The ‘cost’ of a home is determined by two major components: the price of the home and the current mortgage rate. According to the most recent Case-Shiller Home Pricing Index, home values have risen over 10% in the last year. If we look at Freddie Mac’s Weekly Primary Mortgage Market Survey®, the 30 year mortgage rate has increased from 3.67% to 3.91% during that same period.

The table below compares the cost of the same exact house over the last twelve months:

We can see that the advice to buy a year ago made complete financial sense.

What About Moving Forward?

Most experts are not only calling for prices to continue to rise but are also upgrading their projections as the housing market is showing strong signs of recovering.

Regarding interest rates, the 30 year mortgage rate has soared by over a half point already this year and many believe that the increases will continue. Even those trying to be the voice of reason on this issue are projecting higher rates. For example, Polyana da Costa, senior mortgage analyst at Bankrate.com said:

“Rates are unlikely to keep going up so quickly and should remain below 5 percent.”

Bottom Line

The next time a real estate professional says that now is the time to buy they may not be giving you a ‘sales pitch’. They may be giving you nothing but excellent advice.  If you are considering buying, call us for the facts, we would love to help you find your new home and direct you to the right lender. Steve Hill and Sandra Brenner, Windermere Real Estate / FN, Seattle-Northwest. 206-769-9577.

Proudly Presented by Steve Hill and Sandra Brenner
Windermere Real Estate / FN Seattle Northwest
12250 Greenwood Ave N
Seattle WA 98133
206-769-9577

Proudly Presented by Steve Hill
Windermere Real Estate / FN
Seattle Northwest
206-769-9577

Redfin encountered all the forms of industry bias predicted by the Stanford economists. It got angry phone calls and e-mails, and agents steered customers away from its properties. In 2007, Washington’s Northwest Multiple Listing Service determined that one of Redfin’s blogs, which offered frank reviews of properties written by staff journalists, violated its policies against critiquing customer listings. It fined the company $50,000 and threatened to pull its MLS access. Redfin had to shut down the blog. Now it allows only licensed agents to post reviews of properties, and it gives its clients the ability to veto or delay such posts, which seems to have appeased the brokers.

The company also discovered that its customers really did want more hand-holding. As it struggled to make its model work, Redfin had to hire more agents to assist customers in every stage of the buying and selling process. It scrapped the idea of charging for home tours—customers hated that—and because of the increases in service, it overhauled its fee structure. For sellers, the flat fee is gone; they’re now charged 1.5 percent of the sale price of their home. As before, the seller, even if he is using Redfin, must pay the buyer’s broker the usual 3 percent. Buyers are still treated to a refund upon Redfin’s collection of the buyer-side broker commission, though Redfin has gradually lowered that amount as it has added services. “The problem with our original model was that people couldn’t get into houses, they wanted advice. At some point we realized that we had to become a service company,” says Kelman. “We thought we could make the business more virtual than it was.”

Redfin still does a lot of things differently. Apart from the unusual way it pays its agents, it offers a virtual “deal room” that helps customers navigate the maze of complex paperwork and, unlike Zillow and Trulia, draws its listings directly from the MLS. This, Redfin says, allows it to display 20 percent more agent-listed properties than nonbroker websites.

In February the company hired agents and began showing listings in five new markets, including Houston, Raleigh-Durham, and New York City’s Bronx borough (it already operates in Queens, as well as Nassau, Suffolk, and Westchester counties). It also says it plans to double its roster of agents this year to meet rising demand. Kelman says a Redfin IPO is unlikely this year though possible in 2014.

So far, Redfin hasn’t convinced many people that brokers, or their 6 percent take on most deals, are in any real danger. Last October, at a Seattle technology conference, an audience member asked Spencer Rascoff, Zillow’s CEO, if sales commissions were ever going to decline. “There are other startups that are trying to break down those agent commissions, and I think most of them will fail,” he said. Rascoff said later in an interview that “consumers don’t really care about commissions. They say they care, and they talk a big game in the off-season. But when push comes to shove and it comes time to sell their home, the transaction is so infrequent and so highly emotional and expensive—and consumers are so prone to error—that they turn to a professional.”

Economists, like the University of Chicago’s Syverson, watch and wait for a real change in the market. “The Chicagoan in me says there is so much money on the table that someone will figure it out eventually,” he says. “But I will admit, I’ve been impressed with the resilience of the old model.”

5^th Carkeek Forest Restoration Class

Starting on August 24^th 2013

The Carkeek Forest Restoration Class is a program of 12 Saturday mornings between August 2013 and March 2014, focusing on what you need to know to become involved in volunteer forest work in Carkeek Park (or any other park in the City).  Previous classes were held in 2005, 2007, 2009, and 2011.  This program resorts under the Carkeek Park Advisory Council.

Topics include, but are not limited to:

• Species knowledge
• Removal of invasive species
• Planting of trees and shrubs, knowing what to plant where, and why
• Maintenance/monitoring of plantings
• A personal assignment

When: Saturday August 24, September 14, September 28 , etc. with ± 2 weeks interval; twelfth class is on February 22, 2014

Roster: Saturday morning, from 8.30 – 12.00; inside work from 8.30 – 10; outside fieldwork from 10 – 12.

Docents: Lex Voorhoeve, retired forest botanist, volunteer at Carkeek Park; Brian Gay, Seattle Parks & Recreation Naturalist; Loren McElvain, Carkeek Park Forest Steward.

Requirements:

-   be able-bodied; working in the forest can be strenuous;

-   be willing to become a volunteer in Carkeek Park or any other park in the City.

Information/enrollment: 

Loren McElvain at l.j.mcelvain@gmail.com, 206 782 7617;

Brian Gay at brian.gay@Seattle.gov, 206 615 0697;

Lex Voorhoeve at ompa@w-link.net, 206 706 1009

 3626 159th Place SE, Bothell WA 98012

Located on one of the premier streets in all of The Seasons at Mill Creek, this pristine two story home boasts an open floor plan, idyllic cul-de-sac lot location, tasteful upgrades and low maintenance landscaping. Features include large great room with fireplace, enormous kitchen with island, master bedroom with en suite and fireplace, deck with glass rails and greenbelt back yard. Superb street appeal with brick accents. Convenient location with reowned schools, major routes and shopping. 

Online at: http://www.windermere.com/search#!/mlsnum:499166

Proudly Presented by
Steve Hill
Windermere Real Estate/FN
Seattle-Northwest
206-769-9577

According to the latest Existing Home Sales Report from the National Association of Realtors, the median sales price of a home in the U.S. is $184,300. The mortgage payment (principal & interest) on that purchase would be $661.89 assuming a 20% down payment and a 3.5% mortgage interest rate. Currently, the median asking rent in the U.S. according to the Census Bureau is $717 a month.

We realize that the two payments do not necessarily reflect the housing cost on a similar residence. However, that is not the point of the post. All we are saying is that the monthly housing expense on a median price home is $661.89 and the median rent is $717. We now want to discuss what will happen to these costs over time.

The principal and interest portion of the mortgage payment is locked in for the next 30 years. We know real estate taxes may be included in the payment and will increase to some degree over that time. We also acknowledge that the homeowner will have occasion to spend money on repairs. They also receive many tax advantages as a homeowner.

However, the actual monthly housing expense remains the same for the next 30 years.

Now, let’s look at what happens to a rent payment. The best thing to do to predict the future is to study the past. Here is a graph of the median asking rent since 1988 based on Census Bureau data:

We believe rents will follow their historically pattern and increase dramatically over the next 30 years. Buyers have a choice: either lock in your housing expense or deal with the uncertainty of rental increases.

Considering A Home Purchase?
Let our experience save you time and money!

Steve Hill and Sandra Brenner
Windermere Real Estate Seattle Northwest
206-769-9577

We realize that every purchaser wants to be able to get the best deal. They want a great price and the lowest mortgage interest rate possible because those to items together will determine the monthly cost their family will pay. Let’s look at each one:

Are home prices rising?

Just last week, the Case Shiller Pricing Index was released. The index revealed that U.S. home prices increased by 10.2% over the last twelve months. Last month, theHome Price Expectation Survey was released predicting that home values would increase by at least an additional 3.5% for each of the next five years.

If you were waiting for the absolute bottom of the home price declines, you already missed it.

Are interest rates rising?

According to Freddie Mac’s Weekly Primary Mortgage Market Survey, the 30 year mortgage rate shot up to 3.81% last week – the highest level in over a year. This is an increase of a half of a percentage point in the last six months. And the Mortgage Bankers Association, Fannie Mae and the National Association of Realtors all predict that rates will continue rise over the next eighteen months.

Conclusion

If the right thing for you and your family is to purchase a home this year, buying sooner rather than later could lead to substantial savings.

Considering Buying?
Give us a call and let our experience save you time and money.

Steve Hill and Sandra Brenner
Windermere Real Estate Seattle Northwest
206-769-9577