Housing Markets That Will Be Strongest by 2014 - BusinessWeek Bloomberg
REAL ESTATE August 3. 2010. 4:03PM EST
Home prices should begin an uneven rebound next year, says a forecast compiled for Businessweek.com by Fiserv and Moody's Economy.com
By Venessa Wong
At some point, everything stops falling. Sometimes things hit bottom with a bone-crunching thud and just lie
there in a heap. Sometimes they bounce back up at least part of the way. The U.S. housing market is in the
latter camp. While it's unlikely that U.S. home prices will return at any time soon to the highs of the bubble years, some local markets are showing resiliency. Even more encouraging, the forecast in numerous regions across the country is for a healthy recovery by 2014.
While four years may seem too distant to offer many U.S. homeowners much reassurance, the outlook could be worse. Taking into consideration such factors as employment, foreclosure rates, income growth, demographic trends, and construction costs, Moody's Economy.com and Brookfield (Wisc.)-based financial services industry information firm Fiserv (FISV) estimate that by 2014, U.S. home prices will be 7.2 percent above 2010 levels, with the strongest growth in the Pacific Northwest. In the short term, the waning impact of the first-time homebuyer tax credit and increasing foreclosure activity will keep the housing market anemic in most places. Fiserv and Moody's expect U.S. home prices to decline a further 4 percent before reaching a trough early next year, by which time prices will have fallen 32.9 percent from the peak levels of 2006.
PROMISING GAINS-AS SOME MARKETS DROP
"Prices have been falling for four to five years now," says David Stiff, Fiserv's chief economist. "Hopefully the
labor market will be making more steady improvements by next year" Already housing has shown some subtle signs of stabilization. In the first quarter, U.S. single-family home prices rose an average of 2 percent year-on-year-the first national gain since 2006-according to the Fiserv CaseShiller Indexes. The trend is promising, with the increase driven by homebuyer tax credits and gains in such traditionally strong markets as San Francisco and Washington, D.C. says Fiserv. Still, prices in already battered markets continued to fall: Detroit, Las Vegas, and many Florida markets experienced double-digit drops. Stiff says he expects to see home prices bounce up and down near their lows for the next two to three years, especially in the markets that experienced the largest price bubbles. The most robust market in the forecast is Washington State's Bremerton-Silverdale area, a quiet naval community across the Puget Sound from Seattle. Home sales and new construction in the area have slowed in 2010, but Fiserv and Moody's Economy.com expect prices there to shoot up by a total of 44.7 percent over the next four years- 9.7 percent annually-the highest forecast among 384 metropolitan statistical areas surveyed nationwide. Price levels have fallen about 21 percent from 2007 peak levels, according to the Fiserv Case-Shiller ·Indexes.
BREMERTON-SILVERDALE: LESS DISTRESS
One factor setting Bremerton-Silverdale apart has been a stronger economy than the rest of the U.S., says Stiff.The unemployment rate in the area is 7.2 percent, compared to 9.5 percent nationally, according to June datafrom the U.S. Bureau of Labor Statistics. Bremerton's military demographic has helped to sustain employment.
The Naval Base Kitsap and the Puget Sound Naval Shipyard provide numerous local jobs, says Ken LeMay, a real estate broker in Kitsap County, which includes the Bremerton-Silverdale area. Stiff adds that while the area has a large number of foreclosure and pre-foreclosure homes, the market is less
dominated by distressed sales than many other markets. In May, foreclosure resales made up about 12 percent of sales in Bremerton, compared to 19 percent in the U.S. as a whole, according to Zillow.com.
http://www.businessweek.comllifestyle/contentlaug2010Ibw2010082_282258.htm 8/12/2010
Friday, August 13, 2010
Thursday, August 12, 2010
Gig Harbor Neighborhood Profile
Gig Harbor Neighborhood Profile
Quick Glance
Population: 6,621
Population Growth: 1.2%
Residents per square mile Population Density: 1,525
Median Age: 46 years
Median Income: $49,354
100 = national average, 110 = 10% more expensive Cost of Living Index: 124
Gig Harbor Weather
January Avg Temp: 31°F
July Avg Temp: 76°F
Sunny Days: 139
Precipitation Days: 181
Rainfall (inches): 57
Snowfall (inches): 10
Gig Harbor Demographics
Gig Harbor Jobs and Politics
Unemployment Rate: 6.4%
Recent Job Growth: 1.3%
Future Job Growth: 26.8%
Democrat: 50.5%
Republican: 48.1%
Independent (others): 1.3%
Gig Harbor Housing Statistics
Median Home Age: 22 years
Median Home Value: $492,399
Gig Harbor Education Statistics
Expenditures per pupil ($) School Expenditures: $4,184
Quick Glance
Population: 6,621
Population Growth: 1.2%
Residents per square mile Population Density: 1,525
Median Age: 46 years
Median Income: $49,354
100 = national average, 110 = 10% more expensive Cost of Living Index: 124
Gig Harbor Weather
January Avg Temp: 31°F
July Avg Temp: 76°F
Sunny Days: 139
Precipitation Days: 181
Rainfall (inches): 57
Snowfall (inches): 10
Gig Harbor Demographics
Gig Harbor Jobs and Politics
Unemployment Rate: 6.4%
Recent Job Growth: 1.3%
Future Job Growth: 26.8%
Democrat: 50.5%
Republican: 48.1%
Independent (others): 1.3%
Gig Harbor Housing Statistics
Median Home Age: 22 years
Median Home Value: $492,399
Gig Harbor Education Statistics
Expenditures per pupil ($) School Expenditures: $4,184
Pupil/Teacher Ratio: 18
Students/Librarian: 637
Students/Counselor: 319
What's My Home Worth?
Most of us know the mantra that answers," What are the top three factors that determine a home's value?" If you responded "Location, Location, Location" you're right. But what makes for a good location? And what is it about a particular home that gives it value?
Part of the answer is subjective – one person's ideal feature can be another person's deal breaker. But in general there are factors that affect a home's value and attract, or detract from its appeal to buyers.
Virtually every buyer will be a seller one day, so it pays for both potential buyers and sellers to pay attention to the characteristics that help determine how you present or future home will be valued relative to similar properties in your neighborhood:
Home Characteristics:
•Area (square feet)
•Structural condition
•Total number of rooms
•Number of bathrooms
•Number of bedrooms
•Fireplace(s)
•Central air
•Full, dry basement
•Size of garage
•Energy efficiency, utility costs
•Landscaping, curb appeal
Community Characteristics:
•Quiet, safe, clean, attractive neighborhood
•Overall positive public perception of the community
•Adequate fire and police protection
•Quality public schools
•Libraries and other cultural institutions
•Proximity to shopping, restaurants, recreation
•Access to public transportation
•Well maintained infrastructure; roads, parks and other public recreation facilities
•History of solid property values
•Planned changes to zoning, or proposed development projects that could significantly alter the character of the community
Perhaps the main reason many people choose a particular home is that it simply feels like home. Smart buyers and sellers also keep in mind that a home also represents a big investment in time and money.
Part of the answer is subjective – one person's ideal feature can be another person's deal breaker. But in general there are factors that affect a home's value and attract, or detract from its appeal to buyers.
Virtually every buyer will be a seller one day, so it pays for both potential buyers and sellers to pay attention to the characteristics that help determine how you present or future home will be valued relative to similar properties in your neighborhood:
Home Characteristics:
•Area (square feet)
•Structural condition
•Total number of rooms
•Number of bathrooms
•Number of bedrooms
•Fireplace(s)
•Central air
•Full, dry basement
•Size of garage
•Energy efficiency, utility costs
•Landscaping, curb appeal
Community Characteristics:
•Quiet, safe, clean, attractive neighborhood
•Overall positive public perception of the community
•Adequate fire and police protection
•Quality public schools
•Libraries and other cultural institutions
•Proximity to shopping, restaurants, recreation
•Access to public transportation
•Well maintained infrastructure; roads, parks and other public recreation facilities
•History of solid property values
•Planned changes to zoning, or proposed development projects that could significantly alter the character of the community
Perhaps the main reason many people choose a particular home is that it simply feels like home. Smart buyers and sellers also keep in mind that a home also represents a big investment in time and money.
FSBO Facts and Figures
Of sellers trying to sell their homes themselves, most important reasons were:
• 46% did not want to pay a commission or fee
• 25% sold it to a friend or neighbor or relative
• 10% were responding to buyers who contacted the sellers directly
• Only 8% said their did not want to work with an agent
• Only 4% were because a previous agent was unable to sell the home
• Only 4% were sellers with their own real estate license
FSBO sales frequently net a lower final selling price for the owner, an average of 27% less.an average of 27% less. FSBO methods of selling a home are frequently the most expensive and the least effective:
• 72% rely upon yard signs
• 61% place newspaper ads
• 41% conduct open houses
• 27% relied upon friends and neighbors to spread the word
• Only 20% used the internet to market their property
• Only 8% used a FSBO magazine
• Only 2% conducted direct mail to prospective buyers
FSBOs face many problem areas on their own. They frequently report difficulties understanding and assisting buyers in these key areas:
• Only 20% said they understood and could perform the required paperwork
• Only 9% said they were able to get the right price
• Only 5% said they could help the buyer obtain financing
• Only 3% reported they were able to sell within the length of time planned on
• 46% did not want to pay a commission or fee
• 25% sold it to a friend or neighbor or relative
• 10% were responding to buyers who contacted the sellers directly
• Only 8% said their did not want to work with an agent
• Only 4% were because a previous agent was unable to sell the home
• Only 4% were sellers with their own real estate license
FSBO sales frequently net a lower final selling price for the owner, an average of 27% less.an average of 27% less. FSBO methods of selling a home are frequently the most expensive and the least effective:
• 72% rely upon yard signs
• 61% place newspaper ads
• 41% conduct open houses
• 27% relied upon friends and neighbors to spread the word
• Only 20% used the internet to market their property
• Only 8% used a FSBO magazine
• Only 2% conducted direct mail to prospective buyers
FSBOs face many problem areas on their own. They frequently report difficulties understanding and assisting buyers in these key areas:
• Only 20% said they understood and could perform the required paperwork
• Only 9% said they were able to get the right price
• Only 5% said they could help the buyer obtain financing
• Only 3% reported they were able to sell within the length of time planned on
For Sale By Owner v. REALTOR
When you think of selling your home, you really have two options: list it "for sale by owner" or list it on the Multiple Listing Service with a professional real estate agent. What's the difference? What are the pros and cons of each? Read on to find answers to these questions and more.
The Scoop on Realtors
A real estate agent, or Realtor (if they belong to the Realtor trade association), must go through some extensive training in order to lawfully help you sell your home. They must become licensed with your state and maintain a good standing in order to act on your behalf in a real estate transaction.
Some of the common duties real estate agents will perform for you or help you with are:
• Set an asking price
• Point out needed repairs and recommend upgrades
• Screen buyers
• Handle paperwork
• Provide legally required disclosures
• Advertise and market your property to the buying public
• Negotiate with buyers
The traditional fee for real estate agents is 6% of the final selling price of the property. That's $18,000 on a property worth $300,000. Discount real estate brokers have made a splash in the real estate world with the help of the internet. Sellers can commonly find discount brokers who charge 4% of the final sales price. That's still a $12,000 fee for a $300,000 property.
The Scoop on FSBO (For Sale By Owner)
The reasons many home owners decide to list their home FSBO should be obvious at this point. There's a lot of money to be saved if one can successfully sell their home on their own. Historically, 13-16% of real estate sold annually in America has been sold by the owner, without the help of a real estate agent. However, almost 9 out of 10 sellers who initially list their home by owner wind up hiring an agent. Why?
The varied reasons include:
• Time. The FSBO didn't get offers as fast as needed, and became convinced an agent could help them sell faster.
• Money. The FSBO didn't price the home right and therefore didn't get any offers.
• Knowledge. The FSBO didn't know enough about the steps required to complete the sale.
There are other reasons, but those are the big three. Can they be addressed by the average home owner? Sure they can. Almost all knowledge is available to us on the internet these days, and armed with knowledge, more home owners can successfully sell their home on their own.
The Pros and Cons
Before deciding to list your home for sale, consider how much time you have to devote to the task yourself. If you are extremely busy already, you may want to hire an agent right off the bat. There is definitely a time requirement when it comes to selling by owner. You'll need to handle advertising and marketing, take calls, show your home, entertain offers and make sure you comply with all the local laws to complete the sale.
There are people and resources available to help you like for sale by owner web sites, where you can advertise your home to a nationwide audience, and your local mortgage broker who can pre-qualify buyers that show interest in your home. Other local professionals like title companies and attorneys can help you with legal requirements.
The immediate benefit of hiring an agent is that all these duties become their responsibility, not yours. You can continue on with your life, avoiding many of the headaches that come with the sale of real estate. That is, until it comes time to actually move. But that's another story. However, hiring an agent can be a double-edged sword. If you hire the wrong one you will probably rue the day for years to come. Most brokers require you to sign a listing contract for at least three months, though most want six months to a year. This means that they have the exclusive right to sell your property for that length of time, and you will have a hard time firing them if things don't work out and you want to go with a different broker.
So do some homework before you hire an agent, if that's the route you choose. Ask questions like:
• How long have you been in the business?
• How many properties did you sell last year?
• How many properties have you sold thus far this year?
• Can I call some of your past clients for reference?
• Do you do this full-time?
The answers to these questions should give you a good idea of where a particular agent stands in relation to any other agent.
The Bottom Line
A comparison can be made between going FSBO versus hiring an agent, to selling your car in the newspaper versus trading-in. The former takes a little more time and effort than the latter, but it can save you a bundle.
The Scoop on Realtors
A real estate agent, or Realtor (if they belong to the Realtor trade association), must go through some extensive training in order to lawfully help you sell your home. They must become licensed with your state and maintain a good standing in order to act on your behalf in a real estate transaction.
Some of the common duties real estate agents will perform for you or help you with are:
• Set an asking price
• Point out needed repairs and recommend upgrades
• Screen buyers
• Handle paperwork
• Provide legally required disclosures
• Advertise and market your property to the buying public
• Negotiate with buyers
The traditional fee for real estate agents is 6% of the final selling price of the property. That's $18,000 on a property worth $300,000. Discount real estate brokers have made a splash in the real estate world with the help of the internet. Sellers can commonly find discount brokers who charge 4% of the final sales price. That's still a $12,000 fee for a $300,000 property.
The Scoop on FSBO (For Sale By Owner)
The reasons many home owners decide to list their home FSBO should be obvious at this point. There's a lot of money to be saved if one can successfully sell their home on their own. Historically, 13-16% of real estate sold annually in America has been sold by the owner, without the help of a real estate agent. However, almost 9 out of 10 sellers who initially list their home by owner wind up hiring an agent. Why?
The varied reasons include:
• Time. The FSBO didn't get offers as fast as needed, and became convinced an agent could help them sell faster.
• Money. The FSBO didn't price the home right and therefore didn't get any offers.
• Knowledge. The FSBO didn't know enough about the steps required to complete the sale.
There are other reasons, but those are the big three. Can they be addressed by the average home owner? Sure they can. Almost all knowledge is available to us on the internet these days, and armed with knowledge, more home owners can successfully sell their home on their own.
The Pros and Cons
Before deciding to list your home for sale, consider how much time you have to devote to the task yourself. If you are extremely busy already, you may want to hire an agent right off the bat. There is definitely a time requirement when it comes to selling by owner. You'll need to handle advertising and marketing, take calls, show your home, entertain offers and make sure you comply with all the local laws to complete the sale.
There are people and resources available to help you like for sale by owner web sites, where you can advertise your home to a nationwide audience, and your local mortgage broker who can pre-qualify buyers that show interest in your home. Other local professionals like title companies and attorneys can help you with legal requirements.
The immediate benefit of hiring an agent is that all these duties become their responsibility, not yours. You can continue on with your life, avoiding many of the headaches that come with the sale of real estate. That is, until it comes time to actually move. But that's another story. However, hiring an agent can be a double-edged sword. If you hire the wrong one you will probably rue the day for years to come. Most brokers require you to sign a listing contract for at least three months, though most want six months to a year. This means that they have the exclusive right to sell your property for that length of time, and you will have a hard time firing them if things don't work out and you want to go with a different broker.
So do some homework before you hire an agent, if that's the route you choose. Ask questions like:
• How long have you been in the business?
• How many properties did you sell last year?
• How many properties have you sold thus far this year?
• Can I call some of your past clients for reference?
• Do you do this full-time?
The answers to these questions should give you a good idea of where a particular agent stands in relation to any other agent.
The Bottom Line
A comparison can be made between going FSBO versus hiring an agent, to selling your car in the newspaper versus trading-in. The former takes a little more time and effort than the latter, but it can save you a bundle.
Real Estate Aritchmetic-The math behind why you should buy now
Have you ever thought…
“I’d be crazy to buy now…What if prices drop?” Here’s a little Real Estate Arithmetic to help you overcome that fear…unless you are a big gambler!
If a buyer were to buy a $300,000 home today with 20% down with an interest rate of 4.5%, the payment for principle and interest would be $1216, but if you wait and if you get lucky enough for prices to drop by 6%, that same house would cost $282,000. However, what if interest rates increased at the same time and returned to their 10 year average of 6.25%, which is well below the 30 year average? The combination of reduced price and increased interest rate would increase your payment by $173 per month! Which bet are you willing to make: prices dropping or interest rates remaining at a record low?...by the way, interest rates haven’t been this low in 60 years!
Real Estate Arithmetic tells us that the cost of a home is more than the sales price: Interest rate + sales price = COST. Don’t Gamble! Buy now, the price is right!
Let us put our knowledge on your side.
“I’d be crazy to buy now…What if prices drop?” Here’s a little Real Estate Arithmetic to help you overcome that fear…unless you are a big gambler!
If a buyer were to buy a $300,000 home today with 20% down with an interest rate of 4.5%, the payment for principle and interest would be $1216, but if you wait and if you get lucky enough for prices to drop by 6%, that same house would cost $282,000. However, what if interest rates increased at the same time and returned to their 10 year average of 6.25%, which is well below the 30 year average? The combination of reduced price and increased interest rate would increase your payment by $173 per month! Which bet are you willing to make: prices dropping or interest rates remaining at a record low?...by the way, interest rates haven’t been this low in 60 years!
Real Estate Arithmetic tells us that the cost of a home is more than the sales price: Interest rate + sales price = COST. Don’t Gamble! Buy now, the price is right!
Let us put our knowledge on your side.
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