“It could be the difference between selling and not selling your Seattle-Eastside Home,” she said while sitting in her friend’s Redmond condo. The “she” is not me, but a home owner who contacted me to talk about selling her home. At one point, our discussion moved towards the things she would need to do before putting her home on the market. I rattled off the usual maintenance and upgrade items, which I’ve recently written about on this blog. She nodded her head. She understood. But instead of the usual comments I get regarding maintenance and upgrades, she knew it didn’t mean her home would sell for more than it’s worth. She knew that handling the maintenance items and some upgrades before her home went on the market simply meant she’d have a better chance of selling her home.
Most of the time when I talk with home sellers, the more common response is: If I do these maintenance and small upgrades, how much more will my home be worth? Most people think doing these items, like cleaning windows, replacing roofs or carpets will net more money than a home is worth. More than likely it won’t. It will, as she said, make the difference between selling and not selling an eastside home.
As an example, a home has to have a roof with 5 years of life left in it in order for a home to qualify for financing. Yes, a home must also qualify, along with the buyer, in order for the loan to go through. Having a good roof or a new roof, will not net more money, it simply will mean a home can sell and the buyer is able to get a loan on the property.
New carpet, as opposed to old, dirty or worn carpet also means the odds of selling a home will increase. Buyers don’t buy homes with old, worn materials. In today’s real estate market, buyers don’t have to. There are a lot of choices out there. Many of the homes are good homes that are priced right and show well. These are the homes that make it into the “sold” category. They are the homes that sell. The homes with deferred maintenance or few upgrades will be in the category of homes that don’t sell.
The Seattle’s eastside real estate market is a different than some other parts of the country. Back east, where I’m from, many homes are older and the expectation for updating and upgrades is not the same. Here on Seattle eastside, the typical buyer is looking for homes that are move-in ready. These buyers have are extremely busy. Some are handy with a hammer, some are not, but most want to move in and not have to think about fixing up a home.
So take a look at the link in the first paragraph. To sell in the eastside market, you’ve got to do some of the things on the maintenance/upgrade list. There’s a whole host of things that should be done before a home goes on the market so the home will net the price it deserves.
It’s time to accept the reality of the market in Seattle and on Seattle’s eastside. More than likely, it’s going to be the way it is for a few more years, with single digit appreciation after that.
It’s a more realistic market. It doesn’t mean it’s bad. It’s still challenging to sell a home, but it’s not impossible. Homes are selling everyday. There have been many successful sales and there will continue to be successful real estate sales in 2011. On Seattle’s eastside, 7310 homes sold last year. Short sales and foreclosures will still happen. Which, unfortunately, means there will be people who are suffering through these tougher, more realistic times. But the majority of sales on the eastside are not short or distressed sales.
If you are thinking of selling your home, it won’t happen overnight, but it can, and does, happen.
- 2010: 9,594 homes and condos were pending (received an offer from a buyer). There were 7310 firm sales.
- 2009: 8,842 homes were pending.
- 2008: 7419 homes were pending.
Right now in the Seattle area real estate market, most homes are selling in 3-6 months. This is the now the “normal” market time to sell a home. Some homes will sell very quickly depending on the local competition and the price and condition of the home, others will languish and maybe never sell. This will be the typical pattern we’ll see in Seattle area real estate sales for the near future.
Don’t put your home on the market unless you’re clear on the pricing, clear on what the market will bear. This is not a market where you can “try” a price and then come down. If you beat the competition to start, you’ll probably make more money in the long run. Too often, sellers have “tried” a higher price and ended up selling their home for far less.
Is it moving, making a lifestyle change, or the money that’s more important to you right now? If it’s the move that’s more important because you need more space, downsizing, relocating, etc., then plan to move and do it right. Get your home gleaming and ready for the market with a value added sticker price. Your home will need to outshine the competition with a pristine look and a “beat the competition” price. If you price your home right where all your competition is, your home may not stand out.
If more money than the current market will bear is more important, then maybe this isn’t the right time to sell. However, plan on staying put for 5 or even 7 years to realize some significant appreciation in your home’s value. But remember, if there’s only 3% appreciation over 5 years, that’s 15% more. Let’s say you have a home that is worth $500,000 in this market, in 5 years at 3% appreciation, it will be worth $515,000. A 5% increase is $25,000 to $525,000. The increase is nothing to sneeze at, but with 5-7 more years of wear and tear, there’s something that needs to be done with most every house. Any future appreciation should factor in some costs for maintenance and updating.
For those buying, home ownership has gone back to what it always has been, shelter, a place to hang your hat that you enjoy. It’s a lifestyle choice, not a banking machine or something where you can make a “killing.” If you decide to buy, and some of you won’t, then evaluate your home for how it fits your lifestyle. Pick a place to live that matches your wallet and that you enjoy. Pick a place with good access to amenities: schools, shopping, parks, economic centers and easy access to commuting services. When you sell your home in the future, the home will be in a better position, literally and figuratively, to capture any appreciation. The homes located close to conveniences will become increasingly more desirable in this decade.
The glass is “half full” in Seattle area real estate. The media will continue to talk about the “bad” real estate market, but the fact is, the people who need or want to move are still going forward with their plans. Home sellers will not see the appreciation of the past, but home buyers should be able to purchase a good value and a great home. Remember if you’re a seller who’ll be buying another home, you’ll have a great chance of making a great deal on your home purchase.
It wasn’t “perfect’ for buyers back when we all thought the real estate market was great. Many of today’s sellers need to think back to when they bought their home. Buyers often competed for the same home with other buyers and paid full or over full price. Now it’s not perfect for sellers.
This is the “State of Real Estate.” Our glass is “half full” rather than “half empty.” We’re still doing better than most areas here in the Seattle area.
It’s July! Why July? Because that’s the time of year when the largest number of homes and condos are on the market.
Are you surprised? So many times I hear from people they’re waiting until the summer to sell, when school is out. But it’s not the best time. If you look at the chart above, the peak of the competition, when the most number of homes and condos were on the market, was at the end of July. At that time 14,639 homes were on the market.
This year starts out with 10,008 properties on the market, which, if we follow typical yearly patterns, means the first of the year is one of the best times to sell a home. There’s so much less competition. In fact, there are 32% less homes on the market now when compared to July of last year.
Was 2010 unique? No, this is the typical pattern we see every year, no matter the type of real estate market. For example, here’s how the peak of 2009 looked:
The peak of the homes for sale in the Seattle area real estate market was the exact same week in 2009 and 2010.
So, if you’d like to make a move this year, please don’t wait until the summer. That’s when everyone else is going to put their homes on the market.
As soon as the statistics are available for the time of the year when the most homes sold, I’ll share that, too.
If you are thinking of selling your home, feel free to contact me to talk about how to position your home to get the best possible price given current market conditions. But contact me sooner, rather than later this year! Have a great 2011.
Is your head spinning with questions about foreclosures? I’ve had three clients ask me how the foreclosure process will affect real estate sales in Washington State. I’m not sure anyone can answer that question completely right now. This week I heard an NPR news story about mortgage backed securities now asking banks take back certain loans.
I’m not going to attempt to answer all of the questions about foreclosures, since as I’ve said, I don’t believe anyone knows how this will all shake out. However, I am going to talk about what’s happening in Washington State. Attorney General Rob McKenna made a statement as to what his office is doing regarding the foreclosure questions.
One important point to note:
- The focus of Atty General McKenna’s communication to trustees and servicers is directed at pending and future foreclosures.
The Washington Association of Realtors commented on Attorney McKenna’s foreclosure news:
….it is important to understand that buyers who have already closed the purchase of a home with title insurance, even if the home was foreclosed, are not at risk. The AG’s announcement does not undermine those buyers who purchased property and insured title. There is no reason to assume there were defects in a foreclosure process that is already concluded, but if a defect were revealed, the buyer will be protected by buyer’s title insurance.
Similarly, the Attorney General is not asking lenders with REO properties listed for sale or pending closing to stop the sale of those properties. Properties that have already been foreclosed are not affected by the Attorney General’s announcement. There is no reason to believe, based on these announcements, that already-foreclosed properties cannot be sold with clear and insurable title.
All Washington homeowners and REALTORS will benefit from a directive requiring lenders to adhere to Washington law during the foreclosure process. As we (The Washington Association of Realtors) have stated repeatedly in the last two weeks, there is nothing fundamentally broken in Washington’s foreclosure law. To the contrary, the law is good and the Attorney General is insuring that it is obeyed by foreclosing lenders.
Regardless, the foreclosure news puts some fear back into the real estate marketplace. It’s more fear of the unknown here that seems to be the issue. If it were more clear as to how this will impact real estate, it would help to calm the fear of the unknown, which seems to rule right now.
So, in answer to my question that’s the title of this post, I can’t give a definitive answer yet. This news, coupled with the time of year, and the upcoming election, are all issues impacting the real estate market and contributing to home buyers moving more slowly.
What do you think about the latest wrinkle in real estate with the foreclosure question?
Give up on buying a home, The American Dream or refocus how you think about the American Dream? Which is it? Recently, two articles appeared voicing opinions on the topic. One article, in “Time” magazine, thought home buying was something many people need to reconsider.
Whereas an article in The New York Times written by Karl Case, one half of the famous Case-Shiller index and a Wellesley college economics professor, had a different perspective. Professor Case says” The American Dream” should have a different focus. Buying a home is more like what it used to be, before homes began appreciating at dizzying rates. Mr. Case believes there are still benefits to buying a home, but we need to change our expectations. The “Times” questioned whether many should consider buying a home at all.
But for people with a more realistic version of the American dream, buying a house now can make a lot of sense. Think of it as an investment. The return or yield on that investment comes in two forms. First, it provides what is called “net imputed rent from owner-occupied housing.” You live in the house and so it provides you with a real flow of valuable services. This part of the yield is counted as part of national income by the Commerce Department. It is the equivalent of about a 6 percent return on your investment after maintenance and repair, and it is constant over time in real terms. Consider it this way: when Enron went belly up, shareholders ended up with nothing, but when the housing market drops, homeowners still have a house. And this benefit is tax-free.
The second part of the yield on investment in a house is the capital gain you receive if it appreciates and you sell the house. Gains are excluded from taxation if the property is a primary residence and the gain is less than $250,000 for a single filer or $500,000 for a married couple filing jointly.
You can deduct the interest you pay on the mortgage. Interest rates are about as low as they can get. And, don’t forget, home prices are down by 30 percent on average from the peak.
But housing has perhaps never been a better bargain, and sooner or later buyers will regain faith, inventories will shrink to reasonable levels, prices will rise and we’ll even start building again. The American dream is not dead — it’s just taking a well-deserved rest.
Many argue that home ownership should not be a goal pursued at all costs.
One major trade-off (with home ownership): mobility. Being free to move around the country easily means that people can go where the jobs are.
The inflexibility that pervasive home ownership brings to labor markets has a cost.
But if there ever were a time to start weaning America off the idea that home ownership cures all our ills, now-after the worst housing crash in 75 years–would be it.
Who do you think is right or do both perspectives have some merit? What do you think?
There’s no “red” on the Seattle-eastside real estate map, which means there were no seller’s markets in June, 2010. The Seattle-eastside real estate market has turned “yellow” for a market balanced between buyers and sellers, and “green.” “Green” on the map indicates a buyer’s market. It’s not surprising to me that certain areas stay as a balanced real estate market longer than some others.
Which Seattle-eastside areas have remained stronger as a balanced market between buyers and sellers?
East Bellevue and Redmond near Microsoft (530 on the map)
It’s traditionally one of the strongest areas, because homes are so close to jobs at Microsoft. The neighborhoods abut the main Microsoft campus and are an easy commute to downtown Bellevue, the economic hub of the eastside. Plus, housing can be found from the $200’s and $300’s to million+ dollar waterfront. Housing in many neighborhoods is in the affordable range for the area.
South Bellevue and Issaquah (500 on the map)
The area south of I-90 is a big drawing card for Seattle commuters. Again, there’s a variety of home styles and ages, good schools, and a fabulous commute either to eastside economic centers or downtown Seattle.
Sammamish, Issaquah, Preston, Fall City, and North Bend. (540 on the map)
Another area that’s consistently one of the strongest is the plateau areas of Sammamish, Issaquah, Preston, Fall City, and North Bend. The different eastside cities here have a huge variety of homes from estates to acreage to newer construction and town homes. Good schools and some good values keep the area strong.
There are still great homes and condos out there to buy and interest rates are at historic lows. The loss of the tax credit may not make much of a difference when calculating the savings in monthly payments over time.
Demanding home buyers? The New York Times had an article about home buyers being more demanding. I’ve seen it in action on Seattle’s eastside.
In recent home sales, not only do the buyers want a good price for the home, which is expected the way the real estate market has been, but some home buyers don’t want to buy a home unless the systems are all new or newer. Buyers have asked for a new furnace when the furnace worked fine and money to cover a future roof replacement that would not be happening in a condo complex for at least five years. Buyers are asking for replacements for systems that are older, but still working.
Are you seeing the same thing happen with some home buyers?
Mr and Mrs. Home Seller ask: “Why don’t we let the buyers pick out the new carpet? We don’t know what color they may want.”
This is one of the most common sentiments I’ve heard over the years from home sellers. Sellers often think it’s best to leave the old carpet, offer a carpet allowance if needed, and let the buyer choose their own carpet.
Is this right? Do buyers want to choose their own carpet?
NO. Not in the Seattle-Eastside real estate market. Buyers DO NOT want to choose, pay or replace carpet when buying a new home. In this area, Seattle’s eastside cities of Bellevue, Redmond, Kirkland, and Issaquah, etc., buyers want to buy a home that’s move-in ready.
On Seattle’s eastside, the typical buyer is a very busy person(s) who may work a lot of hours. Most buyers aren’t looking to do structural or cosmetic updates to a home. They don’t have the time or the inclination. They want to move in and continue on with their lives with the least amount of disruption. They don’t want to be replacing carpet. Besides, there are lots of Seattle-eastside homes to choose from and many of the other homes have been updated and are ready to go.
Most home sellers don’t want to replace carpet either, but think about it. The buyers don’t have to replace your carpet because they don’t have to buy your home. They have other homes to buy. However, as the seller, you have only one home to sell and so you’ve got to do it. Remember, if you feel like you don’t want to replace the carpet, the buyer probably feels the same way. The catch is, they don’t have to do it, they can buy another home.
So if you want to get an offer to buy your home and make the most money while selling your home, replace your carpet if it’s worn, discolored, has stains, you name it. Make sure it looks fresh and clean, otherwise it will cost you money in the sales price for your home and it could even cost you getting a buyer.
Should you spend a lot for expensive carpet? Absolutely not. You should put in a good grade of carpet, but one that is similar to what builders install in new construction. Make sure you pick a neutral color and install a good 8 lb. pad underneath the rug. A thin pad with new carpet won’t work. It’s easy to tell that either the carpet or the pad are thin the minute you step on it. It feels like you’re on cement.
Looking for some other tips to get the most money when selling your home? Read Parts 1-5, planting some “green,” when to set the sales price, yard clean up, dressing up a front door, and replacing moldings and doors. Pick what your home needs to get it “dressed up” to sell in the competitive Seattle real estate market.
Twelve days ago I wrote a post that King County properties for sale was rapidly heading up to the 2009 high. Just last week we were within 300+ homes/condos of the 2009 peak, which stands at 13,861. There 13,515 homes/condos for sale in King County that week.
This week we see the first big decline, with a drop of 570 properties. The number is back below 13,000, at 12, 946.
Phew, I was just beginning to wonder if we were going to surpass 2009’s real estate totals in the Seattle area. We may, as 2010 is still young, but it’s a breath of fresh air in the real estate market to see a drop in inventory (the number of homes and condos for sale). Sales have been brisk as many buyers were anxious to buy a home in the Seattle area before the expiration of the 2010 tax credit, which could explain the decline in inventory.
The next few weeks will be interesting. Normally the number of homes for sale does increase in the summer months in Seattle, but I’m wondering if a lot of sellers put their home on the market earlier this year to capture the activity with the 2010 home buyers’ credit.
Do you think the numbers will increase as we head into the summer?
You’re a home buyer out looking at homes. You pull in front of a home that looks kind of interesting. You stand by the front door as your agent gets the key out of the key box to open the door. You look around the entrance and notice dirt and scuff marks on the front door. The brass plate is all tarnished, there are scratches by the key hole and the door mat is dirty. It looks like there’s been years of wear and tear and you haven’t even been inside.
A dirty front door and scratched hardware is not a big deal, or is it?
Buyers, what do you think?
I heard from past buyers that it raises a lot of questions. Mostly, the buyer is wondering how well the home has been maintained if something so obvious sticks out when you first walk up. Will this buyer be taking a closer look at the house? Will the buyer start wondering if there might be maintenance issues. Possibly.
A nice front door and shiny hardware make a big difference. It keeps the level of positive energy and interest up. It’s like seeing a blind date for the first time, you want that person to look good from the “get go,” not with messy hair or dirty clothing.
So home sellers, stand out in front of your home by the front door, just as a buyer would. Look at what the buyer would be looking at when standing at the front of your home.
- Is your front door dirty?
- Is it in need of paint?
- Is the hardware gleaming and fresh or is it scratched?
- Are the railings in good shape?
- Are the steps neat and clean?
- Do you have flowers providing color by the front door?
- Is the doormat, fresh and clean?
- Do the house numbers look clean and stand out?
None of the fixes for the above should cost a lot of money. It can actually cost you more money if these items are not in good condition. Here are some more suggestions for creating that great curb appeal.
So before you sell your home, think of it like getting ready for a date or going to a party hoping to meet someone. In this case, your home is meeting a potential buyer. The buyer has a lot of options to choose from, like you might at a party. Help the buyer to choose your home by getting it ready for the party, oops, I mean to sell.