Fall 2016 Real Estate Update
Fall 2016 Market Perspective
What’s Happening Nationally
- Home sales fell 10.9% as the median sale price increased 5.3% in July from July a year ago.
- New listings slid by 6%, the largest year-over-year decrease in 2016, a year starved of home supply.
- For the third month in a row, the number of homes available for sale fell by more than 6%.
- Data released for June 2016 shows that home prices continued their rise across the country over the last 12 months.
What’s Happening with Home Prices
Nationally, home prices have risen at a consistent 4.8% annual pace over the last two years. The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index, covering all nine U.S. census divisions, reported a 5.1% annual gain in June, unchanged from last month.
“Home prices continued to rise across the country led by the West and the South,” says David M. Blitzer, Managing Director a d Chairman of the Index Committee at S&P Dow Jones
- The 10-City Composite posted a 4.3% annual increase, down from 4.4% the previous month, while the 20-City Composite reported a year-over-year gain of 5.1%, down from 5.3% in May.
- In June, Portland led the way with a 12.6% year-over-year increase, followed by Seattle at 11.0%, and Denver with a 09.2% increase. In the strongest region, the Pacific Northwest, prices are rising at more than 10%;
“While the inventory crunch is showing no signs of loosening, prices have begun to stabilize,” says real estate agent Luis Vasquez. “Recently, I’ve been getting calls from listing agents asking if my clients are still interested in homes they saw several days or weeks ago, letting me know they’ve dropped the price. It’s been about two years since I’ve gotten those kinds of calls. There’s a sense of anxiety among both buyers and sellers, which I think can be attributed to the uncertainty around the upcoming election and to the perceived health of the economy. Some buyers are concerned that home prices are topping out and don’t want to get caught in a market that’s getting ready to tumble back down.”
“Overall, residential real estate and housing is in good shape,” continues David M. Blitzer. “Sales of existing homes are running at about 5.5 million units annually with inventory levels under five months, indicating a fairly tight market. Sales of new single family homes were at 654,000, the highest rate since November, 2007.
“The strong home price growth in much of the country, and meteoric rise in the West, is led by a continued lack of homes available for sale.” From articles by RISMedia and by Nela Richardson
Foreign Real Estate Investors—Win Some, Lose Some?
From an article by Lorrainei Woellert
On the one hand
Even before Brexit, global events were influencing some foreign investors to pull out of the U.S. real estate market. Foreign buyers retreated from the U.S. real estate market last year as a strong dollar, rising home prices and slowing overseas economies crimped buying power.
Investors in particular poured dramatically less money into U.S. rental and vacation properties, according to a survey from the National Association of Realtors, slashing their spending by $10 billion to only $35 billion, a three-year low.
“Weaker economic growth throughout the world, devalued foreign currencies and financial market turbulence combined to present significant challenges for foreign buyers over the past year,” said NAR chief economist Lawrence Yun.
While global clients account for a small share of overall U.S. home sales, their pullback might be felt in markets popular with foreign buyers, including parts of Florida, California, Texas, Arizona and New York. Now there is the possibility that Brexit may have an additional impact on those states.
From an article By Katia Dmitrieva and Natalie Obiko Pearson, Bloomberg.com
On the other hand
Vancouver’s new Home Tax may be encouraging some investors to leave Canada and consider real estate in the Northwest.
Canada plans to tax overseas investors buying homes in Vancouver, one of North America’s hottest property markets, as it seeks to tamp down price gains in an area that absorbed more than C$1 billion ($760 million) of foreign money in five weeks alone.
An additional property-transfer tax of 15 percent will apply to foreign nationals and overseas corporations buying residential property in the Metro Vancouver area. That means an extra C$300,000 levy on a C$2 million home.
Governments from the U.K. to Australia and Hong Kong have imposed levies and restrictions on foreign buyers in recent years in an effort to cool housing markets shooting beyond the reach of many local residents. Public pressure for a crackdown has been mounting in Vancouver, where the price of a typical detached home rose 38 percent in June from a year earlier to C$1.6 million.
Foreign nationals invested more than C$1 billion in British Columbia residential property from June 10 to July 14, according to data the government began collecting this summer. More than 86 percent of that was invested in Vancouver and the surrounding region.
With this new tax levied, many foreign investors will be looking south again to the NW region, even with our substantial appreciation. Low interest rates, location and high employment rate creates demand.
Good News/Bad News
Good News—The Pacific Northwest is showing the strongest home price increases, with prices rising at more than 10%.
Bad News— “While homeowners welcome rising prices, it could begin to hinder new buyers if affordability comes into question – especially with home prices rising twice the speed of inflation.” David M. Blitzer
What Every Rental Agreement Should Include
For you landlords out there who may be putting together your own rental agreements, the experts at Avvo.com say that every residential lease agreement should include these 10 categories:
- Duration—Start and end dates of the agreement
- Name and address of both landlord and tenant
- Amount of rent—Plus when to pay, how to submit payment, and the amount of late fees
- Number of tenants—Plus rules about subletting
- Use of the unit—Including business use, parties, overnight guests
- Pets—Like non-refundable pet deposits, weight limitations
- Amenities—Like a community room, pool, or guest parking
- Utilities—Who pays what
- Maintenance procedures—Whom to contact for repairs; who’s responsible for minor repairs
- Tenants’ rights—Like landlord access to premises
Bringing Back Beige Based on an article by Houzz
Whether you are refreshing your current décor, starting fresh in a new home, or preparing your home for sale, think about bringing back beige as your neutral base. It may seem that beige got left behind as our pet neutral sometime after its ’90s heyday, but it’s coming back, and here are some things to consider when choosing a neutral.
- Beige is Friendly and Comfortable. It can be soothing, sophisticated, flattering, rich and mellow, formal or casual, and a perfect launching pad for bolder decor choices. It is also never clinical or cold, an accusation often leveled at gray.
- Beige is Way More than Just One Color. Beige is basically light brown, but it covers the spectrum from creamy-warm to sandy-earthy, depending on the undertones. The color commonly has a yellow or pink base, adjusted with other pigments in an infinite variety of combinations. Beige has many aliases — think ecru, buttermilk, biscuit, oatmeal, vanilla, almond, cafe au lait, camel, flax, sand, string, straw, dune, ivory, eggshell or chamois.
- Beige Plays Well With Others. A Beige décor can be energized by a palette of modern colors trending towards bold and saturated. Keep in mind that neutrals have complex undertones, so the way to get beige right is to choose paint colors and furnishings in shades of beige that have similar undertones.
Here Are 6 Ideas for Sprucing up Beige
1. Pair beige with browns
Combining beige with other browns works really well when you include a variety of tonal differences and deep [wood] tones.
2. Add black and white
If black and white is too stark for you, try an alternative dark that still delivers a distinctive contrast.
3. Blend beige with blues
Inky blues, rich amethyst and peacock turquoises are up-to-the-minute colors that add instant luxury.
4. Unite beige with OTHER NEUTRALS
Elegant combinations are charcoal and buttermilk, a pearly beige with graphite, or creamy beige with gray and taupe.
5. Pep up beige with BRIGHTS
For example, try beachy brights with highlights of white and pale aqua, and navy.
6. Team beige with WARM WHITES
What Should You do In this market?
Whether you are a Seller, a Buyer or an Investor, there are lots of good opportunities in today’s market. I’m always available to consult with you to help you assess and achieve your real estate goals.
Barbara Magnuson 253-307-4505