Mark DeSpain

Moving season is just around the corner!  June is THE busiest moving month of the year, according to Richard Harper with Moving Link.  Mr. Harper provided the following tips on how to save money during the moving process.

Do it yourself

Plan A – Rental
Truck, beverages, and pizza go a long way and is the most cost effective way I know to move.  Now, if you’re older like me – oh, my back, my knees, my friends are all old, my kids either live out of town or can’t afford to take time off work to help, Plan A won’t work.  So, plan B, you’re thinking is to rent a truck and hire some experienced people to help. The cost of your plan B won’t be much different from hiring a professional permitted mover in a competitive situation.

Packing

The more you pack the less the mover will charge you. Couple of thoughts – Start packing the non-breakable items first and if you run out of time, use the movers for the breakable items.  It is pretty hard to break a box of books or linens!  When marking a box for its contents, mark them on the side and end – not the top because the movers will
stack the boxes.  On a local move you will save time and money by “staging” your home for the mover.  I know, I know, after listing your home for sale, the word staging isn’t a fun word, but it can save you money.  Staging for the mover means taking already packed boxes and 1-person pieces of furniture into the garage or close to where the mover will be loading out of your home. Doing this cuts down on how much the movers have to walk – and walking
is money!

PURGE!!

When packing, use the 3 second rule:  If you hold something in your hand for 3 seconds or longer trying to decide if it should go in the move or not – you DO NOT need it!!  Less
to move – the less it will cost!  Have I already mentioned the word purge?

Moving

There is a fine line between getting the highest quality at the most competitive price!  On a local move consider using the mover to move only the big items.  Make sure you
DO YOUR HOMEWORK!!!     www.thebbb.org;    www.utc.wa.gov;    www.wmcmovers.com

If you are moving locally and are going to move some of the items yourself to minimize your cost, you’re your awkward items first.  Most people will automatically think of starting with the boxes, but awkward items slow movers down and time is money on a local move.  What are awkward items? – Table lamps, floor lamps, bicycles, hanging art, etc.  On moves rated by weight choose the heaviest items you can handle – workbench vice, books, tools, etc.
Storage  -  Self Storage? Portable Storage?  Mover’s Storage?

What kind of storage is the most cost effective for you? How long will you be in storage? Look at your total cost not just 1 month of storage charge.  What will it cost you to go into storage?  Do you need access while it is storage?  DAMAGE – is it important to you to maintain continuity in who is responsibility for potential damage?  What does the portable storage unit’s insurance actually cover?  Answering those questions will guide you in the right direction for your storage needs.

Bottom-line – the more you do – the less your move will cost.

I would love to say that the real estate market is as rosy as the recent weather here (4 days worth) in Seattle but there are still some challenges to overcome. Inventory is not coming up to its usual spring levels even though there are plenty of shoppers looking (and waiting) to purchase a home. This is probably in large part to what has been referred to as the “hangover” from the housing bubble. Many home owners who bought at the height of the market 5 to 8 years ago would normally be considering selling to relocate either for new work opportunities, more living space, or whatever the reason. Some of these home owners do not have enough equity to sell in the current market, or they don’t want to be in a position to have to bring cash to the closing table.

It is apparent that the greater Seattle area appears to be showing signs of a sustainable recovery. Many desirable neighborhoods in Seattle proper have been showing signs of recovery for quite awhile. But March showed the third straight month of increases in pending and sold properties in the greater Seattle area, up 30% and 25.3% respectively from the previous month. Although sales are slower than a year ago in March, down 8.9%, that is a direct result of the paltry amount inventory on the market, down 37.9%. However, pending sales were up 15.5% over last March.

If inventory continues at such low levels and demand remains study, we should begin seeing median and average price consistently rise – however slight that rise may be.

For the full statistics in graphs and charts click here.

Curnt vs. Prev Month			Curnt vs. Same Month 1 Yr Ago			Curnt vs. Same Qtr 1 Yr Ago
	Mar. 12	Feb. 12	% Change	Mar. 12	Mar. 11	% Change	Jan. 12 to Mar. 12	Jan. 11 to Mar. 11	% Change
For Sale	1236	1245	-0.7%	1236	1989	-37.9%	1265	1974	-35.9%
New Listing	842	645	30.5%	842	954	-11.7%	676	831	-18.7%
Sold	490	391	25.3%	490	538	-8.9%	396	388	2.1%
Pended	707	544	30%	707	612	15.5%	553	518	6.8%

The residential real estate market is heating up here in Seattle. In February, the number of homes on the market dropped by over 37%; closed sales were up 11.1% and pending sales were up 13.1%, all compared to last February. The number of new listings that came on the market was down 12% from last year. There are people buying and people that want to buy but home shoppers are complaining of the lack of inventory. It’s not that there is a lack of properties for sale, it’s that there is a lack of “quality” properties for sale.

Even though buyers are much more price conscious these days, I, and many of my colleagues, have been experiencing multiple offers on a variety of homes. What do all of these multiple offer situations have in common? They are all houses in great condition and in good locations in popular neighborhoods.

The houses that aren’t selling, as you can probaby guess, are in average to poor condition and/or suffer from a less than desirable location. Even short sales and bank-owned properties are seeing more activity. This is partially a function of the banks becoming more realistic about the market, and how to market. That is, they are listnening to their listings agents more than in the past. There have been numerous bank-owned homes that have attracted multiple offers within the first week of being on the market.

The median price of single family homes in Metro Seattle continued to slip standing at 4.4% lower than last February. How can demand be outstripping suppley and prices still be dipping? Short sales and bank-owned properties now account for over 23% of the single-family residential market in February, putting a drag on prices in general. The charts below show that the combined closings of short sales and bank-owned properties generated a median price more than 35% lower than non-distressed sales. When you take distressed sales out of Metro Seattle, the median price for February goes from $350,000 to $387,000. Don’t expect this to change anytime soon. The banks have plenty of delinquent mortgages and their will be more foreclosures to come.

Northwest housing analyst Glenn Crellin believes “Home prices will continue to slip over the next few months as banks work through a big backlog of distressed properties. But the market could stabilize in 2013.” We shall see.

I recently had a client that purchased a new car while searching for a home to buy. During the course of a conversation about two of the properties he was considering, I was going through a list of the pros and cons of the prospective purchase and asking questions about what he really wanted from his purchase, i.e. do you consider it an investment (resale value) or a consumer purchase (a home where you can be happy for 5 to 10 years). This is something I do with all of my clients to help them, and me, realize what is most important to them. And I always state that I am not trying to “sell” them the house but simply attempting to bring the issues into focus.

A few minutes into the discussion, my client paused, then said, “All you Realtors are like car salesman.” I chuckled and said, “You mean used-car salesman?” To which he responded, “Yes.” When I asked him what I said to make him think that, he shrugged and was unable to come up with anything specific, then added, “Just kidding – sort of.”

Now I try very hard not to come off like a used-car salesman. And I realize he was kidding with me to a certain extent (he is rather dry in his style of humor, but there is always a bit of “truth” revealed in humor). So later back at my office, I tried to remember the conversation and what I might have said to give a “salesy” impression to this valued client and I honestly couldn’t think of anything. The only explanation I could come up with was that: he was kidding and/or he had a pre-conceived notion of the way Realtors are and was squeezing me into that perception. And frankly, who can blame him.

In over a decade in real estate, more often than not it seems like I am dealing with agents that have one concern – selling the deal to the clients and to the other side. Selling is what agents/Realtors do, but we should also be putting our clients’ interests first – always.

Everybody sells something. My 12 year old son sells me on the learning virtues of playing certain video games. I do not usually buy. Real estate agents should not try to sell their clients on the virtues of something with which they are not comfortable. It sometimes takes patience and inquiry to learn what my clients are really telling me. When that something is that they are really not ready to move ahead, it does not pay to behave like a 12 year old and keep pressing the issue. That reflects badly on the rest of us that only sell to customers and not to our clients.

It was just published by the Northwest Multiple Listing Service in Washington state that: By an overwhelming margin, American voters strongly value homeownership and believe tax incentives are appropriate and reasonable. Three-fourths of voters who took part in a new nationwide survey affirmed their belief in homeownership, saying owning a home is the best long-term investment they can make.

Survey respondents also said they object to efforts to weaken or eliminate the mortgage interest deduction or diminish a federal role to help qualified home buyers obtain affordable 30-year mortgages.

“The American electorate is sending a clear message that owning a home remains a cornerstone of the American Dream and preserving a federal commitment to homeownership is essential to maintain a thriving middle class and get housing and the economy back on track,” said Neil Newhouse, a partner and co-founder of Public Opinion Strategies. His company conducted the survey in
early January to gauge likely voters’ attitudes toward homeownership and housing policy issues.

The comprehensive survey of 1500 voters, conducted on behalf of the National Association of Home Builders by the Republican and Democratic polling firms of Public Opinion Strategies in Alexandria, Va., and Lake Research Partners in Washington, D.C., includes data from key political “swing areas.”

The poll shows that three out of four voters (both owners and renters) believe it is appropriate and reasonable for the federal government to provide tax incentives to promote homeownership. That sentiment cuts across regional and party lines, with 84 percent of Democrats, 71 percent of Republicans and 71 percent of Independents saying they agreed with the statement.

Two-thirds of respondents said the federal government should help home buyers to afford a long-term or 30-year, fixed-rate mortgage.

Nearly three fourths (73 percent) of voters oppose eliminating the mortgage interest deduction. These figures held firm across the political spectrum, with 77 percent of Republicans, 71 percent of Democrats and 71 percent of Independents against eliminating the mortgage interest deduction.

More than two-thirds of those polled (68 percent) would be less likely to vote for a congressional candidate who proposed to abolish the deduction, a figure that was virtually identical across all party affiliations (69 percent of Independents and 68 percent of Democrats and Republicans).

A majority of voters are also against proposals to reduce the mortgageinterest deduction, eliminate the deduction for interest paid for a second home, limit the deduction for those earning more than $250,000 per year, scale back the deduction for home owners with mortgages above $500,000 and do away with the deduction for interest paid on home equity loans.

“With the 2012 election season in full swing, candidates running for the White House and Congress would be wise to heed the will of the American voters, who have expressed broad support for government policies that encourage homeownership and oppose efforts to make it more difficult to get a home loan and to tamper with the mortgage interest deduction,” said Celinda Lake,
president of Lake Research Partners.Among the poll’s other key findings:

An overwhelming number — 96 percent — of home owners are happy with their decision to own and 84 percent who are “underwater,” or owe more on their mortgages than their home is worth, expressed the same sentiment.

• 79 percent of home owners would advise a family member or close friend just
  starting out to buy a home, and 69 percent of those who are underwater on their
  mortgage would offer the same advice.
• 74 percent said that despite the ups and downs in the housing market, owning
  a home is the best long-term investment they can make.
• Homeownership and a retirement savings program are considered by voters to
  be their best long-term investments.
• 78 percent of respondents said that owning their own home is very important
  to them.
• Nearly seven out of 10 voters who are not currently home owners (68 percent)
  said it was a goal of theirs to buy a home.
• Job uncertainty and saving for a downpayment and closing costs are the
  biggest barriers to buying a home.

The survey findings are consistent with the results of other public opinion surveys. In a New York Times/CBS News poll conducted in June, 89 percent said that homeownership is an important part of the American Dream and more than 90 percent indicated that it is important for the federal government to continue the mortgage interest deduction.

According to a Pew Research Study conducted last March, 81 percent of respondents agree that buying a home is the best long-term investment a person can make and 81 percent of renters surveyed said they would like to buy a house.

“Even in a down housing market, homeownership remains a core American value, with the vast majority of citizens who do not currently own a home saying they want to buy a home,” said Bob Nielsen, president of the National Association of Home Builders and a home builder from Reno, Nevada. “Those running for office in November need to understand that voters will not look kindly on any candidates
who seek to dismantle the nation’s long-term commitment to homeownership.”

The survey, which has a margin of error of ±2.5 percent, is a follow-up to a
similar national poll conducted last May.

The old saw that the three most valuable aspects of a house are location, location, location, is as true as it ever was. But when it comes to the interior of the home the number one biggest selling point is the kitchen.

For many buyers the kitchen can be what “sells” the house. It is the room where much of a family’s time is spent. And this is true across countries and cultures world wide. It is the focal point of entertaining guests and serves as a show piece for the home. It is the room on which house flippers concentrate most of their time and energy to attract buyers.

The kitchen is also probably the most expensive room to renovate, particularly when the cost of new appliances are included. Many of the “window shoppers” I meet at open houses are there to get ideas for renovating their own kitchen. When I am showing homes to potential buyers the kitchen is almost without exception the first room they gravitate towards.

For sellers, it is always important to look at the competition in your neighborhood with your real estate broker. If you live in a high-end neighborhood, you need to have a high-end kitchen. Your older home may have a comfortable functional kitchen, but buyers will look at your formica counters and white appliances and start calculating the cost and stress of a remodel to deduct from their offer price to you. If you don’t want to put in the time yourself to make upgrades then you may end up having to make concessions in the price.

Sometimes more minor changes can be done (particularly if your not in a high-end neighborhood). Change the paint color to a warm, neutral tone. Get rid of any clutter. Update your appliances, paint your cabinets, change the pulls, or get a high-end looking counter for a fraction of the cost (faux-granite or lower end granite). You might even save by doing some of the work yourself. But it is usually unwise to make design decisions on your own without getting buy-in from your broker or your broker’s design consultant.

For buyers, know that if you are not happy with the kitchen of the house you want to buy, it could be a major expense and inconvenience to have it done the way you want. It’s great to have your own style reflected in your new home, just be realistic about the time and money it will take.

Do your homework (pun intended) by getting your broker to show you the competition in your area. And buyers, have your broker collect best estimates from his contractors so you have a realistic picture of the costs and logistics of your new kitchen. The key take-away is that a kitchen can sell a home or discourage the sale.

The market in north Seattle continues to show signs of stabilizing, albeit slowly. Pending sales were up 4.7% from December of last year and the number of homes on the market fell more than 24%.

Average Cumulative Days On Market are down nearly 15% from last year, and percentage difference of the original asking price vs. the final sold price remained completely flat.

The bad news is that the average sold price is down 10.3% from December of last year and the median price is down 8.1%. This is at least partially an effect of the majority of sales activity taking place in the low to low-mid price ranges while the high end properties continue to languish. Investors are making an impact on the market in the lower price ranges too as they have begun purchasing more distressed and bank-owned properties.

Visit each month for the most current and detailed statistics on what’s happening in the Seattle-King County real estate market. You can also request specific statistics for your neighborhood.

The residential real estate market continuted to show signs of stabilizing in several categories in December. The charts below tell the story: activity is down from last year with the exception of the number of pending sales (under contract but not yet closed) which were up 12% from the same month last year.

The Average Cumulative Days on Market for a property fell 14.7% while the percentage of the original asking price that was realized by sellers rose 2.2%.

The next two graphs are not so happy; showing that, though slowing, sold prices are continuing to fall. The median price for single family homes is down nearly 15% from last December.

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Visit after the 7th of every month for the most current and detailed statistics on the Seattle-King County real estate market.

You can also request customized reports specific to your neighborhood.

It doesn’t take a lot of insight to understand that foreclosures will be on the
rise this year and for years to come. In the past year banks have been slow to
foreclose at least partially because the government and regulatory authorities
have been closely examining the banks’ practices. So in some cases it is taking
years to foreclose on some properties. In New York State, it would take 62 years to
at the current rate of sales to get all the foreclosures off of lenders’
books. That’s the highest in the nation.

So you can count on 2012 seeing an increase in the number of foreclosed homes on
the market. Although this will affect some areas more than others, it will
affect the entire nation as banks put more of these properties on the market. The Federal
Reserve has sent a letter to the ranking members of the Senate Banking and House Financial
Services Committees with several ideas to moderate the inflow of foreclosures
into the existing housing inventory, and explains that the lagging housing
market is the major obstacle to a more robust recovery of the economy. But even
if some or all of these ideas are implemented, it will take time to get the
Congress and the regulators, and there will probably still be a steady rise in
the number of foreclosures on the market.

There will be some bright spots in cities with broad technology bases like Seattle.
Many metro areas will see some slight increases in pricing as some
neighborhoods did last year. But the increases will be very slight (less than
1%) and probably in the low to middle price ranges of these areas.

The Federal Housing Authority has been making a lot of re-hab loans on their 203(k)
program. These loans will probably increase in popularity, giving potential
buyers more options to consider and helping to ease the glut of bank-owned, or
distressed, properties on the market.

Overall, home prices will continue to drop across the nation in 2012 and in Seattle –
but only slightly – by some projections only a few percentage points. This will
be a direct result of the foreclosure glut and will not change until the banks
and the government get together to put into action some of the creative ideas
being proposed.

You would think with interest rates at historic lows, nobody
would be paying cash for homes in this market. But the percentage of
buyers paying all cash rose to 38% of all existing home sales for 2011 according to research
company, Hanley Haywood Market Intelligence. According to two analysts with
Hanley, tighter lending standards and the difficult search for yield on
investment is spurring investors to pay all cash – mostly for distressed
properties.

After 10 years in real estate, I represented my first all
cash buyer this past year. Although it was not a “distressed” property, it was
in very poor condition and was purchased with the intent to eventually
redevelop from single family to mixed-use – townhomes and commercial space. I have talked with other
brokers locally that are seeing more investors with cash as well.

As many home owners give up their homes to the banks or
short sales, investors will continue to be there to turn those properties into
rentals – a sad but necessary reversal of the previous trend of nearly every
one being aspiring to home ownership. You can expect the percentage of cash investors
to continue to rise until the glut of foreclosures and bank-owned homes on the market begins to
abate, which will take at least a couple more years – optimistically.

Written by Mark Despain