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Scott@SmacRae.com

Welcome to 1st quarter MI real estate news update from your real estate concierge! Top of the day one and all! First quarter of 2015 for Mercer Island, Seattle, and the Eastside has been a barn burner of a start to the year! I know I keep saying it, but inventory continues to be incredibly low and this is putting huge pressure on buyers for the houses that do come on to the market. I personally have been involved in several multiple offer situations where there are 6, 8 and even a dozen offers on the table for the seller to choose from!? In follow up on these houses I am seeing sold prices that are as much as 10+% over the list price, which can make for a very discouraging buying experience. Most folks just don’t expect to have to be prepared to reach so far over the initial asking price, which can seem high to begin with, to put in a competitive offer on a home. This situation is not reserved for only high end homes either as we are seeing this up and down all price points in King County in both single family homes and condominiums. Real Estate News
Q1 2014 here on the Island we had 63 closings, Q1 2015 we are at 47, which continues to set a new record for fewest closings in the Q1 quarter. Mercer Island has continued to hover at 50 to 60 residential homes for sale in Q1, and here is the breakdown at the typical price points buyers are asking for as of 4/21/2015 with 49 the residential homes for sale: As you can see the greatest portion of homes are in the one million to 2 million range, and these houses are not staying on the market more than a week before going under contract, if they are updated and move in ready. The ‘architectural adventures’ that one finds on the Island, or homes that are simply overpriced, are the only homes that are not moving in short order here. Builder presells will tend to skew the ‘days on market’ stat and there are a fair few of those being marketed right now. As always, I’m a resource for any information you may be interested in concerning the Mercer Island market or the surrounding areas. Q1 Average Days on Market (DOM) Mercer Island: the time for a house to be on the market for from being listed to sold in Q1 has dropped significantly from Q4 which was 111 days and is now down to 53, with the biggest drop being in the over $2,000,000 segment which has come down from 111 days to 65 days. (Reflects single family home sales only, and is not inclusive of condominiums or townhomes or any short sales. Information provided from NW Multiple Listing Service.) King County: the time for a house to be on the market for from being listed to sold in Q1 has dropped significantly from Q4 which was 55 days and is now down to 46, with the biggest drop being in the over $2,000,000 segment which has come down from 81 days to 74 days. Majority of the King County transactions have been under a million dollars and given that volume the DOM for the county is slightly lower than the Island…unless you are looking at under a million dollar homes on the Island, and anyone of them that comes on the market is snapped up (Reflects single family home sales only, and is not inclusive of condominiums or townhomes or any short sales. Information provided from NW Multiple Listing Service.) Average Price of Single Family Homes (Reflects single family home sales only, and is not inclusive of condominiums or townhomes or any short sales. Information provided from NW Multiple Listing Service.) Mortgage Rates, News and Insights
After dropping a bit with the stock market rates are currently holding steady and look to potentially stay that way through the end of the year. LOCAL RATES AS OF 4/15/2015 (Well qualified buyers, non-inclusive of APR) • 30 year fixed up to $506K: 3.750% • 30 year Jumbo over $506K: 3.750% • FHA’s up to new Federal limit of $517,500: 3.250% Stephen Bozick of Axia Home Loans writes: “It’s been an interesting year so far for the US credit markets. Interest rates hit a 21 month low in January, only to reverse course sharply, rising approximately .50% in about 3 weeks. We’ve improved over .25% since which means rates are still very near all-time lows. Yes, all-time lows. Well, at least back to 1971, which is far back as FHLMC keeps records. The last 3.5 years have been a “once in a lifetime” opportunity for borrowers. The question on everyone’s mind is “How long will rates remain this low?” While there is some likelihood that the Fed will begin to increase short term rates this year, the future of long term rates is unknown. Historically, Fed rate increases usually lead to increases in long term rates, but that may not be the case this time. With the world economy sputtering along and some long term interest rates in the Euro zone near zero, the influx of capital to our credit markets is one of the reasons our long term interest rates remain low and may stay low for quite some time. If you had the choice of a German 10 year bond at less than 1% or a US 10 year bond at 1.85%, where would you invest your money?
"My advice for home buyers and borrowers: you’re living in the golden age of lending, so go forth and borrow. It’s not going to get any better than this.” -Stephen Bozick Senior Loan Originator Axia Home Loans NMLS 91676
Office 206 230 5368/Cell 206 999 7406
From Axia Home Loans; below is a snapshot of Axia’s take on the current market.
https://axiahomeloans.com/blog Market Update:
April 10, 2015 6:05pm The Labor Department reported that March job creation was well below expectations and the fewest added in more than a year. However the number of Americans filing new claims for jobless benefits was also less than expected indicating the weak March job growth was likely a fluke. Mortgage prices worsened on the news.
Loss of momentum in U.S. growth suggests the Fed, which some have thought could raise rates in June, may push back its first rate hike later in the year.
The Mortgage Bankers Association Application index showed purchase applications hit a 21-Month high last week, the third straight week that purchase volume has increased.
The weak employment report, combined with weak consumer and business spending, industrial production and housing starts data is suggesting the economy grew at less than 1.0% annual rate in the first quarter. The labor market strength was underscored by a report on Tuesday showing job openings surging to a 14-year high in February and less competition for jobs among the unemployed.
Next week, the U.S economic data will be important to watch to see if weakness seen in Q1 were largely transitory. In particular, the U.S. Retail Sales and Inflation numbers will be important for the interest rate markets. Around King County Forbes Magazine, January 27th 2015
http://www.forbes.com/sites/erincarlyle/2015/01/27/americas-fastest-growing-cities-2015/2/ “Seattle jumps up six slots this year to fifth place. From 2013 to 2014, King County added 56,000 jobs to the area’s base of about 1.5 million. Greater Seattle is host to a number of big companies: Boeing, Microsoft, Costco, Starbucks and Amazon. Recently, Facebook announced an expansion in the area, while Google currently has some 1,600 employees in the region and has announced plans to expand; Elon Musk last week announced plans for a new SpaceX outpost in Seattle (with the goal of establishing a human colony on Mars).Its $72,000 median pay for workers with college degrees is the 3rd highest for metros across the nation, while a year-over-year jobs growth of 3.56% places it ninth among all the metros we considered…” Economic Development Council of Seattle King County, March 16th 2015
http://edc-seaking.org/news-media/blog/ “Juno Therapeutics Commits to Seattle for Headquarters, Will Grow Jobs in Seattle and Bothell as They Continue Life-Changing Work Toward Cure for Cancer…” A quick overview of the economic health in King County
Other stats on median income, occupation in this link: http://www.bestplaces.net/economy/county/washington/king National News:
CNN, March 19th, 2015
What the Fed rate hike means to mortgage 
money and the economy:
http://money.cnn.com/video/news/2015/03
/18/fed-meeting-patience.cnnmoney/ “Many Americans don't pay much attention to 
what Federal Reserve Chair Janet Yellen and 
"the Fed" do, but that could change very soon. 
In June, the Fed could do something it hasn't 
done since Barack Obama was a U.S. senator: 
raise interest rates. Don't hit the snooze button. 
An interest rate hike will impact everyone who 
has a home mortgage, car loan, savings account or money in the stock market. In short, life is about to get better for savers and a little harder for borrowers. Investors could also face tougher times.” Inman, March 26th 2015
The difference between market price and market value in real estate
http://www.inman.com/2015/03/26/the-difference-between-market-price-and-market-value-in-real-estate/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+inmannews+%28Inman+News+-+Headlines%29 “In real estate, many agents suggest that it all comes down to price. Is it true that a property sells just because of price? What about the value component? Well, we all can agree that there needs to be an exchange of goods in order for a sale to occur. However, the buyer and seller might not rate value equally...” The Power of Two: Your recommendations to friends and colleagues are always much appreciated. You have my personal guarantee that your referrals will be treated as a privilege by me, and you will be thanked by them. If you can think of two people that I could be of service to, please feel free to forward them my contact information. Best wishes to all for a wonderful end of winter and coming of spring! ﷯

Calculated Risk

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