20.3% of the population growth last year in Washington came from abroad.
55% of international buyers pay cash for real estate.
$246,800 was the median price of homes sold in Washington in the second quarter of 2010. That's 6.9% below one year ago.
That's right, the above stat said we have had a 6.9% decrease in the median home price from last year. In most cases if you are looking for that 50% discount you will have to move to Nevada or Michigan.
There is a 47% chance that Seattle area home prices will be lower in two years than they are today (source PMI).
Friday, September 24, 2010
Keep Your Home Purchase On Track
So, you've found your dream home. Don't let any silly missteps prevent a successful closing. A home purchase transaction can fall apart for many reasons. Here are a few tips for avoiding some of those mistakes.
1. Be truthful on your mortgage application
You may think fudging your income a little or omitting debts when applying for a mortgage will go unnoticed. Not true. Lenders have become more diligent in verifying information on mortgage applications. If you fib, expect to be found out and denied the loan you need to fund your home purchase. Plus, intentionally lying on a mortgage application is a crime.
2. Hold off on big purchases
Lenders double-check buyers' credit right before the closing to be sure their financial condition hasn't weakened. If you've opened new credit cards, significantly increased the balance on existing cards, taken out new loans, or depleted your savings your credit score may have dropped enough to make your lender change its mind on funding your home loan. Although it's tempting to purchase new furniture and other items for your new home, or even a new car, wait until after the closing.
3. Keep your job
the lender may refuse to fund your loan if you quit or change jobs before you close the purchase. The time to take either step is after a home closing, not before.
4. Meet contingencies
If your contract requires you to do something before the sale, do it. If your're required to secure financing, promptly provide all the information the lender requires. If you must deposit additional funds into escrow, don't stall. If you have 10 days to get a home inspection, call the inspector.
5. Consider deadlines immovable
Get your funds together a week or so before the closing so you don't have to ask for a delay. If you'll need to bring a certified check to closing, get it form the bank the day before, not the day of your closing. Treat deadlines as sacrosanct.
1. Be truthful on your mortgage application
You may think fudging your income a little or omitting debts when applying for a mortgage will go unnoticed. Not true. Lenders have become more diligent in verifying information on mortgage applications. If you fib, expect to be found out and denied the loan you need to fund your home purchase. Plus, intentionally lying on a mortgage application is a crime.
2. Hold off on big purchases
Lenders double-check buyers' credit right before the closing to be sure their financial condition hasn't weakened. If you've opened new credit cards, significantly increased the balance on existing cards, taken out new loans, or depleted your savings your credit score may have dropped enough to make your lender change its mind on funding your home loan. Although it's tempting to purchase new furniture and other items for your new home, or even a new car, wait until after the closing.
3. Keep your job
the lender may refuse to fund your loan if you quit or change jobs before you close the purchase. The time to take either step is after a home closing, not before.
4. Meet contingencies
If your contract requires you to do something before the sale, do it. If your're required to secure financing, promptly provide all the information the lender requires. If you must deposit additional funds into escrow, don't stall. If you have 10 days to get a home inspection, call the inspector.
5. Consider deadlines immovable
Get your funds together a week or so before the closing so you don't have to ask for a delay. If you'll need to bring a certified check to closing, get it form the bank the day before, not the day of your closing. Treat deadlines as sacrosanct.
Tuesday, September 21, 2010
The Cost of Fees
The fees collected by local governments vary from one jurisdiction to the next, as does the price for each fee.
An estimate by the Washington Chapter of the American Planning Association (APAWA)found that government officials add as much as 17 percent to the price of a typical home through land use regulations. To use our area as an example, this would account for $51,000 of the roughly average $300,000 home. A different study by the University of Washington shows that since the adoption of the GMA (Growth Management Act), as much as 50 percent of the price of a home is attributable to land use regulations.
Even $68,000 imposed by government officials is enough to price many working class families out of the housing market.
A study prepared by the Department of Construction Management at the University of Washington in 2008 shows that policymakers collected more than $1.9 billion in state sales tax and an additional $337.5 million in Business and Occupation taxes from the construction industry. Additionally, construction companies paid sales taxes to local governments of more than $440 million.
Many of the laws used to regulate the construction industry are needed to provide safety or serve the public interest. However, as the data shows, local officials often impose construction fees when they do not need to, in an effort to collect more in taxes. These taxes and extra regulations have a strong effect of unnecessarily increasing the cost of construction in our state.
As stat and local officials continue to ignore or downplay their role in adding to the cost of construction, they put Washington at a marked competitive disadvantage compared to the business climate in other states.
If policy makers are serious about helping economic recovery, they must examine unnecessary fees and remove the regulatory barriers that increase costs to taxpayers and drive up the cost of living for all of us.
An estimate by the Washington Chapter of the American Planning Association (APAWA)found that government officials add as much as 17 percent to the price of a typical home through land use regulations. To use our area as an example, this would account for $51,000 of the roughly average $300,000 home. A different study by the University of Washington shows that since the adoption of the GMA (Growth Management Act), as much as 50 percent of the price of a home is attributable to land use regulations.
Even $68,000 imposed by government officials is enough to price many working class families out of the housing market.
A study prepared by the Department of Construction Management at the University of Washington in 2008 shows that policymakers collected more than $1.9 billion in state sales tax and an additional $337.5 million in Business and Occupation taxes from the construction industry. Additionally, construction companies paid sales taxes to local governments of more than $440 million.
Many of the laws used to regulate the construction industry are needed to provide safety or serve the public interest. However, as the data shows, local officials often impose construction fees when they do not need to, in an effort to collect more in taxes. These taxes and extra regulations have a strong effect of unnecessarily increasing the cost of construction in our state.
As stat and local officials continue to ignore or downplay their role in adding to the cost of construction, they put Washington at a marked competitive disadvantage compared to the business climate in other states.
If policy makers are serious about helping economic recovery, they must examine unnecessary fees and remove the regulatory barriers that increase costs to taxpayers and drive up the cost of living for all of us.
Thursday, September 16, 2010
A thought for the day....
"Remember this-a farmer who plants only a few seeds will get a small crop. But the one who plants generously will get a generous crop. You must each decide in your heart how much to give. And don't give reluctantly or in response to pressure. "For God loves a person who gives cheerfully." And God will generously provide all you need. Then you will always have everything you need and plenty left over to share with others."
Paul of Tarsus
Paul of Tarsus
10 Reasons to Buy a Home
Time magazine is being overly pessimistic in its recent cover piece that called into question the benefits of homeownership. In fact, now is a great time to buy. And, what's more, tomorrow will be a great time to own, because the fundamental strength of homeownership hasn't changed.
Why is now a great time to buy? Here are 10 reasons:
1. You can get a good deal. Prices are down 30 percent on average. They're at a level that makes sense for people's income.
2. Mortgages are cheap. At 4.3 percent on average for a 30-year fixed-rate mortgage, your costs to own are down by a fifth from two years ago.
3. You can save on taxes. When you add up the deductions for mortgage interest and others, the cost of owning can drop below renting for a comparable place.
4. It'll be yours. The one benefit to owning that never changes is that you can paint your walls orange if you want (generally speaking; there might be some community restrictions). How many landlords will let you do that?
5. You can get a better home.In some markets, it's simply the case that the nicest places are for-sale homes and condos.
6. It offers some inflation protection. Historically, appreciation over time outpaces inflation.
7. It's risk capital. If the economy picks up, you stand to benefit from that, even if you're goal is just to have a nice place to live.
8. It's forced savings. A part of your payment each month goes to equity.
9. There is a lot to choose from.,There are some 4 million homes available today, about a year's supply. Now's the time to find something you like and get it.
10.,Sooner or later the market will clear. The U.S. is expected to grow by another 100 million people in 40 years. They have to live somewhere. Demand will eventually outpace supply.
Source: Wall Street Journal, Brett Arends (9/16/10)
Why is now a great time to buy? Here are 10 reasons:
1. You can get a good deal. Prices are down 30 percent on average. They're at a level that makes sense for people's income.
2. Mortgages are cheap. At 4.3 percent on average for a 30-year fixed-rate mortgage, your costs to own are down by a fifth from two years ago.
3. You can save on taxes. When you add up the deductions for mortgage interest and others, the cost of owning can drop below renting for a comparable place.
4. It'll be yours. The one benefit to owning that never changes is that you can paint your walls orange if you want (generally speaking; there might be some community restrictions). How many landlords will let you do that?
5. You can get a better home.In some markets, it's simply the case that the nicest places are for-sale homes and condos.
6. It offers some inflation protection. Historically, appreciation over time outpaces inflation.
7. It's risk capital. If the economy picks up, you stand to benefit from that, even if you're goal is just to have a nice place to live.
8. It's forced savings. A part of your payment each month goes to equity.
9. There is a lot to choose from.,There are some 4 million homes available today, about a year's supply. Now's the time to find something you like and get it.
10.,Sooner or later the market will clear. The U.S. is expected to grow by another 100 million people in 40 years. They have to live somewhere. Demand will eventually outpace supply.
Source: Wall Street Journal, Brett Arends (9/16/10)
Friday, October 16, 2009
Extending & Expanding the Tax Credit Debate Goes On
Here is the latest on the debate in congress concerning extending and/or expanding the First Time Home Buyer Tax Credit.
Congress is considering expanding and extending the $8,000 first-time homebuyer tax credit, which expires Nov. 30.
More than 1.8 million home buyers will have used the credit by the end of November, including an estimated 355,000 who wouldn’t have bought a home without it, according to the National Association of REALTORS® and other analysts.
Mark Zandi, chief economist for MoodysEconomy.com, is among those in favor of extending the credit. Zandi would also make it available to all homebuyers. "The most fundamental argument for the credit is that nothing works in the economy if housing is falling," Zandi said. "[The credit] is a good insurance policy. It's vital to stem the housing price declines."
Opponents argue that the tax credit is too expensive and doesn’t help enough people.
Extending the credit through the end of 2010 and making it available to single filers earning up to $150,000 and joint filers earning up to $300,000 would cost an estimated $16.7 million. Some in Congress propose using unspent money from the $787 billion stimulus bill to pay for it.
Source: CNNMoney.com, Les Christie (10/14/2009)
Congress is considering expanding and extending the $8,000 first-time homebuyer tax credit, which expires Nov. 30.
More than 1.8 million home buyers will have used the credit by the end of November, including an estimated 355,000 who wouldn’t have bought a home without it, according to the National Association of REALTORS® and other analysts.
Mark Zandi, chief economist for MoodysEconomy.com, is among those in favor of extending the credit. Zandi would also make it available to all homebuyers. "The most fundamental argument for the credit is that nothing works in the economy if housing is falling," Zandi said. "[The credit] is a good insurance policy. It's vital to stem the housing price declines."
Opponents argue that the tax credit is too expensive and doesn’t help enough people.
Extending the credit through the end of 2010 and making it available to single filers earning up to $150,000 and joint filers earning up to $300,000 would cost an estimated $16.7 million. Some in Congress propose using unspent money from the $787 billion stimulus bill to pay for it.
Source: CNNMoney.com, Les Christie (10/14/2009)
Monday, October 5, 2009
Take the Trauma Out of Homebuying
Here are five tips to help reduce the stress of the home buying process. I left engaging the assistance of a competent realtor off the list as that seems too obvious seeing that you are on my website in the first place.
1. Factor in maintenance and repair costs in your post-home buying budget. Even if you buy a new home, there will be some costs. Don't leave yourself short and let your home deteriorate.
2. Remember, there's no "right" time to buy, any more than there's a right time to sell. If you find a home now, don't try to second guess the interest rates or the housing market by waiting. Changes don't usually occur fast enough to make that much difference in price, and a good home won't stay on the market long.
3. Choose a home first because you love it; then think about appreciation. While U.S. homes have appreciated an average of 5.4 percent annually from 1998 to 2002, a home's most important role is as a comfortable, safe place to live.
4. Don't ask for too many opinions. It's natural to want reassurance for such a big decision, but too many ideas will make it much harder to make a decision.
5. Don't wait until you've found a home and made an offer to get approved for a mortgage, investigate insurance availability, and consider a schedule for moving. Presenting an offer contingent on a lot of unresolved issues will make your bid much less attractive to sellers.
1. Factor in maintenance and repair costs in your post-home buying budget. Even if you buy a new home, there will be some costs. Don't leave yourself short and let your home deteriorate.
2. Remember, there's no "right" time to buy, any more than there's a right time to sell. If you find a home now, don't try to second guess the interest rates or the housing market by waiting. Changes don't usually occur fast enough to make that much difference in price, and a good home won't stay on the market long.
3. Choose a home first because you love it; then think about appreciation. While U.S. homes have appreciated an average of 5.4 percent annually from 1998 to 2002, a home's most important role is as a comfortable, safe place to live.
4. Don't ask for too many opinions. It's natural to want reassurance for such a big decision, but too many ideas will make it much harder to make a decision.
5. Don't wait until you've found a home and made an offer to get approved for a mortgage, investigate insurance availability, and consider a schedule for moving. Presenting an offer contingent on a lot of unresolved issues will make your bid much less attractive to sellers.
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