2023 PROPERTY TAXES DUE & FALL CHECKLIST!

Fall is now upon is, and that brings two things to mind. 2nd half 2023 Property taxes are due November 1st and its time to get your home or investment property ready for winter.

1st things 1st– many of you are fortunate enough to have paid off your mortgage or have a private loan that does not require escrow of taxes. THIS IS YOUR REMINDER – Time to write that check or log in to the county website and get those 2nd half taxes PAID.

NEXT – Get your home ready for winter!

  • Make sure gutters are clean & downspouts drain away from the foundation.
  • Disconnect & put away all hoses & add foam or other faucet covers to outdoor faucets.
  • Winterize outdoor sprinklers.
  • Check outdoor lighting for those long winter nights.
  • Tune up your furnace and change the filter.
  • And now is a good time to know where your water shut off and water meter are. Watch for my upcoming blog ‘7 things to know about waterlines’ for more details. 

Fall is also a good time to check in on the value of your home, visit my website for a free Home Valuation. No email or phone required unless you want me to refine your value.

Fall 2022 Market Update – Why the Bubble is NOT bursting & sellers still have an edge.

Contrary to most Headlines & other ‘Market Experts” I do not believe the US Housing market is a ‘Bubble about to Burst’ or that there will be a crash in home prices. The reason is simple Supply & Demand. While it is true that inventories are rising, homes are sitting longer & raising interest rates have pushed some buyers to the sidelines, there are still more potential buyers reaching average first time home buying age than there have been in 20 years. As shown the the above chart, this influx of buyers peaks next year but the number of 1st time home buyers remains higher than the last few years for 8 to 10 years.

To understand how demographics affect housing, one must go back to the housing crisis in 2007 – 2010. Referring back to the chart, you see US births dropped sharply starting in 1972 through 1976. With an average first time home buyer age of 30 at that time, this meant a shortage of buyers in 2002 through 2006.  Few buyers meant few home loans, so banks started getting creative with mortgages. Lending standards were lowered, loans made & banks made their money by repackaging & selling loans as securities. Loan, package, sell & then do it again. In turn, this encouraged builders to build too many houses. The home ownership rate raised to an all time high of 69.2% in Q2 2004.  But by 2007 loans defaults rose as homeowners could not / did not make their payments. By the fall of 2008 lending froze, no one could buy except with cash, sellers had no equity because of plummeting prices. If you were there, I need explain no more.

Other demand side factors are high immigration, an ever increasing population and household formation rate, and COVID induced migration patterns turning renters into buyers. These we will leave for another day.


The other side of the coin – Supply

The other side of the coin is the inventory of available homes to buy.  Several factors are at work here, but we must again revisit the 2008 to 2012 Housing Crisis to put it in context.  As I mentioned, in the early 2000’s builders reacted to the demand caused by easy mortgages by building an average of 1.75 million homes a year from 200o to 2006, peaking at 1.98 million in 2006.  This created an oversupply of houses to buy that started to show in 2006. Sellers also came out in droves to take advantage of high prices and / or avoid the impending downturn. This increase of supply with no buyers was one of the drivers of the the Housing Crisis.

Most builders were wiped out by the Crisis & an average of just under 1 million homes a year were built between 2007 & 2020, dropping to a low of 585,000 in 2011.  With an average of 1.3 million to 1.6 million new homes are needed each year, depending if you count vacant homes, 2nd / vacation homes, & Built to Rent (BTR) homes, this created a shortage of homes which was compounded by institutional buyers buying to fill increasing rental demand. The resulting shortage accumulated to  3 million homes by 2020, and shown by this chart (click image to enlarge), just barely met demand in 2021 & so far 2022. Adding to the inventory shortage are home owners staying longer as they do not want to give up the low interest rate by selling. The result is an expectation of lower than normal inventory, even going into the next few months & year ahead. 


Fall 2022 & beyond –

Moving forward we are seeing inventories rise across the country. As one would expect, the areas that were once the hottest like Pheonix & Austin have seen inventories go from 3900 to 16,250 & 1461 to 8758, respectively, in August (Per the St Louis FED). Locally, here in the market I advise clients, the 23 county NWMLS has seen inventories nearly double to 14,683 since one year ago, & nearly triple since the end of Q1 2022. But this increasing inventory has resulted in only a 1.8 month supply, showing just how dire the inventory was due to buyer pressure. Prices, although down since the spring / summer highs, are still up year over year. The 4 county Puget sound area has seen prices up from 5.9% to 9.2% in King & Kitsap counties, respectively. (per Northwest MLS September press release). This price resilience, in spite of the pull back from summer highs, shows how strong the market continues to be. While homes are sitting longer & Buyers are no longer begging sellers to empty the buyers bank account, properly priced homes are still selling. As buyers adjust to a new normal in their buying power, & having more choices, I predict they will continue to jump back in, albeit with a little more leverage. But, I am advising clients that Sellers are still in Charge.

Shift happens – What you need to know

The questions I am asked the most, especially recently, continue to be, ‘Are we in a Bubble?’ or ‘Are home prices going to crash?’.  If you are a regular reader of my posts, you know the answer is NO! Not because I am an optimist (which I am), or because I want to sell your house (which I do), but because of basic economic factors of supply & demand. There are simply too many buyers, today & coming of age in future years and too few houses for them to buy.  I will go into those market factors in another post but today I want to discuss the SHIFT that has happened in the market.

SHIFT HAPPENED – looking back –

The shifting winds created during the last 2 years have begun to shift again. Craving bigger spaces & able to live where they want, those who could move, DID. Trading smaller for bigger, urban for suburban or exurban, people across all spectrums of homeownership moved into new diggs.  Fueled by low interest rates & changed priorities, they paid almost anything just to get under contract. While this was a good moment for those sellers who had a place to go, it actually had a negative effect on inventory by locking up sellers who could not compete as buyers and they stayed put. It also locked out first time homebuyers who could not compete with cash or cash like buyers and also kept move up & /or downsizing buyers in place. In short, low inventory coupled with too many buyers lead to multiple offers & explosive price growth. 

SHIFT IS HAPPENING AGAIN – what now?

Now with prices across the US up 15% to 32% in one year & interest rates on their way to doubling in a short few months, what comes next?  Locally, we are already seeing a reduction in Open House traffic, Days on Market getting longer & only a few offers instead of too many. But the market remains strong with sale prices continuing to rise & the sale vs list price ratio hovering around 100%. Properly priced homes are still moving quickly.  Even improperly priced or presented homes are going Pending quickly once the price is adjusted.

What next?

As the market shifts in the Buyers favor (or at least less in the seller favor), proper pricing is key. No longer can an agent carelessly price low & expect buyers pay more as they beat each other up. With the prospect of only one good offer, sellers must be prepared to accept the price they list at. Sellers & their agents must also prepare the home properly; staging, pre-inspection repairs, sprucing up… all should be on the table.
But as I always say, sell when you need to, Buy when you need to; DO NOT try to time the market. Just hire an agent whose experience can maximize the market when you do decide to sell.

 

3 Awesome Closings -One awesome broker!

This last month I had the privilege of working with 3 sellers on three different listings and they all closed in the last few days. All 3 had multiple offers and all 3 went over the original list price. So what does this mean for you. As a seller you need to know that your home or investment property is in high demand right now. Two of these sales were duplexes and each went at least 12% over asking with few contingencies. The residential condominium in Kirkland went over asking as well, showing a recovery in the prices of condominiums in Kirkland (SEE Previous blog on condo price’s HERE). As a buyer you may consider starting your search now, as prices will hold steady for a long time to come, in my opinion.

Here are the three listings:

January 2021 market Update

A recap of an anything but ordinary year

2020 started off as any ordinary year.  We had made our New Years resolutions (& broken at least one!). We had pondered our goals and travels for the next year.  Real estate was no different.  The previous year had been strong, a slight sellers advantage due to low inventory and low interest rates.  A slight seasonal dip with the promise of a strong spring market.  Then WHAM!  COVID took us all by surprise.  The initial lock downs created havoc everywhere; work, school & home.  In the real estate world,  sales cancelled or stalled, open houses went away, potential buyers and sellers spooked. But after a short month or so the market changed. Buyers, eager for deals came out. People were now able to work remotely & needed space.  Commute time was no longer as big an issue.  The result was an exodus from the urban areas to the suburbs and beyond. Multiple offers, waived inspections, and other buyer concessions became not just normal but ‘required’ if you wanted the deal. This market change has lasted throughout the holiday season into January as buyers had no travel plans and little else to distract them. And no change is expected in the near future.
According to a recent press release by the 23 county NWMLS, house & condo prices increased by 12.2% to $488,000 from December 2019 to December 2020. Single family homes set the pace with a 12.9% jump with condo’s far behind at 1.8%. This is no surprise as houses with more space are suddenly more in favor than their smaller counterparts. See below for more detail on your area, or reach out and we can chat more specifically about your area or home style.

AreaMedian Priceyear over Year change
23 County MLS$488,000+12.2%
King County$675,000+8.9%
Pierce County$430,000+16.4%
Snohomish County$530,000+7.2%
Seattle$720,000+9.1%
Bellevue$1,080,000+9.6%
Issaquah$765,000+13.4%
Kirkland$934,900+27.2%
Source NWMLS – info deemed reliable but not guaranteed

Giving Thanks in 2020

Ok, lets admit, 2020 has been a weird year. It started out like any other year; year end planning was done, trips were planned, goals were set. Then BOOM!

First came political wrestling, then COVID & shut downs, then George Floyd and the subsequent unrest, then more COVID, then fires just a little too close, then the election, then a Supreme Court judge dying, then more election upheaval and now more COVID & lock downs. Definitely a year of change and depending on how you are wired, either chaos or full of blessings.

As we enter the end of this tumultuous year, I encourage you to count your blessings and share them with those close to you at Thanksgiving. Here are some of mine:

  1. My God & my country -I hope you love your God & our country as much as I do
  2. My family – Starting with my wife Katherine & my 91 year old parents to our 4 kids & two grand kids, to brothers / sisters / nieces and nephews, I feel blessed to be part of their lives and grateful
  3. Our friends – Both near and far; close or barely know each other; client, business associate or competitor, Katherine and I cherish each and every one of you. You are the reason we move forward in spite of the year, worry a bit and smile alot ! 🙂

So as we all celebrate Thanksgiving, from a safe distance of course, lets all reflect for a moment and let those who are important to us know it!

STAY HOME -STAY SAFE!

The Power of an agent referral

Quite regularly I get a call from someone I know that goes something like this…”I am looking at buying a house in _______ (name your state) and I meet this agent at an open house. We looked a few houses and we wrote an offer. Now they are asking me to do this and I don’t understand”. or … “they are not doing a good job, what do I do?’ or ??? You get the point. Something is not going right in a real estate transaction. Since I am not a party to the transaction and bound by the Realtor Code of Ethics to not interfere in other agents business, I usually can only console them and tell them it will all work out. I can ask a few questions, give a recommendation or two for them to take back to the agent.

But what I really want to ask them is why did they not call me and have me make a referral? Using both Coldwell Bankers internal Agent Referral platform and my numerous contacts, I could have found an agent with a good track record that fit the level of service they were looking for. I always call the agent and ‘interview’ them, see if it’s a good fit because hey, my reputation is on the line. But more importantly, when something comes up, I now have a right (actually an obligation) to pick up the phone and get some answers. I am a party to the transaction, I can ask to see a contract on their behalf. I can make a suggestion.

So, for those still reading, the main take-away here is even when you are buying somewhere else, call me and I can point you in the correct direction and / or make a direct referral. It will cost you nothing and give me the power to help you if needed.

Kurt is proud to support St Jude’s. Reach out to find out how you can help.

Katherine and I are usually quiet when it comes to the causes we support. But Coldwell Banker’s recent corporate partnership with St Jude’s is one we want to shout about. St Jude’s is on our list of organizations we support yearly and now, with each home purchase or sale, we have committed to an additional donation. You can help by buying or selling with Kurt and rest easy with the knowledge that your trust in Kurt will also help a great cause.

Want to donate to St Jude’s yourself?? Click here: St Jude’s donation

Real estate market goes over the top in September.

After taking a COVID induced break this spring, the local real estate market has heated up and in September it seems to have gone over the top. As reported in earlier market updates, buyers have come out in droves and sellers have hunkered down. This created the ‘perfect storm’ for both price appreciation and market time. Buyers came out looking for deals and were armed with more buying power due to low interest rates. Looking for more space, they are paying more and reducing contingencies. Those few sellers who dare to sell, are getting more for their home.

As shown below, all local areas have seen double digit 12 month price increases and continue to show low time on market. As I look at these stats weekly, I will report that a good share of the gain has come since the lows reached in April and May 2020 due to COVID uncertainty.

Don’t see your city or want a more specific area? Reach out!

What the future holds is anyone’s guess, but if you are a buyer, statistically, it will only get worse. Demographics show a wave of house hungry younger folks reaching the average first home purchase age and new home builders were just beginning to meet the annual demand before COVID. The shortfall that started in 2008 – 2009 will continue to move prices up. Sellers, on the other hand, have a bright future. Those fortunate enough to not need to buy a replacement home, or moving to more affordable digs, will benefit from sustained price increases for the near future.

Thinking of Buying or Selling?? Reach out and we can schedule a chat about your specific needs.