Whether you’re a first-time buyer or not, real estate transactions can be nerve-racking. It’s both a big financial commitment, and, if you’re buying a home for your family, a very emotional decision. There are never any guarantees, but by having a real estate professional (like, say, ME) in your corner, and doing your homework, you can make an informed decision based on facts rather than speculation, guesswork, opinion and emotion. And you’ll sleep a lot better at night.
CALL ME! I’m here to provide you with solid data, help you figure out exactly what you’re looking for, help you prioritize your needs and wants, to get you pre-qualified so you know what your price range is, and then to be your partner in the search for that perfect fit for you and your family. You want to know which neighborhoods are holding their value . . . and which ones are forests of "For Sale" signs. You want to know about schools, crime statistics, covenants and deed restrictions, environmental considerations, and so forth. You want to know which sellers are motivated to sell . . . and why! And when you present your offer, there’s a lot you can do to make it more attractive, even if it’s not necessarily the highest [ Winning In a Seller's Housing Market ]. That’s where I come in.
I always emphasize to my clients that it’s all about the local market, not what’s happening around the country or even in Seattle. Right now, if you’re thinking about buying on Whidbey Island, I believe you have a window of opportunity now that’s not going to last much longer. I base that opinion on two things: prices and interest rates.
Let’s start with the numbers (these are year over year increases from 2012 to 2013): First of all, inventory on Whidbey was up over 16%, about double that of the MLS Northwest Region as a whole. A lot of properties that sellers had been holding onto, waiting for the market to turn, have come up for sale, so for time being, it’s been a bit of a buyers’ market. You can tell that’s true because closed sales were up almost 31% last year, but prices only came up around 2% on the Island [ Whidbey Home Prices ]. So you can see that the bargain hunters have been busy, but the spike in inventory is temporary; the good deals aren’t going to last forever. Also, things are picking up at all of Whidbey’s major employers ( see The BIG Picture ). What’s more, King County’s prices went up 10.5% last year; real estate trends on the Island typically lag 6-9 months behind Seattle. And I know there are a plenty of buyers coming onto the Island because I’m constantly showing property these days. So there are good reasons to think we’ll be turning into a sellers’ market in the next year or two, with desirable homes getting multiple, competitive bids.
And then there’s mortgage rates. I’ve included this chart for a little historical perspective, so you can see for yourself how low mortgage interest rates are compared to the historical average:
Keep in mind that what you can afford depends almost as much on mortgage interest rates as it does on the purchase price. Here’s an example: Let’s say you need to borrow $200,000 and get a 4% interest rate on a 30-year fixed rate mortgage. You end up with a P&I of about $955. But if rates go up to 6%, and that's all the monthly payment your budget allows, you'd only be able to borrow $159,000.
A 2% difference on a $200,000 loan also means that after 10 years in the house, you'd have paid over $39,000 more in finance charges and have around $10,000 less in paid-off principal. That’s a lot less equity in your pocket, and a good reason to think about locking in a low-rate mortgage soon.
Could rates go up that much? They’re forecast to stay low in the short term, but no matter who’s running the Fed, you know that the discount rate will jump at first hint of inflation, and the banks will follow immediately. If you’re even thinking about buying, I encourage you to get out there now to start looking at properties, scoping out the market and lining up your financing. If you need help finding a good mortgage broker, I can help. CALL ME.
Are you thinking about investing? Good idea. Shrewd investors typically get rich by spotting opportunities where others only see the risks, and by being willing to going against the grain. Want a great example? The investors who got into the stock market after it tanked, starting in late 2008, have seen the Dow skyrocket over the last five years while everyone else was waiting to see if the Bull Market was for real. Most ordinary folks don't jump in until after a trend is well established, only getting in when the party's almost over. Right now, prices are reasonable, sellers are motivated and interest rates are at historic lows. But is it time to pull the trigger? Once again, it depends on your individual situation. 1031 exchange? Rental property or raw land? If it's undeveloped, are you planning to build on the property, or just bargain-hunting? Buying with cash or borrowed money? Come on in and let me show you what's available in your price range, and we can focus in on the type of property you're interested in. Then we sit back, monitor the market and wait for that perfect opportunity.
One more thing to think about: If you're buying a house or piece of property without a realtor acting on your behalf, the sellers' realtor is THEIR representative, NOT an impartial expert looking after both sides, and he or she is legally bound to protect the SELLERS and get them the best possible deal. Without a realtor, you're on your own! If you feel like that's a bit of a scare tactic, fair enough, but consider this: I'm licensed and insured. If you screw up or miss something along the way that ends up costing you a bunch of money (like failing to have something inspected that turns out to be broken, or not finding out about a restrictive covenant), there's no recourse. But if I'm representing you and it’s MY bad, I carry insurance to make it right. But just so you know, I've never had a claim filed against me.
Most of all, I won't abandon you as soon as the offer is signed and then sit back and wait to collect my commission. I know it's an anxious time. I make it a point to stay in touch, to keep everyone in the loop, and to be there, to answer questions, monitor inspections, write addenda, and deal with any problems that arise. And if you just want to talk, or vent, or need a little reassurance, I'll be there for you as well. That's how I see my job, and that's why many of my clients are still personal friends, and why they're happy to recommend me to others. CALL ME. Let’s talk.