Everyone knows the classic real estate mantra, “location, location, location,” in determining the present and future value of a house. While that phrase is still apropos, the advice you are most likely to hear from South Sound real estate professionals these days is, “now, now, now!”
This area’s real estate market has moved from the bursting bubble of high prices in 2006 and 2007, to the lows of 2012 and then a period of recovery, followed by a heated-up market in 2014 and 2015. When it comes to 2016, the local experts all predict a modest rise in interest rates, and most say now is the time to refinance your home, now is the time to buy, and now is the time to sell. And, if you’re planning to sell your rambler or other one-story house, you may be able to fetch a pretty penny — the market is starved for them.
Here are some additional insights and tips from local experts.
What was the real estate market like last year?
Shawn Viguerie: “In 2015 we experienced low interest rates, low inventory, more demand from homebuyers, and a significant increase in home values.”
Michael Morrison: “In the upper market, we saw a lot of buyers come into the market in 2014 and 2015. We are seeing many cash purchases — in the last two years, a lender was involved less than 10 times in our business. People know the bottom is over and are seeing it come back in leaps and bounds, and want to invest in real estate now because it’s ticking up.”
Scott Walker: “We saw continued pressure on land. The lack of availability of lots is causing upward pressure on lot prices. In 2005-2007, there was an excess supply of lots created primarily in Pierce County, but also in Kitsap and Thurston. In the last several years, that supply of lots has been absorbed, and now the supply of new lots to be developed is not as great.”
What do you anticipate in 2016?
Jeff Jensen: “It’s going to be a banner year in terms of appreciation and transaction volume. I see people starting to have less hesitancy with moving than in the past. There is more stability in the market now, more volume, and more activity.”
Peter James: “Most analysts are forecasting interest rates to be at 4.5 to 5 percent by the end of 2016. New construction — that’s where the inventory lies today — is one of the areas that really rebounded. If you are looking to move up, new construction is definitely the best option. If you plan on staying in your home, I would strongly encourage refinancing your current home by March 2016.”
Janet Lee: “We’re expecting the market to start early this year. We are working with quite a few buyers looking for the right house waiting for more to come up. From mid-January to mid-February is a great time to put your home on the market; by April and May you will be competing with a lot more homes.”
Walker: “We’ll see continued success in empty-nester-type products, smaller homes with the master on the main floor or a rambler. The empty-nester or retiree type of customer tends to buy the house size they really need and surround themselves with all the amenities and luxuries that they really value — electronics, kitchens, lavish bathrooms and master bedrooms, well-appointed yards, quality materials. We call them ‘a jewel box.’”
What else is happening in the local real estate market?
Morrison: “About 10 percent of our business was to Chinese moving to the area. A Chinese buyer looks for quality schools for their kids, a legacy type of property, something unique. They don’t want a subdivision home as much as a signature piece.”
Jensen: “A lot of people are driving to Tacoma to get more house for the money because they have been priced out of King County. Also, the first-time homebuyers’ market is definitely on the rise.”
What kinds of trends are you seeing that people want in a home?
Morrison: “Big is out! Most people are opting for quality versus quantity. They are opting for manageable lot sizes but still want their privacy. They like large eat-in kitchens, and don’t necessarily need formal spaces. … Home automation is in — controlling (household functions) from a cell phone.”
Walker: “Our clients want a very personalized home built to high customer expectations. But it’s not just the home they are drawn to but also the good communities, good sidewalks. We create places where people want to live, work, and play.”
Lee: “Kitchens are huge and big, open eating areas — a big great room. Instead of hardwood floors, we’re seeing people drawn to engineered vinyl. It looks like wood but is durable and good for pets and kids.”
Do you have any advice for someone who plans to buy a home?
Viguerie: “The sales agent in the model home represents the builder, not you. They are known as sellers’ agents. You can work with a buyers’ agent at no additional cost. And, only a buyers’ agent can legally represent your needs alone. A good buyers’ agent will be able to give you information not readily offered by the seller’s agent, such as construction, warranties, special financing, differences in pricing, quality, even lot selections, so that you get the best value for your money.”
Lee: “Start working now on having pre-approved financing in place. Know what you want and the price range you are looking for. A big part of our job is educating the buyer.”
What advice do you have for sellers?
Jensen: “Declutter. Thin your furniture. Less is more. Clean your carpets; paint the walls. There should be no visible dings or dents. Have your beds made. Then be flexible and make it accessible. Find a home for your dog while the house is on the market. Your home should be presentable at a moment’s notice.”
Lee: “If you have an outdated kitchen faucet, the $150 to $200 to replace it will be money well spent. Put new towels everywhere. Take a critical look at your art and remove or replace as needed. Just adding decorative pillows makes a big difference.”
Morrison: “Invest in curb appeal — landscaping, bark, trimmed trees. Inside I would paint and look at light fixtures first. Even update your furniture so people will want to look around. Would you be as likely to buy clothes at Nordstrom if their furnishings were shabby?”