Time to Reality Check the Real Estate Market



Time to Reality Check the Real Estate Market


Rarely does a day go by that I don’t get asked if this is a good time to buy and/or sell a home. Some people might think that my response is always an emphatic “YES!” because I work in real estate. But in truth, there is no right or wrong answer. Every person’s circumstances are unique, so in some cases the answer might be yes, but for others it might make more sense to wait. Allow me to explain.

The good news is that we’re finally coming out of the housing slump of the past five-plus years. Housing is a major driving factor of the U.S. economy, so regardless of whether or not one owns a home, a stronger housing market is good for everyone. For some would-be home sellers, this positive momentum, combined with a rise in home prices and buyer activity, is enough to compel them to list their home. And right now the statistics appear to be on their side.

According to the most recent findings from the National Association of REALTORS®, total housing inventory has fallen for the past several months, settling at just under two million existing homes on the market that are available to buyers. This represents about a four-month-supply of homes throughout the U.S. This is the lowest housing supply the nation has seen since May of 2005 – during the peak of the housing boom.

“Months supply” basically means that if existing homes were to continue selling at the current rate, the inventory of homes would be sold by that many months. A “normal” market usually has around six months of supply; therefore lower numbers mean a shortage of inventory. If demand is greater than supply, this often leads to competition amongst buyers – and rising prices – as we’ve seen in many markets throughout the Western U.S.

Here are the current inventory levels in key markets along the West Coast, all of which fall below six months of supply and report strong competition among buyers.


·       Seattle: 1.4 months

·       Portland: 4.2 months

·       San Francisco: 1.8 months

·       Las Vegas: 3.8 months

·       Palm Springs: 2.5 months


The following graph demonstrates the downward trend in the overall U.S. month’s supply of homes which is currently at about 4.4 months:

So what does this mean for buyers and sellers? It means as long as inventory levels remain low, competition amongst buyers will remain high, and home prices should continue to steadily rise – albeit at a healthy rate – not like what we saw during the housing boom. As evidence of this, in the recent Home Price Expectation Survey, 105 leading housing analysts called for a 3.1 percent increase in home values by the end of 2013. And in a recent report by the National Association of REALTORS®, median home prices last quarter showed the strongest year-over-year increase in seven years.

Another thing that buyers and sellers need to keep their eye on is interest rates and their impact on affordability. Interest rates have been at such historical lows for so long that it’s easy to take them for granted. But the truth is that several lending institutions, including Freddie Mac and the Mortgage Bankers Association, project that interest rates will rise from 3.4 to 4.4 percent by the end of 2013. A full point increase can have a significant impact on the amount of your mortgage over the long term.

I’ll explain:

Assuming a 30-year-mortgage at a 3.4 percent interest rate, a home valued at $360,000 in today’s market would have a monthly payment of $1,596.53. If prices rise by 3.1 percent and interest rates rise to 4.4 percent, as both have been predicted to do in the coming year, that same home would be worth $371,160 and have a monthly payment of $1,858.62 (see chart below). This is a difference of $262.09 per month – $3,145.08 annually – and $94,352.40 over the life of the loan. That’s not chump change.

With these types of projections, one might wonder why there isn’t a flood of homes coming on the market. The biggest concern I hear from many would-be sellers is that they’re going to lose money because their home is worth less today than when they bought it. A valid concern, to be sure, but not necessarily the case for many folks. Remember, you’re buying and selling in the same market conditions, so if your home has lost value in recent years, it is highly likely that the next home you buy has as well.

I recently spoke to a friend of mine who wanted to sell but was afraid of losing money. He bought his Seattle-area home back in 2002 for $275,000. Over the next five years the market boomed and by 2007 his home was worth about $430,000. During that time, homes in many areas around Seattle appreciated by over 55 percent. Then the housing market crashed – and with it so did home prices. In my friend’s mind he lost $155,000 and now he thinks he should wait to sell until he can gain all that loss back.

Today, my friend’s home is worth about $327,000 – a gain of $52,000 over what he paid in 2002. If experts are right about an annual gain of three percent in the coming years, he will have to wait 10 years before his home is worth what it was during the peak of the market in 2007. My advice to him? If it’s the right time to move and you can afford to do it, go for it, but don’t base your decision on numbers that were the result of an artificially inflated market.

It goes without saying that nobody wants to sell at the bottom of the market, yet at the same time, everybody wants to buy at the bottom. Obviously these two scenarios can’t exist at the same time, but I hope the information in this blog shows there are definitely opportunities to be had by both buyers and sellers that are worth considering.


Posted on March 12, 2013 at 6:51 pm
Maggie Weissman | Posted in Uncategorized |

Remodeling Costs


Pacific — Midrange
Job Cost Resale Value Cost Recouped Project Job Cost Resale Value Cost Recouped Change vs. 2011-12
$56,612 $50,380 89.0% Attic Bedroom $47,919 $34,916 72.9% Change
$12,616 $7,557 59.9% Backup Power Generator $11,410 $6,014 52.7% Change
$73,530 $64,593 87.8% Basement Remodel $61,303 $43,095 70.3% Change
$43,852 $30,262 69.0% Bathroom Addition $37,501 $20,569 54.8% Change
$18,570 $14,791 79.6% Bathroom Remodel $15,782 $10,295 65.2% Change
$16,811 $13,729 81.7% Deck Addition (composite) $15,084 $10,184 67.5% Change
$11,116 $10,682 96.1% Deck Addition (wood) $9,327 $7,213 77.3% Change
$2,897 $2,452 84.6% Entry Door Replacement (fiberglass) $2,753 $1,813 65.9% Change
$1,245 $1,183 95.0% Entry Door Replacement (steel) $1,137 $974 85.6% Change
$93,262 $69,906 75.0% Family Room Addition $79,006 $50,013 63.3% Change
$55,179 $43,035 78.0% Garage Addition $48,806 $31,091 63.7% Change
$1,669 $1,551 92.9% Garage Door Replacement $1,496 $1,132 75.7% Change
$31,338 $15,886 50.7% Home Office Remodel $27,292 $11,911 43.6% Change
$60,865 $49,366 81.1% Major Kitchen Remodel $53,931 $37,139 68.9% Change
$119,724 $88,170 73.6% Master Suite Addition $101,873 $64,390 63.2% Change
$21,094 $18,985 90.0% Minor Kitchen Remodel $18,527 $13,977 75.4% Change
$21,834 $16,084 73.7% Roofing Replacement $18,488 $11,633 62.9% Change
$13,271 $10,142 76.4% Siding Replacement (vinyl) $11,192 $8,154 72.9% Change
$81,682 $42,188 1600.0% Sunroom Addition $72,179 $33,529 46.5% Change
$172,167 $130,118 75.6% Two-Story Addition $152,470 $99,674 65.4% Change
$10,993 $9,072 82.5% Window Replacement (vinyl) $9,770 $6,961 71.2% Change
$12,036 $10,661 88.6% Window Replacement (wood) $10,708 $7,852 73.3% Change
Pacific — Upscale
Job Cost Resale Value Cost Recouped Project Job Cost Resale Value Cost Recouped Change vs. 2011-12
$80,393 $53,600 66.7% Bathroom Addition $70,969 $39,730 56.0% Change
$55,410 $38,701 69.8% Bathroom Remodel $50,007 $29,162 58.3% Change
$39,434 $26,501 67.2% Deck Addition (composite) $34,403 $20,532 59.7% Change
$91,056 $60,481 66.4% Garage Addition $80,511 $44,034 54.7% Change
$2,930 $2,670 91.1% Garage Door Replacement $2,720 $2,046 75.2% Change
$7,507 $5,947 79.2% Grand Entrance (fiberglass) $7,088 $4,528 63.9% Change
$117,210 $81,681 69.7% Major Kitchen Remodel $107,406 $64,113 59.7% Change
$246,520 $147,433 59.8% Master Suite Addition $220,086 $114,569 52.1% Change
$41,997 $26,164 62.3% Roofing Replacement $33,880 $19,194 56.7% Change
$15,355 $12,840 83.6% Siding Replacement (fiber-cement) $13,083 $10,379 79.3% Change
$16,277 $12,098 74.3% Siding Replacement (foam-backed vinyl) $13,818 $9,926 71.8% Change
$14,119 $11,561 81.9% Window Replacement (vinyl) $13,055 $9,295 71.2% Change
$17,627 $14,391 81.6% Window Replacement (wood) $16,361 $11,194 68.4% Change


Posted on February 12, 2013 at 6:26 pm
Maggie Weissman | Posted in Uncategorized |

America’s Coolest City



America's coolest cities

Forbes.com counts down America's coolest towns.

Text by Forbes.com

1 of 12

America's Coolest Cities (The Washington Post/Getty Images)


We attempted to quantify 'coolness' for the 65 largest Metropolitan Statistical Areas and Metropolitan Divisions (areas that include cities and their surrounding suburbs as defined by the U.S. Office of Management and Budget) based on seven data points we weighted evenly. Sperling’s Best Places helped us calculate the number of entertainment options per capita with an Arts & Culture Index (100 is the best score); recreational opportunities, including the amount of green space, quality of outdoor activities available, and the number of pro and college sports teams (again, (100 is the best score); and number of restaurants and bars per capita, with a focus on local eateries. We also looked at each city’s cultural composition using Sperling’s Diversity Index (100 is the best). We included median age, according to the U.S. Census Bureau, favoring places with a large young adult population. Lastly, we looked at net migration for 2011 and unemployment rates, using data from the Bureau of Labor Statistics and Moody’s Analytics. The following list is the 20 cities that ranked highest according to these criteria.


Posted on February 12, 2013 at 6:26 pm
Maggie Weissman | Posted in Uncategorized |

Federal Housing


U.S. House Prices Rose 1.1 Percent in Third Quarter 2012 
Washington, DC – U.S. house prices rose 1.1 percent from the second quarter to the third quarter of 2012 according to the Federal Housing Finance Agency’s (FHFA) seasonally adjusted 
purchase-only house price index (HPI).  The HPI is calculated using home sales price information from Fannie Mae and Freddie Mac mortgages.  Seasonally adjusted house prices rose  4.0 percent from the third quarter of 2011 to  the third quarter of 2012.  FHFA’s seasonally adjusted monthly index for September was up 0.2 percent from August. “With significant growth in home prices during the quarter and a modest inventory of homes available for sale, house price movements in the third quarter were similar to what we observed in the spring,” said FHFA Principal Economist  Andrew Leventis.  “The past year has seen consistent price increases, but a number of factors continue to affect the recovery in home 
prices such as stagnant income growth, high unemployment levels, lingering uncertainty about the macro-economy, and the large number of homes in the foreclosure pipeline.” 
FHFA’s  expanded-data house price index, a metric introduced  in  August  2011  that  adds transactions information from county recorder offices and the Federal Housing Administration to the HPI data sample, rose 1.0 percent over the latest quarter.  Over the latest four quarters, the index is up 3.3 percent.  For individual states, price changes reflected in the expanded-data measure and the traditional purchase-only HPI are compared on pages 21-23 of this report. While the national, purchase-only house price index rose 4.0 percent from the third quarter of 2011 to the third quarter of 2012, prices of other goods and services rose 1.5 percent over the 
same period.  Accordingly, the inflation-adjusted price of homes rose approximately 2.5 percent over the latest year. 

Posted on February 12, 2013 at 6:23 pm
Maggie Weissman | Posted in Uncategorized |

Happy New year!




Posted on February 12, 2013 at 6:22 pm
Maggie Weissman | Posted in Uncategorized |

Home Repair Prices


Which home repairs are the most expensive?

By Ben Steverman of Bloomberg


Renovation rebound

For a few years, carpets have been allowed to fray, faucets to drip and paint to peel. Now, home-improvement spending may be rebounding. Harvard University's Leading Indicator of Remodeling Activity suggests spending will be up 16.6% by the middle of 2013.

To see what projects homeowners are likely to pursue and what they'll spend, Bloomberg.com used survey data from Houzz, a home-improvement website and application. Estimates on potential payoffs from projects come from Remodeling Magazine, which asks appraisers and others how much hypothetical projects recoup their cost in the form of increased home value. Projects are ranked from most to least expensive.

Cost estimates and most other data come from a survey of 29,000 Houzz users. We used National Association of Home Builders estimates on how long improvements should last.

See the whole article here



Posted on February 12, 2013 at 6:22 pm
Maggie Weissman | Posted in Uncategorized |

Kitchen Countertops


Wray Raleigh  NMLS ID# 754404
Windermere Mortgage Services Series LLC/WRE
301 NE 100th Street Suite 200
Seattle, WA 98125


10 Hot Trends in Kitchen Countertops 

While granite and marble remain the most popular choices for kitchen countertops, young homemakers are opting for a surprising number of chic, new countertop choices.
“These trendy alternatives offer a clean, sleek, sometimes industrial look that suggests heavy duty cooking is going on here,” say designers at architectural firm Freshome. 
The hottest countertop materials available today include:
Poured concrete – Stain resistant when sealed, they are relatively inexpensive and can be tinted to any color. Appearance improves with age, but while the concrete is heat-resistant, the sealer is not. It requires trivets under hot pots and cutting boards for chopping.
Butcher block – Elegant yet casual and environmentally friendly, butcher block requires monthly sealing and oiling to prevent drying or cracking. Its soft surfaces require cutting boards, but cleanup demands only mild dish detergent and a light cloth or sponge. 
Reclaimed wood – Salvaged from older homes, reclaimed wood is attractive, sturdier than newer wood, and saves trees. It requires the same maintenance as butcher block.
Cork – Dense, sturdy and lightweight, cork is a sustainable option with sound-cutting properties. It is resistant to water and heat and has antibacterial properties.
Stainless steel – Elegant, sleek and classy looking, these counters are water, heat and germ resistant. Susceptible to dings and scratches, they show every fingerprint, but maintenance requires only washing and polishing.
Soapstone – A natural stone quarried like granite, soapstone is a softer surface that is sturdy but not impervious to dents and scratches, which may be sanded or oiled away. The color is naturally gray and darkens with age, offering a smooth, matte feel.
Recycled glass – Like reclaimed wood, this is a ‘greener’ choice, available in many beautiful colors and patterns. With a life expectancy of 50 years, it is easy to clean and care for. This option is a bit cheaper than granite.
Pewter – Offers a less clinical look than stainless steel, but is softer and susceptible to nicks and dents, although a hammered, antique look can mask damage. This muted, dark silvery color looks good in any kitchen.
Slate – A natural, fine-grained rock, slate is softer than granite but harder than marble. Slate resists bacteria and cleans with soap and water, but is not entirely heat-proof.
Quartz – An extremely scratch-resistant mineral, easy to care for and clean. It needs no sealing and has a long life. It also offers a more unique look than granite.
Copyright© 2012 RISMedia, The Leader in Real Estate Information Systems and Real Estate News. All Rights Reserved. This material may not be republished without permission from RISMedia. 



Posted on February 12, 2013 at 6:21 pm
Maggie Weissman | Posted in Uncategorized |

Fiscal Cliff


How 'Fiscal Cliff' Could Affect Mortgage Interest Deduction

It is arguably one of the most popular U.S. tax deductions, and for some it is the necessary stimulus to buy a home.: Wednesday, 14 Nov 201

Tom Grill | Photographer's Choice RF | Getty Images

The mortgage interest deduction, however, is now at risk, due to negotiations over the so-called “fiscal cliff”—the year-end deadline for large spending cuts and the expiration of tax cuts.

While it is impossible at this point to know what the outcome will be, it is certainly worth running through the possibilities. 

First, let’s do a primer on the deduction as it stands now:The deduction lets homeowners reduce their taxable income by the amount of interest paid on their mortgage. This can be on the principal residence or a second home, but not on mulitple investment properties. Taxpayers are eligible for this deduction only if they itemize. Finally, the interest deduction is capped at $1 million of your mortgage.This deduction, which is the largest housing-related subsidy in the U.S. tax code, reduced income-tax revenue by $79.9 billion in fiscal year 2007, according to the Office of Management and Budget. (Read MoreCould Housing Be the Antidote to the 'Fiscal Cliff'?So what is that in real cash savings to taxpayers? Number crunchers at the Wharton business school did the math:


For those making less than $40,000 a year, the average tax savings is about $100. But in that bracket less than one-quarter of homeowners itemize deductionsl, so most don’t get anything. For those earning up to $250,000, the average savings, based on average mortgage amounts, would be $1,200-$2,600 a year. For those earning more than $250,000, and 100 percent of them itemize, the average savings is $5,400 a year.Now to the proposals—and they are many.One, released by the Simpson-Bowles commission, would cap the mortgage interest deduction at $500,000 of the home’s value and limit the deduction to primary residences. (Read MoreFiscal Cliff: Complete Coverage.A bipartisan plan from Domenici-Rivlin would limit the deduction to just $25,000 worth of mortgage interest.Other proposals include eliminating the deduction only for taxpayers earning $250,000 or more, ending the benefit for second homes, ending the deduction entirely or limiting the amount of all itemized deductions to $25,000. That last one was advocated by Mitt Romney, but apparently some Democrats on Capitol Hill are starting to espouse it. (Read MoreDemocrats Like Romney Idea on Income Tax)Without one proposal leading the pack, again, it is impossible to boil down the real cost to homeowners, but suffice it to say that anyone in the business of home ownership is opposed to reducing the mortgage interest deduction.



30 yr fixed 3.41% 3.22%
30 yr fixed jumbo 4.05% 4.04%
15 yr fixed 2.84% 2.84%
15 yr fixed jumbo 3.51% 3.55%
5/1 ARM 2.79% 2.88%
5/1 jumbo ARM 3.07% 3.02%

“It’s chilling the market,” said Jerry Howard, CEO of the National Association of Home Builders.  “Whenever there is uncertainty surrounding the value of an American home, why would you expect people to go out and buy a home? Or, just as much to the point, when there’s uncertainty about the value of a home why would someone put their house on the market to sell it, that’s why this whole debate to me is counter-productive and is only retarding the nation’s economic recovery.”

Find personalized rates:


“The mortgage interest deduction is vital to the stability of the American housing market and economy, and we will remain vigilant in opposing any future plan that modifies or excludes the deductibility of mortgage interest," said Gary Thomas, president of the National Association of Realtors. (Read MoreHow Will the 'Fiscal Cliff' Hurt You? Depends What You Earn.)

Whatever the arguments for or against the mortgage interest deduction, two things are indisputable.  Going over the fiscal cliff will kill the housing recovery, but said recovery is already so tenuous that yet another barrier to entry will hurt.



Posted on February 12, 2013 at 6:21 pm
Maggie Weissman | Posted in Uncategorized |

Happy Thanksgiving!

Happy Thanksgiving! 

Posted on February 12, 2013 at 6:20 pm
Maggie Weissman | Posted in Uncategorized |

Forget Starters, First timers trade up!


Forget Starter Homes! First-Timers Trade Up

More first-time home shoppers say they want a house they can “grow into” not a home they can quickly grow out of. 

With big housing bargains and low mortgage rates, some first-time buyers have decided to go big with their home purchase and sidestep the traditional smaller “starter house.” 

A growing number of real estate professionals are reporting that childless, twentysomethings who have strong incomes are taking advantage of housing deals and looking for their dream house now, rather than wait until later. 

A Minneapolis couple purchased a 3,000-square-foot-home as their first home. "The more starter homes we saw, the less impressed we became. … Since we knew we could easily afford to buy more than we were initially looking to spend, the choice was quite simple," Joseph Simons told the Minneapolis Star-Tribune. "Why not buy a forever home with everything we want?"

Indeed, more buyers are purchasing a home with intentions to live in it longer than they once did. On average, buyers now expect to stay in their house 15 years compared with 10 years in 2010, says Walter Maloney, spokesman for the National Association of REALTORS®.

Steve Howe, a sales agent for RE/MAX Results in the Minneapolis area, says one big driver for first-time home buyers to to go big on their first home is low mortgage rates. Howe says first-time buyers worry that mortgage rates — the cost of borrowing for a home purchase — will never be this low again so they want to take advantage while they can. 

"If they can lock in a $300,000 or $350,000 mortgage at 3.5 percent, that's as good as gold," Howe says.

Posted on February 12, 2013 at 6:19 pm
Maggie Weissman | Posted in Uncategorized |