Q4 Newsletter '14 [Scott MacRae Realitor Concierge

206.499.5766

Scott@SmacRae.com

Welcome to 4th quarter & year end MI real estate news update from your real estate concierge! 4th quarter (October, November, December) home sales for 2014 were not at the volume that we have normally seen on the Island for the last 3 years, specifically December has been much more active in past years. As you can see from the transactions below in our neighborhood, it was very quiet for home sales this last quarter. In general the I-90 corridor was slower for home sales year on year, and as the house inventory continues to be close to/at all-time lows in the area, it was not hugely surprising to see this dip in activity. Mercer Island in 4th quarter will generally see a home inventory of around 100 – 125, but the low point in this quarter was 37 available homes Island wide?! Add in the available condos and we tipped just over 50 properties in inventory during this time… Listed below are the 4th Quarter single family home sales, and current SFH listings at the time of writing in our local area from: SE 40th St. to SE 49th St. and 83rd AVE SE to 95th AVE SE. The sold homes are from October 1st to December 31st. For 2014, our 4 person team of Bisceglia/Ford/MacRae/Nadesan is the #1 team for Coldwell Banker Bain Mercer Island for sales volume. If you would like to put our success to work for you, please feel free to contact me via my contact information on the last page.
﷯ 1 As of 1/31/2015 these property(s) were for sale. 2 New construction Housing Market: ﷯Mercer Island stats and news: The statistical information below is as reported from the NW Multiple Listing service Traditionally the market is getting ready to enter its most active time of the year starting right after the Super Bowl, and will stay very active right into September. So if you are working with your real estate agent on timing, I would recommend you talk with them about this window of time. As always I am a resource for any information you may be interested in concerning the Island market or the surrounding areas. The below sales numbers reflect a 17.60% increase in final sales price year on year for Mercer Island based on single family home sales. 3
Average sales price on MI according to the Multiple Listing Service for 2014 was $1,114,597.92
Average sales price on MI according to the Multiple Listing Service for 2013 was $918,421.50 The 4th quarter Mercer Island average Days on Market (DOM) is 55 days for all houses. Under $1,000,000 the avg. DOM was: 45 days.
$1,000,000 to $2,000,000 the avg. DOM was: 47 days.
Over $2,000,000 the avg. DOM was: 111 days. The complication of low inventory is that those that want to upsize or downsize do not have as many options, so are tending to not market their houses in order to take a ‘wait and see’ approach. The ‘wait and see’ is compounding the current inventory level conundrum along with a host of other factors. After all, if you want to sell and then buy on Mercer Island and there are no homes to consider, it makes it tough to market your home and be potentially without a home to move into. One option is short term rentals here on the Island. This allows you to market your home while waiting for new homes to come to market versus potentially ‘settling’ for home because you are feeling pressured to get into a house. I frequently come across short term rentals and am happy to make these introductions as part of my concierge real estate service. King County stats and news:
The statistical information below is as reported from the NW Multiple Listing service
The below sales numbers reflect a 6.98% increase in sales price year on year for King Co. based  on SFH sales.3 Average sales price in King Co. according to the Multiple Listing Service for 2014 was $439,119.42
Average sales price in King Co. according to the Multiple Listing Service for 2013 was $408,458.58
The 4th quarter king County average Days on Market (DOM) is 55 days for all houses. Under $500,000 the avg. DOM was: 45 days. $500,000 to $1,000,000 avg. DOM was: 42 days. $1,000,000 to $2,000,000 avg. DOM was: 59 days. Over $2,000,000 the avg. DOM was: 81 days.
County wide our market continues to be strong and our area attractive to people who are relocating here for hi-tech or bio-tech jobs. Sources suggest that Facebook is going to bring an office into the Seattle area that will be 30 employees strong joining Twitter who is also establishing a presence in Seattle. http://www.xconomy.com/seattle/2010/05/05/facebook-coming-to-seattle-in-july-engineering-center-to-hire-30-people/ This will continue to add to an already strong demand for housing in the area, as well as put continued pressure on home prices, and very likely continuing the upward trend of home prices in our local market.
﷯ 3 Reflects single family home sales only, and is not inclusive of condominiums or townhomes or any short sales. Rentals are another sector that is great to be involved  in as current rental vacancy rates hover at what is  considered an all-time low and with construction of  new buildings far behind demand, rental rates are on  the significant rise as detailed by the Seattle Times: http://seattletimes.com/html/businesstechnology/ 2025448532_rentsrisingxml.html Nationally: There is a big stir afoot regarding the  appraisal of homes for a sale. Currently a home  is judged by the appraiser against similar homes with variables for location, neighborhood, view etc. Fannie Mae is working on putting into place access to their database for lenders, and this may be problematic as this excerpt from the Seattle Times implies, or click the link below if you want to read  the full story.
“A national petition sponsored by the Illinois Coalition of Appraisal Professionals is now circulating, demanding transparency. Critics such as Mike Turner charge that Fannie’s data will not be able to recognize differences between adjacent neighborhoods — a key factor in valuations — because it is based on census tract groupings, which may include mixes of lower-priced and higher-priced homes from different neighborhoods.” http://seattletimes.com/html/businesstechnology/2025391002_bizharney11xml.html Nationally: According to one annalist on DSNews.com, we should see a slowdown of rising home prices after the next 18 to 24 months. The annalist cited the new Case-Shiller study format tempering the rise in housing prices and further stated that housing prices did not fall on average of 34% nationally as previously suggested, but more like 25% nationally and we have rebounded to recover about 20+% of the 25% nationally during the housing crash. In King County we’ve seen a bit higher recovery than the national average for current home prices, but locally we did not fall nearly as far down in home prices as other regions nationally. Mortgage News: Rates: After dropping a bit with the stock market rates are currently holding steady at the moment and look to potentially stay that way through the end of the year. Rates locally for well qualified buyers as of 1/26/2015, non-inclusive of APR are: 30 year fixed up to $506K is at 3.875% 30 year Jumbo over $506K at 4.00% FHA’s are 3.375%, up to the new Federal limit for this market of $517, 500
Here is a good link from the Axia Home Loans blog talking about the strength of the US dollar and the volatility of European market effects on the US mortgage market. https://axiahomeloans.com/blog First time home buyers:
Surprisingly, or not depending on how you gauge the obstacles to first time home buyers, this group has been in decline recently to a low of about 33% of all home transactions. This is troubling when first time home buyers typically represent almost half of the home sales out there. Lawrence Yun, NAR chief economist, says “there are many obstacles young adults are enduring on their path to homeownership. “Rising rents and repaying student loan debt makes saving for a down payment more difficult, especially for young adults who’ve experienced limited job prospects and flat wage growth since entering the workforce,” he said. “Adding more bumps in the road, is that those finally in a position to buy have had to overcome low inventory levels in their price range, competition from investors, tight credit conditions and high mortgage insurance premiums.” The rest of the article is here and a very good read: http://www.realtor.org/news-releases/2014/11/nar-annual-survey-reveals-notable-decline-in-first-time-buyers I have asked our resident expert, Steve Bozick of Axia Mortgage, to detail out some of the great first time home buying tools that are available out there. Surprisingly there are great rates available, down payment assistance from the state, and the best news is that the ceiling price has been raised to $517,500 for FHA loans…that puts A LOT of homes on the table here in King County! Steve Bozick with his thoughts on first time home buying: The single biggest challenge facing first time home buyers today is saving for a down payment. While many think the lending world was forever changed by the subprime lending crisis, low down payment loan options for first time homebuyers have always been available, and have recently become even more attractive. Here are some highlights: Conventional 3% down
- Rates in the upper 3’s to low 4’s depending on credit score.
- Private mortgage insurance (PMI) required. Reduced PMI available for certain buyers. FHA 3.5% down
- Rates in the mid to low 3’s. Less dependent on credit score than conventional loans.
- Lower total payments when compared to conventional loans.
- FHA mortgage insurance required. One time premium that can be financed plus a monthly premium that   only drops off with a refinance or sale.
- More flexible underwriting guidelines when compared to conventional loans. VA 0% down
- Rates prices about the same as FHA loans.
- VA funding fee required; waived for disabled vets.
- Very flexible underwriting in terms of debt ratio and credit score. USDA 0% down
- Rates in the mid 3’s.
- Up front and monthly USDA Guarantee fees required. Up front can be financed.
- Must buy in designated area and meet maximum family income test. Washington State Housing Finance Commission
- Down payment or closing cost assistance in the form of grants or loans in conjunction with Conventional,   FHA, VA, or USDA loans.
- Mortgage rates are slightly higher than on similar loans without down or cost assistance.
- Requires home buyer education and possible maximum family income test. Mortgage Credit Certificate
- Tax credit for 20% of total mortgage interest paid.
- Program available with all loan types (FHA, VA,   Conventional, and USDA).
- Family income and home acquisition cost limits.
- Possible recapture of tax credit in later years  – consult a tax advisor!!!!! My website: Please feel free to visit my website  which is located at www.SMacRae.com and let me  know what you think!? There is some very good  (I think ☺) information located there about the  various planning stages to either selling or buying  a home. 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

http://www.realtor.org/news-releases/2014/11/nar-annual-survey-reveals-notable-decline-in-first-time-buyers

www.SMacRae.com