Queen Anne and Magnolia - State of the Market Update

When comparing February of 2012 to past years, more home buyers entered the market with 54 pending listings. This is up from 38 in January.

Month to month closed sales remained flat with 25 home closed. While the number of active listings moved up slightly from January but remains low when compared to prior years. The average days-on-market for a home to sell was 116 days. Up significantly from January. The absorption rate was at 4.92% making a 5 month supply of homes. Normal is 6 months.

When comparing the number of active listings to the number of pending a ratio can be created. This is a good indicator of what home buyers are doing and how active the market is. The ratio of active and pending listings in February moved up to 46%. The ratio for the 2nd week of March was 67%. This is a sign that the market is shifting from a Buyer’s Market to a Seller’s Market. The supply of homes on the market is low and the demand is on the rise.

Keep in mind, these statistics are averages. Some price ranges are more active than others. The hottest price range is $450,000 to $500,000. While the market is slow above $1.25 million.
In the last 6 years the median home price has moved down 15% to $475,000.

As I mentioned last month, home values and mortgage interest rates are low. The monthly mortgage payment for a home has become much more affordable.

State of the Market in Northwest Seattle - January 2012

The real estate market in Northwest Seattle appears to be shifting from a Buyer's Market to a Seller's Market. The supply of homes is low and the demand is high. However, when comparing January of 2007 to January of 2012 the median home price is down 19%. With home prices lower and mortgage interest rates around 4%, in King County the monthly mortgage payment is less expensive than the monthly rent for the average home

Zillow.com

From time to time I’m asked my opinion of Zillow.com’s “Zestimate”. Personally I believe Zillow to be a good tool for one to get a general idea of what is happening in the real estate market.

However, I caution homeowners not to put a lot of faith in the Zestimate tool for an individual home. From time to time after I’ve done a comparative market analysis (CMA) for one of my clients, I’ll compare it with Zillow and have found it sometimes high and sometimes low. I feel the accuracy on an individual property is questionable.

Zillow discloses the accuracy of its Zestimate. A link can be found at the bottom of the home page titled “Zestimate Values & Accuracy”. For example, according to their statistics in Seattle, 75% of the time they are within 20% of a home’s value, 51% of the time they are within 10% of a home’s value, and 28% of the time they are within 5% of a home’s value. For this they give themselves a 4 star rating which is their highest rating.

http://www.zillow.com/howto/DataCoverageZestimateAccuracy.htm

I am confident when I say that a Realtor who has knowledge of a neighborhood will provide a much more accurate value of a home.

Union Members Save on Lender Closing Costs

I was talking with a friend of mine who is a lender and his company is offering a special program that benefits union members. It saves on closing costs and has mortgage assistance benefits if one is disabled or unemployed. If your a union worker and are considering buying a home or refinancing it is something to consider. See the attached flyer.

Auxiliary Dwelling Unit (ADU) in Seattle WA

With the growing population in Seattle Washington and the need for more urban density, homeowners have an opportunity to add value to their home, as well as create additional income for their pocket book, by building an Auxiliary Dwelling Unit (ADU) in the unused space of their home. This additional income may be ideal for the retiree who wants to stay home but the cost of taxes and other expenses are forcing them out, or the first time home buyer who wants to live in a neighborhood they would otherwise be unable to afford.

The expense of remodeling to create an ADU can become costly. For example, adding a second kitchen can cost tens of thousands of dollars. With this in mind, it makes good sense to plan out improvements and additions wisely.

According to the Northwest Multiple Listing Service (NWMLS), the average 2-kitchen home that sold between 2000 and 2004 in North Seattle had a value of approximately $30,000 more than a home without.

For some, the investment of building a second kitchen to create a space for an ADU Unit maybe a worth while investment. However, it goes without saying that not all homes or individuals will function well with an ADU. Before making the investment it is important to have a good design. The space should be designed so it functions well as a rental unit and also as part of the home as a whole. Future buyers may not want an ADU Unit. Therefore, a good design will create a space that is desirable for any use.

Also, being a landlord is not always an easy job. Between finding and screening potential tenants, collecting rent, dealing with concerns, complaints, and maintenance problems being a landlord can be a lot of work.