Buying • March 17, 2020

Coronavirus Protections for Home Buyers

by Don Weintraub

As the situation develops with the COVID-19 pandemic, Windermere Real Estate is dedicated to taking steps to reduce the spread of the virus while continuing to work with home buyers.

To help with this process, here are some ways you as a home buyer can keep yourself and others safe during the buying process.

WHEN TOURING HOMES

❱ Only tour the property if you feel healthy.

❱ Ask your Windermere agent to show you the property instead of attending an open house.

❱ Drive separately from your agent to the property.

❱ Be considerate of the seller’s home and wash or sanitize your hands before entry, touching as little as necessary. While many sellers will likely provide it, bring your own hand sanitizer and use before and after you tour the home. You might also consider wearing disposable gloves for further safety.

❱ Ask your agent to confirm with the seller’s agent that they have not recently been sick or in contact with someone suspected of having COVID-19.

❱ Sellers often ask you to take off your shoes when you tour their home or wear protective booties that have been provided. Consider bringing your own booties and throwing them away when you’ve finished touring.

❱ Be mindful of how much you touch things in the home and minimize contact with doors and hand railings.

❱ Reduce the amount of time spent with other people in the same room. This “social distancing” practice can curb person-to-person spread.

DO NOT TOUR HOMES IF

❱ If you are currently self-quarantined because of illness or other reasons, you should not tour homes in person. Ask your Windermere agent to video chat with you while they tour the home so you can see it virtually.

❱ Do not view homes when you’re sick, feeling like you’re about to be sick, or getting over an illness.

❱ We do not recommend touring homes after returning from international travel or travel that exposed you to a large group of people in close quarters, like large events.

Market Updates • March 12, 2020

Eastside Market Report March 2020

by Don Weintraub

With all the events in the news people keep asking me if I am busy. The answers is…..yes! Rates are at all-time lows and helping drive the real estate market. We also have a sever shortage of inventory and a lot of demand. A lot of people are working from home and looking at property during the week instead of on weekends (ssshhhh…..don’t tell the boss!).

A few takeaways from the market data available through the end of February 2020:

• Median Price of 985k is up 9% from one year ago, but payment remain the same because interest rates are down over a percent

• 34% of the listings sold for more than asking price with multiple offers

• 51% of the listings sold for at or above listing price vs 37% in January of 2020 and 32% in February 2019.

• 55% of the listings sold in 15 days or less

So what about MARCH 2020? The market jitters really kicked in this month and the virus continues to spread:

• We continue to see hot new listings sell in just days with multiple offers over asking.

• New buyers are getting in the market because of the lowest interest rates of all time.

• Demand continues to be high and supply is extremely low with just 0.8 months of inventory.

This week I made three offers for buyers. All three properties had multiple offers and sold for over asking price. Two of them sold for more than 100k over list with all contingencies waived (no inspection, no appraisal contingency, released earnest money to seller immediately, etc).

This is a tremendous time to be a seller with so many buyers itching for a home while rates are low.

As always, please consider me a resource for your real estate questions.

Click here to read the full Eastside report

Market Updates • March 2, 2020

Current Market Takeaways from Premier Breakfast with Matthew Gardner

by Don Weintraub

Last week I attended a breakfast meeting with economist Matthew Gardner and he made some observations I thought you might be interested in. You may have seen Matthew on CNBC or at the event I hosted just a few weeks ago. In early 2021 Matthew will be my guest at our 5th annual market forecast…stay tuned for an invite! Until then, see some notes below:

Economy: We have been in a 10.5 year expansion as the last recession officially ended in June of 2009. “There has been 47 recessions and I remember all of them….and there will be 47 more!”. Hiring growth is slowing in this election year. Consumer are more thoughtful on what they are spending money on and there are some storm clouds, including Coronavirus. There is no doubt that the virus may have a big impact on growth this year, but it is simply too early to know. The virus will cause supply chain issues if it lingers on, and it may very well push up building costs even further along the way. Gardner expects unemployment may rise slightly in 2020, although we are at record lows currently and he is not concerned.

California: The growth in California is noticeably slowing in comparison to Washington State. California lost 250,000 residents in 2019 and affordability is a big reason. Washington gained many of the 250,000, no surprise! Compared to the Bay area, our housing is about 50% less expensive. Apartment rents are about half, and class A office space is also about half.

General Seattle area: We have more cranes than anywhere else in the United States. There are many investors and pension funds looking to put money into our area. 40,000 jobs are expected to be added around Seattle in 2020. Although Expedia recently announced 3,000 layoffs, that is really nothing compared to the growth taking place this year. The 3,000 should be able to find good jobs locally.

Millennials: They don’t want fixer-uppers…..they want turn-key move in ready homes. According to Matthew “they don’t do sweat equity and don’t like to sweat…..and they don’t know how to swing a hammer!”. Millennials want to move in and start living their lives. In the US we have 618,000 millennial millionaires and 92% of them own their own home. Many younger millennials are saving up money with two tech jobs, and making massive down payments when finally do buy.

Overseas Buyers: We are seeing slowing demand from buyers overseas. One reason is that the President of China has limited transfers out of the country to just $10,000 per year per person. That being said, some residents find a workaround through Hong Kong (and pay a fee of 5%) to get more money out of the country. A few years ago there were a lot of buyers from overseas investing in houses/condos for their children to live in while attending college. There are a lot less buyers like that today. All this being said, the US Dollar is a remarkably strong currency and so many foreigners want their money in the US.

Mortgage Rates: The recent stock market drops have really impacted interest mortgage rates in a positive way. Rates in the 3’s indeed easy to obtain, and that is a serious tool for increased buying power. Jumbo rates are similar to conforming, and sometimes even lower. Banks love jumbo loans and often do not sell them to investors, but service them and hold them longer term. Lower jumbo rates are indeed helping the luxury market. In 2019 about 56% of luxury homes were financed, while 44% were paid for in cash.

Boise, ID: This city comes up more and more. As the Bay area and Seattle have become more and more expensive, cities such as Boise are benefiting. Many companies are moving or growing in Boise as housing is about 1/3 of that in Seattle. Values in Boise were up about 14% in 2019. They have a good airport and infrastructure and Matthew expects growth to continue there among other cities.

Luxury homes: Luxury homes in the US have been selling the best in the Seattle area, Sacramento, and Colorado Springs according to Matthew’s numbers. In our area luxury sales are defined as 2 million and up. Ultra-luxury is defined as 5 million and up, and that market has been doing well around Seattle as well. Every week I see very expensive homes selling, and some of those same homes were not selling in 2019. He is spot on.

New Construction Condominiums: The cost to build a high rise condo is over $1,000/ft now. Developers have to sell for more than $1,200/ft to make it worthwhile. The Washington Condominium act was loosened to be a little more friendly to developers and encourage more building. Still, we are still not expecting affordable condos to be built because of the rising cost of materials/labor/land, along with high regulatory fees and long timelines. Many developers feel it is safer to build apartments when vacancy is low and the outlook is strong. Apartments typically fill up within 6 months and there are no concerns about homeowner lawsuits. Furthermore, conversions of existing apartments to condos is not expected despite the strong demand. The laws don’t allow the owner to start work on the conversion until the last tenant leaves. Why do it when rents are rising?

New Construction Houses: This is much of the same story as new condos. The margins simply do not exist for builders to build affordable houses. This is one of the reasons that resales (aka used houses) are selling so fast with many offers. That new square footage cannot be replicated for the same prices.

Outlook for housing inventory: Not good! Supply and demand, along with urban growth boundaries and rising costs will continue to limit our inventory. What about 5 or 10 years from now? Thing about it, if rates are 5% or 6% in 2026 will you give you up your 3.5% rate to move locally? There will be very little turnover and the only way is to build out of it. If you are thinking of selling let me know……now is an incredible time to be a seller.

Safe Haven: Real estate is indeed considered a safe haven compared to the stock market. A lot of wealth is expected to be passed down through real estate, and there are so many investors looking to get in on investments. I talk to potential investors every week and have been investing for 15 years myself. The Seattle area is indeed considered a safe haven by people around the country and the world.

Downsizing: Downsizing is not necessarily down-pricing around Seattle for so many people. It might mean less stairs, less maintenance, or more convenience though. Those that do want to scale down on price are moving to less expensive areas. Not everyone wants to give up their space and live in a small condo. The baby boomers have lots of stuff….”and the millennials don’t want grandma’s dresser”.

As always, if you have questions please consider me as a resource. I am always here to help and happy to chat with you and your friends!

Urban Development • February 27, 2020

Vulcan Breaks Ground on Mixed-Use Office Tower on 108th

by Don Weintraub

The City of Bellevue recently confirmed that Vulcan Real Estate has broken ground on their project located on 108th. The city lists the property as being under construction at 555 108th Avenue Northeast.

The tower will total 45 stories. The office space will be 839,500 square feet, retail space will be 11,680 square feet, and parking will include 1,056 parking spaces.

We reported in February 2019 that the application for design review had been submitted by Vulcan for approval to the City of Bellevue. The existing buildings have now been demolished. These include the previous tenants; Blazing Bagels, Ooba Tooba Mex Grill and Nibbana. Blazing Bagels has relocated to to 108th Ave NE and Main Street.

Vulcan Real Estate previously stated that they would not begin construction until they had a tenant. We’ve reached out to Vulcan to see if they have secured one.

SOURCE: DowntownBellevue.com

Urban Development • February 13, 2020

Amazon Ramping Up Employment In Bellevue With Plans To Add Thousands Of New Jobs

by Don Weintraub

Amazon already has a major footprint in the Bellevue, with some 2,000 employees, but the e-commerce giant is continuing to expand its workforce in the city, with plans to create 15,000 new jobs over the next few years.

Amazon has been on a hiring binge nationwide. Founder and Chief Executive Officer Jeff Bezos said the company has created more than 300,000 new jobs over the past decade ― and now employs more than 650,000 people worldwide, including more than 50,000 in Seattle.

Its first office building in Bellevue opened in 2017 and Amazon says it is designing its expanding office presence with an eye toward ensuring easy access to public transportation and minimizing the company’s carbon footprint ― seeking LEED Gold certification or better for its own real estate developments in the city.

“After more than a year of partnership with Bellevue’s urbanists, city planners, and real estate professionals, we are on track to create more than 15,000 new jobs in Bellevue over the next few years,” Amazon says in a blog post on its website.

The company says the buildings housing its fast-growing Bellevue workforce will be located within 0.5 miles of new Sound Transit Link Light Rail station in downtown Bellevue and within 10 minutes walking distance of each other. In addition, employees will be provided with free ORCA passes and also be eligible for company-subsidized ride-share carpool options.

“In Seattle, more than 50% of our employees either walk, bike, or take public transit to work — and over 70% of them use a mode of transportation other than a single occupant vehicle for their commute,” the blog post says. “In Bellevue, we want to build on our green mobility record.”

A version of this article was first published on Seattle Business Magazine by Bill Conroy.

Living • January 31, 2020

Kick-Starting a Kitchen Remodel

by Don Weintraub

content_Windermere_Real_Estate_Blog__-_Kitchen_Remodel.png

Image Source: Canva

Ask a homeowner which room they would most like to improve, and most will point to the kitchen – the starting point for every meal and the heart of the home.

Ask those same people why they don’t move forward with a kitchen remodel, and many will say the project seems so overwhelming they don’t know where to start. If your kitchen needs an upgrade, here are some step-by-step suggestions to get you started.

Gather your thoughts

The steps that follow will all progress much easier if you take time beforehand to form a strong opinion about the desired look and layout of your new kitchen.

Start by reviewing kitchen magazines and photo-heavy kitchen remodeling guides and/or websites. Compiling clippings and printouts in a notebook helps you refine your vision. Clip or print the photos that capture your imagination, add notes, and draw circles and arrows around the things you like most.

Once you have a clearer vision of what you want, search online for better examples and new solutions, if necessary. If you live with a significant other, share your ideas with them and don’t allow yourself to become too committed before getting buy-in from them. Contractors and sales associates will expect a unified front.

Focus on the flow

Another major factor you’ll want to consider is how your new kitchen will be used, and by whom:

Do you want to cook with others?
Do you want family and guests to gather in the space while you cook?
Do you want to serve meals in the kitchen?
Do you want to display your dishware?
Where would you like things stored for maximum efficiency?

Imagine yourself happily cooking and entertaining in your new kitchen, then note the key elements necessary to make those dreams a reality. Having a list of your desired kitchen features and storage needs will help ensure your plan meets your vision.

Determine your budget

According to the annual Remodeling Magazine survey of costs, a “midrange,” “minor” kitchen remodel will cost homeowners living on the West Coast about $23,000. Those same folks can expect to pay about $70,000 for a midrange “major” kitchen remodel. Determine what you can afford before you start work to ensure that your vision is within reach, or to help prioritize what’s most critical.

What to do with the cabinets

Replacing the cabinets is one of the most expensive improvements you can make in a kitchen remodel (typically consuming 20 to 40 percent of the overall budget, according to Architectural Digest).

Consider refacing instead. This can include one of the following: 1) Installing completely new cabinet doors and drawer fronts or 2) installing new wood or laminate veneer over the existing cabinet and drawer fronts or 3) simply refinishing the existing cabinet and drawer fronts.

Shopping for contractors

The contractor you choose will determine much of the cost, the pace of your project, the amount of disruption, the final results, and your level of satisfaction. So be thorough in your search:

Ask friends and family for referrals and advice.
Interview at least three of the leading prospects in-person.
Ask to see samples of past work.
Look for someone who complements your operating style (similar personality and communication style).
Once you’ve narrowed your choice to one or two, ask to speak with a few past clients.

You’ll be tempted to latch onto the first contractor who gets rave reviews from a friend or family member. But remember: You and your project are unique, and it’s worth the time and effort to be rigorous in your search.

Selecting appliances

If you’re planning to replace appliances, here are three factors you’ll want to consider:

Finish – Stainless steel is still the most popular option, but beware: smudges, fingerprints, water spots, and streaks will be obvious. Black stainless steel has a warmer feel and is better at hiding spots.

Extended warranty – According to Consumer Reports, extended warranties are hardly ever worth it because today’s appliances are so reliable. And if something does fail, it’s often less expensive to just pay for the repair.

Unbiased testing and reviews – Before making an appliance purchase, use the information resources available through Consumer Reports.

A final note

Moving walls and extending your home’s foundation are both very expensive options. If your kitchen plans call for these architectural renovations, perhaps you’ve outgrown your home and need something larger (with an already-improved kitchen).

Buying • Market Updates • Selling • January 14, 2020

Our 2020 Real Estate Market is Moving Full Steam Ahead

by Don Weintraub

I cannot go anywhere without someone asking me “……so how is the market”. Well after a nice break with family over the holidays I can tell you with certainty that the real estate “switch” has since been turned back on. Just days into the year and I feel like I need another vacation! That is ok, I am really bad at relaxing anyway and love real estate.

Some takeaways from the early days of 2020:

10+ offers on a Kirkland house last weekend. Many buyers waived all contingencies and the sale price escalated more than 6%. The house was priced correctly, not artificially low. This is not an anomaly and I have talked to other brokers with similar stories the first week of the year.
Today I listed a condo in downtown Bellevue and less than 4 hours many brokers and potential buyers already toured the unit. Two are threatening to make an offer. I expect it to sell in a matter of days.
I showed a client several homes on the Eastside and two of them are pending in 48 hours. Both of them were listed in 2019 and did not sell, but sold immediately in 2020.
I have spoken to more people than usual about their new year’s real estate plans (aka resolutions) in just the first days of the year. Normally it takes a month or two for so many of these conversations to occur.
Interest rates continue to be near record lows and making the national news. There is also good news in the local media about housing and employment.
There continues to be a lot of confidence in our market with such strong growth plans from some of the world’s most admired companies.
Many buyers that have been sitting on the sidelines are jumping in the market. 2019 was the year of the first time buyer…..and the trend in 2020 it will be quite similar.

Price appreciation generally happens in the 1^st Six months of the year and prices are expected to increase ½ to 1% per month in the first Six months of 2020. If the estimates are correct, then:

Buyers should try to buy sooner than later (assuming they find what they want and can comfortably afford the monthly expenses).
Sellers may be able to wait and gain the ½% to 1% per month but there are downsides:

Can life wait to get the 3% to 6% appreciation? If moving locally that seller can still gain appreciation on the next home.
Competition from other sellers will increase as the year goes on. Historically Spring has the most listings.
World events, stock market crash, or interest rate increases can change the real estate market nearly overnight

If you are making any real estate plans for 2020 please consider me as a resource. I always have time for a conversation.

Market Updates • December 18, 2019

2020 Forecast and Upcoming Event!

by Don Weintraub

I attended a market forecast event with famed economist Matthew Gardner where he made some observations and pulled out his “crystal ball”. You may have seen him on CNBC, or even at one of my annual events! I took some notes that I thought you might also find interesting, see below. On February 4^th Matthew will be speaking at my own event in downtown Bellevue on February 4th. Please look for an invitation in January by email.

Building: Building is very, very expensive in our area. Regulatory expenses make up .25 cents of every dollar spent on homebuilding. One example given was a $45,000 city permit. Land, materials, and labor all cost more than ever before. There is a shortage of 340,000 construction workers in the US. Builders struggle to make money building smaller, more affordable homes that so many are looking for. They are generally building luxury homes with more square footage to be able to make a profit. A $300,000 lot in Bothell will need to result in a 1.2+ million house for the builders to have a solid margin.
Interest Rates and quality of mortgages: They are “stupidly cheap” and helping the housing market. Only 5% of all loan originated are ARM (Adjustable Rate). Most buyers are choosing fixed rate products, and guidelines remain very stringent. Buyers are very well qualified and have larger down payments without the creative financing of the early 2000’s that led to the housing crisis. Rates are expected to remain very low in 2020, but may go up slightly. Americans are sitting on a ton of equity in their houses, and not using them as ATM’s like before the last recession. 25% of homeowners have 50% or more equity in their home in the US.
Millennials: Biggest generation, largest workforce, and they are eager to buy more homes. Millennials want to be close to work and not pushed too far out into the suburbs. They want safe locations, amenities, sand quality schools that are “one foot in town and one foot out”. Builders have a challenge in finding ways to add more affordable housing close to the urban centers. Millennials are very well qualified with an average FICO score of 741. Many continue to rent because they cannot find anything they want to purchase. Parents of millennials continue to help with down payments.
Multi-family housing trends: 65% of multi-family construction is apartments, versus condominium. Interest rates are low for developers which makes holding apartments lucrative with our strong workforce and continued growth. Developers need to price new condos over $1,200/ft to make money (concrete and steel high rise). They also face potential warranty litigation and challenges that are obstacles for them after the sale.
Seattle is Smart!: We are “wickedly smart” with the highest percentage of college graduates than any other city in the US.
Tacoma is a hot market: In the past Snohomish County for those seeking an alternative to high-priced King County, but the trend today is moving South. Pierce County is 100k less, on average than Snohomish County. He expects Kitsap County to have future growth if the ferry system improves.
Foreign Buyers: There will continue to be foreign buyers investing in Seattle area real estate but the trend downward continues. In China, for example, only 50k per year can be sent to the US each year. The President of China would like to reduce the limit to just 10k per year. Many find workarounds through Hong Kong and do continue to get large quantities transferred to the US.
2020 Projection: Local housing values are expected to increase about 4% in 2020. The economy expected to expand in the US with about 2% growth. Still very strong, but not as strong as 2019. There is a 30-40% chance of recession in 2020, but if it occurs he expects a modest contraction that will not impact housing (as it is not going to be led by housing – like ten years ago). The housing market is trending back to “normal” This means there is more balance between buyers and sellers.
Seattle area notes: Gardner believes Seattle is the best place to be for a future recession. We are not reliant on Boeing like the 1970’s, but now very diverse with immense growth occurring both in the city and on the Eastside. Seattle has just as many cranes as Los Angeles but is a much smaller city. Amazon is adding as much as 5 million square feet in downtown Bellevue alone. Facebook has big growth occurring both in Seattle and on the Eastside……among others. 50,000 new jobs likely in 2020 around Seattle. Most will be high paying, high tech related. We have full employment and this is expected to continue in 2020.

As always, if you have questions about anything real estate related please consider me as a resource. I am always here to help.

Urban Development • December 18, 2019

Seattle A National Leader In High-rise Apartment Development

by Don Weintraub

Seattle is growing up, literally, when it comes to its housing market, ranking fourth among the 30 largest cities in the country in an assessment of cities with most high-rise apartment complexes built over the past decade, a recent RentCafe study shows.

High-rise apartment buildings represented 9% of all new multifamily development in the city over the past decade, up from 5% in the 1990s, the study found.

“Of the 26 residential high-rises delivered in the last decade, six were skyscrapers (of 40-plus floors),” according to the report by the apartment-search platform RentCafe. “No wonder the average number of floors for all types of apartment buildings in Seattle went from five in the ’90s to eight in the current decade.”

Ranking ahead of Seattle on the high-rise apartment front is New York, with 112 projects developed between 2010 and 2018, followed by Chicago, at 71; and Philadelphia, at 27. Trailing Seattle is Boston, with 24 high-rise apartment developments over the period, followed by Dallas, at 23; and Los Angeles and Houston, with 20 each.

For the purposes of the study, a high-rise is defined as a building with 13 or more floors while a skyscraper is defined as a property with more than 40 floors.

“Seattle witnessed a veritable residential high-rise boom in the last decade,” the RentCafe report says. “The number of completed apartment high-rises [in the city] jumped from three in the ’90s to a significant 26 in the ’10s.”

The trend toward high-rise apartment development in Seattle is likely to continue in the coming decade, as Seattle Business reported earlier this year.

Seattle has seen the number of jobs and people living and working in downtown grow by nearly 40 percent over the past decade, giving rise to a report from the Downtown Seattle Association that contends unless Seattle adjusts its zoning guidelines, the downtown area will have “only a few viable sites for the next development cycle.”

One solution is to expand vertically, rather than horizontally near mass transit stations, allowing mid- and high-rise development projects that create densely populated vertical neighborhoods — mini-downtowns — that combine housing, restaurants, shops and offices.

This past March, the Seattle City Council unanimously approved a controversial plan to rezone for more intensive use, or “upzone,” portions of 27 neighborhoods and several commercial corridors, which encourages denser development and more high-rise buildings.

This was originally posted on Seattle Business Magazine by Bill Conroy

Market Updates • December 16, 2019

Matthew Gardner’s 2020 Mortgage Rate Forecast

by Don Weintraub

Each year Windermere’s Chief Economist, Matthew Gardner, forecasts into the next. Here’s what he expects for Mortgage Rates in 2020.

Some takeaways from the early days of 2020:

Price appreciation generally happens in the 1st Six months of the year and prices are expected to increase ½ to 1% per month in the first Six months of 2020. If the estimates are correct, then:

If you are making any real estate plans for 2020 please consider me as a resource. I always have time for a conversation.

Price appreciation generally happens in the 1^st Six months of the year and prices are expected to increase ½ to 1% per month in the first Six months of 2020. If the estimates are correct, then: