Friday, August 18, 2017

Housing and Jobs in Symbiosis

Our local housing market, like that of many areas, has been in a state of an abrupt climb in price. This has been largely driven by low rates and a short supply. Our area is also experiencing an influx of "migrants" from other states seeking to soak up the delicious Pacific Northwest. This however is not enough to sustain the rapid run up in home values.

Good paying jobs must be in abundance for the upward mobility of pricing to continue. We are starting to see a bit of a slowdown in the increase of valuations and frankly this is a healthy trend. What the area needs now is an increase in HIGH-PAYING jobs. Not just jobs, but good jobs. Factories, High-Tech, etc.

This area has a good bit of these, but demand is stripping away at supply for high-quality jobs as new people flood into the area. At some point housing will take a hit and it may be sooner than later. Generally a large housing crash needs more than just typical market trends. The events of 2008-09 were driven by major economic forces well beyond the normal scope of real estate trends and fluctuations. I do not see any major corrections on the near horizon but I do see a softening in the seller's market.

By this time next year we may be in a near neutral market with modest, healthy appreciation and sellers a little more willing to work with buyers. The current high median resale value is pushing many buyers out of the marketplace, and that will eventually erode the excessive demand.

Without an influx of new higher-paying employment opportunities the demand will falloff faster and if if falls too fast, that can lead to a buyer's market. Every local government agency should be hyper-focused on creating jobs int he private sector. Private sector jobs are good for every industry including the real estate market.

Friday, August 11, 2017

End of Summer Push for Buyers

The end of summer is near and buyers may be getting even more anxious. Many people prefer a move during summer months. Little or no rain makes for an easier move and often a move is disruptive during the school year when children are involved. Seller's may see a bit of a dip in activity as September comes to a close so the rest of this month and all of next could be the best time to unload your listing that may have sat unsold this summer.

Seller's that sell late in the summer gain the advantage of the seasonal bump and then purchase during a time that tends to slump a bit. Lately the slump has been a slowdown in growth rather than an actual lower price, but in any case the seller that wraps up their home now may gain a slight advantage at both ends with a top dollar sale and a less competitive buy.

Rates remain solidly low and hikes are coming. We have already seen the Fed move away from some of their market manipulation that led to temporary spikes in rates. These have since backed off a bit but may become permanent should the economy continue the track of positive growth.

Interest rates are the single most important factor in home buying unless one is paying cash. Even cash buyers are affected however as low rates bring a larger pool of potential buyers into the market. Should rates pop of a full point and stay there, the buyer pool will shrink and the upward pressure on pricing will subside.

Entry level always takes the biggest hit in a rising rate market. Sellers locally offer homes in the under $350k range are most vulnerable to a rising rate market. Although things are stable now, one never knows what might trigger a stiff rise in rates and both buyers and sellers should remain vigilant and take care of their real estate business now, why things are really good.

Friday, August 4, 2017

It's Hot Outside, Sellers Beware!

This toasty warm weather is great for the beach but it can cause problems for sellers with homes that do not feature A/C. Sellers should take great steps to keep their home cool whether they have air conditioning or not. If a home is equipped with A/C by all means be liberal with the cooling when trying to sell the home. Follow all the HVAC guidelines for maximizing efficiency so as to keep the environment clean and your wallet flush.

Those with out A/C... I'm so sorry ;) but there is hope! Keep all south and west facing windows shaded either with your curtains but better yet with blinds. I like horizontal blinds as they can adjust whether light is reflected back out of let in. In the winter I turn the blinds with the sunlight spilling all over, in the summer the blinds are turned at about a 45-55° angle down. This allows a great deal of light to filter in but reflects direct sunlight back away from the interior of the house. This tactic alone will keep your home much cooler and save big bux on your electric bill if you have A/C.

Open windows at night after the temp falls back into the 70s and leave the windows open as late as you can or until the temp climbs above 75° or so. This keeps all that fresh cool night air inside and your A/C unit may not have to come on until late in the day.

Sellers, if you home is unbearably hot the buyers may be turned off and a possible offer may have been lost. Buyers are more sensitive to how cool a house stays int he summer during heat waves and that means sellers have to do their best to keep that home as comfortable as possible.

If you do have air conditioning or a good heat pump system, you don't have try and ice the place over. On the contrary, if it is 95° outside and they walk into a cool 75° it will feel deliciously chill. This will save money and keep your system from overworking itself to death.

It's sizzlin' out there, keep the house cool and get a hotter offer.