Tag Archives: Bellevue real estate

Covid-19 and real estate

I was planning to write today for a different reason than I’m writing now. I was planning to write and talk about the spring real estate market because most people who are thinking about a move start talking about buying and selling in early spring. But our world has changed as we all focus on new priorities which include staying safe and healthy. I hope you and your family are doing well in light of all that’s going on.

Virtually overnight this virus has changed the way we live, and many people wonder how this will affect the real estate market. I want to assure you that the real estate market will weather this storm and there will be many more sunny days ahead for real estate. The economy was strong before the virus and will recover once the crisis has passed.

The fundamentals of our real estate market are strong. Immediately prior to the virus outbreak our housing inventory was extremely tight and buyers had to compete when making offers to buy. Our economy was thriving, unemployment was low and demand for housing was extremely high. Home prices had risen to record high levels and sellers were experiencing high appreciation rates on their homes. 

Over the years I have seen many events that affected our real estate market, including the Great Recession of 2008/2009, the dot.combubble bursting in the late 90’s, and the horrific terrorist attack on our country on 9-11. A common thread among these events is that we weathered their effects and real estate came back even stronger than before. I expect the same thing to happen again.

So please remember that real estate is an industry driven by supply and demand. Our area has too little inventory to satisfy our demand, and this fact caused real estate prices to rise so substantially over the past few years. Real estate still is and will continue to be a strong, stable investment. It is still an incredible time to both buy and sell real estate because buyers benefit from low interest rates while sellers benefit from the low inventory and the high buyer interest. And while the market may be “on hold” while we all exercise caution and stay at home, know that this is a temporary situation. 

I also wanted you to know that I am adapting in order to continue helping you and the people you care about. For the next little while there will be fewer people searching for their dream home, but here will still people who need to sell a home and even more who want to take advantage of compelling interest rate offers. I will be incorporating tools like video and web conferencing to have meetings and to show and market homes for the people whose moves must go on. Continue to feel comfortable having me as your resource to lead, guide, and protect you and your home during all times and especially in times like these.

All the best,

Mike

An unsexy post about mortgage loans

 

Improvements to an old loan program available in Washington and Montana, and the addition of a new loan program available in Montana, will make buying a home easier – and create a new pool of buyers for many home sellers beginning in October.

First, the old:

The USDA loan program offers 100% loan financing for homes located in designated rural areas. In Missoula, that appears to be anything outside of the city limits. In Montana, East Missoula, for instance – minutes from downtown – is a qualifying area. In the Puget Sound area,  homes in North Bend, Arlington, or Bainbridge Island qualify.   The USDA says 97% of US land mass is USDA loan qualifying.

*There’s an upfront fee for a 100% USDA loan, and it’s being reduced from 2.75% to 1% (of the purchase price). That’s a savings of $5250 on a $300,000 loan.

*There is an annual fee of .35% of the unpaid principal balance per year, down from .50%. That’s a savings of about $30 per month on a $250K loan balance.

The new USDA loan will now be less expensive than a comparable FHA loan which requires a minimum 3.5% down payment, upfront fee of 1.75% and annual fee of .85%.

Find USDA eligible areas with this map:

http://eligibility.sc.egov.usda.gov/eligibility/welcomeAction.do?pageAction=sfpd

Learn more about USDA loans:

http://themortgagereports.com/14969/usda-loans-home-mortgage

Next up is a gift program available in Montana and Idaho, which does not require repayment and is available on properties located anywhere in those states. So you can use this one in Missoula city limits.

If you qualify for a FHA, VA, USDA or HUD Section 184 loan and meet the income requirements, you may be eligible for the HomeNow Down Payment Gift Program. Homes must be occupied by the buyer as a principal residence within 60 days of purchase and for at least two years afterward. This is not a first time buyer program. If you’ve owned before, you can be eligible. The gift of $3500 or $5000 may be used for down payment or to pay closing costs.

More on HomeNow here:

http://mtcdc.org/down-payment/homenow

For more info on how these loan programs can help you with your next home purchase, and to connect with a lender who works with them, message me on this page or call me at 406-282-2976.

Here is a picture of George Clooney to make up for being boring.clooney

George says, search for Missoula homes here:

https://www.era.com/ERA-Lambros-Real-Estate-992c/Mike-Stussy-338629a

This Winter is a Great Time to Sell

Winter can be a great time to get your home sold. Especially this Winter. King County median home prices in December were the highest since 2007 at $508,000. Inventory of homes and condos was the lowest since 1993 with 2189 active listings, according to the MLS. Historically high prices combined with historically low inventory makes for very happy sellers.BoeKlahan-20

If you’re thinking of selling and planning to wait until the flowers bloom, perhaps think again. While inventory will continue at the low end in Spring, it will increase and buyers will have more choices. More choices can mean less competition for your home. An increase in interest rates can reduce your potential buyer pool. If you’re selling, those are good reasons to go ahead now rather than waiting for warmer weather. Winter buyers are generally very motivated to make a purchase and get settled quickly. I think that’s especially true of buyers this year.

For tips on the steps you should take for your particular home and a winter sale, please contact me at (425) 829-7887 or send an email to mike@mikestussy.com.

Interest Rates and Buyer Buying Power

In my previous post, we went over getting started with your home search and the importance of beginning with or at least getting handled your financing early on – hopefully, that means before walking into homes you’re thinking of buying.  Today, let’s look at interest rates and their effect on buying power.

Lately, I’ve received calls from buyers who had wanted to buy in the last year but felt they were priced out of the market. Now, they are back, wondering what their next move should be. They want to pay what prices were over a year ago, not what prices are now with demand being high.  Interest rates are expected to rise and that may decrease demand in many areas; however, is it really worth waiting for prices to come down (if they come down)?

Let’s look at an example. If you are considering the purchase of a $600,000 home and you want to “save” money, so you decide to “wait” until prices fall by 5% – or $30,000. But let’s look at the numbers if you were to purchase the $600,000 home today at today’s low interest rates:

Home Price $600,000
Down Payment $120,000
Loan Amount $480,000
Interest Rate 3.75%
Monthly Payment $2,223
Amount Paid Over Life of Loan $800,263.74

But let’s say you decide to wait in the hopes of purchasing the home for $575,000 … and in the meantime rates creep up to 5.5%.

Home Price $575,000
Down Payment $115,000
Loan Amount $460,000
Interest Rate 5.5%
Monthly Payment $2,612
Amount Paid Over Life of Loan $940,258.59

Over the course of 30 years, that additional $389 you pay each month adds up to an additional $139,995. The point of the story?  Waiting to “save” money by hoping prices will drop may well cost you far more than your expected “savings”.  It will cost you the appreciation you could earn while the market is hot and prices are rising.

If you’re interested in the current status and potential of a particular neighborhood or house to determine how it might fit with your real estate and investment strategy, feel free to give me a call to discuss.

Later, all!