Brooks & Heinze - Seattle Real Estate

419A 11th Ave, Seattle, WA | Powered by Postlets

info@propertyinseattle.com (Kerstin G. Brooks) — Wed, 24 Jun 2009 23:38:00 +0000

419A 11th Ave, Seattle, WA | Powered by Postlets

Shared via AddThis

Have we seen the bottom yet in Seattle?

info@propertyinseattle.com (Kerstin G. Brooks) — Tue, 16 Jun 2009 19:45:00 +0000

Have we seen the bottom yet in Seattle? Maybe, maybe not. It depends what neighborhoods and price ranges you are talking about.

The suburbs are still struggling and many properties that have sat on the market for a long time in these areas continue to sit. Condos are tough to sell, as well, largely because financing is tricky for some of those. And homes in higher price ranges (above $600k) are also not moving as quickly (some neighborhoods excluded).

So, where are things turning around? Downtown and north of downtown to about 85th St. has seen a change in momentum in the last couple of months. Particularly in Fremont, Wallingford, Roosevelt, Ravenna, Ballard, Queen Anne, Wedgwood, Greenlake and Bryant where single family homes in good condition are selling quickly and occasionally two or three buyers are competing for the same home. There is an increased demand in the under $600k range.

If you are looking to buy in these more popular neighborhoods, wait no more, I think we have seen the bottom (dare I say it).

Properties south of downtown and north of 85th are more affordable than ever and some great deals are to be had. Take advantage of a strong buyer's market, low interest rates and if you are a first-time homebuyer you most likely qualify for the $8000 tax credit (contact us for more information on who qualifies).

Pending sales are up even in these areas compared to a few months ago, some of which can be attributed to the time of the year (sales always go up in late spring/early summer) , some of it can be attributed to favorable terms for buyers such as low interest rates and the first-time homebuyer credit and I am hopeful it is actually a sign of a recovery.

The Seattle Metro area is one of the "10 Cities Most Likely to Bounce Back" according to Forbes Magazine. Forbes magazine has identified the top 10 cities that it believes are poised for recovery by examining unemployment figures, projected gross domestic product from Moody’s Economy.com, and housing affordability data from the National Association of Home Builders.

Here is Forbes’ top 10:

Austin-Roundrock, Texas
Fayetteville-Springdale-Rogers, Ark.
Boulder, Colo.
Huntsville, Ala.
San Antonio, Texas
Mobile, Ala.
Dallas-Fort Worth-Arlington, Texas
Washington-Arlington-Alexandria, D.C.-Va.-Md.-W.Va.
McAllen-Edinburg-Mission, Texas
Seattle-Tacoma-Bellevue, Wash.

Have a wonderful day,

Kerstin

Kerstin G. Brooks
Brooks & Heinze Team
Skyline Properties, Inc.
http://www.propertyinseattle.com/

What is the Homebuyer Tax Credit and who qualifies for it

info@propertyinseattle.com (Kerstin G. Brooks) — Sat, 28 Feb 2009 02:30:00 +0000

The stimulus plan that President Obama has signed into law as part of the American Recovery and Reinvestment Act of 2009 contains an important tax credit for first-time home buyers: a tax credit of 10% of the purchase price, up to $8,000 for first-time home buyers only.

First-time buyers, for the purpose of this credit, are those who have not owned a home in three years. This new tax credit does not replace the 10% of purchase price, up to $7,500 tax credit passed as part of last year's Housing and Economic Recovery Act of 2008.

So, there are two breaks for first-time homeowners in the tax code now. Which credit you can take depends on when you purchased your home.

If you're a first-time home buyer and you purchased your home on or after April 8, 2008, and by Dec. 31, 2008, you may qualify for 10% of the purchase price, up to $7500 tax credit but you have to pay that back because it's not really a credit, it's more like a 15-year, interest-free loan from the IRS.

Visit the IRS website or consult your tax advisor for the details if you qualify for this credit (loan). The credit is 10 percent of the purchase of the home, with a maximum available credit of $7,500 for either a single taxpayer or a married couple filing a joint return; $3,750 for married persons filing separate returns.

The full credit is available for homes costing $75,000 or more. Only purchases of a main home located in the United States qualify, and the home must have been purchased after April 8, 2008, and before December 31, 2008. For a home you construct, the purchase date is the date you first occupy the home.

The up to $8,000 tax credit is available for qualifying home purchases made from Jan. 1, 2009, until Dec. 1, 2009 (yes, Dec. 1 not Dec. 31). At least the credit is a true credit and does not need to be repaid, that is, if you don't plan on moving within three years. The home must remain the buyer's "main home" for at least 36 months after the purchase date, which means no selling or renting the home. This won't work for an investment property. If the buyer sells or moves before 3 years have passed, they will need to pay back the credit.

There is also an income limitation and the credit starts phasing out if you have over $75,000 in gross adjusted income for single filers and up to $150,000 in adjusted gross income for joint (married) filers.

A tax credit is much more valuable than a deduction. A credit reduces dollar for dollar the amount of tax you owe. A deduction merely reduces the amount of your income that is taxable.

Please click on the following links to see a side by side comparison of the two tax-credits, repayment requirements, recapture requirements, income limits to qualify, property eligibility, amount of credit, etc.

Tax Credit Chart (Source: National Association of Realtors)

http://www.irs.gov/newsroom/article/0,,id=204671,00.html (IRS.gov Website)

If you are still not sure which and if you qualify for the first-time homebuyer credit and if you qualify for the maximum amount of credit, contact the IRS or your tax advisor.

If you are a first-time homebuyer and still on the fence whether to buy this year or not, perhaps this new credit will get you to jump off the fence and dive into homeownership. When you combine the tax credit with historically low interest rates, a great selection of homes, desperate sellers and low home prices, shopping for a home gets exciting.

NOTE: This blog is not meant as tax advice. Please consult your tax advisor for details about your particular situation. We are real estate agents, not tax advisors.

Kerstin G. Brooks
Brooks & Heinze Team
"Where People Come First"
Skyline Properties, Inc.
http://www.propertyinseattle.com/
Email: info@propertyinseattle.com

Is now really the best time to buy? Yes, no, maybe?

info@propertyinseattle.com (Kerstin G. Brooks) — Mon, 16 Feb 2009 20:38:00 +0000

I have put off writing this article for several weeks because I am genuinely devoted to give the best advice I can to my clients. Every buyer I am working with now and almost every buyer who has come through one of my open houses the last several months has asked me if now is the right time to buy and what I think will happen to home values.

There is a lot of information out there about low prices, low rates and tax credits and how people should take advantage of these things. So, let me answer the question of whether it is a good time to buy. Well, not so fast. I wish there was a clear cut answer that was right for everyone. Frankly, there is no blanket answer that applies to all. For many people, now is a fantastic time to buy. Let’s look at what you should consider before you decide if buying now is right for you.

Are prices still falling drastically in your market? Are there a ton of foreclosures in the neighborhoods you are looking to buy in?

If the answer is yes, maybe you should wait. A lot of new foreclosures being filed in an area usually signal that the worst is not over yet and it usually means that prices are going to continue dropping substantially. To find out foreclosure rates in your area, go to
http://www.realtytrac.com/foreclosure/foreclosure-rates.html . Certain parts of California and Nevada have been hard hit and there seems to be no end in sight to prices dropping and foreclosures being filed. If you are thinking about buying in one of these markets, you may want to wait. But talk to your local real estate professional to find out about the unique forces in your area.

Are you looking to “move up”?

“Moving up” means selling a less expensive home and buying a higher priced home. It is true that selling a home is more difficult now then it used to be and you will ‘take a hit’ on the sale. But don’t let that scare you. Just be smart about it. Don’t commit to a new home until you have sold your current home. Then, move to a nicer, bigger home at a terrific, discounted price.

Take a look at rates right now. Rates are almost unbelievably low right now.

Why are they so low? It’s one of the things our government has done to encourage homebuyers to enter the market and allow homeowners with adjustable mortgages to refinance at a lower rate. I don’t necessarily agree that this is the best tool or bail out strategy but that’s a topic for another blog entry.
If prices go down more, higher rates can affect your payment sufficiently as to wipe out any or all of that additional buying power. For more information about how a rise in rates can make buying a home less affordable please read my blog entry entitled http://brooksheinzerealestate.blogspot.com/2008/10/know-how-interest-rates-affect-your.html

More points to consider. Do you want to own a home?

Has it always been your dream to own a home? Do you have a stable job (like Health Care, certain government jobs, etc.), are you worried about inflation (you should be it’s a real thing), do you like to get free money from the government (you get a tax credit from the government when you buy a home now)? Well, then, maybe you should buy a home in 2009.
Obviously, if you are not comfortable with the security of your job, you may want to consider holding off on buying a home. On the other hand, you will have a housing expense whether you are renting or own so you may just want to make sure that you are not overextending yourself and buy a home you can truly afford.

Historically, real estate tends to rise along with prices in the overall economy and can thus provide an effective hedge against inflation. Of course, at the moment home values are dropping not rising. Have you noticed that many other goods are cheaper too now? Have you looked at gas prices, air line tickets, hotel rates, etc.? All are down – seems food is the only commodity that hasn’t dropped. The government is creating money out of thin air by printing more of it. Sooner or later that will result in inflation.

If you haven’t guessed it, I am not sure that some of the things the government is doing to ‘help’ us make a lot of sense, on the other hand, I would not talk a first-time homebuyer out of taking free money. If you plan on buying a home, take advantage of the tax credit the government is offering.

Appreciation is great and it is the one benefit that most homeowners understand. Now that we have depreciation in action, most homeowners forget that there are other advantages to owning a home. Remember that your home is your shelter, it is where you live, where you raise your children and where you create family memories. You have to live somewhere, right? Why not in your home where you can do as you please? Rather than an apartment where someone else dictates the rules. Payments on your home (unless you have one of those dreaded adjustable rate mortgages) are generally fixed. Rents can go up.

Don’t forget about the tax advantages of owning a home – mortgage interest is deductible and reduces your taxable income. I am not a tax advisor, so check with your CPA how your situation is affected by this.

To get back to my initial reason for writing this entry: Should you buy a home now?

Depending on your situation and your goals, now is a great time to buy a home. Whatever happens with the economy, you need to live somewhere and an affordable place is always a good thing.

Work with a real estate agent who truly understands his/her market and cares about you. Work with a mortgage professional who explains all the costs involved in financing a home and who will go over your budget in detail. Buy a home that is affordable to you, don’t overextend yourself. Plan to stay put for a while and enjoy the home you bought for many years to come.

For more information, please contact the Brooks & Heinze Team in Seattle, WA or attend one of their free homebuyer workshops - http://www.propertyinseattle.com/buyerworkshop.htm

Kerstin G. Brooks
Brooks & Heinze Team
“Where People Come First”
Web: www.propertyinseattle.com
Email: info@propertyinseattle.com

Your buying opportunities are endless !

info@propertyinseattle.com (Kerstin G. Brooks) — Fri, 31 Oct 2008 03:04:00 +0000

Buy now - don't wait.

A lot of buyers are saying they want to buy but they are waiting until prices hit rock bottom. First, it is really hard to tell when the market has hit bottom. It does not matter if we are talking about gold, stocks or homes here. Trying to time the bottom is almost impossible.

Is it likely that prices will go down further? Yes, it is is. In fact, I do not believe that we have seen the bottom yet. However, I do not forsee any more drastic drops.

You should buy now because prices are low and financing rates are low. It is important to keep in mind that purchase price alone does not determine the cost of investment but the combination of purchase price and mortgage interest rate determine the true cost. For a more detailed explanation and some compelling examples take a look at my blog entry from Oct. 22, 2008.

If you are a cash buyer, feel free to wait what you perceive to be the bottom of the market. However, if you are like most buyers who need to get a loan to finance a home purchase, don't wait to buy. Interest rates are great at the moment but everyone in the lending industry I have talked to says they will soon go up. Higher rates will affect your buying power or may even make it impossible for you to qualify alltogether. Just talk to some of your relatives or friends who bought in the eighties - the rate was 17.48% in January of 1982 (source Freddie Mac homepage). Now rates are going to jump that high overnight or perhaps ever again but I just wanted to make the point that you need to look at the cost of financing, as well as the purchase price.

Just for fun, take a look at the mortgage rate changes between 1971 - 2008.

So, don't delay. Buy today. We would be happy to help you take advantage of this great buyer's market. The opportunities are amazing.

Kerstin G. Brooks, ABR, Realtor

Brooks & Heinze Team at Skyline Properties, Inc.

Cell: 206.276.5827

Email: kerstinbrooks@earthlink.net

Web: www. propertyinseattle.com

Should I sell my house now? When does it make sense to sell in a down real estate market?

info@propertyinseattle.com (Kerstin G. Brooks) — Sat, 25 Oct 2008 22:26:00 +0000

If you're thinking of moving up in a down real estate market it can make a lot of sense to sell rather than wait. There is never a better time to make a move up in real estate than when the market as a whole is down. Yes, you will probably not come out as well with the sale of your current home, but you will more than make up for it when it comes to buying your new home.

Let's look at an example:

- Assume you own a $300,000 house and you're ready for a $500,000 house. If the market is down 5% then unfortunately your current house is really only worth about $285,000 .

- Assuming that $500,000 house is also down 5%, then you're buying that house for $475,000! You accept a $15,000 loss when you sell, but you make $25,000 when you buy!

But it gets better, every market has a "hot price range" and a "cooler price range" - or put differently, some price ranges are selling better than others.

If you are selling in a "hot price range" (in Seattle that is single family homes under $350k) and are buying in the "cooler" price ranges / higher price range (in Seattle that's $500k+) you can take advantage of a great deal and moving up in this down market can work well for you.

If you are ready to take advantage of this down market to move up and get a great deal, contact us today.

Kerstin G. Brooks, ABR, Realtor
Brooks & Heinze Team at Remax Northwest
www.propertyinseattle.com

Know how interest rates affect your buying power and payments

info@propertyinseattle.com (Kerstin G. Brooks) — Thu, 23 Oct 2008 00:38:00 +0000

Know how interest rates affect your payment. The interest rate on a loan is used to calculate your monthly payment. The higher the interest rate, the higher your monthly payment. The lower the interest rate, the lower your monthly payment. Simple? Yes, but abstract until you see it applied to your loan.

When interest rates rise, it lessens the buying power of potential buyers because it increases monthly payments which are used to decide how much money the lender will let the buyer borrow.

Following is an example to illustrate how your buying power is reduced or how your monthly payments are affected as rates change: At a 6% fixed rate, with 30 years of payments, one would have to pay approximately $600.00/month for every $100,000 borrowed. At a 7% rate, one would have to pay about $665.00/month on every $100,000 borrowed. So, in this example, for a $350,000 home your monthly payment would increase by $227.50)/month (from $2100/month to $2327.50) if the interest rate rose 1%.

Home Price Interest Rate Monthly Payment
$300,000.00 6% $2,100.00
$300,000.00 7% $2327.50

Let’s do a second example. At a 6% fixed rate, with 30 years of payments, your monthly payments for a $500,000 would be $3000/month and at a rate of 7% would be $3325 (a $325/month increase in payments).

Home Price Interest Rate Monthly Payments
$500,000.00 6% $3,000.00
$500,000.00 7% $3,325.00

Obviously, an increase in rates can have several negative affects on the market. With less buying power, buyers may find that they can no longer afford now what they could have afforded a couple of months ago. This can decrease the number of financially qualified buyers. Less buyers in the market equals less demand for homes, causing a downward pressure on prices in some of our local Seattle communities. You may wonder than if you should wait until prices drop before you buy - the answer is no (see example below).

Let's look at it from a slightly different perspective why waiting for prices to drop is the wrong approach. Example: You decide to wait to buy your home until prices drop 10% percent. The risk in waiting could be higher interest rates and higher mortgage payments as seen in the example above. So if the price of a home happens to drop ten percent from $500,000 to $450,000, but interest rates rise 1% point from 6% to 7%, your payments are still about $3000 a month. Only a $7.50 change in monthly payments.

Home Price Interest Rate Monthly Payments
$500,000.00 6% $3,000.00
$450,000.00 7% $2,992.50 (-$7.50)

One more tidbit of caution. When rates rise, they usually rise fast (much faster than the change of appreciation).

Disclaimer: The above rates I used are not actual rates here in Seattle — they’re just used as an example to show the effect of rate changes on monthly payments. Rates do vary depending on your credit score, how much you are borrowing, and market conditions. Please consult a mortgage professional to get a better idea of what your monthly payments would be and to see what you can afford. We would be happy to refer you to our team lender for further information.

If you have more questions, about this topic, please feel free to contact us at 206.276.5827 or at kerstinbrooks@earthlink.net.

For the folks who prefer this information in a visual/audio format, please watch a brief video summary about this on YouTube.

Kerstin G. Brooks, ABR, Realtor
Brooks & Heinze Team at RE/MAX NW Realtors
http://www.propertyinseattle.com/
Phone: 206.276.5827
Email: kerstinbrooks@earthlink.net

How to sell a house in a slow market

info@propertyinseattle.com (Kerstin G. Brooks) — Sat, 27 Sep 2008 03:54:00 +0000

So, how do you sell a house in this market where nothing seems to sell?

Well, first you should decide if you really need or want to sell:

If you need to sell because of a relocation, financial hardship, divorce, death in the family, etc. there are a few things that you need to do to get that home sold.

First select the right agent who will actively, and aggressively market your home. Interview a couple of agent. Have them explain to you how they will market your home and what they will do to get your home sold.

Do not go on the market high thinking that you can drop the price later if your home does not sell. List at a salable price. You want to be the best value on the market right now - this is not the time to price your home at the same price as competitive homes like was done during a strong market - this is the time to price your home lower than competing homes. Buyers have so many choices right now and unless you are the best value you are not even on their radar.

Your house needs to shine and make a good impression. It needs to stick out of the crowd. Don't overspend on fancy upgrades but really make the home shine with a fresh coat of paint, clean flooring, clean windows and 'tidy up' every room. Bring light into your home (leave lights in your house on even during the day, and borrow some extra lamps from friends for more light). Add a little life with a few house plants.

Make showings easy. Do not restrict showing times or ask for a lot of notice before showings. If it is a pain for buyers to view your home they will go on to the next house.

If you get an offer you don't like, do not reject it. And do not get offended no matter how far apart you think you and the buyer are. Negotiate; keep the dialogue going. Remember, your house is only worth as much as an able, willing buyer will pay for it. Do not give your home away but realize that the buyer is in the driver seat.

If you are looking to sell to move up, this is a great time to do it. Yes, you will get a little less for your current home than a few years ago but you will be able to save on your move up house.

For more detailed advice and help with selling your home in the Greater Seattle area, please contact the Brooks & Heinze Team at Remax NW Realtors.

Kerstin G. Brooks, ABR, Realtor
Brooks & Heinze Team
Remax NW Realtors
www.propertyinseattle.com

Home Maintenance – or how to protect your biggest investment

info@propertyinseattle.com (Kerstin G. Brooks) — Mon, 01 Sep 2008 23:54:00 +0000

Many homeowners wonder when to schedule home maintenance. Some of you, the do-it -yourselfers take great pride in doing the maintenance yourself or only calling a contractor in on the big jobs. Some of you busy moms and professionals would rather have someone else do it quickly and right the first time. Either way is fine - just do it or have it done.

Following is a brief outline of some of the most common home maintenance jobs and repairs, as well as a guide on how to select contractors should you decide to hire one.

The old adage of “an ounce of prevention is worth a pound of cure” rings true for home maintenance. Simple and relatively inexpensive regular maintenance can help avoid many extensive and expensive problems.

Home maintenance by season:

Fall Maintenance
Clean and repair gutters. Recaulk exteriors around windows and doors. Fill all other holes and gaps. Remove debris and moss from the roof. Keep debris away from the home such as leaves, plants, wood, etc. Replace your furnace filter and have your furnace serviced. Late fall/early winter freeze proof your exterior plumbing.

Winter Maintenance
Recaulk and regrout in tubs/shower and sinks. Check seals on dishwasher/washer. Check dishwasher/washer hoses for leaks. Check dryer hose and vent for lint blockage. Check for leaks in your attic, basement and your water heater.

Spring Maintenance
Clean and repair gutters. Remove debris and moss from roof. Replace damaged roof shingles. Repair torn screens and check siding. Power wash walkways and drive ways. Power wash and restain decks and check for rot/insects. Late spring/early summer cut back trees and shrubs hanging over or touching the home.

Summer Maintenance
Check exterior paint and sand/repaint as necessary.

How to select a contractor:

Get a referral from your real estate agent. One way to retain or increase property value is by doing the proper maintenance and sometimes upgrades – your real estate agent knows all about that and most likely, if she/he is a good agent, she/he knows which companies do a great job when it comes to maintenance, repair and remodel.

If you are looking for a contractor in the Seattle area, contact Kerstin G. Brooks or Krisanne Heinze of the Brooks & Heinze Team at RE/MAX NW Realtors for a referral to a roofer, electrician, plumber, handyman, power washer, cleaner, and more.

Have a great day,
Kerstin G. Brooks
The Brooks & Heinze Team
206.276.5827
Email: info@propertyinseattle.com
Web: www.propertyinseattle.com

What's going on in the Seattle housing market?

info@propertyinseattle.com (Kerstin G. Brooks) — Mon, 07 Jul 2008 19:38:00 +0000

So, what's going on in the Seattle market? If you live in Seattle but listen to the national news, all you hear is about how the housing market is in the toilet. Yes, the housing market has slowed in Seattle over the last year but not as much as the national average (not by a long shot).

Well, there are a couple of things going on in Seattle that make this still a healthy real estate market. Of course, our market has slowed down and the changes in the mortgage industry, high fuel and food prices, credit crisis, sub-prime delinquencies, etc. are to blame for that. But our employment market is great and it is keeping our real estate market in good shape.

The good news is that Microsoft and Boeing are doing well and are adding jobs in the information services and manufacturing sector. The unemployment rate in the Seattle-Bellevue-Everett area has remained low at 4.1% in May (lower than the national 5.5% rate). Source: Bureau of Labor Statistics: http://www.bls.gov/news.release/archives/laus_06202008.htm

The U.S. Census Bureau estimates that there will be a 8.7% change in population in the U.S. between the years 2010 – 2020 and a change of 13.6% change in Washington State during the same period. The projected change in the U.S. between 2000 – 2030 is 29.2% and 46.3% change in Washington State during the same period. Source: U.S. Census Bureau: http://www.census.gov/population/projections/PressTab7.xls

Where are all these people going to live? In apartments, houses and condos, of course. If these projections are correct, there will be an increased need for housing in Washington, which should bode well for real estate values. Some areas are showing a projected decline in population, such as D. C., North Dakota and West Virginia.

In short, Seattle is affected by the national economy and prices have dropped which is great for buyers who can take advantage of some great deals. How long will it be a buyer’s market? Who knows … for a while longer; but the great employment opportunities, good income, population growth and limited availability of buildable land (due to geography and environmental protection laws) make for a strong housing market that is good now and will be fantastic in the future.

So, buy a house in Seattle!

Kerstin G. Brooks, ABR, Realtor
Brooks & Heinze Team
Remax NW Realtors
Phone: 206.276.5827
Email: kerstinbrooks@earthlink.net
Web: http://www.propertyinseattle.com/

Facing Foreclosure? Don't know what to do?

info@propertyinseattle.com (Kerstin G. Brooks) — Fri, 07 Mar 2008 22:25:00 +0000

With mortgage delinquencies rising, many homeowners find themselves faced with the threat of foreclosure. Many homeowners do not know what their options are and where to turn.

The questions for many then is what the homeowner can do if anything to protect against the bank and losing their home.

What the homeowner needs is knowledgable support from professionals who know what to do when foreclosure is knocking on the door:
- a real estate agent can provide a property analysis to find out the current market value of the property
- a mortgage broker can determine if a refinance is available
- a lawyer who specializes in foreclosures can advocate on the homeowner's behalf with the lender and provide guidance in understanding legal options and impacts

What not to do as a homeowner:
- do not ignore the reality of delinquency and foreclose; procrastination and denial may limit your options to stave off the bank; swift action on the other hand may save your home and credit

What needs to be done:
- in some cases, a quick sale may the best option
- in some cases, negotiating for modified terms and payoff concessions with the lender may be the best option
- and in some cases, surrendering the home through foreclosure or deeding the property to the bank may be the best solution

What's the right solution for you if you are faced with foreclosure?
- every situation is different and there is no straightforward answer without knowing all the facts (worth of you property, loan balance, income, market situation in your area, etc.).

You may be able to keep your home if you take the proper action but sometimes, it may be best to sell.

Working with individuals who know the industry can help ease the stress and confusion. The right professionals with experience and compassion can help you make the right decision for your situation.

Kerstin G. Brooks, ABR, Realtor
Brooks & Heinze Team
Remax NW Realtors
Phone: 206.276.5827
Email: kerstinbrooks@earthlink.net
Web: http://www.propertyinseattle.com/

Rising Mortgage Interest Rates and Buying Power

info@propertyinseattle.com (Kerstin G. Brooks) — Fri, 15 Feb 2008 21:00:00 +0000

When interest rates rise, it lessens the buying power of potential buyers because it increases monthly payments which are used to decide how much money the lender will let the buyer borrow.

Following is an example to illustrate how your buying power is reduced or how your monthly payments are affected: At a 6% fixed rate, with 30 years of payments, one would have to pay approximately $600.00/month for every $100,000 borrowed. At a 7% rate, one would have to pay about $665.00/month on every $100,000 borrowed. So, in this example, for a $350,000 home your monthly payment would increase by $227.5/month if the interest rate rose 1%.

Obviously, an increase in rates can have several negative affects on the market. With less buying power, buyers may find that they can no longer afford now what they could have afforded a couple of months ago. This can decrease the number of financially qualified buyers. Less buyers in the market equals less demand for homes, causing a downward pressure on prices in some of our local Seattle communities. You may wonder than if you should wait until prices drop before you buy - the answer is no (see example below).

Let's look at another example to illustrate why waiting for prices to drop is the wrong approach. Example: You decide to wait to buy your home until prices drop 10% percent. The risk in waiting could be higher interest rates and higher mortgage payments as seen in the example above. So if the price of a home happens to drop ten percent from $500,000 to $450,000, but interest rates rise 1% point from 6% to 7%, your payments are still about $3000 a month. No change in monthly payments.

One more tidbit of caution. When rates rise, they usually rise fast (much faster than the change of appreciation).

If you have more questions, about this topic, please feel free to contact us at 206.276.5827 or at kerstinbrooks@earthlink.net.

Kerstin G. Brooks, ABR, Realtor
Brooks & Heinze Team at RE/MAX NW Realtors
300 NE 97th St
Seattle, WA 98115
Phone: 206.276.5827
Email: kerstinbrooks@earthlink.net
Web: www.propertyinseattle.com

Looking for a Green House?

info@propertyinseattle.com (Kerstin G. Brooks) — Thu, 17 Jan 2008 01:56:00 +0000

If you are looking to buy a "green house" - Seattle is a great place to do that. There are several builders who have started specializing in building green homes and some homeowners have started using "green" products and building materials in their remodels.

Despite more awareness and a greater understanding about green building and what it means, there is still some confusion exactly what the term and concept means. There are generally five criteria: 1, environmentally friendly building site, 2, using an energy efficient design, 3, reducing water consumption, 4, promotion of quality indoor air and ventilation, and 5, using recycled products and sustainable products.

Newer homes often use LED lights now, which use a fraction of energy regular incandescent bulbs do. Energy Star appliances are used in most new homes and when homeowners are searching for a replacement of an old appliance. Energy Star appliances are certified to meet strict guidelines about how much electricity they require to operate. Many new homes now have toilets with 1/2 tank and full tank flush options.

Energy efficiency has been popular for some time, but unfortunately, making homes air tight has resulted in problems with mold, especially in moist climates like Seattle, however, new green homes are built with energy efficiency but also better ventilation technology.

Many countertops in green homes are now made of paperstone (recycled paper materials and resin) and floors are made of bamboo (and other sustainable resources).

If you are looking for a "green home" but don't know where to find one, contact Kerstin at 206.276.5827.

Kerstin G. Brooks, ABR, Realtor
Brooks & Heinze Team
Remax NW Realtors

http://www.propertyinseattle.com/

400K Vertical House in Seattle

Free Homebuyer Workshops in Seattle

info@propertyinseattle.com (Kerstin G. Brooks) — Fri, 11 Jan 2008 01:14:00 +0000

The Brooks & Heinze Team hosts Free Homebuyer Workshops in Seattle on the following dates:

Thursday: Jan 10, 2008 at 5:30pm at Remax NW Realtors in Northgate.

Saturday: Jan 19, 2008 at 11am at Wells Fargo.

Thursday: Feb 21, 2008 at 5:30pm at Remax NW Realtors in Northgate.

Saturday: Feb 23, 2008 at 11am at Remax NW Realtors in Northgate.

Thursday: Mar 13, 2008 at 5:30pm at Remax NW Realtors in Northgate.

Saturday: Mar 29, 2008 at 11am at Wells Fargo.

Thursday: Apr 10, 2008 at 5:30pm at Remax NW Realtors in Northgate.

Kerstin G. Brooks, ABR, Realtor
Brooks & Heinze Team
Remax NW Realtors
206.276.5827
http://www.propertyinseattle.com/

Stable Existing-Home Sales Expected in Early 2008

info@propertyinseattle.com (Kerstin G. Brooks) — Tue, 08 Jan 2008 22:09:00 +0000

Repost of an article posted on the National Association of Realtors Homepage talking about nationwide existing-home sales and appreciation in 2008:

http://www.realtor.org/press_room/news_releases/2008/pshi_jan08_stable_existing_home_sales.html

Stable Existing-Home Sales Expected in Early 2008, then Gradual Rise

WASHINGTON, January 08, 2008 -
Over the next few months, existing-home sales are expected to hold fairly steady as indicated by pending sales activity, then rise later in the year and continue to improve in 2009, according to the latest forecast by the National Association of Realtors®.

Lawrence Yun, NAR chief economist, said there is a pull and tug exerting itself on the market. “On the one hand, we have a pent-up demand from the four million jobs added to our economy over the past two years of sales decline,” he said. “On the other, consumers continue to wait for additional signs of market stabilization. There are more people with financial capacity now than in 2005, but many are trying to market-time their purchase. As a result, the exact timing and the strength of a home sales recovery is a bit uncertain. A meaningful recovery in existing-home sales could occur as early as this spring, or it may be further delayed toward late 2008.”
The Pending Home Sales Index,* a forward-looking indicator based on contracts signed in November, fell 2.6 percent to a reading of 87.6 from a strong upward revision of 89.9 in October, but remains above the August and September readings and indicates a broad stabilization. The index was 19.2 percent below the November 2006 level of 108.4. “Although there could be some minor slippage in the first quarter, existing-home sales should hold in a narrow range before trending up,” Yun said.

The PHSI in the South rose 2.3 percent in November to 100.7 but is 19.8 percent below a year ago. In the West, the index slipped 2.1 percent to 86.6 but is 18.5 percent lower than November 2006. The index in the Midwest fell 4.1 percent in November to 82.1 and is 18.6 percent below a year ago. In the Northeast, the index dropped 13.0 percent in November to 70.1 from a spike in October, and is 19.1 percent below November 2006.

Existing-home sales for 2007 will probably total 5.66 million, the fifth highest on record, then edge up to 5.70 million this year and 5.91 million in 2009, compared with 6.48 million in 2006. Existing-home prices for 2007 are likely to be down 1.9 percent to a median of $217,600, hold even this year and then rise 3.1 percent in 2009 to $224,400.

“Rising home prices in the affordable midsection of the country are likely to offset declines in some of the previously hot markets,” Yun said.

There are wide variations in housing market conditions around the country, with nearly two-thirds of the metropolitan areas showing price gains. Healthy increases in metro prices are occurring in places such as Pittsburgh; Beaumont-Port Arthur, Texas; San Jose, Calif.; and Bismarck, N.D.

“Our consumer survey shows buyers today are in it for the long-haul, planning to stay in their home for a median of 10 years. This is a wise approach to housing because the data shows the longer you own, the better your investment,” Yun said.

New-home sales are projected at 773,000 for 2007, and declining to 669,000 this year before rising to 730,000 in 2009, but well below the 1.05 million 2006. With an appropriate slowdown in production, housing starts, including multifamily units, are forecast at 1.36 million for 2007 and 1.09 million this year before edging up to 1.10 million in 2009; starts totaled 1.80 million in 2006. The median new-home price should drop 2.1 percent to $241,400 for 2007, and then rise 0.4 percent to $242,200 this year and gain another 5.9 percent in 2009.

“Some policy changes, such as raising the loan limit on conventional mortgages, would provide a significant boost to home sales, increase liquidity, strengthen home prices and lessen foreclosures, but it is unclear as to if and when the measure will be implemented,” Yun said. NAR strongly supports raising the Government-Sponsored Enterprise loan limit to at least $625,000 from the current $417,000 so that more consumers will have access to lower interest rates on safe conforming mortgages. “NAR estimates that raising the GSE loan limit will result in interest rates savings for an additional 330,000 homeowners,” he said.

NAR also encourages the Fed to make a single lump-sum cut in the Fed funds rate to 3.5 percent at the January Federal Open Market Committee meeting, rather than a series of modest cuts throughout the year. “Consumers are also looking to market-time interest rates, and the expectations of further rate cuts are pushing some home buyers to delay. Monetary policy will be much more effective with a one-time large cut, rather than a series of small cuts,” Yun added.

The 30-year fixed-rate mortgage is expected to rise slowly to the 6.3 percent range by the end of this year, but an additional cut in the Fed funds rate would lower short-term interest rates.
Growth in the U.S. gross domestic product (GDP) is seen at 2.1 percent in 2007, below the 2.9 percent growth rate in 2006; GDP growth will probably be 2.0 percent this year.

After averaging 4.6 percent for both 2006 and 2007, the unemployment rate is estimated to rise to 5.3 percent in the second half of 2008. Inflation, as measured by the Consumer Price Index, is projected at 2.9 percent for 2007 and 3.1 percent this year; it was 3.2 percent in 2006. Inflation-adjusted disposable personal income is forecast to grow 3.1 percent for 2007, the same as in 2006, and then grow 1.6 percent this year.

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing more than 1.3 million members involved in all aspects of the residential and commercial real estate industries.

# # #
*The Pending Home Sales Index is a leading indicator for the housing sector, based on pending sales of existing homes. A sale is listed as pending when the contract has been signed but the transaction has not closed, though the sale usually is finalized within one or two months of signing.

The index is based on a large national sample, typically representing about 20 percent of transactions for existing-home sales. In developing the model for the index, it was demonstrated that the level of monthly sales-contract activity from 2001 through 2004 parallels the level of closed existing-home sales in the following two months. There is a closer relationship between annual index changes (from the same month a year earlier) and year-ago changes in sales performance than with month-to-month comparisons.
An index of 100 is equal to the average level of contract activity during 2001, which was the first year to be examined as well as the first of five consecutive record years for existing-home sales.

Existing-home sales for December will be released January 24; the next Forecast / Pending Home Sales Index will be released February 7.

Is the Seattle Real Estate Market Tanking?

info@propertyinseattle.com (Kerstin G. Brooks) — Tue, 01 Jan 2008 03:09:00 +0000

What's happening to the Seattle Real Estate Market? The market has cooled off but compared to much of the rest of the country, the market in Seattle is healthy and not tanking.

Seattle has strict growth-managment policies and therefore has not seen the same building boom as some parts of Arizona, for example. So overbuilding isn't as much a problem here as it is in some other areas that have seen tremendous urban sprawl. We do not have an overabundance of vacant inventory.

A strong job market is key to a healthy housing market. The number of new jobs has outpaced or at least kept up with building permits for single-family homes and condos in this area. The Seattle Area has seen a tremendous amount of local job and population growth. In fact, "growth in this sector is running twice the national average, plus high wages. Local per-capita income, expected to be $46,356 this year, is 19.7 percent above the national average" (Elizabeth Rhodes, Seattle Times, December 2007).

Location. Location. Location. Yes, real estate is local and even though some areas can be doing really poorly, some areas can do really well. And yes, Seattle is doing well, although, national factors do and will affect all local markets. National factors have affected the Seattle market.

In the summer of 2007, the mortgage industry saw a meltdown which resulted in a shortage of funds available to lenders for home loans. Money was and still is difficult to come by for credit-challenged borrows. With fewer qualified buyers there is less competition - less demand - lower prices.

So, although Seattle has a lot going for it, particularly a strong and good employment, it can't be completely incubated from the national crisis.

We get a lot of clients asking us to predict the housing market. Obviously, we can't do that. We think that the market has slowed down and that appreciation will be relatively flat for a while.
However, we would not expect home prices to drop in the Seattle area.

Some of our buyer clients we have been working with have decided to wait and see what the market will do. And some of our sellers have decided to sell "before the bottom drops out" or have decided to wait "until prices go up again". Clients ask us what the best time is to buy and sell.

If you are looking to speculate in the market short term, I would say - stay out. It is simply impossible to predict with any certainty exactly what the market will do.

If you are a renter, thinking of buying, I would say - do it. If you can qualify for a mortgage now and you think you will occupy your new property for at least 5 years, buy now. It is a buyer's market (for the first time in a long time in Seattle !!!). Now is the time to negotiate on a good price, get some closing costs paid for and get some critical repairs paid for by the seller). We do not predict prices to drop much if at all and mortgate rates are great right now.

If you are a seller, thinking of selling, I would say - maybe. If you plan on staying in the area for only a short while longer, because you are retiring, relocating, etc. Do not switch to being a renter. Do not list your home for sale in the winter months. Come on the market in the spring. (November through January - are usually slow months for real estate in Seattle). If you plan on staying in Seattle long-term and like your home, keep it. Remember, there are other benefits to owning a home besides appreciation such as tax benefits, pride of homeownership, etc. If you have outgrown your home and plan on moving into a bigger home, now is a good time to do that. Yes, you may not get top dollar for your current home but you will get a great deal on the new home (which presumably is more expensive and your savings in percentage will be greater on the new house than the "loss" on the old house).

If you have any questions regarding this particular blog entry or any other questions regarding real estate, please feel free to contact us at your convenience.

Happy New Year!!!

Kerstin G. Brooks

Brooks & Heinze Team
Remax Northwest Realtors (Seattle)
Email: info@propertyinseattle.com
Web: http://www.propertyinseattle.com/
Cell: 206.276.5827

This article was written by Kerstin G. Brooks, Realtor, ABR