Spring 2015 Real Estate Update

June 1st, 2015

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Spring 2015 Market Perspective

Overview The real estate industry is expected to strengthen this year and continue to get stronger through 2017, according to a new report released from the Urban Land Institute Center for Capital Markets and Real Estate, which is based on a survey of the industry’s top economists and analysts.

Survey respondents said that the residential, single-family housing sector remains in recovery mode and economists predict that housing starts will rise from 647,000 in 2014 to 700,000 in 2015; to 815,000 in 2016; and 900,000 by the end of 2017.

Sold SignHome Sales Existing-home sales jumped in March to their highest annual rate in 18 months, while unsold inventory showed needed improvement, according to the National Association of Realtors®. Led by the Midwest, all major regions experienced strong sales gains in March and are above their year-over-year sales pace.

Locally, Northwest MLS members reported an 18.7 percent year-over-year increase in pending sales, with the volume of mutually accepted offers rising from 9,590 transactions to 11,384. For the four-county Puget Sound region members logged 8,671 pending sales to top the 8,000 mark for only the second time in the past 16 years.

Rising Home Prices 2Home Prices Economists predict that existing home prices will rise through 2017- rising 8.5 percent this year, another 4 percent in 2016, and by 4 percent in 2017. Survey respondents were also upbeat with their forecasts for the commercial market.

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Important New Rules From the Consumer Finance Protection Bureau (CFPB)

The closing process will significantly change when the Consumer Financial Protection Bureau’s fine rule for integrated mortgage disclosures goes into effect Aug. 1, 2015. The rule integrates forms required under the Truth-in-Lending Act (TILA) and Real Estate Settlement and Procedures Act (RESPA). A Loan Estimate will replace the current Good Faith Estimate and early TIL disclosure, while a Closing Disclosure will replace the HUD-1 and final TIL disclosure.

Among the changes is a requirement that sellers and buyers must be given 3 days after signing to change their minds, which means a sale cannot close (be recorded) and ownership be transferred until 3 days after signing.

The overall effect of all the changes is that lenders may need 60 days to close instead of the average 30-45 days.

The CFPB has given an implementation deadline of August 1, 2015, which means the proposed changes will affect any purchase and sale transaction dated on or after August 1, 2015.

Be prepared for longer closing times.

For more information, Click Here or go to http://www.alta.org/cfpb/#sthash.Dw18Dpbs.dpuf.

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Increase the Value of Your Landscaping Investment with Architectural Lighting

Landscape lighting can have a dramatic impact. It enhances the home’s charm and elegance year round, maximizes the home’s curb appeal, and adds warmth during the fall and winter. Lighting your property can add thousands of hours of enjoyment to any home or garden. With the proper exterior lighting, you can also extend the home’s usability by adding life to dark areas and making the property appear larger. During the spring and summer, landscape lighting can create a “resort-like” environment, especially in a backyard patio or pool area. Imagine an elegant waterfall with soft, white light casting ripples and shadows onto the greenery in your garden, or the canopy of a tree exploding with a variety of shadows and lines.

Landscape lighting also offers enhanced safety and security, as burglars will move past a home that’s lit up at night in favor of a dark house. To really increase the value of your landscape investment, the landscape lighting portrait should be subtle, artistic and carefully placed, taking all angles into account.

Excerpted from an article provided courtesy of ARA Content

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Thumbs Up xGood NewsThe National Foreclosure Report was released for April, 2015 last week.  The report stated that foreclosures are down 67% from the peak in 2010 and down 15.7% from February 2014.  In addition, completed foreclosures were down 11.6% from January 2015.  All in all, good news.

The Mortgage Bankers Association total commercial and multifamily debt (not counting residential) outstanding in the U.S. stood at $2.64 trillion in the fourth quarter of 2014, an increase of $49 billion, or 1.9 percent (almost 2%), over the third quarter of 2014.  Looks like some borrowers are taking things to “the next level.”

Thumbs Down xBad NewsNew regulations from the Consumer Financing Protection Bureau will mean more time allowed to process mortgage loans (see article above).

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Gig Harbor Snapshot  -> 12– Month Average Sale Price                         

Gig Harbor Sale Price

Tacoma/UP/Puyallup Snapshot -> 12– Month Average Sale Price

Tacoma-UP-Puyallup Sale Price

 

 

 

 

 

 

 

 

 

 

 

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Current Trends – Gig Harbor

Median list price    $549,000

Median house size     2948 sq. ft.

Median asking price per sq. ft.    $189

Median lot size    .25 – .5 acre

Average days on market     107

Listings with price decrease      29%

Percent re-listed     2%

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Home Buyers Sentiment shoots upward

Lawrence Yun, NAR chief economist, says the housing market appears to be off to an encouraging start this spring. “After a quiet start to the year, sales activity picked up greatly throughout the country in March,” he said. “The combination of low interest rates and the ongoing stability in the job market is improving buyer confidence and finally releasing some of the sizable pent-up demand that accumulated in recent years.”

Total housing inventory at the end of March climbed 5.3 percent to 2.00 million existing homes available for sale, and is now 2.0 percent above a year ago (1.96 million). Unsold inventory is at a 4.6-month supply at the current sales pace, down from 4.7 months in February.

“The modest rise in housing supply at the end of the month despite the strong growth in sales is a welcoming sign,” adds Yun. “For sales to build upon their current pace, homeowners will increasingly need to be confident in their ability to sell their home while having enough time and choices to upgrade or downsize. More listings and new home construction are still needed to tame price growth and provide more opportunity for first-time buyers to enter the market.”

The percent share of first-time buyers was 30 percent in March, marking the third time since last March that the first-time buyer share was at or above 30 percent. First-time buyers represented 29 percent of all buyers last month; they were 30 percent in March 2014.

Nationally, mortgage purchase applications are 12 percent higher than a year ago, but the loans are not the same.

“The average loan amount for a purchase application reached a record high, a sign that the mix of purchase activity is still skewed toward higher priced homes,” said Mike Fratantoni, MBA’s chief economist. The average loan size for purchase applications rose to a survey high of $297,400.

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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     253-307-4504

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Contact Barb Magnuson

Magnuson Residential & Commercial Properties
Keller Williams Realty - West Sound
11515 Burnham Drive NW, Gig Harbor, WA 98332
(253) 307-4505
(253)851-4511
(253) 857-8700

barbmagnuson@gmail.com

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