Great News for the Real Estate Industry in WA

On Saturday, March 28th, in cooperation with Washington Realtors, Governor Inslee agreed to certain modifications to the Stay Home, Stay Healthy Order for the real estate industry.  Due to the fact that the vast majority of real estate brokers are abiding by the Order, several of the original restrictions on in-person activities have been revised – provided that strict protocols for social distancing are implemented.

The protocols that must be followed for the permitted in-person activities include:

  • In-person activities must be by appointment only
  • No more than two people, including the broker, may be at the property at any one time
  • Those two persons must strictly follow social distancing guidelines established by the Centers for Disease Control and Prevention (“CDC”) by remaining at least six feet apart at all times.

The revisions to the Order are limited to allow the following in-person activities, provided the above protocols are followed:

  • Previews and showings of listings by appointment only
  • Listing presentations, photography, and creating virtual tours for new listings [Note: professional photographers are not considered “essential,” thus all photos must be taken by the broker or seller]
  • Inspections for pending transactions
  • Appraisals for pending transactions
  • Buyer “walk-throughs” for pending transactions prior to closing
  • Providing keys to buyers at closing

The Order strictly prohibits all other real estate brokerage services that are not conducted remotely from the broker’s home. Also, please note that staging and moving services are not considered essential and also remain prohibited by the Order.

Source: NWMLS 3/28/20

WA State Governor Inslee’s “Stay Home, Stay Healthy” order

Effective midnight on Wednesday, March 25, 2020, real estate brokers in the state of Washington are limited to providing services to their clients remotely from their homes using technology for a minimum of 2 weeks. You may read the document NWMLS created that provides details of how we’re effected. If you’re planning to buy or sell real estate soon, please reach out to me and I’ll be happy to explain what we may do to help you prepare to be ready when the order is lifted.

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3 Things to Consider Before Buying a Second Home

Buying a second home is a great way to lock in a great vacation spot and earn some extra rental income. However, there are also some financial realities that many homeowners aren’t aware of before they purchase their second home.

IRS Limitations

If you rent your second home more than fourteen days a year, the IRS qualifies that home as a rental/investment property. As such, the income you gain from your home is taxable. Your second home also won’t qualify for the same deductions as your primary home.

Risk & Liability

It’s easy to overlook problems like leaks and water damage in a home that goes unoccupied for long periods of time. Empty homes are also more likely targets for vandalism. Hiring a property management company to keep an eye on the home can help ensure you catch potential problems before they get out of hand.

Other Expenses

Expenses such as home insurance, security monitoring fees, and running utilities can add up in your second home. On top of these costs, you have annual maintenance costs and repairs that will inevitably pop up over the years.

Understanding the expenses involved with owning a second home is an important part of purchasing your next home! That way, you can make a plan. Vacation rental services like Airbnb make it easy to cover the costs of owning a second home or even profiting from it. You can also use remote monitoring technology, such as video doorbells, access control systems, and environmental monitoring to minimize the risk of missing important developments while away from your home.

Buying a second home is a great investment, but one that you need to be well informed about before you commit yourself. For more information about buying a second home or an investment property, give me a call!

The Global Demand for Affordable Housing

The subject of affordable housing in cities around the world is becoming a focus of discussion as we move into the next decade. Whether it be in Los Angeles, San Francisco, London, Sydney, or Cape Town, academics, politicians, and developers are trying to solve the growing problem.

It cannot be a solution to the demand for housing in thriving cities, to move people further away from the city in search of cheaper places to live. The cultural issue is how to bring about significant increases in supply to city precincts without resorting to building on green belts and other open areas. Various cities will require the incumbent powers and political leaders to align with housing providers, new financial models, and the market to support low-cost housing essential to creating economically successful and enduring living places.

LA’S CRISIS

Los Angeles’ affordable housing crisis is well documented. According to the annual report from the California Housing Partnership, LA county would need over half a million units of affordable housing to meet the demand from low-income renters. In most major cities around the world, the price of most market-rate units is out of reach for low-income earners.

Most definitions of affordable housing are homes affordable to those entering or in the housing market but unable to access current planned or available supply either because of income circumstances or the stage of their lives.

According to the California Housing Partnership, the crisis is more significant than single communities. No matter how hard local governments and citizens work, help is needed from state, provincial, and federal authorities. A report by Savills in Britain estimated that as many as 500,000 families a year are unable to access available housing supply.

In Sydney and Cape Town, demand for affordable housing far exceeds supply. A comparison between the 20 most affordable Sydney suburbs for low-income earners in 2006, and again in 2010, found dramatic reductions in the number of affordable properties. The suburb of Westmead, for instance, recorded a 90 percent reduction in affordable properties over the period. A study done in Cape Town by a prominent architect suggests that mixed-income high-rise residential developments have the potential to break the mold. Integrating private sector investment and provision of tax breaks to developers would allow a larger budget for better aesthetics in design, giving people from a spectrum of income groups the ability to be accommodated in previously exclusive city areas. Blended buildings would provide people with inhabiting social housing units more integrity and all the inhabitants a sense of value and strong dignity.

We have a way to go before viable solutions are found to this problem, but comfort can be found in the fact that some of the most qualified people are applying their minds to solving the global affordable housing crisis.

Source: Washington REALTORS®

Top 10 Outperforming Markets

Metro Areas NAR Expects Home Price Appreciation to Outpace in the Next 3 to 5 Years

The National Association of REALTORS® identified the top metro areas taking into account a myriad of variables, including domestic migration into the area, housing affordability for new residents, consistent job growth outperforming the national average, age structure of the population, attractiveness for retirees, and the area’s home price appreciation.

In alphabetical order, the markets are:

  • Charleston, South Carolina
  • Charlotte, North Carolina
  • Colorado Springs, Colorado
  • Columbus, Ohio
  • Dallas-Fort Worth, Texas
  • Fort Collins, Colorado
  • Las Vegas, Nevada
  • Ogden, Utah
  • Raleigh-Durham-Chapel Hill, North Carolina
  • Tampa-St. Petersburg, Florida

Read more on the National Association of REALTORS® website…

Beware of the Flip

Before the Great Recession of 2008, housing prices climbed dramatically, and homes sold faster than buyers could gush, “I love that spa bathroom.” Contractors and even handy DIYers got in on the uptick by buying fixer-uppers and improving them in the quickest ways possible, selling them, and reaping the profits. Enter the real estate phenomenon of flipping.

The trend waned a bit as the housing market hit the skids, but then returned with some significant differences. Today’s flippers are more often professional investors with access to cash as banks tightened mortgage loan guidelines and available work crews, says Seth Captain, managing broker of Captain Realty in Chicago.

Read the article in REALTOR® Magazine

Real Estate Forecast: Recession Unlikely in 2020

Expect Continued Economic Growth, Slower Real Estate Price Gains and Small Chance for Recession in 2020, According to Group of Top Economists

 

A group of top economists recently arrived at a consensus at the 2020 economic and real estate forecast at the National Association of Realtors®’ first-ever Real Estate Forecast Summit. The economists who gathered at NAR’s Washington, D.C. headquarters expect the U.S. economy to continue expanding next year while projecting real estate prices will rise and reiterating that a recession remains unlikely.

These economists predicted a 29% probability of a recession in 2020 with forecasted Gross Domestic Product growth of 2.0% in 2020 and 1.9% in 2021. The group expects an annual unemployment rate of 3.7% next year with a small rise to 3.9% in 2021.

When asked if the Federal Open Market Committee will change the federal funds rate in 2020, 69% of the economists said they expect no change, while 31% expect the committee will lower the rate next year.

The average annual 30-year fixed mortgage rates of 3.8% and 4.0% are expected for 2020 and 2021, respectively. Annual median home prices are forecasted to increase by 3.6% in 2020 and by 3.5% in 2021.

“Real estate is on firm ground with little chance of price declines,” said NAR’s Chief Economist Lawrence Yun. “However, in order for the market to be healthier, more supply is needed to assure home prices as well as rents do not consistently outgrow income gains.”

Apartment rents are expected to rise 3.8% and 3.6%, respectively, in 2020 and 2021. According to the group of economists, annual commercial real estate prices will climb 3.6% in 2020 and 3.4% in 2021.

“Residential and commercial real estate investment remains attractive as we approach the start of a new decade,” said NAR President Vince Malta, broker at Malta & Co., Inc., in San Francisco, CA. “Increased home building can serve as a stimulator for the overall economy, and we strongly encourage more homes to be built as buyer demand remains strong.”

The 2019 NAR Real Estate Forecast Summit consensus forecasts are compiled as averages of the responses of 14 leading economists who participated during the summit. The survey was conducted from December 2-5, 2019.

The National Association of Realtors® is America’s largest trade association, representing more than 1.4 million members involved in all aspects of the residential and commercial real estate industries.

Source: National Association of Realtors 12/11/19