Local Market Update – April 2019

Local Market Update – April 2019

After months of softening, home prices began to rise in February. That trend continued in March. While prices in most areas were down from the same time last year, they increased over the prior month. New listings rose as well, offering buyers more options and more time to make the right choice. Despite the uptick in listings, inventory is still under two months of supply, far short of the three to six months that is considered balanced.

Eastside

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Unlike most of King County, home prices on the Eastside grew over the prior year. The median price of a single-family home on the Eastside rose 3% to $950,000. That represents an increase of $50,000 over February.  Amazon’s plans to relocate its worldwide operations team to Bellevue is expected to add thousands of employees to their Eastside campus and put even more demand on what is already tight inventory.

King County

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The median price of single-family home in King County in March was $667,725. That figure was down 3% from the same time last year, but up from the $655,000 median price in February.  The two areas that showed price increases year-over-year were the most expensive area in the county – the Eastside – and the least expensive –  Southeast King County. The number of homes for sale was more than double that of a year ago, but still far short of enough to meet demand.

Seattle

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The median price of a single-family home in Seattle hit $752,500 in March, down 8% from a year ago, but up $22,500 from February. Inventory rose 136% over last year. Despite the increase, new listings that were competitively priced saw many multiple and contingency-stripped offers.

Snohomish County

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In Snohomish County, the median price of a single-family home grew 5.3% over last year to $500,000. That was an increase of $25,000 over February. A new passenger terminal at Paine Field is expected to provide a boost to the local economy and also lift demand for housing.

This post originally appeared on GetTheWReport.com. 

What Credit Score Do You Need To Buy A House?

What Credit Score Do You Need To Buy A House?

There are many misconceptions about the credit score needed to buy a house. Recently, it was reported that 24% of renters believe they need a 780-800 credit score to be considered for a mortgage. The reality is they are misinformed!

Only 25% of the Americans have a FICO® Score between 740 and 800. Here is the breakdown according to Experian:

  • 16% Very Poor (300-579)
  • 18% Fair (580-669)
  • 21% Good (670-739)
  • 25% Very Good (740-799)
  • 20% Exceptional (800-850)

Randy Hopper, Senior Vice President of Mortgage Lending for Navy Federal Credit Union said,

Just because you have a low credit score doesn’t mean you can’t purchase a home. There are a lot of options out there for consumers with low FICO® scores,”

There are many programs available with low or no credit score requirement. The Federal Housing Administration (FHA) now requires a minimum FICO® score of 580 if you want to qualify for the low down payment advantage. The US Department of Agriculture (USDA) does not set a minimum credit score requirement, but most lenders require a score of at least 640Veterans Affairs (VA) loans have no credit scorerequirement.

As you can see, none of them are above 700!

What Credit Score Do You Need To Buy A House? | MyKCM

It is true that the average FICO® score for all closed loans in January was 726, but there are plenty of people taking advantage of the low credit score requirements. Here is the average FICO® Score of closed FHA Loans since April 2012 according to Ellie Mae:As you can see, that number has been dropping for the last seven years. As a matter of fact, the average FHA Purchase FICO® Score reported in January 2019 was 675!

One of the challenges is that Americans are unsure about their credit score. They just assume that it is too low to qualify and do not double check. Credit.com confirmed that only 57% of individuals sought out their credit score at least once last year.

FICO® reported,

Since October 2009, the average year-over-year FICO® Score has steadily and consistently increased, from a low of 686 in 2009 to the latest high of 704 as of 2018.”

Here is the increase in the average US FICO® Score over the same period of time as the graph earlier.

What Credit Score Do You Need To Buy A House? | MyKCM

Bottom Line

At least 84% of Americans have a score that will allow them to buy a house. If you are unsure what your score is or would like to improve your score in order to become a homeowner, let’s get together to help you set a path to reach your dream!

Homeownership Greatest Predictor of Wealth

Homeownership Greatest Predictor of Wealth

According to the Survey of Consumer Finance, homeownership is the primary driver of wealth in the U.S.

A recent Seattle Times article reported that the median net worth for Seattle homeowners is about 25 times higher than those who rent.

How Homeownership Creates Wealth 

A home appreciates.

Since 2000, homes in the Seattle area have appreciated at an average annual rate of 5.6 percent. The real estate market, like the stock market, ebbs and flows as values go up and down over time. While real estate prices here dropped during the housing crisis, they have far exceeded average appreciation for the past few years. The same cannot be said for the stock of many companies that imploded when the dot-com bubble burst.    

As an investment, a home benefits from leveraging.

Equity in a home appreciates based on the entire value of the home. This includes the money you’ve paid as well as the money you’ve borrowed. For instance, rather than earning appreciation on the $70,000 down payment you made, you build equity on the full $700,000 value of the house even though the bank financed most of it.  

Ready to buy a home?

We can help you negotiate the best possible terms on the what will probably be your greatest single asset. 

Ready to sell your home, or wonder how much equity you have?

We can provide you with a market analysis of homes that have recently sold in your neighborhood and help you plan for a future sale.

This post originally appeared on GetTheWReport.com

Local Market Update – March 2019

Local Market Update – March 2019

The spring home buying season started early this year. Open houses had increased attendance and bidding wars returned. After months of softening, home prices in most of the region jumped significantly from the prior month. With just one month of data, we’ll have to wait and see if this is the start of a longer upward trend.

Eastside

>>>Click image to view full report.

The Eastside was one area of King County that continued to see prices moderate. The median price of a single-family home on the Eastside was $900,000 in February, a drop of 5 percent from a year ago and down slightly from last month. However, supply here isn’t nearly enough to meet demand, a fact that most likely won’t change any time soon. Amazon’s latest expansion in Bellevue is expected to bring a significant wave of new employees to the city.

King County

>>>Click image to view full report.

The median single-family home in King County sold for $655,000 in February. While up slightly less than 1 percent year-over-year, it was an increase of $45,000 over January.  Southeast King County, which includes Kent, Renton and Auburn, saw the greatest gains with prices rising 4.5 percent over the previous year. While inventory has grown, it is less than half of the four to six months that is considered balanced.

Seattle

>>>Click image to view full report.

More inventory and low interest rates helped bring buyers back into the market. The median price of a single-family home in Seattle hit $730,000 in February, down 6 percent from a year ago, but up $18,500 from January. With just six weeks of available supply, Seattle continues to have the tightest inventory in the county. Seattle’s record development boom shows little signs of easing, so we can expect strong demand to continue.

Snohomish County

>>>Click image to view full report.

The median price of a single-family home in Snohomish County reached $474,947 in February. Although that is a 2 percent decrease from last year, it is $5,000 more than January. As buyers push outside of King County to search for more reasonably priced homes, Snohomish County continues to struggle to find enough inventory to meet growing demand.

This post originally appeared on the WindermereEastside.com Blog. 

Interest Rates Hit New 12 Month Low!

Interest Rates Hit New 12 Month Low!

According to Freddie Mac’s Primary Mortgage Market Survey, interest rates for a 30-year fixed rate mortgage are currently at their lowest for 2019. Rates like these haven’t been seen since February 2018!

Last week’s survey results reported an interest rate of 4.35%. This is a welcome change from the near 5% rates seen in mid-November. At 4.32%, the second week of February 2018 was the last time rates were this low. This can be seen in the chart below.

Interest Rates Hit New 12 Month Low! | MyKCM

Freddie Mac’s Chief Economist, Sam Khater, had this to say:

“Mortgage rates fell for the third consecutive week, continuing the general downward trend that began late last year.

Wages are growing on par with home prices for the first time in years, and with more inventory available, spring home sales should help the market begin to recover from the malaise of the last few months.”

Bottom Line

If you plan on buying a home this spring, we can help prepare you for today’s market before rates increase!