Cash Sales: 32 Percent of Residential Sales

This is an amazing statistic, but not surprising.  I've had a lot of experience with cash buyers and sellers.  My observation is that most cash buyers are looking for a secure place to park their money.  Real Estate in most cases is secure.....no ones going to steal it and long term returns can be excellent.

Cash Sales: 32 Percent of Residential Sales

Sell Now, Buy Now, or Wait?

By Ken Urman, Realtor 

The question I am asked most often this year is, “Should I sell now or wait until prices increase more?” This is not an easy question to answer because much depends upon the amount of your

mortgage and the amount of equity you have in your home. Yet several considerations suggest that this is a good time to buy and to sell a home.

The factors to consider are:

1.       Mortgage rates, although still at record lows, are beginning to rise.

2.       A mortgage rate increase of even ½ point will cost hundreds of dollars more per month.

3.       The average U.S. net worth has reached an unprecedented level; this is certainly the case in the Seattle-Bellevue-Lake Washington area.

4.       High-paying employers in the area are hiring, increasing both the demand and the price of available homes.  Seattle jobless rate is now under five percent.

There is an extreme imbalance in our area between demand for homes and homes currently on the market. Many homes, particularly in highly-desirable neighborhoods, are receiving numerous offers that are significantly above listing price. This creates a very advantageous market for sellers. Throughout the U.S. homeowners are caught in negative-equity situations, owing more than the current value of the home. Many of these homeowners cannot afford to sell.  This contributes to the buyer-seller imbalance. Add to this people who want to move to a more desirable location or a larger house and newcomers to the area, and the result is a very competitive market.

As mortgage rates rise, the actual price of a home also rises. As long as mortgage rates are at historic lows, the actual cost of purchasing a home is far less than it will be as mortgage rates increase – and they will increase, probably to six or seven percent in the next few years. This is a strong argument for buying now. Look at the difference in total cost of a home purchase at a higher interest rate:

Purchase of a $750,000 home with $250,000 down payment and a loan of $500,000

15 years at 4%   Monthly payment = $3,698.44                    Total Interest = $165,719.13
15 years at 7%   Monthly payment = $4,494.14                    Total interest = $308,945.44

30 years at 4%   Monthly payment = $2,387.08                    Total interest = $359,347.53
30 years at 7%   Monthly payment = $3,326.51                    Total interest = $697,544.49

Clearly, higher interest rates make a home more expensive to purchase.

Whether you are considering buying or selling, rising interest rates make it beneficial to act now. In a seller’s market, sellers may get a higher price for their homes due to competitive bidding. Further, sellers can expect to benefit from lower interest rates on their next home purchase. Buyers are able to invest significantly more in the house and pay less interest if they buy while mortgage rates are low.

Some people in the real estate profession are predicting a very troubled trade-up market in two or three years as interest rates and home prices rise. I agree with this prediction, particularly in a luxury home market like Mercer Island and the communities surrounding Lake Washington. The current extreme supply-demand imbalance is driving both competition for available homes and prices of those homes. When interest rates reach six or seven percent, it will become more difficult for owners of mid-range homes to trade up. The high salaries paid by many local employers will also continue to push prices higher. I have no doubt that, in the long run, you will be happy with the outcome of either a sale or a purchase now.

To schedule a free consultation to evaluate your options as a seller or as a buyer, please call 206-230-0833 or 206-499-4948. I’ll be happy to come to your home, and I’ll bring the coffee.

Get to Know the Woodridge Community

By Ken Urman, Realtor®

Woodridge is a community of 5,116 (2010 census) within Bellevue, WA. It includes the neighborhoods of
Woodridge Hill and Norwood Village, and accounts for about four percent of the City of Bellevue. After World War II, most of Woodridge Hill was an undeveloped tangle of blackberry vines, trees, and undergrowth. The area was developed over the next two decades, and was annexed by the city of Bellevue in 1966.

The Woodridge Hill neighborhood is located immediately south of downtown and east of I-405, and a long strip of multi-family, office, and light industrial development flanking Richards Road. Woodridge Hill is a neighborhood of quiet streets and family homes -- many with views of Lake Washington, downtown Bellevue, or Seattle.

Much of the community’s daily life revolves around Woodridge Elementary School, located at the top of the hill within this neighborhood. Woodridge Elementary School was rebuilt completely in 2007. The 2012 enrollment was 574. Many people consider Woodridge Elementary to be one of the best elementary schools in Bellevue.

Norwood Village was built on Woodridge Hill in the late 1940s by and for World War II veterans. This development began in 1947, when a nonprofit veterans’ organization acquired 48 acres and developed it into Lower Norwood. Local architects designed these homes and positioned them on lots to take advantage of the spectacular views. This prevented the neighborhood from having the uniformity of other post-war tract housing neighborhoods. The community was considered so unique that it was featured in home and garden magazines in 1952. Norwood Village is the oldest community in Washington

State with continuous water fluoridation. Today, it is a Historic District of post-WWII architecture. Before there was a Bellevue, there was historic Norwood Village!

The average household size in Woodridge is 2.2 people, and the average family size is 2.8 members. Among all households, 50.6 percent are married couples, and 19.1% of households include children. The median household income in 2009 was $83,178. Residents are well educated, with 53.6% holding at least a Bachelor’s degree and 12.1% a Master’s degree.

Both Woodridge Hill and Norwood Village built their own community swimming pools, still prized by

residents. The pools provide a range of activities for all ages, and provide swim lessons and competitive swim teams.

There are three parks within the Woodridge Community: Bannerwood Ballfield Park, Norwood Village Park, and Woodridge Water Tower Park, which offers a trail that is well shaded by tall trees and a good spot for serious bird watching. Residents also have immediate access to the Woodridge Open Space, a 20-acre upland forest that is part of the Richards Valley Greenway.

Currently there are five homes listed for sale in the Woodridge area. Here is one example. In the last 180 days, 31 properties have sold in this area, ranging in price from $160,000 for a condo to $851,000 for a 4,140 square foot single family home. The average travel time to work for 75-80% of the population is 10 to 20 minutes.

Keep up with all the news from the Woodridge community with the Woodridge blog.
If you would like to see the homes available today or you wish to learn more about Woodridge, please contact me 206-230-0833 or email me, kenurman@comcast.net.