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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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…

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

Fannie Mae, Freddie Mac loan limit increases to more than $510,000

The Federal Housing Finance Agency recently announced that it is raising the conforming loan limits for Fannie Mae and Freddie Mac to more than $510,000.

In most of the U.S., the 2020 maximum conforming loan limit will be raised to $510,400, up from 2019’s level to $484,350.

This marks the fourth straight year that the FHFA has increased the conforming loan limits after not increasing them for an entire decade from 2006 to 2016.

Read more details on HousingWire

A Possible New Way to Fund Roads in Washington State

Washington has been exploring a potential gas tax replacement to fund our roads and bridges. Conducted by the Washington State Transportation Commission (WSTC), the test-driving phase of the Washington Road Usage Charge (WA RUC) Pilot Project ended in January 2019. Approximately 2,000 drivers participated in the year-long WA RUC Pilot Project, reported their mileage, and provided feedback to help state decision-makers understand if this potential policy could work for Washington drivers.

Did you know that the current gas tax of 49.4 cents per gallon is used to fund the state’s roads and bridges? As cars become increasingly more fuel efficient and as more electric vehicles are on the road, gas tax revenue used to support our roads and bridges will decrease more each year. To ensure stable, long-term funding, we need to change the way we pay for our roads.

A road usage charge (RUC) system is a per-mile charge drivers would pay based on how many miles you drive, not how much gas you consume. This approach is similar to how people pay for their utilities, including electricity or water. The WA RUC Pilot Project tested a mock 2.4-cent-per-mile road usage charge for light-weight, non-commercial vehicles including gasoline-fueled, hybrid, and electric vehicles.

Read more and watch a short informative video at WaRoadUsageCharge.org