold at or above their asking price, up from 37% in January and 32% a year ago. The percentage over asking price was 34%, compared to 20% a year ago. That’s up 70% compared to last year’s over-asking price percentage. Single family home prices are up 9% over last year and condo sale prices are up 7%.

In Seattle prices remained flat while supply of homes for sale dropped almost 50%. The percentage of over-asking price sales and full price offers went up, almost identically to the Eastside figures. The same percentages and changes occurred for condos in Seattle as on the Eastside. A very strong market by all measures and the same strength is evident from Skagit to Pierce County as well as on the west side of the Sound. Our region is humming along very well.

Photo by National Cancer Institute on Unsplash

With the announcement of Covid-19 in our local region, some are fearing a significant pullback in sales enthusiasm but that’s not translated to reality yet. Open house traffic has been pretty steady over the last couple of weeks. Only time will tell if a pull back will occur but so far demand is winning the tug of war. Typically supply begins to match buyer demand as homes for sale normally spring up like daffodils and tulips as our spring bloom begins. I see no reason to doubt this cycle.

Interest rates have declined to record low levels and this has balanced out the move up in home prices. If the stock market continues to struggle, we’ll likely see more investor flight to safety and security and that often means Mortgage backed securities–especially since the last major recession and the improvement to the quality of these securities. This demand for security by investors should keep our interest rates low and a lid on upward pressures.

The overall strength of our economy and businesses is unquestioned. The Covid fears and transmission of that into the world and local economies is near-term troubling; possibly longer term for some industries like the airlines, cruise ship travel and the travel sector as a whole, but most predictions are for a bottom to be near. Likely we sit still here while we get better data on Covid-19 incidence and health risks/remedies but most indications I’m seeing are still in strong support of American business strength and the American economy as a whole.

Fear may trap too many of us in our homes and cause unnecessary harm to restaurants, entertainment and small businesses. That would be a shame as most people are not sick and need not live shuttered in and in fear. Simple precautions and steps will likely help all of us weather this storm of concern and infection. Treating fear is much harder than a virus and recovering from the unintended consequences can take much longer to complete.

I see no reason to anticipate or expect any significant decline in our sales or prices even if our economies are bombarded by the fear virus on top of Covid-19. The local economy is extremely strong and diversified. Employment and wage growth are active in most career categories. Business expansion is widespread and seems committed to completion regardless of any short term setbacks or surprises. I’d prefer we only deal with Covid-19 but it seems the fear virus is too intertwined.

Negative economic impacts will likely keep our interest rates low for the balance of this year, allowing more affordable payments for homes and a cash resource for those looking to spend some of the equity in their homes. I’m not always a big fan of spending our home’s equity but this is likely the best time to consolidate other debts you may have and likely still lower your monthly mortgage payment as interest rates are very near 3% for 30 year fixed mortgages.

So, what’s the likely effect of Covid-19 on our local housing market? Barring an unusual set of unlikely possibilities, it will hopefully be minimal. Obviously any given family can be upset to devastated by this virus. I hope none of us has the misfortune to suffer this. Let’s all agree that we won’t let fear rule our lives and dictate our activities to an unnecessary degree. Housing is a change and need-driven industry for the most part; we have all the change and need pieces in place to keep our real estate market moving ahead. Stay safe, be wise and we’ll all get through this together.

In The News • February 6, 2020

Buying In A Seller’s Market?

by Paul Isenburg

Our winter market has been exceptionally strong since late November. Homes in most price ranges and geographies have sold quickly with very little competition and lots of demand. This is great news for home sellers, so don’t doddle if you’d like to take advantage of these circumstances. For Buyers this isn’t so great. The stock market gyrations drove down interest rates to 5 year lows, as did economic worries and woes around the globe which increased buyer urgency to capture low rates and offered some relief for those “bidding” above and beyond Seller asking prices.

We’ve seen this scenario for the past 4 years now; a bit less so last year but still a strong winter to early spring market bounce. What we also saw the last couple of years were sales prices moderating in the “over asking” price range to more commonly in the 2-3, sometimes 5+% range. This is much better than in 2016 or early 2017 when 20+% was more normal for the winning bid over the asking price. So far this year, it seems to be mostly in this 2-3% range but activity has been very strong and I’ve seen some homes generating 10+% over their asking prices.

Over-asking price % chart

While our local market has great optimism and continued pricing pressure for home values, it’s important to recognize that if you are a Buyer have some patience, some time before you have buy and move in and some diligence in your efforts and readiness, you will likely be rewarded by waiting a bit in time. The last few years have seen a pretty dramatic decline in the percentage of “over asking price” offers and what some might think are overly inflated prices. This market shift has been occurring between mid-April and Mother’s Day weekend the last few years, so by very early May. That’s not great relief if you must buy/move now, but it can help you monitor the market for current data points on home values and then be better prepared when more homes come on the market later this spring.

We may see some rise in interest rates from the low levels we presently have, but most expectations are for interest rates to rise from the 3.375 range, back to our more normal level of last fall where 3.5-3.625 were the steady norm. Even if they climb to 3.75%, we’re still in very favorable ranges for borrowing. Don’t let fear drive your decisions. You may also want to consider learning about other possible neighborhoods or areas that might fit your life, school, commute needs, etc. and which might provide some variance to the price points and choices you’re seeing.

One final point for consideration; find an experienced, committed agent who will listen to you. You need experienced and calm help to guide your searches, prospects and offer processes. When the markets get heated, Sellers and their agents want to dictate and control as much of the process as they can. That’s a reasonable expectation. You need to have a known and respected agent, lender and support team to guide you in how to “show up” on an offer and in offer negotiations, so your offer is the best that it can be. There are a myriad of details and nuances that can improve your offer, besides just price. Believe it or not, price doesn’t always win. Sellers care about certainty in the buyers’ offers and that’s something you, as the Buyer, can control. I’m happy to help educate you on what makes the best offers and how to win when your new home shows up. Give me a call or email to meet and talk about your needs and concerns. We can set a strategy or timing plan to make you happy, better informed and ready to act and win.

Photo by Robson Hatsukami Morgan on Unsplash

In The News • October 3, 2019

ULI’s Economic Forecasts Show Stability for US and us

by Paul Isenburg

Headlines of fear always get more notoriety than good news but here’s the most recent news release from the Urban Land Institute. They surveyed Economists and analysts on the US Economy.

The report shows a persistently stable to robust economic expansion around the country. We have been on a prolonged skyrocketing trajectory that can’t be sustained, so look for stabilizing but not worrisome declines in our future economic data or real estate values. With the Northwest being at the epicenter of much of the US business growth, this is even better news for our local market.

Here’s their report