Q1 2018 Seattle-Eastside Real Estate Report

Q1 Market Snapshot

 

Q1 prices in the Seattle-Eastside region have escalated yet again with no sign of slowing in the immediate future. An unprecedented lack of inventory for sale coupled with rising interest rates has prompted buyers to compete with reckless abandon to win the prize of their very own home, albeit with a steep price tag.

 

Overall median prices in Seattle rose 16.1% to $770,000, while the Eastside rose 13.0% to $944,000. Those regional numbers certainly don’t tell the whole story, especially when you consider the highest change in median sale price was nearly 46% and the lowest was a -4%. New construction sales, or lack thereof, made the biggest impact on home sale prices. Existing homes, offering good walkability or commute options, and those that were on the more affordable end of the pricing spectrum saw the strongest appreciation overall.

 

Rising mortgage interest rates, now up a full percentage point from their lows, are adding fuel to the fire. While not dampening buyer demand yet, further increases will likely begin to price home buyers out of the core Seattle-Eastside region. Homebuyer fear of being priced out of the market is at least partly to blame for the crazed demand at more modest price points.

 

As predicted, many who don’t have a need to be close in to the metro region are choosing to sell at a high and buy more affordably outside of the Seattle-Eastside area. The rate of tear-down new construction infill has escalated at staggering numbers as builders capitalize on the market’s appetite for fresh and new.

 

Buyers today should consider their purchase thoughtfully as buying at or near the peak of the market can limit their resale options when the market corrects. Planning to stay put for five to seven years is a good strategy at this time.

 

Q1 Market Snapshot

SEATTLE

West Seattle leads the pack in median home price growth on the Seattle side of the lake. With its vibrant, hip vibe and convenient access to the city, West Seattle has benefited from Seattle’s commute gridlock—maintaining status quo while other Seattle neighborhoods have come to a halt (literally).

Seattle Report

Queen Anne saw a nice rebound in Q1 after lagging the Seattle averages for some time. South Seattle, with its light rail access, affordable prices, and new vitality, continues to see its real estate market thrive.

Click here to view the complete report for a neighborhood by neighborhood breakdown of Average Sale Price, size, and number of homes sold.

 

EASTSIDE

Significant new home development at higher price points has led the market in West Bellevue and Kirkland and brought up everything else along with it.

Eastside Review

With land values alone higher than average home sale prices in surrounding communities, this growth will have long-lasting impacts that will forever change the flavor of these communities–for better (fresh new housing stock) and worse (the lack of affordable options). Kirkland led this charge with a median sale price 45.9% higher than Q1 last year, followed by West Bellevue at 23.1%.

Click here for the full report and neighborhood-by-neighborhood statistics!

 

MERCER ISLAND

Overall, a much higher percentage of mid-range homes sold in the first quarter than in quarters past, giving the appearance of falling prices. In reality, however, it was actually a downward shift of the segment of the market that is selling.

Mercer Island Report

Don’t let the negative number for Q1 fool you. The market below the two-million-dollar mark is vastly different than the market above it. With the most severe shortage of available homes in mid-range price points Mercer Island has seen, especially early in Q1 this year, the sub $2 million market has been brisk and competitive with strong price escalation. The $2 million and above market has been a different story altogether. While highly desirable homes in that bracket have transacted quickly, many other less notable homes have languished on the market.

Click here to view the complete report for a neighborhood by neighborhood breakdown of Average Sale Price, size, and number of homes sold.

 

CONDOS – SEATTLE & EASTSIDE

Still the only affordable option for many home buyers today, condos have continued to escalate in value with appreciation rates above those of residential homes in many areas.

Condo Report

On the Eastside, new condo and townhome developments in Crossroads and Rose Hill drove prices up to new highs in those communities. Richmond Beach and Shoreline benefited from an infusion of new construction standalone condominium ‘homes’ on very small lots.

Check out all of these factoids and more in the full condo report.

 

WATERFRONT

Waterfront Report

Several significant sales accented an otherwise unremarkable quarter. A $26.8 million iconic Medina estate on 2.5 acres with 150 feet of waterfront set a new benchmark on the Eastside. Two $8+ million homes on the north end of Mercer Island–both newer construction with over 7,000 square feet–set the tone for the Island in 2018. Lake Sammamish, with a $4.2 million sale in Q1, is still in hot demand, while Seattle saw only three modest waterfront sales.

Check out the full Waterfront Report for a complete list of waterfront home sales by address and community.

 


ABOUT WINDERMERE MERCER ISLAND

We earn the trust and loyalty of our brokers and clients by doing real estate exceptionally well. The leader in our market, we deliver client-focused service in an authentic, collaborative and transparent manner and with the unmatched knowledge and expertise that comes from decades of experience.

 

© Copyright 2018, Windermere Real Estate/Mercer Island. Information and statistics derived from Northwest Multiple Listing Service and deemed accurate but not guaranteed.v


Posted on April 13, 2018 at 2:05 pm
Windermere Mercer Island | Posted in Real Estate Trends | Tagged , , , , , , , ,

Planning ahead: how tax reform will impact your home deductions next year

2018 Tax Changes for Home Owners

 

While you may still be busy filing your 2017 taxes, it’s important to look ahead and be aware of how the new 2018 tax reform laws will affect next year’s return–especially if you’re a homeowner. Those who itemize will need to note some big changes in what they can and cannot deduct. Many will instead choose to use the new higher standard deduction ($12,000 for single individuals and $24,000 for joint returns) rather than itemizing their deductions.

What can you do now? Check in with your accountant for advice specific to your situation and filing status. Also, you’ll probably want to update your withholding amount to reflect the new deduction amounts. In the meantime, here is the skinny on 5 changes that may affect you if you own a home…

 

1. Mortgage Interest Deduction

The deduction that allows homeowners to reduce their taxable income by the amount of mortgage interest they pay has been scaled back.

  • For loans taken out after 12/14/17, you can now only deduct mortgage interest paid on the first $750,000 of combined debt for primary and secondary residences (or $375,000 if married filing separately).
  • Current loans of up to $1 million are grandfathered and are not subject to the new $750,000 cap if they were taken out before 12/15/17 (or if you entered into your purchase contract prior to 12/15/17 and the sale closed by 1/1/18).
  • You can continue to deduct the interest on grandfathered loans even if you refinance.

 

2. Home Equity Loan Deduction

Under the former tax law, you were able to deduct the interest on up to $100,000 of home equity debt even if the proceeds were used for something other than buying or improving the home (for example, an equity line of credit used to pay college tuition). This is now no longer the case.

  • New 2018 law eliminates the deduction for interest on home equity debt unless it’s used to buy, build, or substantially improve the home that secures the loan.
  • Loans to buy second homes do not qualify for the interest deduction if they’re taken out against the equity of your primary home.

 

3. Deduction for Property & Sales Taxes

Tax relief for homeowners who pay property taxes has also been limited.

  • Itemized deductions for property taxes, sales taxes, state income taxes, and any other local taxes will now be limited to a combined total of $10,000.
  • The combined limit drops to $5,000 if married filing separately.

 

4. Deduction for Moving Expenses

While you used to be able to deduct some moving expenses when you moved for a new job, this deduction has been repealed for everyone except active-duty members of the armed forces.

 

5. Deduction for Casualty Losses

Under former law, substantial losses to your home and personal property through things like fires and robberies could be deducted from your taxable income. Under the new law, this deduction is eliminated for everything except presidential-declared natural disasters.

 

Want to know more?

 

The above article is presented for informational purposes only and is not intended to replace professional tax advice from your accountant.

Sources:
“The Tax Cuts and Jobs Act – What it Means for Homeowners and Real Estate Professionals,” by the National Association of Realtors
“5 Homeownership Changes Coming Under New Tax Law” by NerdWallet
“Tax Reform” by the Internal Revenue Service


ABOUT WINDERMERE MERCER ISLAND

We earn the trust and loyalty of our brokers and clients by doing real estate exceptionally well. The leader in our market, we deliver client-focused service in an authentic, collaborative and transparent manner and with the unmatched knowledge and expertise that comes from decades of experience.

©2018, Windermere Real Estate/Mercer Island


Posted on March 12, 2018 at 12:04 pm
Windermere Mercer Island | Posted in Uncategorized | Tagged , , , , , , , , , ,

Baby Boomers: Impact on the U.S. Housing Market

Originally posted on Windermere Blog

75 million Baby Boomers control nearly 80% of all U.S. wealth, and as this generation ages, retires, and inevitably downsizes, they will have a significant impact on the housing market. Windermere’s Chief Economist, Matthew Gardner, explains when we can expect to see Boomers start to sell, opening much-needed inventory and making home ownership available to younger generations.


Posted on June 30, 2017 at 11:56 am
Marianne Parks | Posted in Economic Trends | Tagged , , , , ,

Kickoff 2017 – Design Trends Panel

At our recent Kick-off event for the Windermere offices on the Eastside, 3 design experts participated in a panel discussing the latest trends for the home here in the Pacific Northwest. Susan Marinello, of Susan Marinello Interiors, Brenda Gage from JayMarc Homes, and Sheri Olson, of Sheri Olson Architecture, dished on the freshest interior design elements and frequently requested features for home design.

Susan Marinello

Susan shared that appliance rejuvenation is in full force. New materials for use for countertops and flooring are a fresh take within kitchens, with granite use starting to subside. Black as a neutral within the kitchen is also on trend.

Susan also discussed what trends are out, out, out. Her top pick: microwaves over the range. Other fading design elements are tub/shower combo, and a mixture of too many materials within a room. Less is definitely more. Simple, neutral, clean lines, open, light – those are the goals for being fresh and on trend. Susan said, “The power of paint is a beautiful thing!”

Brenda Gage

Brenda was asked to name a few most requested home features from JayMarc’s new construction clients. The dual master bedrooms, with one on the upper level and one on the main level, is right up at the top. The jr master suite on the main level is perfect for multigenerational families, those with extended family who live out of area but will be visiting, and homeowners who are thinking ahead about aging in place.

In fact, other aging in place home features, like planning for an elevator, are also sought after. More rooms with en suite bathrooms are desired by families with teens. With the number of Tesla cars being purchased in the Pacific Northwest, the request to include Tesla battery chargers in the garage is increasingly popular. Brenda also mentioned how the popularity of modern design is surging in our area. Design modeled after the Craftsman style is more closely associated with the Big Recession.

Sheri Olson

Sheri echoed the popularity of home design that helps facilitate aging in place. Sheri also identified more informal living space, both inside and out, as highly sought after. The addition of a mud room as command central is becoming highly desirable in the PNW.

Sheri stated that homeowners are taking a closer look at what makes more sense to create the home they seek: raise or raze. Older homes that contain cherished period details that would be too expensive to replicate today may be a better choice for a remodel. However, increasingly homeowners are finding that it makes more fiscal sense to tear down a home and rebuild to create the home they desire. Things to look at are height restrictions, along with zoning and permitting issues within your city.
NW architecture style where the natural setting helps shape the home design is also seeing a resurgence here.


Homeowners that opt for clean, classic lines, neutrals, and design that welcomes our Pacific Northwest environment will be well served by their home updates. In addition, those home buyers who are planning to live in their homes for long time have many options available to make aging in place possible.

Photo credit: Frances Gaul


Posted on January 19, 2017 at 2:15 pm
Marianne Parks | Posted in Hot Trends | Tagged ,

2017 Real Estate Forecast

Matthew Gardner, chief economist for Windermere Real Estate, was one of the presenters at this year’s Eastside Windermere Real Estate Kick Off I attended. I eagerly look forward to his forecast, because it is always so packed with useful information. And I love sharing it with you!

He covered our local economy – which is experiencing remarkable growth. The economies of the metros located in the western United States have been strong, and Washington State metro areas are currently at the top of this group. Mr. Gardner expects this economic trend to continue in 2017, along with low unemployment. The Seattle region should maintain a robust influx of people relocating here during 2017 to fill jobs in the tech sector, and escape higher priced real estate in California, especially the Bay area.

Mr. Gardner showed an interesting chart detailing the most successful spin-off companies that derived from Microsoft.  He expects the same thing to occur from the talent being hired by Amazon. He said that Amazon hires more MBAs than any other company in the world, which translates into positive economic implications for our regional business environment.

Any slowdowns reported on the employment front have been due to everyone who wants a job are already employed, a trend that will continue this year with the projected generation of new jobs. Post-recession sectors in our area seeing noteworthy growth, in addition to the tech industry, are retail and leisure. With our low unemployment numbers, Mr. Gardner said that when unemployment drops under 4% (King County’s unemployment rate in November 2016 was at 3.9%), we start seeing pay increase to retain employees. He projected a 4.5% growth in income during 2017.

Two sectors he noted as slower growing are manufacturing and construction. We’re seeing that trend play out in lower numbers of single family residential permits being issued. The lack of new construction places pressure on our regional resale market, which will contribute to our housing market’s continued low inventory in 2017.

Western Washington home prices will experience continued growth this year. Mr. Gardner did stress that housing affordability is an issue that needs to be addressed. King County homes are not affordable for many first time home buyers, which is driving homebuyers to purchase outside of larger King Country cities. He mentioned the trend of people communting from bedroom communities like Marysville and Cle Elum to their jobs in Seattle and Bellevue. Some commuters are even opting to purchase homes in Spokane, where real estate is much more affordable than in Western Washington, and then bulk buying airplane tickets to fly back and forth weekly from their jobs on the west side of the mountains to their homes in Spokane.

The change in the presidential administration was also discussed. Mr. Gardner forecast that this change won’t affect our housing market in 2017. He stated it takes time for rhetoric to become policy. In the Seattle area we should see a seller’s market persist this year, increases in home prices, and continual job growth in the next 12 months.

Photo credit: Frances Gaul

 


Posted on January 19, 2017 at 1:18 pm
Marianne Parks | Posted in Economic Trends, Real Estate Trends | Tagged , ,

Interest Rates, Post-Election

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We’ve seen some volatility in mortgage interest rates since the presidential election. When Freddie Mac released the fixed and adjustable rates on Thursday, November 17th, they had gone up considerably. 30-year fixed rate mortgages jumped from 3.57% the week before to 3.94%. 15-year fixed rate mortgages climbed from 2.88% to 3.14%. 5-year adjustable rate mortgages followed suit, jumping from 2.88% to 3.07%.

However, we need to keep things in perspective. At this time a year ago, 30-year fixed rate mortgages were 3.97%.

When the Federal Reserve meets December 14th, it would not be surprising to see an increase in short-term rates. It’s projected they will increase them a quarter of an interest point at this meeting. If the Federal Reserve does move forward with a rate increase, there’s talk of slowly increasing mortgage rates to follow. The uptrend is expected to be modest, until we see stronger inflation, or until the Fed decided to move the 10-year Treasury Bond Rate closer to a “norm” of 3%.

On November 11th, Kiplinger mentioned in their Economic Forecast for 2017 that they projected the 10-year Treasury Bond Rate would remain at 2.1%, until the end of 2016. However, this past week we saw it rise to 2.34%. Erin Lantz, vice president of mortgages for Zillow Group, is quoted as saying, “There is a flight to safety of assets outside the U.S.,” in response to the jump in yields for the 10-year Treasury Bonds.  Kiplinger had projected in their economic forecast we should see the 10-year Treasury note yielding around 2.5 by the end of 2017, with the average 30-year fixed rate mortgage moving upward toward 4.3%, and 15-year fixed rates around 3.6%. These are economic indicators we will need to monitor closely in upcoming days.

Until we know more know about the policy proposals President-Elect Trump will bring to the table, there may be a sustained increase level of uncertainty mirrored in interest rate levels. Erin Lantz stressed patience for home buyers, “Consumers considering buying or refinancing now should stay patient, as we’ll likely see rates stabilize once markets find a new equilibrium.”  Freddie Mac’s chief economist, Sean Becketti, surmised that those who were waiting to see what interest rates were going to do will jump off the fence, under certain circumstances, “If rates stick at these levels, expect a final burst of home sales and refinances as ‘fence sitters’ try to beat further increases, then a marked slowdown in housing activity.”

The Wall Street Journal surveyed 57 economists between November 9th and 11th, asking for their forecast for 2017 and beyond. The average forecasts delivered by this group for growth, inflation and interest rates – in both 2017 and 2018 – all reported slight upward movement, when compared to their survey responses given before the election in October. Many of the responding economists added the caveat that their estimates were tentative. “Anyone who tells you they absolutely know what will happen under a Trump presidency is probably lying,” said Megan Greene, chief economist at Manulife Asset Management. There is definite concern regarding White House missteps, and the potential for trade wars to erupt. A number of economists continue to worry about a decline in business investment. Robert Dietz, chief economist at the National Association of Home Builders shared, “Uncertainty on major policy issues limits hiring and investment decisions.” Across the board, however, the economist respondents to the WSJ survey estimate about a 1 in 5 chance of dipping into recession within the next 12 months. These replies are a slight decline when compared to data collected over the past three months, but are up from 14% a year ago.

We’ll have to be patient, as Erin Lantz suggested, until we see more concrete policy language from the Trump transition team. Continue to keep in mind how low our interest rates are now – they are historically low, and on par year-over-year. If you have any questions regarding interest rates, and the current state of our housing market, let’s schedule a time to talk. Please email me at marianne@windermere.com.

photo credit: pixabay


Posted on November 22, 2016 at 1:32 pm
Marianne Parks | Posted in Economic Trends | Tagged , , , , , , ,

Where to Drink Coffee in Seattle Right Now, Fall 2016

coffee-1580595_960_720

Originally posted on Windermere Premier Blog.

Lucky Seattle. This city has tried-and-true coffee industry veterans, solid neighborhood cafes, and a growing crop of newcomers pushing the scene forward. Venerable roasters Vivace and Victrola helped build the Emerald City’s reputation as the specialty coffee center of the planet, and they’re bolstered by a fresh set of bean businesses that are breathing new life into Seattle’s cafe culture this very minute: multi-roaster shops like Milstead and Co. and back-to-basics roasters like Slate are keeping the attention of the caffeinated crowd at home and well beyond the Pacific Northwest.

1. Royal Drummer

Opened in April, this North Ballard newcomer is an ode to Australian culture, which sees the cafe more as a place to socialize than to pound espresso for a busy laptop work session. Australia’s shops tend to serve full-course meals to encourage guests to sit and stay a while, so expect the same at Royal Drummer.
6420 24th Ave NW, Seattle, WA 98107 | 206-484-6693 | Website

View rest of article631 more words

Photo credit: Pixabay | qimono


Posted on November 21, 2016 at 6:39 pm
Marianne Parks | Posted in Exploring the Puget Sound Region, Hot Trends | Tagged , , , ,

Benjamin Moore Color Of The Year For 2017

In an interesting turn of events, Benjamin Moore moves from Simply White, color of the year for 2016, to Shadow 2117-30, a rich amethyst color, for 2017. Shadow is paired with a palette of 23 colors that embody Benjamin Moore’s take on 2017’s most influential hues.


Posted on October 30, 2016 at 9:03 pm
Marianne Parks | Posted in Hot Trends | Tagged , , ,

Making sense out of the market

content_16229_WWA_GardnerReportQ3_SpeedometerWith the continued low inventory around Seattle and the Greater Eastside, how do our regional housing sales continue to grow?  In his recently released 3rd quarter report, Windermere Real Estate’s chief economist, Matthew Gardner, pointed out that there has been an uptick in the number of 1st time home buyers purchasing homes. Svenja Gudell, Zillow’s chief economist, stated in her 3rd quarter report that during 2016 almost half of all U.S. buyers were first time home buyers.

However, we’re also seeing the prices of starter homes skyrocket in our area.    The recently released S&P Case-Shiller Home Price Index pinpointed that the Seattle area has the 2nd fastest-rising home prices in the nation. In fact, since 2012 the starter home prices have jumped 75% compared the overall housing market increases at 59% for the same time period. Millennial home buyers are ready to purchase their first homes, but starter homes are not what they used to be.

Additionally, homes in the luxury price points are seeing a slowing in their price gain in our region. According to the Case-Shiller Home Price Index report Seattle area luxury homes had a price gain of 10.9%, compared to the least expensive homes that experienced a 12.9% gain during the same report time period.

With so many differing factors working to shape our regional housing market conditions, it can be confusing to keep track of what is going on in your neighborhood, or how to make comparisons between communities that you may want to call home. I work diligently to maintain a pulse on the workings of our real estate market, to be an educated resource for you to utilize. Please give me a call with any questions you may have regarding home pricing, real estate investment, or making your first home purchase.


Posted on October 28, 2016 at 8:46 pm
Marianne Parks | Posted in Real Estate Trends | Tagged , , , , , , ,

Why So Many Americans Are Either Upsizing or Downsizing

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Originally appeared on Windermere Blog, written by Shelley Rossi.

According to two recent surveys that took industry watchers by surprise, many family homeowners are putting frugality aside and upsizing to new houses that average as large as 2,480 square feet (an increase of as much as 13 percent from the year before), and sometimes exceed 3,500 square feet in size.

Meanwhile, millions of baby boomer homeowners are rushing to downsize—with some 40 percent of Americans between the ages of 50 and 64 saying they’re planning to make a move within the next five years.

It’s a tale of two very different segments of the population making dramatic shifts in their living accommodations to find the housing solutions that best suit their needs: one upsizing while the other downsizes.

With so many baby boomers now nearing retirement age (8,000 Americans turn 65 every day), it should come as no surprise that the number of prospective “downsizers” exceed the number of “upsizers” by three to one. With their children gone, these aging homeowners are interested in reducing the amount of house they need to care for, and are eager to bulk up their retirement savings with any home-sale profits.

As for why many families are choosing to upsize so substantially after years of downsizing or staying put, experts point to the extremely low interest rates and discounted home prices available today, and theorize that many families now feel confident enough about the economy to move out of homes they outgrew years ago.

If you’re considering upsizing or downsizing, here are some facts to consider:

 

How such a move can impact your life

The most common benefits of downsizing:

  • Lower mortgage payments
  • Lower tax bills
  • Lower utility bills
  • Less maintenance (and lower maintenance expenses)
  • More time/money for travel, hobbies, etc.
  • More money to put toward retirement, debts, etc. (the profits from selling your current home)

 

The most common benefits of upsizing

  • More living space
  • More storage space
  • More yard/garden space
  • More room for entertaining/hosting friends and family

 

Negative impacts:

  • Upsizing will likely increase your living expenses, so it’s important to factor into any financial forecasts
  • Downsizing will require that you make some hard choices about what belongings will need to be stored or sold

 

Other impacts to consider:

  • The loss of good neighbors
  • Lifestyle changes (walking, neighborhood shopping, etc.)
  • The effect on your work commute
  • Public transit options

 

Buy first, or sell first?

Homeowners considering this transition almost always have the same initial question: “Should I buy the new home now, or wait and sell my current place first?” The answer is dependent on your personal circumstances. However, experts generally recommend selling first.

Selling your current home before buying a new one could mean you have to move to temporary quarters for some period of time—or rush to buy a new home. That could prove stressful and upsetting. However, if you instead buy first, you could be stuck with two mortgages, plus double property tax and insurance payments, which could quickly add up to lasting financial troubles.

If you need to sell in order to qualify for a loan, there’s no choice: You’ll have to sell first.

 

Another option:

You could make the purchase of the new house contingent on selling your current home. However, this approach can put you in a weak bargaining position with the seller (if you can even find a seller willing to seriously consider a contingency offer). Plus, you may be forced to accept a low-ball offer for your current house in order to sell it in time to meet the contingency agreement timing.

The truth is, most home sales tend to take longer than the owners imagine, so it’s almost always best to finalize the sale, and do whatever is necessary to reap the biggest profit, before embarking on the purchase of your new home.

 

When to make the transition

Ideally, when you’re selling your home, you want to wait until the demand from potential buyers is high (to maximize your selling price). But in this case, because you’re also buying, you’ll also want to take advantage of any discounted interest rates and reduced home prices (both of which will fade away as the demand for homes grows).

How will you know when the timing is right to both sell and buy? Ask an industry expert: your real estate agent. As someone who has their finger on the pulse of the housing market every day, they can help you evaluate the current market and try to predict what changes could be coming in the near future.

Even if you’ve been through it before, the act of upsizing or downsizing can be complex. For tips, as well as answers to any questions, contact a Windermere agent any time. 

Photo Credit: midascode | Pixabay


Posted on September 10, 2016 at 12:34 pm
Marianne Parks | Posted in Real Estate Trends | Tagged , , , ,