Wednesday, December 7, 2016

What is Cohousing?

Cohousing is an intentional community of private homes clustered around shared space. Each attached or single family home has traditional amenities, including a private kitchen. Shared spaces typically feature a common house, which may include a large kitchen and dining area, laundry, and recreational spaces. Shared outdoor space may include parking, walkways, open space, and gardens. Neighbors also share resources like tools and lawnmowers.

Households have independent incomes and private lives, but neighbors collaboratively plan and manage community activities and shared spaces. The legal structure is typically an HOA, Condo Association, or Housing Cooperative. Community activities feature regularly-scheduled shared meals, meetings, and workdays. Neighbors gather for parties, games, movies, or other events. Cohousing makes it easy to form clubs, organize child and elder care, and carpool.

Common Characteristics

  • Neighbors commit to being part of a community for everyone’s mutual benefit.
  • Cohousing cultivates a culture of sharing and caring.
  • Design features and neighborhood size (typically 20-40 homes) promote frequent interaction and close relationships.
Balancing Privacy and Community
  • Cohousing neighborhoods are designed for privacy as well as community.
  • Residents balance privacy and community by choosing their own level of engagement.
  • Decision making is participatory and often based on consensus.
  • Self-management empowers residents, builds community, and saves money.
Shared Values
  • Cohousing communities support residents in actualizing shared values.
  • Cohousing communities typically adopt green approaches to living.
More information on cohousing is available at

Happy Investing!

Monday, December 5, 2016

Seattle Tops in Appreciation

SEATTLE’S NUMBER 1!!!  Great news if you’re already a homeowner…not very good news if you’re looking to buy in the near future.  Case-Shiller reported that Seattle’s year over year appreciation rate of 11% in September was number ONE in the country.  We had been trailing Portland’s appreciation rate for most of the year, but in September the greater Seattle Metro area became number one with an appreciation rate of 11%.  Portland was close behind at 10.9%, but no one else was even close - no other metro city in the nation was even in the double digits…The Northwest is officially HOT! 

We all know Seattle has had a good run as of the past few years, but to put things in perspective, Greater Seattle Metro is now in the top 5 for most expensive regions to purchase a house – more expensive than Greater Boston, Greater New York, and Greater DC.  That said, we’re still a bargain for West Coast Homebuyers – Case-Shiller reported the four regions still ahead of Seattle are San Jose, San Francisco, LA, and San Diego.

Happy Investing!

Today's blog courtesy of Kyle Bergquist, Guild Mortgage

Wednesday, November 30, 2016

Retirement on a Budget

I was pleasantly surprised to read the recommendations by syndicated columnist Scott Burns regarding best investments for a retiree living on Social Security. He advised consideration be given to three major levers on retirement expenses:

  • The biggest single expense for retirees is shelter. He advised purchasing a manufactured home in a resident-owned community, common in Florida and California. It is possible to purchase one with land for under $60,000 and have monthly ownership expenses under $300/mo. This is but one option.
  • Another option is :"expense sharing," which is really communal living. As someone who rents out furnished rooms where I live, this was something I have enjoyed doing for many years before anyone ever heard of Airbnb or couch-surfing. Burns explains, "This suggestion usually brings cries of 'yuck' from readers, but those without adequate retirement income can 'create' income by developing their social skills and learning what it means to be amiable."
  • And finally, becoming more of a smart shopper.
The "sharing economy" is the way of the future, and it was affirming to see it promoted in this way.

Happy Investing!

Monday, November 28, 2016

Gas Prices And Change

The Bauman Society warns of the problems related to falling oil costs:

As you likely realize every time you pump gas into your car, the cost of fuel has dropped by about 50% over the last two years.

The Fall of Crude

This is great news for consumers, but it’s bad news for the exploration companies extracting black gold from rocks and sand. 

And as bad as it is for those companies, it’s absolutely awful news for the states that have been collecting “severance” payments from all that oil being recovered. Oil provided a massive tax base for these states. Alaska, for example, made so much money from crude, it’s been known to pay residents an oil dividend every year.

This year, the governor said he’s going to give residents half as much as they received last year and cap the total payout to just $1,000. Yet this actually understates their problem: Alaska has a $4 billion hole to patch up thanks to lost oil-severance payments.

In an interview with MarketWatch, Alaska’s director of Office Management and Budget said: “We could close every school in the state and that still wouldn’t be enough to close the budget gap.”

While Alaska has the biggest problem, it’s not alone. Oklahoma and North Dakota each have a $1.3 billion deficit to fill. Louisiana’s is $2 billion.

So how will these budget gaps be rectified? By cutting spending and raising taxes, that’s how. That means more unemployment and less spending. In other words, these four states — which previously led the U.S. economy — will now become a drag.

That’s terrible news when the GDP of our nation is barely growing at a 1% clip. The last thing we need are more problems to hold back our economic potential.

And I’m afraid things are going to get worse before they get better. As James Dale Davidson and Charles DelValle have mentioned countless times, we are in the midst of a major shift in the global economy. The rules that were once considered “conventional wisdom” are fading away.
 All the various economies around the world are increasingly intertwining and becoming more complex. As author and historian Joseph Tainter pointed out in his book The Collapse of Complex Societies, the deeper the integration between these various economies, the more susceptible they become to a major problem.

So now, rather than wonder about what’s happening in the oil patch exclusively, we have to worry about what China’s future monetary policies will be … what Russia may do with its hoard of treasury bonds … or whether the European Union will splinter apart and push the entire globe into a new financial crisis.

We are heading full steam toward a collapse. And while we don’t have a crystal ball to tell us precisely when this will all take place, we do know that it’s inevitable. Because as every day goes by, we see more and more pieces falling apart.

All of which could mean big changes for the local real estate market...stay tuned!

Happy Investing! 

Wednesday, November 23, 2016

Homebuyer Housing Trivia

  • Half the homebuyers in the US are under 36 years old & 47% are first-time buyers.
  • 83% of buyers are shopping for single-family houses with top considerations being affordability and being in a safe neighborhood. 
  • Only 46% of buyers secure the first property they put an offer on, otherwise the average search takes up to 4.2 months!
  • More than 50% of all homeowners purchase a property that needs updates.
  • Sellers' top regret is that they didn't take more time to prepare for a sale.
  • 63% of all sellers are listing a home for the first time and 38% of all sellers are members of Generation X.
  • While looking for a property to rent, 58% of renters also consider buying.
  • Renters spend an average of 10.4 weeks searching for a home, and they contact 5 landlords while submitting 3 applications during the process.
Happy Investing!

Tuesday, November 22, 2016

Good News for First Time HomeBuyers

First time homebuyers are purchasing homes at an increasing rate.  A Zillow online survey found that 47% of purchases in the past year went to first time homebuyers…now, it was an online survey, and first time homebuyers are a little more technologically savvy when it comes to anything online, so the results may be skewed a bit in favor of the younger generation – ie. the first time homebuyers.  By contrast, the National Association of Realtors conducted a snail mail survey and found that the first time homebuyer number is closer to 32%.  Purely based on my own observations, I would lean towards the NAR snail mail survey at 32% versus the 47% Zillow came up with.  Either way, the reality is still the same:  Percentage of sales to first time homebuyers is increasing, and is expected to continue increasing over the next year. 

This is great news.  As the financial crises gets smaller and smaller in the rearview mirror, lending guidelines have become a little more favorable for first time homebuyers.  In late 2015 Fannie Mae announced that it will decrease the minimum down payment required on their high balance loans from 10% to 5% (ie. Loans between $417,000 and $540,500 in King and Snohomish counties now only require 5% down versus the previous requirement of 10% down).  Moreover, they also removed the requirement that 5% of the down payment be from the borrowers own funds, if purchasing a 1 unit home – the entire down payment can now entirely be gifted.  These two small moves opened the door to A LOT of first time homebuyers in our region, and it’s good to see millennials taking advantage. 

By continuing to relax lending guidelines, Fannie Mae and Freddie Mac are opening the door to more and more buyers, which in turn continues to support the Puget Sound housing market…and all other housing markets nationwide for that matter.  Greater Demand à Decreasing Supply = Rising Housing Prices. 

Happy Investing! 

Today's blog courtesy of Kyle Bergquist, Guild Mortgage

Friday, November 18, 2016

Seattle Homeownership

I had dinner recently with four millennials, none of whom had any immediate plans to buy a house. Seattle's homeownership rate at 55.4% is well below the declining national average of 62.9%.

Absorption rates and demand for rental housing are very strong locally and nationally, supporting the need for more rental supply here in Seattle.

It is a good time to be looking at rental properties in Seattle.

Happy Investing!