The end of the year is always a good time to reflect on what has happened during the year. The housing market is on the forefront of everyone’s list because of the impact on personal finances as well as on the general economy. So, let’s look at some of the changes in the market.
A good place to start is with the statistics from the Northwest Multiple Listing Service (NWMLS) to find out what is happening in Woodinville.
Months of supply in inventory (active inventory divided by pending sales) gauges the type of a market we are in. Zero to three months of inventory signifies a sellers’ advantage, a three- to six-month supply indicates a balanced market and six or more months supply slides to a buyers’ advantage.
According to the latest Realtors® Confidence Index, the cost of renting a residence (apartment or house) is up compared to a year ago. A total of 51 percent of Realtors® reported higher rents, in contrast to 15 percent reporting lower rents compared to a year ago. This makes home buying more lucrative.
The work of the congressional Joint Select Committee on Deficit Reduction to fill a huge gap in the federal budget came to a close without any progress. Elimination of the mortgage interest deduction is now off the table for at least 2012. This will have a positive effect for many homeowners and certainty on April 15.
Congress extended flood insurance several times, each time for only a few months. Realtors are urging Congress to add certainty to the program by extending it for five years. Without flood insurance, homeowners in a 100 year flood plain would not be able to sell their homes. FEMA is in the process of extending the areas that is now included in the flood plain. This could eliminate any building in the Kent Valley.
The number of opportunities to acquire mortgage money increased dramatically and likely contributed to the decrease in inventory. The government initiated new programs that offer buyers a wide variety of options, decreased the time that lenders have to facilitate the sale of a distressed property, and even stopped any attempt of evicting any homeowners during the holidays.
The Federal Housing Administration has raised the loan limit for King, Pierce and Snohomish Counties back to $567,500. This enabled buyers to not only qualify for a higher loan but also to have the same interest rate afforded to other borrowers.
The year 2010 signaled the end of the $1,500 tax credit for energy efficient home additions. In 2011, the government added lower but still useful energy tax credits for heating and cooling systems. The HouseLogic web site clearly lists specific requirements for a maximum $500 tax credit. HouseLogic is a free source of information and tools for homeowners from the National Association of Realtors® that helps homeowners make smart decisions and take responsible actions to maintain, protect and enhance the value of their home.
Investors have more access to loans. This is taking more of the distressed properties off the market and has the possibility of helping to keep prices of non-distressed properties from depreciating further.
Last year’s fear of increasing interest rates did not happen. Interest rates are holding steady and even dip into the 3’s for certain loans.
The one lesson that can be learned from the present market is that no one knows the future. But, indicators show improvement and this is a great time to find the perfect home at a great price with a great interest rate.
Joan Probala is the managing broker for Issaquah Windermere (Windermere Real Estate/East Inc.). She has 30 years of experience in real estate, construction and sales. She is president-elect (2012) of the Seattle King County Association of Realtors.
“The housing market is on the forefront of everyone’s list because of the impact on personal finances as well as on the general economy.” FALSE…One would hope so, but actions by the Woodinville City Council have clearly demonstrated that housing is at the bottom of the list. Delay after delay with passing the downtown zoning code amendments is strike one (which include some housing incentives); indefinitely postponing any effort to revitalize the single family housing industry in the city is a big strike two (zero single family homes issued final occupancy permit since 2008…ZERO! no other municipality within King County can share this distinction I'll bet); and final strike to complete the out, it appears the Council is in favor of annexation of rural and agricultural lands into the City’s urban growth area, which in part will then be used to assist in meeting Growth Management Act housing targets (rather than promote new construction)! The housing bubble has had a dramatic impact on the housing industry, some estimates claim that 30% of the job loss and market decline can be attributed to this. Isn’t it time that regionally we address this issue, which must include positive steps by the City of Woodinville? Isn’t the housing industry one industry that can’t be imported or shipped overseas, meaning we must put local workers back to work to build local residences? I say it’s time to start building something!