Why Invest In the Tri-Cities

Posted on July 30, 2013 by Jennifer

When buying any kind of real estate you want to make sure that you are making a good investment because you never know when you might need to sell it, whether that be a single family home, condo, or even raw land.

That being said we have all heard the expression location…location…location when considering a piece of real estate to invest in as if the location of the property is ideal, demand should always be high and therefore, will return a higher price than property in a not-so-desirable location. While this is absolutely critical there are a few other things to consider before making what could be a very smart or a disappointing real estate purchase. Although location is still at the top of the list, there are two other critical points to consider.

A real estate buyer or investor must also answer the questions “Who is buying?” and “What is the health of the community they are buying into?” These two factors are often overlooked but they are essential for making a wise real estate purchase.

An area like the Tri-Cities of Richland, Pasco, and Kennewick are perfect for many types of buyers – critical to note when deciding where to buy. The “Who is buying?” question is important because the more types of buyers that can buy in a particular area means there will be higher demand when you go to sell and that always equates into higher sales prices. The demand in Tri-Cities is high due to it being a great place to raise a family, start a new business, retire or purchase a second home, not to mention the wealth of recreational opportunities that abound. This is a wonderful recipe for high demand and higher sales prices.

The other thing to look at when buying is the health of the community. Variables to consider include:

Is the area growing?
Are the available jobs in the area tied to a variety of industries?
What natural resources are readily available?
Are the health care system and school systems highly rated?

According to the Tri-Cities tourism bureau, we have a strong school system, virtually no traffic congestion, growing health care, low crime rate and annual precipitation of less than seven inches. All of this along with its varied recreational activities and incredible weather makes it a perfect place to invest in real estate.

The Tri-Cities visitors and convention bureau says it best with their “Water, Weather and Wine” slogan. There is no question that the Tri-Cities is rich in each of these areas and makes it a very attractive investment location.

If you are considering investing in the area and would like additional information, please contact Jessica Johnson at Referred Real Estate at (509) 947-2230 or Jennifer Cowgill at (509) 947-5670.

Interest Rates

Posted on June 18, 2013 by Jennifer

We have been getting a lot of inquiries lately about interest rates. As you may or may not know, interest rates have been quietly creeping up since December of 2012. At that time, the rates for a 30 year fixed rate mortgage were at a record of 3.35%. The last few weeks, however, rates have been hovering around 4% or more for the first time since November of 2011. Just how much of a difference can this .65% increase make? You might be surprised!

Below is a table which illustrates the corresponding monthly payment for a home purchased at our first quarter, 2013 median home price of $181,700. This assumes a 20% down payment with principle and interest only on a 30 year fixed rate mortgage.

If you are in the market for a home and you see that mortgage interest rates have gone up a small fraction of a percent, is that cause to panic and change direction? Of course not, but if you are in the market for a home, it does make sense to establish a close relationship with a lender right away who can quickly spot interest rate trends and get you “locked in” if conditions are favorable and you are within days or hours of submitting your loan application.
Do you see how just by waiting six months can diminish a buyer’s buying power? The difference between 3.35% and 4% is $53 a month or over $19,000 over the life of the loan!

Currently, the rates are being kept artificially low due to the government buying bonds in an effort to stimulate the economy. However, with the economy growing stronger, the Federal Reserve is expected to cut back on buying bonds, causing rates to rise. Chief Economist for the National Association of REALTORS®, Lawrence Yun, predicts interest rates could go as high as 5% by the end of the year. At our median home price of $181,700, that could equate to a monthly payment of $87 more per month than where rates are right now – or $31,320 over the life of the loan.

If you think you may be on the move in the coming weeks or months, give us a call. We can provide you scenarios based on interest rates now and what your situation may look like with different interest rates in place so you can make informed decisions. Please give us a call – Jessica (509) 947-2230 or Jennifer (509) 947-5670.

Source: http://www.forbes.com/sites/morganbrennan/2013/06/05/how-rising-mortgage-rates-could-affect-the-housing-recovery/

Tri-Cities Real Estate Market Update First Quarter 2013

Posted on June 14, 2013 by Jessica

The National Association of REALTORS® has released their market statistics for the Kennewick-Richland-Pasco area first quarter 2013. Our area did see a modest increase in median home prices year over year (comparing quarter 1 of 2012 with quarter 1 of 2012) of 2.3%, putting our median home price at $181,700.

Nationally, median home prices rose 11.2% comparing quarter 1 2012 with quarter 1 2013, but remember, many areas of the country saw big declines between 2009-2011 and are still not back up to pre-recession levels. In fact, the National Association of REALTORS® also tracks “Housing Equity Gain” which reflects price appreciation over 3,7, and 9 year terms. The 7-year Housing Equity Gain for the US total is still -$40,867 although Kennewick-Richland-Pasco reports a 7 year Housing Equity Gain of +$29,700.

The below graphs indicate the snapshot of monthly inventory (number of homes on the market) for 2012 vs the first few months of 2013. Our inventory has remained fairly consistent with last year.

The below chart illustrates the year over year number of solds in the Tri-Cities comparing 2012 with 2013. The number of solds so far this year is 900, which is modestly above the 807 sold year-to-date in 2012.

Additionally, NAR tracks building permits. Compared to the previous year (which is actually a sum of the past 12 months of building permits issued), single family housing permits are up 28.4%. (as opposed to 25.6% nationally). This indicates construction is on the rise, which is an indicator that inventory levels have stabilized.

If you have questions on what these figures mean to you, please don’t hesitate to give us a call. You can reach Jennifer Cowgill at (509) 947-5670 or Jessica Johnson at (509) 947-2230.

Sources:

http://www.realtor.org/sites/default/files/reports/2013/local-market-reports-2013-q1/local-market-reports-2013-q1-WAKennewick.pdf

http://tcarmls.com/wp-content/uploads/2013/05/STATS-FOR-2010-2013-MEDIAN.pdf

What Do Buyers Want?

Posted on May 2, 2013 by Jessica

NAHB recently released their in-depth study, What Home Buyers Really Want which provides an overview of the most important features buyers are looking for in a home.

Nationally 65% of home buyers indicated their first priority in buying a home is to make sure the “living space and number of rooms” met their needs.

Three of the ten most-wanted features in a home were associated with energy efficiency:

94% wanted ENERGY STAR rated appliances (with 36% viewing these as a “must have”)
91% wanted an ENERGY STAR rating for entire home (with 28% rating this as a “must have”)
89% wanted ENERGY STAR rated windows (with 35% rating this as a “must have”)

Organization is also very important, with 93% of buyers wanting a separate laundry room, 90% wanting a linen closet in the bathroom, and 85% wanting a walk-in kitchen pantry. Garage storage space also scored high nationally.

In the Tri-Cities, we are also taking note of that trend, with buyers asking for larger garages and/or a separate shop for “toys”. “Smart storage” is the trend here locally. This includes everything from closet organization systems to garage organization systems and more!

Additionally, having a full tub/shower option in the master bathroom is important nationally.

Interestingly, nationally buyers are shying away from two-story spaces such as in the living room or family room because they are being viewed as “energy inefficient”. In fact, locally, we are seeing very high demand for single-story homes.

Locally, we are also seeing a high demand for “low maintenance” exterior and landscaping. Stucco or Hardiplank siding along with native landscaping is what buyers are attracted to. People are very busy and our cold winters and windy conditions can wreak havoc on wood exteriors or elaborate landscaping.

Finally, one trend we are seeing locally is buyers wanting some kind of “wow” factor in a home. Something that makes the property stand out. That might be a view, a backyard for entertaining, or an entry with punch. Also, trendy contemporary finishes such as concrete and glass are in-demand at the moment.

If you are thinking about moving or making some updates to your property, keep these “buyer must-haves” in mind and think about what you really want – or need! – in your place to call it home. Please call Jennifer at (509) 947-5670 or Jessica at (509) 947-2230. We can take a look at your “must have” list and help you determine the best way to get there!

The Six Most Important Questions Sellers Should Ask Before Choosing a Tri-Cities Real Estate Agent

Posted on April 19, 2013 by Jessica

Selling your home is one of the most important decisions you’ll ever make… as often your biggest investment is at stake. You need a real estate agent who is going to look out for your best interests. This is not a job for your mother’s brother’s best friend or a random agent chosen from the internet.

If you want the strongest representation at the negotiation table, here are six questions to ask a real estate agent before you make a choice:

1. “How long have you been a real estate agent, and is it your full-time job?”

You need – deserve – an agent with a consistent record of accomplishment. An agent who dabbles in real estate but works a second part time job is not an agent who is immersed enough in the business to work all the angles to sell your home quick and at top dollar. Would you trust a part-time brain surgeon? No.

2. “What specific marketing systems will you use to sell my home and can you please spell that out in detail?”

You don’t want an agent who is just going to put up a “For Sale” sign in your yard and hope for a buyer. You need an agent with an aggressive approach to marketing. This includes print marketing (such as ads in real estate magazines and beautiful house flyers) as well as online marketing (listings syndicated across the internet), agent to agent marketing. An agent who knows what they are doing should have no trouble showing you their plan, and commit to doing it all.

3. “Can I take a look at your website?”

Agents who have not taken the time to develop their own website with powerful buyer search tools may not fully grasp the power of the internet in enticing buyers to search for homes. According to the National Association of REALTORS® 41% of homebuyers in 2012 first searched for their home online and 90% of buyers used the internet in their home search. 90%! Those numbers indicate the internet is hugely important in the home buying process, and those agents who do not make an effort to draw in potential homebuyers may be missing an opportunity.

4. “How will you determine the price of my home?”

Every agent is going to say that they perform an in-depth CMA. But an agent worth their salt will take it a step beyond. Agents should have at least a few additional pricing tools they use on a consistent basis to “double check” their price. If an agent doesn’t have any other pricing tools, then they may not be doing additional pricing research, which could either cause you to leave money on the table or your home to linger on the market for weeks and months on end.

5. “How will you keep me informed?”

This is a great question because you’ll be surprised at how many agents don’t have a good answer for it. The correct answer is, “How do you want to be kept informed?” A good agent communicates with you based on your preferences, not theirs.

6. “Could you give me the names and phone numbers of your three most recent clients?”

Not the three best clients. The three most recent clients. This provides a better picture of what it’s like to work with this agent. A raving testimonial from three years ago doesn’t reflect how good this agent is today.

Ask most agents these questions and you will be shocked at how many you disqualify because they don’t have the answers which are the best match to your particular selling needs.

Innovative Building Material – I.C.F. Construction

Posted on March 12, 2013 by Jessica

Through the years, man has relied on many types of materials to build shelters – brick, wood, mud, straw, and yes – even concrete.

But while one might picture a cold and unwelcoming institutional dwelling when thinking of concrete construction, it might surprise you to know that not only is concrete versatile and when combined with other materials, is very warm and inviting. It is also on the cutting-edge of energy efficiency, and is a building material that is perfect for the weather we have here in the Tri-Cities.

I.C.F. – Insulated Concrete Forms – are a great match for our climate extremes here in the Tri-Cities because, as its name says, they are very insulating. This helps homeowners use less energy to heat their homes during our cold winters. It might surprise you to know that they also do a better job of keeping a home cool in the summer because the thick wall regulates the temperature more evenly.

An additional bonus? Because the walls are more air-tight than their wood-built counterparts, the dust that plagues most stick-built homes (and becomes very bad in the wind here in the Tri-Cities), is significantly less in an I.C.F. home. In fact, a resident of Mediterranean Villas (an I.C.F. community in Pasco) reported having left for six months and returned to a virtually dust-free home!

So how does it work? Basically I.C.F. Construction is a series of lego-type foam blocks that stack on top of each other and lock into place, allowing concrete to be filled in the center. Then stucco or siding can be applied to the outside and drywall applied to the inside, just like a regular house. I.C.F. offer space to run not only plumbing but also electrical conduit.

Not only do homeowners of I.C.F. homes report they are much more comfortable (and outside noise-free!) than a stick-built home, the energy savings are very dramatic. David and Carol Myers who own an I.C.F. home in Mediterranean Villas reported that when they owned a comparable-size traditionally-built home, their energy bills would be up to $175 in the winter. However, since they moved to a Devoted Builders-built I.C.F. home, their highest winter energy bill was $66. Watch the video here: http://www.youtube.com/watch?v=TYfIHiQ5egw

You’ll probably be hearing a lot about I.C.F.s in the years to come. If you’re considering a building project, you may want to consider insulated concrete form construction. For additional information and to learn more about this innovative, energy efficient way of building, please contact Jennifer Cowgill at (509) 947-5670 or Jessica Johnson at (509) 947-2230. You can also watch our videos here to learn more!

Tri-Cities Real Estate Market Update

Posted on March 1, 2013 by Jennifer

The fourth quarter numbers are out from the Washington State Center for Real Estate Research. Median resale prices are up 8.3% over the previous year as are the number of sold properties.

	Resales	% change from last quarter	% change from last year	Median Resale Price	% change from last year
Benton County	3,100	+2.6%	+.3%	$189,300	+8.3%
Franklin County	640	+3.2%	+1.6%	$189,300	+8.3%

*Numbers are seasonally adjusted

The below lines represent the past year’s inventory and homes under contract. As the lines get closer together, this represents the housing inventory being consumed at a faster pace (in other words, demand for housing has increased). As the lines get further apart, this represents a surplus of inventory. As you can see, our inventory levels are lower than this summer, but are not quite as low as they were last January, but the number of homes under contract is a bit higher than the number of homes under contract last January.

Spring is right around the corner, and we are excited for things to come. If you have been thinking of buying or selling this spring, let’s set up some time to discuss your plans and create a strategy. Please call Jennifer at (509) 947-5670 or Jessica at (509) 947-2230.

Sources: http://wcrerdata.be.washington.edu/WSHM/2012Q4/Snapshot%204Q%202012%20v2.pdf and the Tri-City Association of REALTORS®.

Should I Buy a New Home?

Posted on February 5, 2013 by Jennifer

There are many things to consider when buying a home – should you buy something that has been lived in before or should you splurge and buy something new? New homes are usually more expensive than their resale counterparts, but is it worth it?

Aside from the possibility of being able to customize your new home with the finishes (counters, back-splash, flooring, and sometimes floor plan) and colors you like, buying a new home can actually save you money each month.

According to the National Association of Homebuilders, a home is considered “new construction” if it was built within the last four years. The NAHB recently cited the 2009 American Housing Survey in evaluating what homeowners spent on maintenance expenses per month. The survey found that 26% of all homeowners spent $100 or more per month on home maintenance expenses. But of the homeowners who owned a home classified as “new construction,” only 11% of owners paid this amount. What is a more startling figure? 73% of new homeowners spent less than $25 per month on maintenance.

So what about utilities? According to the survey, all homeowners spent about $.78 per square foot per year on electricity. This means for a 2000 square foot house, $1560 ($130/month) was spent on electricity. However, compare this with “new” homeowners who spent only $.65 per square foot per year ($1,300 per year or $108.33 per month for the same 2,000 square foot house).

A big difference was seen in homes with natural gas. Homeowners on average spent $.53 per square foot per year (for a total of $1,060 per year or $88.33 per month for a 2,000 square foot house) while owners of new homes paid $.38 per square foot per year ($760 per year or $63.33 per month).

And new homes that are ENERGY STAR® certified strive to be 30% more energy efficient than typical new homes. Using our example “new” 2,000 square foot home which could cost $1,300 per year in electricity, a comparable ENERGY STAR® certified home may cost $910 in electricity per year.

There are currently over 550 listings in the Tri-Cities which were built between 2009-2013 (classified as “new construction”). If you are in the market for a new home, an existing lovingly “used” home, or if you want to start completely from scratch and create something all yours, you owe it to yourself to learn your options and determine the best fit for you – and your budget. We can help! Please call Jessica at (509) 947-2230 or Jennifer at (509) 947-5670. We can show you all the costs and benefits of buying a used home versus buying a new home.