Friday, February 17, 2017

Whither Interest Rates?

We never pressure our clients to buy or sell if they are not ready, its kind of what we are known for.  But, if you've been kicking around the idea of selling or buying, here is something to think about.  When interest rates rise, how much home can you afford?  Let’s say you can afford a $400,000 with a 4% interest rate today.
If rates rose by .5%, you could afford a home for $380,000
If rates rose by 1%, you could afford a home for $360,000
at 1.5% higher rates, you’d only be able to buy a home for $343,000.
You can buy less of a home when interest rates rise. We don't know for sure what rates will do over the next year, but odds are very good they're headed upward. Let us know if you'd like to talk about your plans this year and we'll give you options, ideas and answers.
Happy Investing!
Wendy Ceccherelli
Century 21 Northwest Realty

Tuesday, February 14, 2017

Local Real Estate News

Western Washington pending home sales higher than listings in January

Seattle workers are second-best paid techies in U.S.

Seattle No. 6 in new ranking of best places to live in U.S.

How long are Seattle’s houses on the market?

Single women finding it unaffordable to buy homes in Seattle and many other large cities

Seattle home prices grow at slowest pace in three years

More workers are turning to transit to get to Downtown Seattle jobs

Silicon Valley tech workers lead migration to Seattle


Wednesday, February 8, 2017

Housing Trends

Welcome to my most current Housing Trends eNewsletter. This eNewsletter is specially designed for you, dear blog reader, with national and local housing information that you may find useful whether you’re in the market for a home, thinking about selling your home, or just interested in homeowner issues in general. 

Please click on this link to view the Housing Trends January 2016 Newsletter 

The Housing Trends eNewsletter contains the latest information from the National Association of REALTORS®, the U.S. Census Bureau, reports and other sources. 

Housing Trends eNewsletter is filled with local and national real estate sales and price activity provided by MLSs and the National Association of Realtors, U.S. Census Bureau key market indicators, consumer videos, blogs, real estate glossary, mortgage rates and calculators, consumer articles, and local community reports. 

If you are interested in determining the value of your home, click the “Home Evaluator” link for a free evaluation report: 

Sound decisions can only be made with accurate and reliable information, and I am happy to be a trusted resource for you.

Sincerely yours, 

Wendy Ceccherelli
Century 21 NW Realty


From October 2016 Rotary magazine:

Champions have a positive, "learn from it" attitude toward obstacles that other athletes lack. Researchers at England's University of Central Lancashire studied three groups from different sports: the "best of the best," the good, and low achievers. Each athlete encountered similar challenges, from injuries to poor performance, throughout his or her career, but champions were determined to return to action even stronger. Low achievers were often surprised by failures and lost enthusiasm. These characteristics, researchers say, hold true in fields outside athletics.

Happy Investing!

Monday, February 6, 2017

Silent Second Mortgage

Going to take a slightly different approach to this week’s Friday Market Update, and tell you about a Silent Second Program that isn’t just for first time home buyers – Unison Home Buyer.  Think of Unison Silent Seconds just as you would gift funds…so long as the borrower has at least 10% down, Unison will match their 10% allowing buyers to get out of monthly mortgage insurance and lower their overall P&I payment, therefore increasing the purchase price ceiling for those buyers.  

What does Unison get in return?  

When the buyer decides to sell the home in the future, Unison will take a percentage of the Profit of that sale – ie. If the buyer buys their home for $500,000 and decides to sell 5 years later for $600,000, Unison will take a percentage of the $100,000 profit.  That said, if the buyer sells their home at a loss, Unison will share in the percentage of the loss as well.  Unison is in it for the long haul, and betting real estate across the nation will continue to increase in value over time.  Unison down payment assistance has NO monthly payments, NOR do their funds accrue interest.  They ONLY share in the profit or loss…and for their sake, hoping for more profits than losses.

Ok, as a lender we get pitched new products all the time – many of which I don’t even share with you guys because the pros don’t necessarily outweigh the cons, and truth be told, when I first heard about Unison, I wasn’t crazy excited about this one either.  However, as a number’s guy, I had an epiphany, and here’s why I’m SO excited about this one. 

On one hand, Unison’s cost for their funds is between 17.5% and 35% of whatever a buyer’s profit may be.  To me, that seemed too expensive.  Going back to our initial example, that would mean if a buyer bought a house for $500,000 and sold 5 years later for $600,000, that buyer would owe Unison $35,000 + the initial principal lent from Unison of $50,000 (total of $85,000).  If that buyer saved $600 per month over 5 years, that means the buyer paid $85,000 to save $50,000 upfront + $36,000 = $86,000 … essentially a net zero.  So why would I even take the time to educate people on this (outside of those scenarios where saving $600 per month is the difference between qualified and not qualified).  Here was the kicker for me:  Most buyers who are purchasing above $400,000 are dipping into their 401K’s and/or brokerage accounts.  What if, instead of putting $100,000 down on a $500,000 home to get out of mortgage insurance, that buyer only put $50,000 down, took out a Unison Second, and left the other $50,000 in their 401K?  

Furthermore, what if that buyer ALSO directed the $600 per month they were saving due to Unison over to their 401K as well?  Check this out.  This literally blew my mind.  If a buyer did this, and they earned an average of 7% compounded annually on their 401K (Per Forbes, the S&P 500 has an annualized return of over 10% over the last 90 years), that buyer would pay overall $85,000 to Unison on one hand, but their money would be worth $113,086.68 on the other!  That’s a net benefit to the buyer of $28,086.68.  Moreover, that’s just for a 5 year turn around.  If instead of 5 years we were using a 10 year timeline in this scenario, that buyer’s money would be worth $201,568.97!!!  A net benefit to the buyer of $79,568.97!!! 
Happy Investing!

Today's blog courtesy of Kyle Bergquist, Guild Mortgage, Cell:  425-478-0961
Licensed Loan Originator NMLS - 918621
Guild Mortgage Company NMLS - 3274
Equal Housing Lender
The information provided herein has been prepared by a third party company and has been distributed for education purposes only.  Each loan is subject to underwriter final approval. All information, loan programs, interest rates, terms and conditions are subject to change without notice. Always consult an accountant or tax advisor for full eligibility requirements on tax deduction.

Monthly savings for qualified borrowers will vary based upon a variety of factors including, but not limited to loan amount, existing interest rate, and the rates the customer qualifies for.

None of the interest rates in this history represent interest rates that Guild Mortgage has offered or is currently offering. Rather, they are for informational purposes only and reflect historical interest rates that were available in the marketplace at some point during the period to which they relate. For current interest rates and annual percentage rates that Guild offers, contact Guild.

The positions, strategies, or opinions of the author do not necessarily represent the positions, strategies or opinions of Guild Mortgage Company or its affiliates.

Sunday, February 5, 2017

Local Real Estate News

No holiday for Seattle’s housing market

Prospective home buyers rush to buy homes in response to rising interest rates

Vancouver tax driving foreign buyers to Seattle and Eastside

Issaquah mayor convenes regional transportation summit

New luxury condo tower to break ground in Bellevue in 2017

Not even the colder months of the year can stop the South Sound housing market

The Foss is a hot spot for development in Tacoma

Fircrest couple buys their own backyard from Pierce County

Tacoma may be looking for a new city manager

Olympia and Tacoma among top October housing markets