Update from the front…

Regular readers of this blog (and you know you are one) may remember that last month Lori and I embarked on an awesome adventure, selling our home in Clyde Hill and planning a move to Madison Park (See http://blog.ripwarendorf.com/ ). Well I’m back to report that our westward migration is well underway. Here’s a quick update and a few learnings from the real estate front lines.

As sellers, we took the time needed to get our house ready to sell. Then we hired a stager (and did what he said), priced it right, put the marketing in place and then got out of Dodge for a few days. The result was multiple offers, a quick closing, and we’re still here thanks to an expertly-negotiated free “rent-back” from the buyers. The seller’s market is real!

We’ve now turned 180° and put on our buyer’s hats. Using some of the same strategies that have worked recently for my buy-side clients we have uncovered some promising prospects in Madison Park and are working to convert one of them into a deal. Here are a few ideas from my recent experience on the buy side.

“Money talks…” Have your cash/financing completely locked and loaded so you can make a clean, non-contingent offer when the right place becomes available. Making an offer with as few contingencies as possible and a quick close works wonders.
Pre-inspect. In competitive situations, sellers see home inspection contingencies as the giant OUT CLAUSES that they are. It will cost you a few bucks, but doing an inspection before submitting your offer may allow you to waive the inspection contingency, making your offer much stronger and giving you a competitive advantage.

Talk is cheap…and effective. Persistent networking works for clients and it seems to be working for us too. Conversations with anyone who will listen, snail mail, email, social media, etc. can all play a part. It’s amazing where valuable leads and connections come from.

Find a way station. Instead of trying thread the needle and time everything perfectly from the sale of your home to identifying and closing on a new one, consider a short term lease in your target neighborhood. We’ve found one in a great location with room for the kids when they come around, and removing the timing pressure improves the odds of closing one of the opportunities we’ve uncovered.

So, still happily married, enjoying the hunt and settled in for a fun summer in the new ‘hood. So far, so good. Stay tuned…

A Bit of My Own Advice…

I recently took the opportunity to heed some of my own advice. Home prices at new highs, inventory at all-time lows, a seller’s market entering its fourth year, and a desire to change things up a bit all combined to push Lori and I into action. Step one of the process (hopefully the process of downsizing to a new home in Madison Park) was to sell our home in Clyde Hill. Check.

That oversimplifies both the decision-making and selling processes, but not by too much. It feels good to kick into action and once you do the process seems to fall into place. Here are a few of the early takeaways from our very much ongoing adventure.

A dose of your own medicine. All realtors should be required to take some of their own advice periodically; just as management consultants should periodically have to stick around and execute one of their own plans. It’s really eye-opening to see the world first hand from the other side.
It’s a process. Don’t try to get your house ready to sell in a day or a week. We started chipping away at it right after the holidays and managed to be ready to go by March first. Take as long as you need to do it right.
Seek professional help. Preparing your house for sale can range from doing the dishes and putting a sign in the yard to curating a museum exhibit. Understand that you are too close to it all to be objective. Get some outside input on which projects to do and which not to do. Then hire a professional stager to make prepping your house less personal. (Hint: Apparently, Mom’s antiques and the shrines to your kids can go to storage.)
Run away! Get everything ready and then GO AWAY, at least for the first weekend you are on the market. It’s not about you. It’s about letting buyers have access. Turn things over to your realtor and let them me work it.
Gut Check. For years I’ve been telling anyone who would listen that “you can’t underprice your house in this market”. It’s true. Hit the market at a reasonable price and if your home is worth more you will get more. The “shoot for the moon” pricing strategy is tempting when things are hot, but it often leaves beautiful homes sitting on the market. Everyone gets this idea conceptually, but it’s a real “gut check” when the time comes to make the call on the final price.
If you don’t ask, you don’t get. Let your agent know what, in addition to price, is important to you in a transaction (quick closing, rent back, inspection terms, financing, etc.). Remember, you are selling in a seller’s market so you might as well ask.
If you’re interested in more detail or in putting your own plan into action give me a call anytime. I’d be happy to help get you started.

With a little luck, next month I’ll have some interesting (and happy) tales to report from the buy side. Wish us luck!

Kardashian, Trump and Beyond…

As always, this time of year brings an assortment of year-end wrap ups and New Year predictions. This year is no different, with prognostications on everything from the Kardashians to Donald Trump to the economy. While the K’s and the Donald are tempting subjects, I’m going to stick a little closer to home.
All indications are that we’re in for another solid year in the local real estate market. Tight inventory on the supply side, combined with a strong local economy that continues to attract educated, high-earning workers to the region will keep upward pressure on home prices.  Rising rents, builders actively searching for suitable lots, and now the reality of creeping interest rates all add fuel to the fire on the demand side of the equation.  Below are two interesting perspectives that point to the unique nature of our local market.
We’ve all read that 2015 was the stock market’s first down year since 2008. The Dow was off about 1% for the year, but if you focus more locally the numbers tell quite a different story. The chart below shows the 2015 performance of some of our area’s leading companies and it’s these numbers, not the broader market indices that are driving the local economy and in turn our real estate market.
(See the full Seattle Times article HERE)
Another take on things comes from Redfin, who analyzed a variety of data to compile a list of the most competitive real estate markets in the nation by neighborhood. It’s no surprise that a booming tech economy was a strong indicator of markets with bidding wars and quick sales. But that 13 of the 30 most competitive neighborhoods in the country for 2015 were in the Seattle metro area came as a bit of a shock! Click HERE to see their full analysis and list of the “hottest” neighborhoods.
So it’s true that things really are a bit “different” around here. And barring unforeseen events all indications are that they should stay that way on the real estate front in 2016. Thanks for making 2015 a great year and feel free to give me a call if I can answer any real estate (or Kardashian or Trump) questions for you moving forward.

Spring Market Snapshot

Memorial Day is behind us and the spring real estate market is in full swing. Since I’ve sworn off griping about the lack of inventory I thought I would provide a snapshot of recent activity here on in the eastside. The numbers below show closed sales for the past 60 days in both the single family and condo markets in Bellevue and Kirkland.

Bellevue & Kirkland Closed Sales — Last 60 Days

Boiling it down, it’s still amazing how fast things are selling. In Bellevue over the past 60 days, two thirds of the single family homes that sold for less than $2M sold in less than 10 days. For homes under $1M in Kirkland it was 53%.

Our new construction market is also rolling. Ric Mangialardi and I recently sold the two Medina listings HERE and HERE. Both were over $3M and sold in less than 3 days. (Don’t worry,there’s more where those came from!)

The local condo market is also very competitive as downsizers make their presence felt in what has traditionally been a younger market. It’s also surprising to see how similar the numbers are for the Bellevue and Kirkland condo markets.

The market dynamics are similar throughout the area, but let me know if you would like to see the numbers for another market or neighborhood. You’d be surprised how quickly deals come together from a quick conversation.

The New Normal

I’m through complaining about the lack of inventory in the local real estate market. The number of houses for sale in our area is at its lowest level in more than 20 years and that’s just the way it’s going to be for a while. And while I can’t easily decipher Janet Yellen’s musings I think the same can probably be said for the low interest rates and for our strong local economy. Say hello to the new normal!

Much like the weather around here, the “spring” real estate market seems to be heating up a bit early. Here are a few interesting stats that illustrate what’s going on.

With that backdrop here are some things to consider if you are thinking about buying or selling in this seller’s market.

FOR SELLERS
• Even in this seller’s market, if you shoot for the moon and overprice your home it will sit on the market. The market remains very efficient (and brutally honest). By contrast, it is virtually impossible to under-price your home in this market. Go a little low and if your home is worth more buyers will bid it up to its rightful level. Get a professional (non-Zillow) price opinion from someone who is not just telling you what you want to hear and don’t get greedy.
• Since you will likely be able to dictate some of the terms of your sale, make sure your agent understands the deal terms other than price that are most important to you (i.e. closing date, pre-inspections, financing terms, remaining in the house after closing, etc.). Properly communicating your preferences to buyers up front can help during negotiations and really streamline the process.
• As you get ready to sell don’t spend “dumb” money on projects that won’t increase the value of your home in the eyes most buyers. The goal is to do the things that will make your home appeal to the broadest possible buyer pool. A quick conversation about what to do, what not to do and why is always worth the time. Call me.

BUYERS
• Get someone good on your side. In a hot market like ours you need to have an agent working for you who can give you that “unfair advantage”. A good agent’s intimate market knowledge and a strong personal and professional network can give you a first mover advantage, strengthen your negotiating position and ensure that your offer stands above the crowd. (Despite the urban myths, few ever “outfox” the market and in times like these the number is actually zero!)
• Make sure your financial house is in order. Unless you are an all-cash buyer with the full amount of your purchase sitting in the bank, make sure you consult with a mortgage professional to figure out all your options and get pre-approved for a loan. A good mortgage person will propose options you had not considered and when the time comes will help make your offer as strong as it can be.

So that’s the view from here. Let me know how I can help.

A few new numbers…

The latest numbers from Case-Shiller confirm that real estate prices are still on the rise here in the Seattle market. They are rising at a slower (and hopefully more sustainable) pace than they did in 2013, which is probably good news for all of us. See http://tiny.cc/c934sx for the details and an interactive graph by market.

Of note is the fact that in some neighborhoods in and around Seattle prices are at or near the peak levels from 2007! 2015 is also off to a fast start…

State of the Union

Here’s a quick look at some of the main drivers of the local market as we head toward the end of the year.

  • Interest rates remain near all-time lows. Rates on 30-year fixed rate mortgages are at around 4% and for shorter term loans, ARMs and even Jumbos the rates go down from there! These rates drive “affordability” and should keep buyers engaged.
  • The population of the Puget Sound region and more specifically the Seattle metro area continues to grow rapidly. The strong and diverse local economy is adding good jobs and people are drawn to the region’s communities, schools and lifestyle. We live in one of the fastest growing major metro areas in the country.
  • Residential rents continue to increase throughout the region, tilting the buy vs. rent calculation toward buying for many young and first-time buyers.
  • The builders are back in force and are out in the market competing to buy land for new construction projects. Cranes once again fill our skylines, and both new construction projects and remodels appear to be on every corner in residential neighborhoods from West Seattle to Kirkland.
  • The inventory of available homes for sale remains at or near its all-time low. In September the eastside averaged a 2-month supply of inventory and in Seattle the number was 1.4 months. A market is considered “balanced” between buyers and sellers if it maintains between 4 and 6 months of inventory, so we’ve got a long way to go.

So, add ’em up. Increasing demand from relocating employees, builders and foreign investors plus cheap money, rising rents and low inventory all point to a continued strong market and increasing home prices – at least in our area’s most desirable neighborhoods – well into next year.

As things slow down for the holidays, it’s a great time to take stock of your real estate situation and to evaluate possible action plans for the coming year. Let me know if you (or someone you know) would like more specific market data or if you just want to make sure you have all the possible options on the table for moving forward.

Back at it!

Every year at this time, after a nice long summer, we head back to work, school and fantasy football with renewed enthusiasm and a little extra pep in our step. Whether we’re simply turning the page on another year or starting a completely new chapter in our life it’s a great time of year to take stock of where we are and consider future plans.

If future plans might include a move a quick conversation about the state of the market, the value of your current home, how to maximize its value, and to get all your possible options on the table is always worth the time. Let me know if I can help.

In the meantime, below is “Neighborhood Snapshot” of Kirkland. I’m going to add these profiles of recent sales to the newsletter from time to time to give an idea of the state of the market in different areas. Kirkland is an interesting study. Three distinct neighborhoods, a great downtown scene, beautiful views, lake access and a variety of housing options from new construction homes to building lots to nice condos and townhomes make Kirkland an attractive option for lots of folks.

Enjoy the stats below and let me know if there’s a neighborhood you would like to see profiled in the future.

Next Moves…

Reaction to my last post about there being plenty of quality properties to be had even in this “low inventory” market (see http://blog.ripwarendorf.com/strategery/) got me thinking and talking about how folks can best take advantage of the situation. Here are some follow up thoughts on removing obstacles and moving ahead.

The most common hurdle that comes up when folks start considering a move goes something like this: “I want to use the proceeds from the sale of my current home to purchase the next one, but don’t feel comfortable selling first for fear of not being able to find what I’m looking for in this tight market.” No one wants to be left in the lurch or be forced to settle because they have sold their house and have to move.

Several recent conversations with mortgage lenders have revealed creative solutions to this issue. For example, according to John DesCamp, a friend at Cobalt Mortgage, depending on the equity you have in your current home it can be easy to finance your purchase without selling first. You can access the funds using a bridge loan and then refinance that loan with a conventional mortgage after you sell your house. Rates on these loans are competitive and in some cases they can also enable you to look like a cash buyer (i.e. no financing contingency) when you make your offer. I know plenty of smart people in the mortgage business who can present you with your options, probably including solutions you had not considered. Let me know if you would like an introduction.

The next step is to get a plan in place that will allow you to quickly and efficiently market your current home when the time is right. (That’s where I come in!) Agreeing on the pieces of this plan now, and doing the needed prep work to get your house ready to sell will give you the best shot at a smooth, inexpensive transition when the time comes. Getting the ball rolling on these two fronts will help you avoid chaos down the road, and may even uncover options you have not considered.

Operators are standing by…

Strategery…

Several people have recently told me that they are considering selling their homes, but haven’t pulled the trigger yet for fear of not being able to find their next place in this wild market. Fear not! With the right approach It is still possible to get the property you want without the stress of multiple offers and bidding wars.

Believe it or not, even in today’s tight market, there are currently 79 single family homes and 43 condos for sale in West Bellevue that have been on the market for more than 30 days. Many of these properties are still available due to a single flaw: their price. After a month or so on the market listings can fade into the background and not get much love from buyers or their agents. Our market is very efficient and it speaks loud and clear, and while many sellers are reluctant to admit it, they know they will eventually have to adjust the price of their property if they are serious about attracting a buyer. Approaching these sellers with a solid but realistic offer can often result in a good deal for all involved.

Here’s a small sample of the 30-day+ inventory currently available in West Bellevue.

*  Two beautiful 4,200+ square foot homes in Clyde Hill listed for $2.1M and $2.2M

*  A 2,100 square foot condo in downtown Kirkland with lake views and a private roof deck listed for $975,000

*  A nearly 5,000 square foot “fixer” on Yarrow Point listed for $1.7M

*  Two Lake Sammamish waterfront lots (or possible remodels) each for under $1M

*  Multiple two-bedroom condos in downtown Bellevue with lake and city views listed for $700,000 and up

There are plenty more where these came from and with the right timing and approach someone will eventually buy all of them for about what the market says they are worth. Maybe that’s you! Let me know if you want me to keep my eyes peeled for something specific.

Operators are standing by…