Tips for Finding the Perfect Neighborhood

The neighborhood you choose can have a big impact on your lifestyle—safety, available
amenities, and convenience all play their part.  While the home itself is the icing on the cake of the home buying process, the neighborhood your home is in can be equally important in the decision.  You are not only buying the home itself, but are also becoming part of the community that home is in.  The following are a few helpful tips in narrowing down your perfect neighborhood.

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1. Make a list of the activities—movies, health club, place of worship—you engage in
regularly and stores you visit frequently. See how far you would have to travel from each
neighborhood you’re considering to engaging in your most common activities.
2. Check out the school district. The Department of Education in your state can probably
provide information on test scores, class size, percentage of students who attend college,
and special enrichment programs. If you have school-age children, also consider paying a
visit to schools in the neighborhoods you’re considering. Even if you don’t have children,
a house in a good school district will be easier to sell in the future.
3. Find out if the neighborhood is safe. Ask the police department for neighborhood crime
statistics. Consider not only the number of crimes but also the type—burglaries, armed
robberies—and the trend of increasing or decreasing crime. Also, is crime centered in
only one part of the neighborhood, such as near a retail area?
4. Determine if the neighborhood is economically stable. Check with your local city
economic development office to see if income and property values in the neighborhood
are stable or rising. What is the percentage of homes to apartments? Apartments don’t
necessarily diminish value, but they do mean a more transient population. Do you see
vacant businesses or homes that have been for sale for months?
5. See if you’ll make money. Ask your REALTOR to get information about price
appreciation trends in the neighborhood. Although past performance is no guarantee of
future results, this information may give you a sense of how good an investment your
home will be. Also, your REALTOR or the government planning agency may be able
to tell you about planned developments or other changes in the neighborhood—like a
new school or highway—that might affect value. Check out City Data for some
great information by zip code or city.
6. See for yourself. Once you’ve narrowed your focus to two or three neighborhoods, go
there, and walk around. Are homes tidy and well maintained? Are streets quiet? Pick a
warm day if you can and chat with people working or playing outside.

Market Mondays: Bellevue Condos

Happy Monday everyone!

This week, I chose the Bellevue condo market to look at. As a resident of Kirkland, Bellevue is one of my favorite neighboring cities to explore and is a lovely place to live, raise a family as well as one of my favorite things to do: recreate.  The following are some interesting facts about Bellevue:

As of 2014, Bellevue’s population is 122,873 people. Since 2000, it has had a population growth of 8.69 percent!

——————–The median home cost in Bellevue is $554,300. Home appreciation the last year has been 12.50 percent.

——————–Compared to the rest of the country, Bellevue’s cost of living is 77.90% Higher than the U.S. average, wow!

——————–Bellevue public schools spend $12,674 per student. The average school expenditure in the U.S. is $12,435. There are about 19.3 students per teacher in Bellevue.

——————–The unemployment rate in Bellevue is 3.90 percent(U.S. avg. is 6.30%). Recent job growth is positive and continuing to grow. Bellevue jobs have Increased by 2.64 percent.

As of November 3, 2014 there are 90 active condo listings WEST of 405 in Bellevue.  The range is $189,000-$3.5 million with a median listing price of $890,000.  There have been 74 condos sold in the last 90 days, ranging from $184,950- $3.3 million dollars with a median sale price of $504,000 and 19 days on the market.  Based on the number of condos sold, Bellevue is looking at 3.6 months supply of inventory, however, when all pending sales are included, months of inventory drops to about 2.5.  There are currently 104 condos that have gone pending or sold in the last 90 days, ranging from $184,000- $6 million dollars!  The median pending/sold price is $689,000, the graph below displays the months supply of inventory through the end of September 2014.

As you may know from my previous posts, a balanced market is considered to be around 6 months supply of inventory, which puts Bellevue (and most areas in King and Snohomish County) in a position where there is a high demand for inventory and homes are selling quickly, although somewhat less so than what we saw earlier in the summer.

Currently, the number of condos for sale vs. sold for the month of November are up from both September and October.

Bellevue continues to see high list price/sale price ratio and demonstrates a range of average days on market, currently the median days on market are 25.  Most likely, the number of days on market reflects the inventory available and it’s subsequent price point.  Because these numbers vary slightly every month, or every day for that matter, it makes sense to see the fluctuations represented above.

Stay tuned for a post on “Kirkland Lifestyle” later in the week, I’m excited to share with you one of my favorite places to play and live.  Make this week a good one everyone!

Market Mondays: 2015 Economic Forecast

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This week I have decided to step back briefly and look at the market from a macro level as well as discussing predictions for 2015 that were shared at a recent conference.  It’s interesting and exciting to see where the housing market is headed, as well as the economic health of the real estate market as we head into 2015.  Before I dive into that information, as of October 27th, 2014 King County is at about 2.6 months supply of inventory while Snohomish County is hovering around 3.1 months supply of inventory.  Those numbers are a 4.2% increase from October 2014 in King County and a 6.2% increase in Snohomish.  With interest rates at a 16 month low, it is a great time to get in there and take advantage of this market if you are thinking of buying or selling your home.

What is the state of the real estate market?  Well, we are currently down 10.6% nationally from peak values in 2006, however, we are slowly making our way back up as demonstrated by the graph below.

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As demonstrated above, all but one top 30 metro areas show annual home value appreciation.  Seattle Metro leads the Puget Sound in annual home value gain at 8.3%, while other areas of the country who were drastically impacted by the recession are seeing a big jump in annual appreciation as well.

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Seattle Metro is currently down 11.5% from it’s peak, compared to the national average of 10.6%.

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Although Seattle Metro is slightly below the national average, what we are seeing is a steady increase in inventory, resulting in a healthier and more sustainable market as well as softening the rate of appreciation (which is still significant, regardless).  The nature of markets are to rise and fall (think rolling hills), however, slow and steady is preferred over sharp inclines and falls.

Are you ready for some good news?

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According to the National Association of Realtors and as demonstrated by the Zillow Real Estate Research for Professionals tool, negative equity has declined steadily since quarter 1 of 2012, which is great news for home buyers and home owners alike.  However, negative equity remains at 17% nationally and is highest in the bottom value tier.  The number of homes underwater is above 25% nationally and 30% in the Seattle area.  The middle value tier is 13% and the top value tier is 6% in the Seattle area.  Although these numbers are declining annually, there are still many homeowners who are underwater, especially in the bottom value tier.

As we move into 2015, mortgage rates are expected to rise, with interest rates expected to reach the 5% mark (which is still fantastic, historically), while rent affordability is below the historical average on a national level.  Renter households are forming faster than owner households for the first time since the late 1980’s and the market is responding with higher rental rates and a shortage of available rentals while the market struggles to keep up with the demand.  (translation: don’t rent if you can buy!)

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Below are some year over year percent change forecasts for Snohomish County, by city.  Appreciation rates are expected to continue to gain, however, slightly less than in 2014.  With rental rates skyrocketing, as well as a shortage of available rentals and low interest rates, now is a great time to get into a home for a first time home-buyer.  Investment properties in the bottom value tier to generate rental income are also a great option, it’s an exciting time in the real estate market around the country.  Please contact me with any questions you have at rachelwagner@johnlscott.com or call/text 425.324.0302.  I am available to help with any of your real estate needs.

And in other Simple Tranquil Living news, the holidays are quickly approaching! Okay, so that may not be news to you, but here at Simple Tranquil Living we have a lot of fun with holiday festivities so stay tuned for a special Halloween post and perhaps another GIVEAWAY! Happy Monday everyone!  

Finance Friday: Improve Your FICO Score Quickly!

With mortgage interest rates hovering near record lows, you may want to either refinance your mortgage or purchase a new home before rates go higher again.  There is no better time than now to buy a home, interest rates are expected to climb which can have a big impact on the amount of home you can purchase!

The question is — can you qualify for refinancing or a purchase loan?

Since the recession, lenders have tightened loan qualification standards and their most widely used tool to determine if you qualify for a loan and at what interest rate are your credit scores. Credit scores are determined by a software algorithm that analyzes your credit and payment history.

These “FICO” scores run between 300 and 850, with the highest numbers considered to be the best scores. The 47% of Americans with credit scores of 720 or higher receive the best interest rates, according to MyFICO.com.

Credit scores make a significant impact. For every 20-point credit score increase, according to Zillow, the average low APR declines 0.12 percent, a savings of $6,400 on a $300,000 home over 30 years.

Improve your credit scores

FICO scores are based on your credit history. Each credit reporting bureau, Experian, TransUnion, and Equifax calculates its own score, so you may have three scores.

The first thing you need to do is review your credit reports for errors and get them resolved as quickly as possible. Visit freeannualcreditreport.com to get copies. You can then purchase your credit scores for approximately $14.95 from each agency or all three at myfico.com.

FICO scores change with every new piece of information that comes into the credit reporting bureau, so the credit score you receive today can be improved quickly by following some dos and don’ts.

 

Don’t close credit card accounts. FICO scores utilize a credit utilization ratio that turns against you because it appears that you might be overusing your available credit.

Don’t max out or consolidate credit cards. Credit card companies like it if you only use about 30% of your available credit on your card. You’re better off having small balances on multiple cards than a large balance on one card.

Don’t apply for new revolving credit or transfer balances. If you’re buying a new home, it’s tempting to buy some new furniture, but don’t open that account until after your loan closes. You don’t want “inquiries” to be raised in the scoring algorithm.

Don’t change jobs right before you apply for a home loan, although job changes within the same field are considered more favorably in scoring.

Do pay all bills on time and with at least the minimum payment due. Lenders like on time payment histories.

Do pay down your debt, as lower income-to-debt ratios are attractive to lenders. Start by reducing credit card balances first, beginning with the balances that generate the highest interest rates. Revolving credit is considered riskier debt than installment loans such as student loans or car payments.

Do shop lenders simultaneously. Credit score software takes into account several inquiries from mortgage lenders as normal, but if you space rate-shopping out over weeks or months, that could impact your credit score negatively.

Remember, mortgage lenders are most interested in your ability to repay their loan. The most important factors are job and debt payment history. Job security — long-term employment in the same field and on-time.

There are literally thousands of people renting that could be saving money by owning their own home, and like I mentioned earlier, there is no better time than now.  If you are wondering if this applies to you, contact me at rachelwagner@johnlscott.com and I can connect you with a lender who can educate and begin the process.