It’s Good To Have Options…

The graphic below details the trajectory of Seattle area home prices since 1990 –seemingly all good news for sellers. Note that February (the last month for which Case-Shiller has published numbers) marked 6 consecutive years of rising prices, matching the length of the last run up, but far outpacing its price increases. Matthew Gardner, Windermere’s Chief Economist, sees the trend line continuing, driven primarily by population and job growth. (See Matthew’s latest analysis HERE.) Add our continuing inventory shortage to the mix and it remains the best time in history to sell a home in our area.
On the flip side, first time buyers, downsizers and move up buyers all face challenges in this market and creativity continues to be the coin of the realm to be successful as a buyer. Complicating factors for buyers include fierce competition for available homes, mortgage rates at 8-year highs (and climbing) and the fact that many potential buyers want to purchase their new places before selling their current homes. My friend Lysa Catlin and her team at Caliber Home Loans have some interesting workarounds that might be helpful. Here are a few.
To help buyers compete with cash offers:
  • Full TBD (property To Be Determined) Underwriting Approval. Getting through the full underwriting process BEFORE MAKING AN OFFER allows buyers to provide much stronger pre-approval credentials with their offers and to close within 15 days of offer acceptance. Many are waiving their financing contingencies, which makes an offer as good as cash!
The Lock and Shop program allows you to lock in today’s interest rates with 30 days to identify a property to buy and 45 additional days to close on the new home.
For folks who don’t want to sell their current home before finding a new one:
  • Bridge Loans for up to 75% of the value of your current home can be used to purchase a new home and then be converted to a traditional loan after the current home is sold.
  • The Departing Residence Program lets you qualify for two mortgage payments by allowing you to count market rent on your current home toward your qualifying income – without having to rent it out.
  • A Home Equity Line of Credit on your current home can be used for a down payment.
Lots of food for thought. Call anytime to talk about your specific situation and all your options.