Last year was a very rewarding year in real estate, but it was also extremely challenging. This market is brutal for Buyers—often submitting offers on multiple homes, competing, spending $1000s on pre-inspections and often paying (as much as 25%!) over the asking price―and it is an emotional roller coaster on the way to finding a home. This type of market is hard for me as a Buyer's agent. I take pride in helping my clients find THE HOUSE, not just a house. This can take months in a balanced market, and the current market is anything but balanced. Inventory is lower than ever, and competition is higher than ever. It often feels like an impossible task to prevent a Buyer from settling. However, I'm also proud to say I was the winner of 17 multiple offer situations on behalf of my buyers last year.
On the flip side of that, I had many happy Sellers. The chart below is a data visualization of my listings in 2015. Not one of them sold for under the list price, and on average they went for 8% OVER the asking price.
DIY transformation sets resale record
My record sale this year was a home in Meadowbrook, a neighborhood in the Lake City area of Northeast Seattle. John and Kelly Poort bought a mid-century rambler in 2010, it was all original inside and had a pool in the backyard. Over the next five years, the couple had three daughters, removed the pool and completely updated the house. (A true DIY project, thanks to a handy John, and his three handy brothers.)
"We were nervous about the process of selling," the Poorts said. "But after talking to Heather about the market and what we'd need to do to get our home ready...we decided the time was right. We went away for a long weekend when the house hit the market and were both shocked and thrilled when Heather shared the offers a few days later. Making the decision to leave a home [that] held so many memories for our young family was scary, but we are so grateful that we did as it led us to the home where we will watch our girls grow up."
We listed the house in March at a market-based price that was appropriate given the recent comparable sales in the neighborhood. After five days we had 13 offers. The winning offer was nearly 37% over the asking price, and included an addendum noting the Buyer was willing to make up the difference in cash, as it would likely appraise for closer to the asking price. Demand for this house was so high― thanks to timing of the market, location, size, and fantastic updates (we didn't even need a stager!)― that the Buyers were willing to pay more than what they knew it would appraise for.
Mortgage insurance tax breaks extended
Premium payments may be deductible for some borrowers with adjusted gross incomes less than $110,000
In December, President Obama signed a bill that included provisions extending the deductibility of mortgage insurance (MI) for the 2015 and 2016 tax year.
To qualify, the policy must be for loans for the purchase, construction or major improvement on a first or second home. So mortgage insurance policies on cash-out refinances or home equity loans will not qualify for the deduction.
The deductibility is effective for purchase and refinance transactions closed after Dec. 31, 2014. Mortgage insurance premiums paid during the year are reported on Form 1098 and are sent to borrowers by the lender. Consult your tax advisor for additional assistance on claiming the itemized tax deduction on the Schedule A form.
Here is a breakdown of how the deduction works:
Borrowers with adjusted gross incomes below $100,000 may deduct 100% of their PMI premiums.
For borrowers with adjusted gross incomes from $100,000.01 to $110,000, deductions are phased out at 10% increments for each additional $1,000 of adjusted gross household income.
How low is inventory?
Have you heard that real estate inventory in Seattle is at an all-time low? Check out this map of single family homes in North Seattle, it shows only 19 properties for sale that are currently listed for less than $550,000. That means that for the 1000's of Buyers searching from Lake Union to Shoreline there are only 19! available homes. Wow. Similar trends are present in neighborhoods around the region, and inventory in 2015 was also at an all-time low (see chart below from SeattleBubble.com, a real estate information blog).
A recent story in The Seattle Times highlights that recent King County home prices have hit new highs while inventory is at new lows.
We NEED houses to sell― please call me if you have one.