WHY RISING INTEREST RATES ARE NOT IMPACTING HOME PRICES (YET)

 
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Interest rates have steadily increased to over 4% in recent months, but prices have not curbed (yet). Most people assume that mortgage rates and price have an inverse relationship (yield up=price down), after all this holds true in the bond market and commercial cap rates. This is not always the case when mortgage rates rise, as many other factors come into play, such as wages. Up until now wages in Bellingham have increased along side the mortgage rates.  According to PayScale in Q2 2018 Bellingham has experienced a .02% drop in wages. This could be an indicator prices may level off especially if rates continue to rise. 

What does this mean for you?

If you are a buyer who has been waiting on the sidelines, it may be time to start warming up!   If you are planning on selling and want to know what your house is worth today, call us we will give you a free market analysis. 

THE HOME OF THE FUTURE

 
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Lennar, the country’s biggest residential construction company is setting a new precedence in residential construction. The Florida based company has teamed up with Amazon to start making a series of Smart homes around the nation. These new homes are equipped with keyless entries and virtual doorbells. They are also outfitted with several Amazon brand devices ranging from Alexa in her many forms to little dash clickers that allow you to purchase groceries with a push of a button.

What if you want a smart home but don’t want to buy a new house entirely?

Luckily, Amazon has you covered as most of the smart devices are available from the online retailer. 

Read the full story here

THE CITY OF SUBDUED EXCITEMENT JUST GOT PRICEY

 
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Bellingham dirt is hitting record breaking amounts. The average price home sold in Bellingham for the past 3 months was $516,000. This is a new record high, with prices never going over $500,000.

Why?

The biggest contributor is the lack of new inventory. New construction and population growth is being pushed to other spots in Whatcom County. Think Blaine, Ferndale and Lynden. In fact, Blaine just got its first ever Starbucks…Welcome to the club.

What does the Chrystal Ball say?

Many believe this bubble is about to burst. The increases are not sustainable and valuations will begin to drop or level off in the near future.

What’s your end game?

Many current home buyers are scratching their heads trying to fulfill the “buy low sell high” mantra. If you are looking to cash in your chips and sell your home but not sure where to buy next, Call us we will help you find a great value.

Click here for full article. 

Nerd Alert: The numbers have been crunched: 2017 Whatcom County Housing Report

 
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The real estate story for 2017 is nothing new with prices up and demand outstripping supply. Without a significant surge in new building and affordable housing stock, the relatively high level of growth in home prices of recent years will continue in most markets. Although policymakers are increasingly looking for ways to address the lack of affordable housing, much more needs to be done soon to see a significant improvement over the medium term. Click Here for full Report. 

Wondering how much your home is worth? Contact us to find out!

P.S. We use the same approach as appraisers. 

 

WHATCOM WATERGATE FINALE...For Now

 
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This post is hopefully the final conclusion to our 4 part series titled Whatcom Watergate. After more than a year in waiting, there is finally some resolution to the so called "Hirst Decision" that heavily impacted Whatcom County rural development.   Republican and Democratic leaders reached a negotiated agreement which was signed by the Governor late yesterday. Below we have quickly outlined what it means for Whatcom County property owners . To read the full report on the fix Click Here

What Does this mean for you? The boiler points are these:

-If you are a landowner with an existing well-you are grandfathered under the pre-Hirst 5000gal/day exempt-well statute.  

-Land that is not serviced by public water and depends on an exempt well for a building permit. The following applies: 

  • Pay a one time $500 application fee
  •  3000gal/day annual average daily consumption per domestic hookup (indoor and outdoor use)
  •  Unlimited stockwatering
  • Record amounts on title

Note: different watersheds may have varying rules. The above is applicable to the Nooksack, WRIA 1, and 6 other WRIAs (1, 11, 22, 23, 49, 55, 59)”

Wondering what the next steps are? Contact us to discuss. 

 

A SUM OF THE PARTS

Along with Coldwell Banker BAIN, the Cantrell Group helped to produce a short documentary on our team's unique experience in the 2017 Ski to Sea Race. We hope you enjoy the story and the scenery in this iconic short film.

Tips for Buying and Selling

Author: Erika Buse

 
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As a buyer with a home to sell, you’re no doubt facing a variation of the chicken-or-egg dilemma, asking which comes first: Should I buy then sell, or sell then buy? If you sell first, you may rush too quickly to buy a new house and end up with one you’re not that crazy about or perhaps paid too much for. Or you could become home-less, having to bunk with relatives or rent temporary while you continue to house hunt.

If you buy first, you’ll be Jonesing to sell your old house quickly, and for top dollar, to cover the costs of your new place. Or, worst-case scenario, you could end up paying for two houses at the same time. Yikes! To make the exchange easier, consider the pros and cons of each option and understand your appetite for risk.

Sell First, Then Buy This is perhaps the safest strategy, and in a hot market selling your house will likely be easier than buying a new one. But going this route involves multiple moves. First, you list your home and complete its sale before you buy another home. Then you put the bulk of your belongings into storage and move in with family, friends or a temporary rental while you continue to house hunt. If your buyers are amenable, you might arrange a rent-back deal that allows you to stay in the house for a month two, paying rent to the new owners, while you scout for a new house. The advantage of this scenario is that you’ll know exactly how much you can spend on a new house and you won’t have to worry about getting temporary financing. Plus, without another house waiting in the wings, you’ll be less tempted to drop your price or accept any offer that comes in, even lowball offers. The downside, of course, is the disruption in your routine and the prospect of being displaced for a while if your house search takes a long time.

Buy First, Then Sell This strategy eliminates the threat of being home-less and minimizes disruption. In this scenario, you buy a new house, move in, and then sell your old house. In a buyer’s market, finding a new house will be relatively easy, with lots of houses to choose from at reasonable prices; but, depending on how long it takes your old home to sell, you could end up paying two mortgages for a period of time.  There is also a chance you will qualify for less with an existing mortgage in place. This plan typically works best if your first house is already paid off.

Another option is to make the purchase of your new house contingent on selling your old house. A seller who’s having a hard time finding a buyer may be wiling to accept a contingent offer, even though it means waiting for you to find a buyer. Limiting your search to houses that have been on the market for 30 days or more may be your best bet here, as their owners might be more receptive to a contingency. In hot markets, however, sellers rarely accept contingent offers, so be prepared to give your seller good reasons why you believe your home will sell quickly. If contingency is not an option, talk to a mortgage broker about arranging financing.

Nicole Cooley, local money coach and Founder of Money with Moxy, concludes with this advice, “If you are having a hard time deciding which home buying strategy is best for you consider three things. 1.Your season of life. (e.g. If you have small kids at home, it might be harder to be displaced or move twice) 2. Your cash cushion. (e.g. If you don't have the appropriate cash cushion to carry two mortgages, don't try to swing it. The stress won't be worth it) 3. Your gut. Understand all the options and get all the info and then make the best decision for your family”. 

 

 

Didn't Win the Powerball?

 

Author: Erika Buse

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The chances of winning the $759 million Powerball were approximately one in 290 million. you're more likely to get struck by lightning, attacked by a shark, and hit a hole-in-one all on the same day. So if you played and lost, it's probably not a huge surprise. If you're looking for more reliable ways to build wealth, consider investing in real estate and generating some passive income. The Bellingham rental market over the past two decades has been robust, with residential rents increasing 9 % since last year. (According to Zillow).

Larry Simpkins, who has been rental owner for over 30 years says, “Being a rental owner has been a profitable endeavor for us over the years.  Using the rental income to pay for the mortgages can be a smart business plan. Owning rentals is not a get rich quick thing but for the right individuals it is a slow and steady way of building financial security”.

Owning rentals is not as cumbersome as some people may think; as you can hire a property management company for less than 6 percent of the yearly income.  Not only are you generating monthly cash flow, but Uncle Sam allows you to take advantage of depreciation which has a significant positive impact on your Internal Rate of Return. Similar to owning stocks, investing in rentals involves a certain level of risk. Understanding the expenses and factoring in potential vacancies is critical to protecting your downside. Not into spreadsheets and calculating deprecation or the IRR? No problem, call us for a sample of our rental income worksheets. These worksheets help us identify good potential buys.

Rentals can also be a good option for folks who are willing to owner occupy. On both conventional Fannie Mae loans and loans backed by the Federal Housing Administration, a portion of the anticipated rental income can be added onto the borrower’s income at application, which helps people qualify for more house than they normally would. The loans are available for owner-occupied properties with 4 units or less.

Investing in income producing real estate is a great way to generate passive income and diversify your investment portfolio. Bonus point: When you invest in real estate, you are buying physical land or property, there is a certain level of security when you can physically see your investment in the ground. Feel free to call us to chat about entering the rental market. *If you are comfortable relying on Powerball to come through for retirement please disregard the above article.

Series: Watergate Part III

Author: Derek Buse 

 
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When it comes to water rights in Whatcom County, namely an update on the Hirst Decision ruling, there is not much to report. ( Wait, what is the Hirst Decision again?) There was an impasse at the State Senate in late July on a bill that could potentially fix or reverse the Hirst Decision. Senate Republicans claim they will not pass a capital budget without legislation aimed at overturning the Hirst decision.  This leaves us at square one, scratching our heads, wondering where to go from here?  If you're a property owner, do you sit on that parcel and wait out a "fix" in hopes that it will be business as usual?  Or do you cut bait and fire sale it now while we are still in limbo on long term legislation that could negatively effect its value till the end of time? At the end of the day, this ruling is now moving Whatcom County into the hot seat and holding it responsible for becoming the water authority.  This has never been the case.  The county is now responsible for determining connectivity and impairment for small scale impacts such as permit exempt wells and they do not have the resources at hand to make these decisions effectively.  It is rumored that the bill is already 20 pages long, It could take years to put into act, a system that allows Whatcom County to monitor water usage at any level with any sort of accuracy.  The point here is that there is probably no quick fix in sight.  

What are the options?

Construction loans for a single family (primary) using rain catchment as the water source are difficult to come by. Many banks say they loan on homes with catchment systems but we are finding this is simply not true. There are few more adventurous lenders locally that plan to start in-house loan programs that may accommodate these types of loans later this year. We have sourced one financial institution who finances bare land transactions without water.  This is a viable option if you plan to buy and wait to build.

Call or email us if you have questions regarding financing vacant land or how Hirst decision affects your property.

 

 

 

The Hottest Luxury-Home Market VIA the WSJ

 

The title caught my attention too. I immediately tried to guess the location in my head before reading on to find the answer.  Thoughts of 10,000 sq. ft mansions in the Hamptons, or Ski Chateaus in Aspen, or even those estates in Jupiter Florida that they call houses but are more like luxury hotels, flashed through my head.  I settled on the Hills of LA as my answer to the Hottest Luxury-Home Market in the US.  I had heard of some crazy homes being built and I was settled that this was the market that the WSJ was referring to in their recent May article.  I was about 2000 miles off.  Way off. Wasn’t even close.

Answer? Read: Washington State’s San Juan Islands. The priciest 10% of the homes in this archipelago real estate market rose faster last year than any other U.S. county last year. 

What Does This Mean To You? Expect to see more people and higher prices in your favorite PNW sandbox.

 Want to talk about the market and learn more about what's going on in your backyard? Call us we want to chat! 

Stop Eating Avocado Toast!

 

An Australian real estate mogul has deduced the real reason the millennial generation are finding themselves increasingly unable to buy homes: avocado consumption.

There is a lot of discussion in the Real Estate industry regarding the “Millennial Buyer”. This generation represents more than one quarter of the nation’s population and achieves about 35% of all consumer spending. According to this Time.com article they are spending their money on avocado toast and not homes. In 2016 only 32% of home owners were first-time buyers, the lowest point since 1987.  Studies have revealed that this age group place value over convenience such as the ease of eating out and spend their money on "experiences" over ownership of goods. While this may be true we think there is more to the story than avocado toast.

The modern housing market is a dangerous, uncertain place for millennials, who are mostly first-time buyers. They are fiercely competing for scarce real estate in the major metropolitan areas against repeat buyers and foreign Investors who have more buying leverage and experience. A shortage of available homes has driven up prices -- particularly among starter homes that tend to fall within first-time buyers' budgets. This dovetailed with things like the staggering costs of higher education, delays in marriage that make young two-income households increasingly scarce; a fluid job market that makes it risky for members of an increasingly mobile workforce to make such a significant long-term investment; city governments reluctant to permit the construction of badly-needed starter homes; and skyrocketing rents that make it difficult for young people to accumulate the savings necessary to make a down payment.

But yeah. Avocados, though.

What does this mean to you? The struggle is real for the first time home buyers. If this is you one of the best things you can do is keep on saving. (in other words make avocado toast at home).  If you are in a multi offer situation and have 20% down vs someone with just 10% that could be the golden ticket.

Need a good agent who knows the art of bidding wars and can help you compete against all cash offers? Call us we’ve got your back! 

Does your refrigerator take selfies? 

 

Can your refrigerator take a selfie and send it to you?  If you answered yes then you probably dwell in a “smart home” The term “Smart Home” is commonly used to define a residence that has appliances, lighting, heating, and security systems that are capable of communicating with one another and can be controlled from any location in the world courtesy of the World Wide Web.

As artificial intelligences continue to develop the options for what can be automated or watched for in the home continue to grow. Which has home owners wondering if any of it is worth the cost? According to this PC Mag article, Americans believe smart homes are cool but cost too much. The article explains that 57% of connected home product buyers were men, and only 20 percent of households with yearly incomes under $50,000 have bought a connected home product.

What does this mean for you? If you are NOT a tech-minded person with a penchant for smart devices don’t worry you don’t need a selfie taking refrigerator just yet. There are other home improvement projects that have a much higher ROI.

Wondering what home improvement projects offer the best ROI? Call us we will tell you where to spend your dollar bills. 

 

April 2017 Newsletter

 

Whatcom Watergate Part 2: Why water rights may increase your property taxes

If you missed part one of Whatcom Watergate you can catch up here.

The House of Representatives hearing on Senate Bill 5239 aka the Hirst Fix bill, was held on Tuesday, March 28.  As of today, the bill has missed a crucial deadline and, absent an attempt to move it forward as part of the budget, is stalled in that committee.  The word on the street is that it will be part of the "negotiations" for the budget.

There is another aspect to this court case that is beginning to be revealed: property valuations.  

Skagit County recently re-evaluated the various properties in Skagit county impacted by the prior Swinomish Tribe case (Skagit River basin) and adjusted taxation values based on the lack of access to legal water sources.  This "adjustment" removed over $22,000,000 of value from the County tax roles and resulted in a tax shift to the remaining land parcels in the County - tax increases for those property owners whose property was not impacted.  

There is a movement to immediately provide tax relief for property owners whose parcels are affected by the Hirst ruling.  Rep. John Koster (R-Snohomish County) has teamed up with other legislators to draft a bill requiring that counties immediately conduct revaluations of properties that now lack access to exempt wells following the Skagit County model.  Whatcom County is already facing revaluation requests so it is safe to say that we would experience a similar tax shift. 

How does this affect you? A shift in property taxes

·      If you own land that is affected by the Hirst bill you may be provided with tax relief.

·      If you own property in Whatcom county you may experience a property tax increase.

 

 

 

Show me the Money: Home flipping profits on the rise

 

ATTOM data solutions, curator of the nations largest property database, released its 2016 Year-End US Home Flipping Report, which showed that 193,009 single family homes were flipped in 2016. This is up 3.1% from 2015. In fact, home flips in 2016 accounted for 5.7 % of all single family home sales during the year. ATTOM believes the culprit for the increase was low inventory of homes in sellable condition coupled with a flood of capital searching for generous returns and stability available with US real estate. Home Flipping profit reach new record highs in 2016. Home flipped in 2016 sold for a median price of $189,900, a gross flipping profit of $62,624 above the median purchase price of $127,276 and a gross ROI of 49.2%. Both gross flipping dollar amount and ROI were the highest going back to 2000!  

What does this mean to you?

Whether you are investing in real estate or the stock market there is always money to be made. The key in this particular environment is to uncover the asset’s intrinsic value....value investing 101.

If you looking to flip a property, call us we are here to help.

 

Bellingham's Backhanded Compliment 

With over 2 million subscribers, online lifestyle publication Thrillist, ran an article identifying “The Most Underrated Places in Each State”.  It is an interesting read and surprisinglz  informative.  We know what you’re thinking: What is Washington’s Most Underrated Place?! Spoiler Alert: Yes, the city of Subdued Excitement got the official nod.  In our opinion its great to keep “underrated” status, because of course, no one wants to be overrated.  But the question now becomes, how do we keep our underrated status, right?

And there’s more….

Its no secret that Bellingham is home to some robust businesses and plays host to some unique industries in the PNW, but how does our home town stack up to the rest of the country.  Fortunately, Forbes has done the homework for us and produced some riveting statistics bolstering our community and its business potential. Get more details and the article in its entirety here

What does this mean for you?

People migrating to the PNW is not going to slow anytime soon. If the current economic landscape and interest rates stay relatively stable it looks like 2017 will remain a sellers market.

Wondering what your home is worth? Call us we will give you a free market analysis.

 

 

 

March Newsletter 2017

 

The Whatcom Watergate 

The topic creating hoopla around our office water cooler these days is, well,…well water. By now you may have heard that the Washington State Supreme Court issued a ruling in the case of Whatcom County v. Western Washington Growth Management et al, which basically shut down all new rural development in Whatcom County. This ruling was a shock to many and has hundreds of vacant land owners wondering if they will ever be able to develop their land using a building permit dependent on an exempt well. What we know as of now is two paradoxical Bills are being drafted. The first counteracts the ruling which would essentially reinstate the ability to develop land using exempt wells. The second Bill contends that the Supreme Court does not have the ability to reverse the ruling and that the instream flows are a protected water right, thus put the kibosh on rural development.  

How does this affect you?  The boiler points are these:

  • Land that is not serviced by public water and that depends on an exempt well for a building permit, currently falls under a Building Moratorium.
  • You can still obtain a building permit by using a Rain Water Catchment System.
  • The moratorium is in effect until later this spring but has the ability to be extended.

Have questions or need to find out the impacts on your property, contact us today!

 

PEAKED INTEREST

Mortgage rates are “having a moment”. These rates have been especially fickle lately, taking big jumps up and then back down again on the daily. Home prices, however, are not retreating. In fact, they continue to increase more rapidly than incomes and inflation and apparently homebuyers don’t give a darn.  According to this article lenders saw no letup in loan demand. It also touched on the fact that purchase activity remains on par with a year ago, which suggest that recent wage growth of nearly 3 percent is helping to offset the increase in interest rates.  

What does this mean for you? 

If rates do settle into an upward climb and the current economic environment remains relatively the same this will inevitably put pressure on home sales and we may even see prices level off…what goes up must come down so they say.

Do you need to talk to a mortgage broker? Contact us, we know a few.
 

 

Nerd Alert 

We are geeking out on the 2016 Whatcom County housing annual report, which reported home sales increased 6.8% from 2015. It also stated Whatcom County median home price increased 10% to $315,000. (National average was only a 5.2% increase). The main culprit for the increase is low inventory and according to this report that is not going to change anytime soon. It appears 2017 will be bleak on the inventory front.
 
What does this means to you? 

If you are looking for affordable real estate in Whatcom County things got a bit harder. Homes sold in the $150,000k and below price range fell 48% to 11.8% of the market. On the flip side if you are a Whatcom county homeowner your home's price tag just boosted your financial report card.
 
Are you wondering what your home is worth today? Call us for a free market analysis on your home.
 

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