Blog - Blue Dot Real Estate

Backyard Staging: Don’t Forget the Outside!

It’s prime selling season! Sellers tend to get advice from all sides when they’re preparing their house for the market, with staging among the top recommendations. When the weather warms up and more people are out house shopping, it’s important to maximize appeal to those potential buyers. What about your backyard? Backyard staging is every bit as important as curb appeal and interior staging. You want potential buyers to picture themselves enjoying summer sunsets and social gatherings there, too! Take a look at some of our tips for backyard staging, and let’s get your house sold quickly and for as much money as possible.

Tips and Suggestions for Backyard Staging

backyard staging ideas — *A few small, thoughtful touches can make a big difference.*

Clear away the clutter – Take a walk around the perimeter of your yard and pick up any stray toys, balls, garden implements, and garbage. You may not see it when you’re living in the space day-to-day, but a potential buyer totally will. They have eagle eyes, and they’re thinking, “If I buy this house will *I* be the one who has to clean this up?”
Spruce up your landscaping – You’ve probably taken care of the front of your house, but give the backyard the same TLC. Weed, trim shrubs and bushes and remove yard decorations. Potential buyers may not love garden gnomes as much as you do.
Powerwash hardscapes and fences – You’d be amazed at what a powerwash can do. Rent a powerwasher at your local Home Depot or Lowe’s, and spray off the grime and buildup. Also, if any of your yard structures are in need of repair, take care of that as well.
Flowers and greenery – Plant some colorful flowers and greenery in the beds and/or decorative pots to brighten things up.
Lighting – String lights in a gazebo, sconce-style lights on the side of the house are both good choices for indirect lighting. Solar-powered yard stake-style works well, too.
Create Zones for different uses – Help buyers see what they can do with the backyard space by arranging the yard for different activities. An outdoor dining table and chairs in one area, set up a hammock or a garden bench in another area (a shady spot is perfect for this!) but leave an area open in the middle – give the impression there’s room for entertaining, solitude, and play.
Leave some room – Ideally, you want to create a good flow around the backyard, so be aware of how much furniture and other items you have outside. Clutter isn’t good, so you may want to remove a few pieces of patio furniture to achieve this end.

Are You Ready? Get Your House Sold!

Our professional agents know their markets and their communities. Contact Blue Dot Real Estate today and we’ll help you get ready for your big change!

Lending Standards: Too Loose or Too Tight?

Lending Standards Too Tight or Too Loose?

Are We Headed for Another Bubble?

Between 2004 and 2007, lending standards were loosened significantly, bringing previously unqualified buyers to the housing market. These loosened standards, coupled with sub-prime lending, led directly to the housing crisis a decade ago.

We can see that the current market has recovered from the market crash and then some. Home appreciation has risen year over year, and that appreciation coupled with tight inventory has given rise to the current real estate boom. We know the contributing factor in the crash was risky mortgages with high rates of default. What’s different today? Tighter lending standards and the Qualified Mortgage Rule.

According to the MCAI (Mortgage Credit Availability Index) with a benchmark set at 100 in 2012, higher numbers indicate a loosening of lending standards, and lower numbers the opposite. April 2018 MCAI was unchanged from March, at 177.9. Broken down, conventional credit increased driven by an expansion in jumbo credit. Government MCAI, however, fell 1.4 percent, indicating that at least in that sector, lending standards are tightening.

The Interest Rate Factor

On June 13th, 2018, the Federal Reserve raised rates for the 2nd time this year – from 1.75% to 2% – and we know this affects mortgage lending rates as well. It costs more to borrow money now. While interest rate increases often lead to a rush in mortgage applications, how many of those applications are approved? What does it take to be a prequalified buyer in today’s market?

So, Lending Standards: Too Loose or Too Tight?

Take a look at this chart from the Mortgage Bankers Association’s graphic below. A graphic representation shows that we are nowhere near the standards that caused the housing crisis. In fact, while the index has risen recently, credit standards are still quite tight, leaving a segment of qualified buyers out of the market.

Bottom Line:

With recent reports of the skyrocketing cost of rent, further loosening of lending standards would serve a segment of potential buyers with lower credit scores but with sufficient income to cover payments. The Consumer Financial Protection Bureau is in the midst of reviewing the Qualified Mortgage Rule, determining whether to loosen some of the consumer protections instituted by the Dodd-Frank Act. With fewer restrictions on lenders and borrowers, the potential for bringing qualified home buyers to the market increases. It is possible to balance consumer protection and qualify for a mortgage simultaneously. That’s what we’d like to see – healthy buying AND lending conditions.

Are You Ready?

Contact Blue Dot Real Estate today and we’ll help you get ready for your big change!

Relocating? Research!

Are you considering relocating? RESEARCH! Relocating to another region is a huge decision. Whether you are moving for a job, a different lifestyle, or even hoping for bluer skies and warmer climes, we can’t recommend enough taking the time to research all possible angles. The place you’re dreaming of may not match the reality. With a decision as big as this, research is step one. There are the obvious areas to look into such as affordability, traffic/commute times, etc. What about some of the less obvious things you may not think of right away when considering a big move? Being a little more methodical and a little less emotional will increase your chances of being happy with your decision and your new home. Knowledge is power.

*Move north, they said. It’s awesome, they said.*

Have you considered looking into the local legislature, unique laws, quirks and more? How about the arts/cultural scene? What kind of extreme weather events are possible and how does that affect your homeowner’s insurance? Look at the bigger things, certainly, but it’s equally important to focus on the other crucial things to consider before relocating. For example, if you are considering the South, you’ll want to look at hurricane and flooding history, and regional flood insurance rates. North? How do you feel about snow?

PEST Analysis

One tool for helping you make informed decisions is called a PEST Analysis. While a very handy tool for businesses, it can also be very useful for personal decisions such as this one. PEST stands for Political, Economic, Social, and Technological; all things to think about when making a decision to relocate. Some things we suggest you check before you consider a major move to a new county, part of your state or another state, both obvious and not-so-obvious:

Crucial Things To Consider Before Relocating

The Obvious:

Crime rates, including sex offender map/listings obtainable from the police departments or county sheriffs.
Weather – 10-year pattern for extremes, outages and more.
Flooding and snowfall for the specific areas you are considering.
Utility rates
Tax rates
Home values, foreclosure rates in the area and the cycle.
School ratings. Even if you are past the age of having school-aged kids, the local schools affect how tax dollars are spent. Learn the demographics of the county and congressional district you are considering.
What are the key industries that fuel jobs? Some states or regions have ONE industry or major employer. If something happens to one of them, the economy tanks and neighbors are on hard times. Will you be able to do what you do in this new location? Any opportunity for growth? Will you have to travel more?

The Less Obvious:

Where is the biggest voting population? Are the issues important to them in line with your own, or are you on the opposite side? Research proposed legislation. What is the state focusing on? How about the county? People in a major metropolitan area have different needs for safety, medical, and schools than those in rural regions. How will those priorities fit with you and your family’s needs?
Look at past election ballot pamphlets explaining what the issues were, for and against comments, and see how the votes went, as well as the fallout.
Is public transportation helpful to you or annoying? If you are going rural, will you have to buy a truck for those roads? Will you need more than one?
What’s customer service like at local grocery stores and local Home Depot or hardware stores? If you move, you’ll be in both a lot.
Do you have medical concerns, issues? How easy will it be to get new doctors and dentists in the new location? Will they take your insurance? How GOOD are the hospitals? If you are a heart patient, cancer patient or have other chronic issues, you need to seriously consider a move that will have you changing doctors. Perhaps you are moving so you can improve that exact situation. If so, visit the local hospitals, interview potential specialists.
How about auto mechanics – how do they rate? Does your brand of car have a place nearby that can service it? Do you have room to park your RV? If not, how much and far is storage?
Hair salons? Visit the area, check out the mall, stop in high-end restaurants for an appetizer and look around – how are they looking? Do you feel out of place, or right at home? Ask someone where they get their hair done. They’ll appreciate you asked.
Houses of Worship – is your brand of faith in the area? Faith communities can often be one of the best places to connect with new friends who are of like mind.
Calendar of events – what types of events do they have annually?
Check out the local papers for a few months. This is not a fast process. You are considering a big move – think it through.
Check the stories published about the city and/or state you are considering in OTHER papers – such as the NY Times, Washington Post, Chicago Tribune. If they are writing about it, chances are it’s an “issue.”
Set up a Google Alert for the area you are considering. Google Alerts sends you an email when the specific word or phrase is mentioned online. This can help you automate some of your research. Here’s on online how-to: Create a Google Alert.

Make An Informed Decision!

While it may seem like a gigantic task to check these things out, you and your family will be happier and more secure in your decision on where to relocate. Taking the extra time to consider these crucial things to consider before relocating will result in a happier move and a good fit.

Are You Ready?

Contact Blue Dot Real Estate today and we’ll help you get ready for your big change!

Property Rights vs Historic Designation

Recently, in Portland, Oregon, a group of neighborhood residents formed a committee to try to have the neighborhood designated as a historic district. There are legal and neighborhood ramifications for such a designation, and we found how one homeowner managed the situation to be particularly interesting.

Backstory:

Portland is a city in the midst of seismic change. Development in the area has skyrocketed, and many longtime residents have voiced concern about the demolitions of historic, “Old Portland” buildings and neighborhoods taking away some of Portland’s unique character. Portland has always been somewhat protective of what makes it different, so the surge in development projects has risen the hackles of veteran residents.

Many homeowners in older neighborhoods have banded together and made attempts to have some of these areas designated as National Historic Districts, which are registered through the National Park Service. Such a designation would limit demolition of older buildings and restrict development in an effort to preserve the older homes, and thus the overall character, of the neighborhood. The Eastmoreland Neighborhood Association started the process a few years ago to stave off these demolitions and help keep housing density low. However, many homeowners opposed this effort because the national nomination process is one of ‘negative consent.’ This means that in the national process neighbors are assumed to be in favor of the designation unless they sign a notarized objection.

While the small, grassroots effort to declare the area a historic district did gather steam, many neighbors opposed the idea, stating their concerns about property rights. When the National Park Service designates a neighborhood a historic district, homeowners in the area have restrictions on what they can and cannot do with their property. The objections of several hundred homeowners are presently not being considered by the proponents of the designation. In response, an opposition group called “Keep Eastmoreland Free” has collected 500 notarized objections, about half of what it thinks it needs.

A Frustrated Homeowner’s Solution

Enter: Patrick Cummings. Mr. Cummings found a way to give himself 1,000 extra ways to object to the historic district designation. He divided up his property into 1,000 trusts. He now owns one-thousand 0.1 shares of his home, giving Mr. Cummings 1,000 opportunities to submit the notarized objections required under current Park Service rules. Mr. Cummings designated himself Trustee of each, and under Oregon law, multiple trusts create multiple owners. He took this step to oppose what he feels is a very unfair process which allows a small minority to dictate what individual property owners can do.

Proponents of the designation are, not surprisingly, upset, saying they believe the step Mr. Cummings took is the true affront to the rights of property owners. They accuse him of essentially “stuffing the ballot box.” Neighbors had until April 13th to submit objections, and the Park Service will begin reviewing the nomination on May 18th. Regardless of the way the Park Service rules, both sides of the argument are preparing for lawsuits and court battles.

Property Rights vs Historic Designation: The Lesson

When you are considering a home purchase in a historic area, take the time to research what – if any – designations and land-use restrictions you may have on the property should you decide to buy it. It’s also a good idea to search for related news stories and drive through the area. What kind of signage is on lawns, street signs, shop windows and parks nearby? Is this your dream home, or a red tape nightmare? The homes may be beautiful and evoke nostalgia, but if your values, ideas, and plans for your home are at odds with the neighborhood restrictions and culture, this may not be The One.

What Happens to the Housing Market When Interest Rates Rise?

The Federal Reserve raised interest rates a quarter of a percentage point on June 13th, 2018, from 1.75 percent to 2 percent, an indication of confidence in the strength of the economy. As such, mortgage rates will likely rise as well. According to Bankrate’s weekly survey of large lenders, the benchmark 30-year fixed-rate mortgage last week was at 4.7 percent and we’re likely to see that increase after the June announcement. While we all like to see a strong economy, we also know raising interest rates creates some changes in consumer behavior. So, what happens to the housing market when interest rates rise? In the short term, here’s what we typically see:

Consumers feel more pressure to lock in interest rates, so applications typically rise.
A jump in offers and panic buying, tightening inventory.

What we see in the long-term when interest rates rise and how it affects the market is the real issue. A recent survey by Redfin found:

About one-fifth of consumers said 5 percent interest rates would cause them to move with more urgency to purchase a home.
More than a quarter of consumers, however, said that a 5 percent rate would cause them to slow their plans
Six percent surveyed said they would drop their plans altogether.

Where are we headed?

What Happens to the Housing Market When Interest Rates Rise?

Historically, we are nowhere near the record-high mortgage interest rates of the 1980’s, when rates hovered over 18 percent. Rates have decreased steadily since the early 1990’s. The latest rise does, however, mark a change in direction. With surging home prices already making affordability difficult, and inventory tighter than ever, the rise in interest rates will compound the problem. However, the rise in rates isn’t estimated to curb homebuying activity. With a positive economic outlook and more people working, feeling secure in their jobs, and bringing home more money, buyers are more likely to simply buy a less expensive home instead of opting out of the buying process. For many prospective homebuyers, the higher rates may speed up the decision to enter the market.

In the immediate future, the segment of the market most affected by the rate hike are homeowners with a HELOC. Every rate increase affects their payments and ultimately, their bottom line. Adjustable-rate mortgages are adjusted annually, so homeowners with these types of loans won’t feel the effect of the rate hike immediately, but multiple rate hikes throughout the year will increase their payments.

Keeping Current

At Blue Dot Real Estate, we offer the personal service of local experts, combined with a national presence. The best of both worlds. Contact us today, or join our team!

Seattle-Tacoma Area Market Trends

2016 saw Seattle-Tacoma area home prices steadily rising, and 2017 is shaping up to be no exception. What does that mean for investors, and what are the Seattle-Tacoma area market trends for 2017?

Seattle-Tacoma Area Market Trends

Seattle

Seattle market trends show an increase of $30,000, or 6%, in median home sales over the previous year. Competition for investment properties has taken an interesting turn, as Seattle has become the number one U.S. market for Chinese home buyers. These buyers tend to come in with all-cash offers, and that’s been contributing to the upward tick in home prices. Some of these investors are moving into the homes, but many are buying them and either renting them out or leaving them empty. The West Bellevue, Medina and Mercer Island areas have seen the biggest bubble, with home prices jumping 125% in the last five years.

That’s not to say there aren’t any lower priced homes to be found, the “deals” are going to be in other parts of King County, and don’t leave out the condominiums on the REO market as well.

Tacoma

Pierce County is a different market. Don’t count this South Puget Sound area out for finding bank-owned homes with profit potential. Tacoma real estate saw a 10-13% gain on median sales price (Aug 2015-Aug 2016) which far out-paced the national rate of appreciation. The city and surrounding areas offer some of the outdoor and cultural perks of closer-in Seattle, but without the Seattle housing price tag to go along with it. This makes the Tacoma area more affordable for those with moderate incomes. Rent rates in the same area rose nearly 40% over two years. For rent-weary potential buyers, Tacoma offers some starter-home gems.

Tacoma-Pierce County has also seen more out-of-state investors buying up homes in the area – up threefold since 2006 – the bulk of which are owned by investors in Texas. Because of the rapid appreciation in the area and the rising rents, these LLC’s are turning a healthy profit.

2017: Looking Ahead

Seattle and Tacoma look to remain very desirable markets in the coming year. And while predictions are that home prices will continue to rise, with a possibility of the trend cooling off over the next year, with gains being smaller than what’s been seen in the previous few years. However, it’s still a very hot market to jump into with investments looking strong for the near future.

FHA Mortgage Limits: 2017

While the Seattle-Tacoma area market trends lean toward investors, home buyers are still very much in the picture. The mortgage lending limits were updated by HUD for Washington State – it’s always a good idea to familiarize yourself with what’s changed. Take a look at the 2017 FHA mortgage limits on HUD.gov.

With more than a decade of full-time professional management and marketing of bank-owned homes, we are your REO agents. Contact us and get your assets sold…fast!